[Original published on
OnLondon, 3 January 2018]
In his foreword to his
draft London Plan,
Mayor of London Sadiq Khan writes of London’s population growing by
70,000 every year, to reach 10.5 million in 2041. Population growth has
been London’s big story for the past 30 years. Growth assumptions
underpin the business case, and increasingly the funding strategy, for
everything from affordable housing delivery to major infrastructure
projects like
Crossrail 2. But could these be wrong? Could a toxic mix of falling immigration and
priced-out professionals slow or even reverse London’s growth trajectory?
Population projections – like all predictions – tend to be either lucky or wrong. As Tony Travers observed in a
recent edition of Centre for London’s London Essays,
population projections underestimated London’s decline in the 1960s and
1970s, then missed the first signs of recovery in the mid-1980s when
London’s shallow growth was dismissed as a blip in the pattern of
decline that cities were expected to pursue. But growth continued,
gathering pace through economic cycles of boom and bust.
London’s population growth is not a single process, but the product
of great surges of people arriving and departing, at airports and
stations, maternity wards and hospices. In mid-2016 London’s population
was
estimated,
on the basis of passenger surveys and NHS registrations, to have grown
by around 110,000 in the preceding 12 months. The components of this
growth were as follows.
Births |
130,000 |
80,000 |
110,000 |
Deaths |
-50,000 |
Domestic in-migrants |
580,000 |
-95,000 |
Domestic out-migrants |
-675,000 |
International in-migrants |
220,000 |
125,000 |
International out-migrants |
-95,000 |
This pattern has been pretty consistent in recent years: young UK
residents move in to London from across the country, but more move out
every year – generally to south east England. This domestic net
migration
from London is countered by international migration
to London, and the city’s young age profile is reflected in a surplus of births over deaths.
There have been variations: in the years of the financial crisis,
domestic out-migration slowed, perhaps because the credit crunch meant
thirtysomethings were unable to get mortgages and so were stuck renting
for longer. And the years since 2014 have seen a spike in international
in-migration, potentially driven by the lifting of restrictions on
Romanian and Bulgarian workers.
Could Brexit disrupt these flows? There are already some signs that
things are changing. In November 2016, the Office for National
Statistics’ latest estimates of net long-term international migration
showed a sharp fall of 38 per cent in London. The figures are only
estimates, with wide margins of error, but the ONS assessed the fall as
being statistically significant. It may be a blip, but could it signal a
longer-term change? Other indicators certainly suggest a slowdown: the
number of foreign nationals registering for a national insurance number
when they arrive to work in London
dropped by 20 per cent between the beginning of 2016 and the beginning of 2017, with European nationals accounting for most of the decline.
Bringing the UK’s international migration down to “tens of thousands”
as the Government has pledged would therefore have a big impact on
London’s population, and it looks as if the mere prospect of tighter
controls is already having an impact. Would this be offset by more
people coming to London from the rest of the UK, and fewer leaving?
Previous research has shown that when international migration declines
(generally in recessions), domestic out-migration also slows, keeping
population levels up.
But this depends on the balance of push and pull factors remaining
constant: as long as London offers economic opportunity, people will
come here; as long as it remains an expensive and tough city to live in,
people will leave. Net out-migration has been rising since 2009 – from
30,000 to more than 90,000 – but it still has
some way to go to attain its previous peak of 110,000 in 2004.
So what about births and deaths? The number of deaths in London has
been pretty constant – around 50,000 Londoners die each year – but the
annual number of births has climbed from around 100,000 to around
130,000 in the past 15 years. However, “
natural increase” replenishment of London’s population has also been affected by immigration:
70 per cent of babies born in London in 2016 had one parent born overseas. Reducing immigration levels could, therefore, have an impact, in the long term, on that part of the picture too.
When London’s population started to recover in the mid-1980s after
four decades of decline, it was driven first by domestic migration and
then by accelerating international migration. Since then, momentum has
grown, as freedom of movement, an internationalised economy and cheap
air travel have combined to open London up, creating a city where
800,000 people – 10% of its population – arrive every year, and only
slightly fewer leave.
But there is nothing inevitable about continued growth. It is
perfectly possible to imagine a scenario where falling international
in-migration and rising domestic out-migration combine to stop London’s
growth in its tracks. If net international migration fell back by 20% a
year, it would fall to around 65,000 in three years’ time – only
slightly lower than its level in the early 2000s. If this was combined
with a growth in internal out-migration to its previous peak, and a
slight dip in births, London’s population growth could be reduced to
just 17,000 by 2019 and could go into reverse the following year.
This is all highly speculative. We are still in the dark about the
nature of Brexit, let alone its impact: London is still creating jobs
and attracting inward investment, though business confidence remains
fragile. The long-term change in international migration may be
negligible, or may be counterbalanced by domestic movement.
London may continue to thrive economically, preserving and enhancing
its offer to businesses and talented people from across the world, or
its service sector economy may take a hit; academic research in recent
months has suggested both that London will be
hardest and
least hard hit
by Brexit. London property prices may resume their stellar trajectory,
or may cool off to allow wages to catch up. It will only be in the next
few years that we understand whether Brexit checks, stalls or amplifies
the phenomenal population boom that London has experienced over the past
30 years.