Inward migration ‘crucial’ to maintain Island’s population levels

The report on ‘Inward Migration Incentives & Disincentives’ has been published to meet the resolution set by Tynwald in December 2023.

And it reveals that government’s population goals may still be out of reach.

At the heart of government’s ‘Economic Strategy’ is an ambition to create and fill 5,000 new jobs across key sectors, by 2032, reaching an overall GDP of £10bn.

Another is to further develop infrastructure and public services to plan for a consequent estimated population of 100,000 by 2037.

However, the new report reveals that the Island’s population has only increased by 461 people between the census taken in 2021 and 2023.

Between May 2021 and 2023, 3,705 people migrated into the Isle of Man.

But when outward migration is taken into account – 2,709 people – along with the fact there were fewer births than deaths in our resident population, the resulting increase in the population was only 461.

Indeed, the Island’s natural population change (births versus deaths) continues to be negative.

This is due to the fact that the Island has a ‘higher dependency ratio and an older population than our nearest comparable neighbours, which is straining our labour market as more people retire and fewer enter work’.

Therefore, as CoMin says in the report: “Inward migration is crucial to maintain our population at current levels in the short term and can support a reversal of this trend in the longer term.”

CURRENT SITUATION

Between the mid-1980s and the mid-2010s, the Isle of Man population saw a steady rise, driven primarily by large increases in the Island’s working population migrating to the Island for employment in the growing financial services industry.

However, as these residents have aged, this is now beginning to be reflected in a growing proportion of the Island’s population being of retirement age and a slowdown in the Island’s working age population, tightening the Island’s dependency ratio.

There is an urgent need for more workers across many parts of the economy.

Although a large majority (75%) of those relocating to the Island through immigration pathways do so, either directly or indirectly, as a result of employment.

The number of work permits approved in 2022 was the highest recorded figure available, whilst 2023 remained high in comparison to Covid years of 2020 and 2021 but below the 2019 figure.

The unemployment rate in May 2024 was 0.6%, similar to the rate a year previously (0.5%). This is set against over 1,000 vacancies being listed each month and 4.5 vacancies for every one jobseeker in 2023, with employers facing difficulties finding staff widely reported.

As a result of the ageing population, the Island’s ‘replacement rate’, or rather the difference in the rates of births and deaths in a given year, has been negative for each year since 2014.

Compared to our most similar neighbours (Guernsey and Jersey), the Isle of Man has a smaller proportion of the working age population, a larger proportion of the population being 65+, and a lower birth rate.

Furthermore, it is estimated that the number of those aged 85+ resident in the Island is projected to rise by 20% over the next 25 years, as a result of an ageing resident population.

Compounding this – it seems arriving migrants do not always stay.

Data in the report shows that approximately 35% of those who migrate to the Island will leave within 5 years of becoming resident.

Approximately 45% will have left after 10 years, 35% will have left after 5 years, and 20% will have left after 2 years.

KIDS

Despite having the lowest birth rate (compared to Guernsey and Jersey), the Isle of Man has the highest proportion of children (aged 0-15) compared to its whole population.

Which may be indicative of families with children relocating to the Island.

The report states that the ‘large number of children being granted Entry Clearance highlights the prevalence of young families relocating to the Island from outside the Common Travel Area’.

It also states that whilst this influx of young people is ‘welcome as contributing to sustainable long term population growth’, as many of these children will as adults enter the Island’s workforce, it does ‘place pressures on the Island’s education system in the immediate term’.

In 2022/23, the Department of Education, Sport, and Culture (DESC) noted 325 ‘unexpected’ new arrivals at the Island’s primary and secondary schools, some of whom also had Additional Educational Needs (AEN).

These unexpected arrivals were described as placing ‘extra and unnecessary strain on the Department’s resources’, especially as inward migration is concentrated in the east and south of the Island.

This is therefore placing a strain on schools in those areas, whilst others have spare capacity to manage an increase in pupil numbers.

OTHER IMPACTS

CoMin describes the impacts of migration on the Isle of Man as ‘extremely hard to quantify’.

In terms of healthcare, it says it is not possible to accurately measure the impact of inward migrants on the Island, owing to how the data on GP registrations is held and the high proportion of ‘ghost’ records (whereby registrations are retained after a person no longer uses the services).

But it is worth nothing that those employed in the medical and healthcare sectors accounted for 18.9% of all occupations undertaken by inward migrants.

In terms of housing, CoMin says at least anecdotally, ‘concerns have been raised regarding off-Island purchasing of residential property for investment purposes which, it was feared, could be exacerbating demand for housing’.

However, the Land Registry’s publicly available dashboard shows that only 1.5% of all residential property has been bought by off-Island purchasers with no intention to reside in the Island within 6 months since a dedicated recordal fee was introduced in May 2023.

It is noted however that the fee is applied on a self-declaration basis and therefore the true figure may be higher.

INCENTIVES AND DISINCENTIVES

CoMin says: “Measures to incentivise and disincentivise inward migration need to be set in the context of wider work to improve the quality of life for all residents.

“Whenever a decision to relocate is made, a whole package of factors including, but not limited to, family ties, availability of housing, employment opportunities, safety and security, quality of life, and the cost of living (including taxation) are considered.

“An individual’s own personal circumstances will determine how they prioritise these, and other, factors.”

For instance, the relatively large proportion (15%) of child dependents of Worker Migrants (those aged 0-15) entering through the immigration system highlights that a considerable percentage of those relocating are families with children.

This group is likely, in their decision-making process to move, to view safety and quality of life as a priority.

These are areas where the Isle of Man is ‘known to be particularly strong, due to our low crime rates, short commute times and stunning scenery’.

Conversely, there are also factors which will prevent, or dissuade, an individual from relocating to the Isle of Man.

CoMin states that: ‘Various surveys of those in receipt of Student Awards have explored these factors, which typically include perceived lack of opportunities in their chosen career, a lack of affordable housing, poor social opportunities, and high cost of travel to and from the Island’.

So, what options are being explored by the Council of Ministers.

In terms of incentives, these include:

• Student Loan Forgiveness (An alternative approach relevant to Manx students might be to add cost for those who do not return)
• In-Country Visa Fees
• Housing incentives
• Streamlining the Relocation Experience

In terms of disincentives, these include:

• Changes around accessing public services and Social Security Benefits, such as:
  • Introducing an Immigration Healthcare Surcharge
  • Health Insurance changes
  • New Resident Charge
• Access to Housing:
  • Non-Worker Recordal Fee
• Legal controls for access to housing and public services

Further work to be scoped out going forward includes:

• A new ‘Resident Registration System’ which will ensure the Isle of Man collates and shares sufficient data within government to manage an increase in the number of inward migrants, and to ensure those who do relocate to the Island are supported to remain here long-term.
• Reviewing immigration pathways – government says there is ‘some concern that disparity between the UK and Isle of Man entry rules means the island is susceptible to being seen as a ‘back door’ to the UK, and the Island’s immigration system must be robust in efforts to minimise labour exploitation arising from organised crime’ – so the costs and benefits of aligning the Island’s immigration system wholly to the UK is to be investigated.

You can find the report in full HERE.

Manx Radio invited the cabinet office minister to comment on the report.

In response a spokesperson said: "The Inward Migration Incentives & Disincentives Policy Report will be debated in Tynwald in October. The Report references that policy development is ongoing and it represents an interim step.

"We look forward to members having the opportunity for a full discussion on the Report and do not want to pre-empt the outcome of this with comment at this time."