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The Progressive Policy Think Tank

Addressing the challenge: Scotland's ageing population

Recent statistics confirm what we've known for some time. Scotland is getting older. 

From this year, the number of deaths in Scotland are projected to outnumber births for decades to come. Between now and 2039 we will see steady increases in the non-working population, with over 65s due to increase by 53%. At the same time our working age population will fall proportionally.

To be clear, an ageing population is a huge success. It is the product of generations of improvements in public services and living standards. However, it will also bring significant change and huge economic challenges.

An older population will increase the costs facing our already strained public services. At the same time a falling number of workers will see decreasing tax revenues. We will likely need to see significant tax rises or increases in productivity over the long-term simply to stand still. 

And Brexit could make matters worse. By reducing our economic growth over the long-term and reducing immigration, we could face a double whammy making demographic change more extreme, and damaging economic growth further.

So what can be done?

Firstly, we need to prepare for our transition now. We need to reform our public services and put in place the revenue streams we will need over the long-term - through increased or new taxes.

Secondly, we will need to target increased net migration into Scotland. This is where Brexit could be a double edged sword. Leaving the EU will present new barriers to immigration, but it also presents opportunities to do immigration differently. Our work at IPPR has called for the devolution of immigration to Scotland and across the UK, as happens in other countries like Canada and Australia. This would allow Scotland to set some immigration policies that are right for Scotland, rather than trying (and failing) to do so for the UK as a whole.

Our ageing population presents huge changes. To meet these head on in the fairest way we need a serious debate involving citizens and politicians, and urgent action, to manage our transition. If we don't take action now, reality may be forced upon us risking damage to public services and worsening inequalities.

Originally published in The Scotsman.

Russell Gunson is Director of IPPR Scotland. He tweets at @russellgunson.