He's At It Again

Edmund Conway in the Telegraph on demography and pensions. The man's an idiot. Not only does he take the Dave Osler view of immigrants as tax-producing units and nothing more, he even thinks the chav mothers of the UK will help.

thanks partly to our relatively open immigration policy and partly to a rise in births, Britain's old age dependency rate is set to increase far less rapidly than that of any other major country between now and 2050, according to UN projections.

In and out of wedlock, babies are being born at a higher rate than for many years, and every new child represents another prospective taxpayer to help reduce that bill.

Teenage pregnancies may bemuse nonagenarians such as Gertrude Janeway, and they may cause hand-wringing among social commentators; but in economic terms, they may be the best hope we have for solving the impending fiscal timebomb.

The man's practically certifiable.

Firstly, the underclass kids will all be on benefits themselves in 18 years. The least-educated mothers are the ones having more kids.

Secondly, according to the ONS figures on unemployment by ethnicity, all immigrant groups have lower employment rates than the natives. Now you can blame that on the evil racist Brits, but you can't have it both ways. They can't be at once both poor victims of unemployment AND doing the jobs the natives don't want to do.

Thirdly, both immigrant and underclass members who are in employment are likely to be in low-paid jobs where they cost more in government expenditure than they pay in taxes.

Fourthly, and this is conjecture rather than established fact, I would be amazed if the tax take was the same for all ethnic groups, even when controlling for income. Those in cash trades, taxis, catering etc have far more opportunity to do things 'off the books' than someone working 9-5 for an FTSE100 company. I don't know if the Revenue have done any research (probably not - and if they have it'll be in a locked leadlined safe somewhere), but I would venture the suggestion that as time goes on and the composition of the UK changes, the percentage tax take per economically active person in the UK will fall.

It's a pity his prescriptions are so bloody awful, as his diagnosis is spot-on :

In the 1940s and 1950s, Britain went, via the Beveridge Report, from being a warfare state to a welfare state. We may take the current system for granted now, but it was nothing short of a massive economic experiment, one forged in the shadow of terrible suffering. Moreover, it is a system that has been in operation, in its full embodiment, for less than a lifetime.

Unfortunately, it has been an experiment based on unrealistic assumptions about Britons' longevity and their fecundity. Since the 1940s, life expectancy at birth has climbed from just over 60 years to just under 80. And fertility rates, which peaked at an average of almost three children per family in the baby boom era of the 1960s, have now seen a drop to below two children per family for three decades.

In other words, the cultural revolution kicked in and babies went out along with churchgoing and wearing a tie on weekends.

Until relatively recently, most funds were designed either as defined benefit schemes, with pensioners given a guaranteed payment no matter how much they paid in, or plain unfunded schemes, with pensioners paid from the current account.

Several companies suffer a hangover from large versions of the former British Airways and British Telecom being prime examples. Many insiders fear that before long we could see a major British company taken down by the burdens of its pension scheme.

But these bills are as nothing compared to the unfunded liabilities of the state. By even conservative estimates, the state and public- sector pensions liabilities could more than double the total national debt, causing far more damage than the current financial crisis. The situation is hardly any better in the US, where the unfunded liabilities for social security and Medicare health care for the old are more than $50 trillion.

For all the talk of waste in the public sector, of inefficiency and of profligacy under Gordon Brown, nothing that this Government has done to dent Britain's public finances can compare with the damage imposed by decades of this demographic disaster.

There's a word for financial schemes which take in money, promising a good return in the future, and use the new money coming in to pay existing investors. They're called Ponzi schemes. A characteristic is that they need to recruit more and more new investors to pay the outgoings to the current investors. When the supply of new investors dries up, the scheme cannot continue to pay out and collapses.

Or in Dave Osler's words "Either immigrants keep this country going, or it folds." For 'new investors' in the Ponzi scheme, read 'new taxpayers' paying for some old chap's pension and NHS treatment.

I have wondered for some years about our Government's attitude to mass immigration. Even white liberal guilt seemed insufficient motive for their determination to see the positive side - and not exactly ignore the negative side, but rather deny that there was or ever could be a negative side (and only racists would suggest such a thing).

Maybe they've just been looking at the sums all along, and see mass immigration as the only politically acceptable solution. After all, no-one's going to suggest that we stop killing 200,000 babies a year, are they ?