EU referendum

The increasing complaints about the counter-productive nature of most “expert” interventions in the EU Referendum Debate appear to have had no effect on their supply. In one of the latest, the Institute and Faculty of Actuaries (IFoA) has commissioned the National Institute of Economic and Social Research (NIESR) to research The Impact of Possible Migration Scenarios after ‘Brexit’ on the State Pension System. Concerned that this might be ignored, the IFoA helpfully released the following key findings in a press release:

  • Reducing annual migration numbers, for example by c150,000*, could cost the State more than £3bn per year by 2032 and more than £8bn per year by 2057
  • To offset this funding gap in 2057 might require a further increase in the State Pension Age from 68 to 69 or a reduction in State Pension of £300 per year
  • Government could also use policy levers such as National Insurance contributions, or the level of State Pension benefits to mitigate against the net increase in Government costs
  • Raising the potential earnings profile of immigrants could also mitigate, or even reverse, impacts

The report itself adds two important caveats to these findings. First, the net effect on the government budget is not statistically significant. Second, the increase in total state retirement benefits over the time period considered, without any change in migration policy, of around £94b dwarfs the higher costs due to any changes in migration scenarios considered. Only the second of these made it into the press release, several paragraphs down.

I am guessing, perhaps unfairly, that most of the UK press will only use what is in the press release. In which case they will not understand that the baseline scenario against which the six migration scenarios the report studies is itself based on Office of National Statistics (ONS) Principal Population Projections which show net migration falling to 185,000 from 2020-21, and remaining constant at that level in subsequent years. Now this may happen but, considering how much attention is being devoted to the immigration question within the EU currently, I would regard it as highly unlikely to represent the non-Brexit position. Which makes the comparisons rather meaningless. And there is of course the problem of projections to anything like 2057 which I have commented on before. The immediate conversion of financial scenarios into specific policy responses like changes to the State Pension Age is, I am afraid, pure Project Fear behaviour.

I am not a Brexiteer, but the constant barrage of “evidence” like this is not going to win any arguments for the Remain side in my view, which is shared by many others. My view is that Brexit might finally make it clear to us that our problems of democracy are at a national level rather than an EU one, as suggested in Chris Bickerton’s excellent The European Union: A Citizen’s Guide. This might be worth a certain amount of economic sacrifice. On the other hand staying in the EU might make action in areas where cooperation is required – such as climate change, pollution, migration and tax reform – more likely, although the EU’s track record internationally is mixed here. EU membership probably makes some kinds of policy change more difficult, perhaps encouraging more thought before radical change.

What has become obvious is that announcing the Referendum has done nothing for the discussion except to turn it into an adversarial one. I have lost count of the number of online petitions I have been invited to sign up to by people who have lost sight of the need to have a discussion and just want their side to win at any cost.

If enough people voting for a particular outcome do so with a clear reason about what they would do to improve our society after the vote, we will have won whatever the outcome. If it’s Brexit, we will need to roll up our sleeves, as we will have made life more difficult for ourselves in purely economic terms, but if the feeling of control and responsibility for sorting out our national problems energises a large segment of the population it will be a win. If it’s Remain, but we realise that the EU cannot continue as it is and that a massive shift of control away from the elite political class of all nations is required, whether via DiEM25 or something perhaps more relevant to the concerns of the UK, that would also be a win. What we need above all is for the most energetic and innovative people amongst us to decide to vote and follow it through.

The only way we will lose is if we vote for Remain and then just continue as we are.

So, if anyone under the age of 30 is reading this, I would encourage them to:

  1. Register to vote (you have until Tuesday 7 June) and can do this here;
  2. Stop listening to my generation and that of my parents (if you are, your deference to age and experience in this case is misplaced!); and
  3. Make up your own minds.

And whatever we all decide on 23 June, we can make it work out okay for all of us. Of that I am quite certain.

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