The benefit of going slow

The benefit of going slow

Britain's population will "boom" over the next 50 years, EU statisticians said this week. The UK will overtake Germany as the most populous nation in the union, jumping from around 61 million today to 77 million by 2060. And the battle for the best places by the pool will be over as the number of Germans shrinks to 71 million from today's 82 million.

Many other EU countries, including Italy and the accession states in eastern Europe, are also expected to suffer from falling populations.

This has the EU in a funk. The Americans already call us "old Europe" and it's fast becoming a reality. The ratio of workers to pensioners will fall to just two-to-one, compared with four-to-one today, as the retired population across the EU doubles.

We're supposed to cheer our relative good fortune. The demographic timebomb that will explode across Europe will only ripple through Britain. EU spokeswoman Amelia Torres dubs it a challenge equal to climate change and globalisation. But is Britain's olympian performance in the population tables really something to cheer?

Our infrastructure is groaning. Try adding 25% more people to the London Underground in the rush hour. Put another 25% more cars on the M1 or M6. Find the school places and hospital beds for 16 million more people. Build more airport runways and concrete over the countryside for the six million more housing units required. And, at the risk of sounding like the Daily Express, what will it mean.....continued below

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for house prices?

Britain is already madly over-populated. We won't solve the demographic timebomb by importing more people or encouraging higher fertility. They are the trite solutions put forward by economists slavishly attached to GDP growth and with no understanding of social capital.

The solution lies instead in longer working lives and higher savings rates.

The state retirement age has not changed since 1928, even though most of us don't begin our working lives until 18 or 21 today compared with 14 or 16 back then. The government is already proposing that we will have to work to 68 by 2046 to get a full state pension.

But we may have to go further - back to the first days of the state pension in 1908, when David Lloyd George's generosity extended only to those over 70.

And the boring reality is that we'll have to put aside more savings for our extended retirements. The answer isn't, as some suggest in the letters next to this column, blowing it all today and relying on the state for our old age.

It will be fascinating watching societies such as Germany and Italy cope with falling populations and growing numbers of pensioners. Yes, there will be fewer taxpayers and fewer spenders keeping the shops and the economy ticking over.

But, logically, there should be lower pressure on resources and less environmental degradation. Asset prices should fall, so incomes should stretch further. Already Italy is embracing the "slow cities" movement which means putting pleasure before profit, human beings before head office, and slowness before speed.

The country will have fewer consumers and many more old people by the middle of the century. But if that also means a slower rate of creation and consumption of products, then is it really such a bad thing?