The Centre for Economics and Business Research says the UK population is 1.4 million more than office figures suggest.
Although official figures reports the UK population has ‘just passed 60 million’, cebr says that figure was probably reached five years ago and the true figure today is about 61.5 million.
Cebr has to watch population figures quite closely since in its quarterly publication ‘Housing Futures’ in which it forecasts what will happen to house prices.
It claims that to understand house prices you have to look not only at the ratio of house prices to average earnings but also to factors like population size and the size of the housing stock.
This is why it has argued that there would not be a house price collapse.
It says there are four reasons why the official estimates of the population are too low.
First, the figures are out of date – the figures released in the past week relate to ‘mid-2005’ when now it is end August 2006.
With the population rising by 375 thousand in a normal year, timing matters.
Second, the figures do not include illegals – it points out the government claims there are 430 thousand illegal immigrants.
Third, the official figures only include migrants who say that they are definitely planning to stay for over 12 months, so they include only 100 thousand migrants from the EU accession countries.
The latest data show 412 thousand from accession countries who have been granted National Insurance numbers since accession in May 2004.
Finally, the numbers are based on the infamous 2001 census, which estimated a population about 900,000 too low compared with what it estimates from alternative sources, and from what the government’s own data had estimated from earlier censuses, births, deaths and migration data.
As Westminster Council famously said at the time in relation to the Census’s claimed sharp drop in the Westminster population, if they are paying Council tax, it means that they probably exist.
There is some overlap between all these categories so the crude total is not an additional 1.9 million but only 1.4 million, which brings the total population up to 61.5 million from the official estimate of 60.1 million.
Cebr says this matters because EU grants are based on GDP per capita and if the population is understated then GDP per capita is overstated.
Merseyside, the Highlands and Islands, and possibly parts of Wales and the North East of England may have lost EU Objective One money because of the understating of the population.
It also means that local authorities are not necessarily given the right sums to invest in capacity for their populations.
This might explain why particularly urban areas are underinvested in infrastructure.
It also affects housing needs – housebuilding has remained low despite rising demand, which is one of the drivers of house price inflation.
Although cebr says it has no personal view on the how beneficial immigration is to the UK economy, it says the public has to choose – if it wants the stronger economy that large scale immigration brings, the UK needs to invest in housing and in transport capacity especially, as well as other items of social infrastructure.
Douglas McWilliams, chief executive at cebr, says: “What will bring the worst of all worlds is to have the immigration but not the infrastructure which will condemn all of us to traffic jams, rising house prices and overcrowding in schools, hospitals and elsewhere.”