Scotland is facing a demographic crisis. The population is set to become older – by 2045 we are projected to have a 65% increase in the number of people over the age of 75. At the same time we are also the only part of the UK projected to have a smaller overall population. In other words, we are going to have a small number of working taxpayers paying to care for a higher number of non-working, non-taxpayers.

These changes will have huge implications for public services as demand for health and social care increases, while a shrinking working age population means there will be a smaller tax base from which to raise revenue.

A declining population also makes it harder to fill key vacancies - Donald Macaskill of Scottish Care has highlighted that even if every school leaver worked in social care there would still not be enough people. It is clear that Scotland needs to retain its young and working age people, and there are a range of policy interventions we can make to help in that endeavour. However, it should be without doubt that Scotland also needs to attract more working-age people from outside our borders.

There has been, at least in the past, a broad consensus at Holyrood that Scotland should welcome more immigrants.

But despite this backdrop, the two main parties at Westminster have made it very clear that they want to see a reduction in immigration, responding to the political pressures in England.

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This means that whichever party wins the general election, because immigration is reserved, there is a danger Scotland’s needs will be overlooked.

However, constitutional change is not the only route to ensuring Scotland’s circumstances are accommodated. There is no reason why the next UK Government could not create a specific Scottish immigration policy as part of a broader UK one, it just needs political will and leadership. After all, it has been done before.

The previous Labour and Liberal Democrat coalition government in Scotland, working with the then Labour UK Government, introduced the Fresh Talent Initiative in 2005.

This was a post study scheme administered by the Home Office that allowed international graduates of Scottish universities to remain in the country after the end of their course of study to live and work for up to two years.

The policy was intended to both support economic growth and mitigate demographic pressure. The programme ran until 2008, when it was mainstreamed into the UK points based immigration system. Post-study work was then ended in 2012 by the Conservative and Liberal Democrat coalition government.

In 2015, following the independence referendum, the Smith Commission recommended that the Scottish and UK Governments explore the possibility of re-introducing a post-study work route, but nothing was developed.

It is also potentially now a lot easier to create a distinct Scottish system as taxpayers are separately identified within the UK tax system. This could enable a UK government to develop a more tailored Scottish solution.

Alison Payne Alison Payne (Image: free)

For example, Scotland could be removed from the immigration cap; or people could be allowed to work in Scotland but not elsewhere in the UK; or new schemes similar to Fresh Talent could be developed. Schemes could be designed to focus on the specific skill shortages we are facing.

There is an indication that this may happen. Scottish Labour’s leader Anas Sarwar has suggested that he will work with Sir Keir Starmer, should he become Prime Minister, to make Fresh Talent 2 a reality.

Should that happen, it is important that policies focus on attracting migrants who are ‘complements to’ rather than ‘substitutes for’ existing workers, as this is more likely to raise productivity and average incomes, and avoid displacement of local people in the labour market or downward pressure on wages.

For these sort of policies to be implemented it requires the Scottish and UK governments to work together in the best interests of Scotland. It means thinking carefully about who Scotland wants to attract – for example should there be a more generous family policy within Scotland? Potential benefits and costs need to be weighed up in deciding what balance to strike.

While Reform Scotland believes that there are economic, demographic and cultural benefits of increasing immigration, it is also important to remember that it is no silver bullet to the problems we are facing. We also need to focus on retaining and upskilling our existing population.

And it is important to acknowledge that demographic pressures are not being felt the same across the country, with rural areas in particular struggling to attract key workers. Therefore, it is also imperative that the Scottish Government, in partnership with local authorities, works to ensure there is the infrastructure and services necessary to support these communities. After all, no change to UK immigration rules will bring much needed individuals to these areas if there are no affordable homes to live in, jobs available or vital public services.

There is also no constitutional issue stopping Scotland developing policies to improve migration to Scotland from elsewhere within the UK.

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For example, according to the Higher Education Statistics Authority (HESA) there were 3,370 graduates from the rest of the UK who attended a Scottish institution in 2020/21. Of those, only 990 chose to remain in Scotland for work after graduation. Reform Scotland has suggested that reform of higher education funding offers an opportunity to develop schemes which incentivise people to remain in Scotland after graduation.

Equally, consideration needs to be given to policies around taxation and public services to ensure that we create the landscape that encourages people to want to come and work in Scotland.

These domestic and devolved policies are just as important as the immigration system.

However, we are in the middle of a general election campaign where reducing UK immigration is a key pledge from both Labour and the Conservatives. Once again important nuance and discussion around the subject has given way to familiar political game-playing.

This isn’t about Scottish exceptionalism, but simply the need for a recognition that the situation in Scotland is different.

Scotland needs immigration. We need to attract people to come and live and work in Scotland. And we need policies that will encourage and promote that immigration.

Alison Payne is Research Director at Reform Scotland