25
Examination of witness
Professor Sarah Harper.
Q1 The Chair: Welcome to the opening session of the Economic Affairs Committee’s new inquiry on preparing for an ageing society. We are delighted to have as our first witness Professor Sarah Harper, who is joining us remotely. She is the director of the Oxford Institute of Population Ageing. Professor Harper, thank you very much for coming today.
The session is being broadcast on parliamentlive.tv. A full transcript is going to be taken; it will be made available shortly after the meeting so that you can make any corrections to the official transcript. Thank you very much for joining us.
Maybe I could start with a very general question, just to set the scene. Can you possibly tell us the main current demographic trends with respect to ageing in the UK, how they have arisen, and what you take to be the top one or two challenges, or even opportunities, that these trends represent?
Professor Sarah Harper: Thank you very much for choosing this subject. Population ageing should not be a surprise because we have known for a long time that our birth rate, our fertility rate, has been falling. We know that our life expectancy has been increasing. It is true that we have seen a quite rapid change, as with many high-income countries, in our fertility rate over the past 20 years or so. We have seen a steady increase in life expectancy. It has obviously been disturbed by Covid. It has also been flattened a bit, as in some other countries, by inequality within our society, so the national picture does not necessarily reflect what is happening among different groups.
Basically, we need to look at it in two very broad ways. We have not replaced ourselves in this country since 1976, as many high-income countries have not. Indeed, when we look across the globe, we can see that, in two‑thirds of the world’s countries, women are at, near or below replacement. With the exception of sub-Saharan Africa, this is a 21st-century trend, which started 250 years ago here in Europe but took off globally in the 20th century. At the same time, we have seen the pushing back of late-life mortality in particular; that is those people who are over 80 or 85. Over 65 is where we are seeing the biggest gains in the fall of mortality, and now it is pushing back into the older adults.
This means that, if we look at it in two distinct ways, the falling of the number of children who have been born—and, therefore, potential workers for our economies—raises real questions about our ability to be able to support dependants within our society. We have fewer child dependants to be supported economically, but a growing number of older adults.
The other part of the big picture is what is happening with this falling late-life mortality. What is that impact? That, in particular, is increasing chronic disease, disability and frailty within our population because we know that the over-85s tend, just because of biological ageing, to increase that. Demographically, we have these two trends operating together. They are operating distinctly within our economies, but they have the same kind of impact. We have the average age of the population going up, fewer people naturally being born in our society in order to drive our economies, and a growing number of older dependants.
There are different ways in which we can tackle this. We can tackle it demographically by trying to encourage women to have more children; I can talk a bit about this if you like. We can ensure that we have a healthier population so that we push back the onset of disease and disability. We can also ensure that this particular group—I think it is the over‑50s, particularly those between 50 and 70—are productive and remain economically active for as long as possible, or we can increase migration. There are ways in which we can tackle this.
Going to the second part of your question, there are four big macro challenges, which very much map on to this demographic change that we are seeing. The really key population for me are those aged 50 to 70. If we have a healthy, active, well-educated cohort coming through of older people who can continue working for those extra 20 years, that will really change our dependency ratio. We know that, if you can keep active in the population, in actual fact, you are delaying the onset of disability.
Challenge number one is how we can ensure the economic activity or general contribution, because it could also be through providing care, of a higher percentage of older adults, particularly those aged 50 to 70, who are physically and mentally fit yet are withdrawing from economic activity. Part of that is changing the attitudes and expectations of older people. It is also changing the attitudes of employers and work practices in terms of HR, ergonomics, flexible working, et cetera. Secondly, how can we ensure the economic activity of that group of older people, particularly aged 50 to 70, who are physically and mentally unfit? That must be a public health initiative and education initiative around lifelong education and health.
The second big challenge is around health, in particular how we care for the growing number of over-85s, which we know is going to increase. By the middle of the century, we are going to have about 3 million people in our population who are over 85. They are much more likely to be frail, to have disability and to have chronic conditions. We have to ask what the appropriate strategies for providing health and social care for this population are, as well as how they map on to existing family and community structures—including the fact that we now have severe competition for resources, particularly within the generations. That means we have to look at social care, community resources and supporting families and carers. In particular, we have to tackle inequalities in our society.
There are two more things I would suggest. The first is that we have to understand the financial arrangements for supporting older people and how dependent they are on the intergenerational contract. That comes back to what I inferred before, which is how we can adjust our society to maintain an equal redistribution of resources between younger and older populations, maintaining intergenerational equity as we see the age of the population increasing. From an opportunity point of view, how can we harness the experience, expertise and creativity of this huge growth of, in particular, people over 50 within our society? How do we change society to capitalise on that?
Q2 Lord Lamont of Lerwick: Can you say something about the point at which population declines? When would you expect that to happen in, say, European countries? What are the variables that might change when that happens?
Professor Sarah Harper: There is quite a lot of hype at the moment around population decline. I am sure you are aware that there was a McKinsey report, which seems to have affected the corporate world in particular. On population decline, we have had regional population decline within countries for a long time, but many countries are now facing the possibility that, during this century, they may see an absolute population decline.
We know that population growth is, in a way, being sustained by longevity because we have people living longer. We know that the real factor behind population decline is falling fertility. We can look to increase childbearing, but almost every country that has tried that has not had a huge success. We can definitely look to ensure that all younger cohorts that want to have children are supported to do so. There is a lot of evidence that there is fear around things such as economic insecurity, jobs, housing, et cetera.
We also know that, in the current cohort of young women in particular, there is a generational shift. We see this in surveys not only in the UK but in south-east Asia and southern Europe, in particular, where we have these very low levels of fertility: 1.2 or 1.3. A lot of women who probably would have believed formerly that to be adult and female was to have children are now reconsidering this. To a certain extent, we have to accept that we probably will not go back above replacement levels in any country. Even the French, who have tried very hard with a variety of social and financial directives to get women to have more children, still have never gone above replacement. They have now gone from about 2 down to about 1.6. In fact, France has even been lower than the UK.
We have to accept that we are going to be in low-fertility societies. The only way we can compensate for that is looking at migration. To be honest, since 1976, we have kept our population reasonably buoyant. We slowed down ageing in the UK partly because of the migration that we had. Obviously, that is a politically sensitive topic. Given that we still have very large numbers and a very high total fertility rate, particularly in sub-Saharan Africa, going forward, the world population is likely to increase at least to 12 billion. We now think it will be 10 billion to 12 billion, depending on what happens in Africa and whether the fertility transition continues. The redistribution of skills internationally, or maybe within regions, seems to me to be the way to stop national depopulation, because I do not think that we are going to do it by increasing birth rate.
Q3 Lord Petitgas: Professor Harper, now that we are on the question of setting the scene, you mentioned immigration not as a solution but as one thing that has been boosting population. I wonder, as we set the scene on data, what the demographics of immigration have been. Is it that the immigration cohorts are coming in and are, on average, younger; or are they also bringing with these cohorts a number of people who are already aged, which accumulates or compounds some of the issues we have?
Professor Sarah Harper: One big debate has been—there was a big literature on this that I can refer you to—that, if we continued to have immigration, we would have an ageing of those immigrants, and therefore they are more likely to go on to benefits, particularly in later life. Obviously, the immigration policy of the UK has changed quite tremendously. I know that you have people from the Migration Observatory coming, I think next week, who are complete experts in this area.
It is true to say that, while we were members of the European Union, we tended to get younger migrants. The research that was done then tended to show that they were more likely to follow job opportunities and more likely to return. We had what we call circular migration, so a more balanced migration of young people coming in for job opportunities but also going back because these short-term migration patterns were easier for them.
In the past few years, we have seen a switch. We know that the vast majority of our migrants now are long-distance migrants. The majority come from south Asia. My understanding is that, currently, about 45% of work‑related visas go to dependants. This means that we are likely to see those migrants, understandably, settle in this country and therefore, in theory, age and, in a way, compound the ageing of our population.
Migration works. When we have work-related migration that is following job opportunities, that is good. It is good not only for our country but for the source country. There is also a bigger international fear that some of the high-income countries may be sucking skills and resources away from lower and middle-income countries, so migration in our region seems to work. It is demographically more complicated when we bring in workers who bring family dependants and are likely to stay and therefore age themselves.
The Chair: We will come back to immigration in a minute. First, we have a question from Lord Agnew on birth rate issues.
Q4 Lord Agnew of Oulton: Thank you, Professor Harper. You have largely answered the question. You are pretty much saying that no country has been successful in materially stimulating the birth rate of its native population. If that is the view, which seems logical to me, we then accept that we have a declining birth rate and so there are some of the items that you mentioned at the beginning, such as trying to get older people to be healthier, work longer and so on. These are motherhood and apple pie statements, are they not? Is there anything practical? We are all old here, and we are always being lectured to eat better and take more exercise. Are there any real levers that the Government can pull to get the older part of our population to be bigger contributors to the economy?
Professor Sarah Harper: We have to look at health, education and, in particular, lifelong skills. When we did the work on Foresight, we did a big piece looking at lifetime education. We have to look at productivity and how the older population will contribute to productivity. We also have to recognise that there are real assets in a knowledge economy in terms of having an older workforce and having a mixed workforce.
In terms of health, there are a lot of public health initiatives that one can take. One problem—I keep going back to it—is inequality because we have a very unequal society. We have those people who are fit and healthy, who typically have a high income, and who are well educated and working in services in the knowledge economy, but we still have a group of people who are either unemployed or in low-skilled jobs. Typically, that tends to be associated with a population that tends to be poorer, less well educated and in ill health.
Lord Agnew of Oulton: Are there any examples? I agree with you; I think that we would all agree with you. Can you point to any really successful schemes in other developed countries where they have harnessed the older cohort—50 to 70, as you referred to—and shown a meaningful increase in their participation in the workforce or improvement in health? I worry that these are all lovely things but, if we are to make some useful recommendations at the end of this piece of work, we need something a bit crunchier.
Professor Sarah Harper: We understand how we can retain older adults. We need to recruit them, retain them and retrain them. We have seen an increase in the number of people, particularly 50 to 65, who are staying in the workforce. Part of that has been because we had, in the 1980s, a real push to early retirement. We saw a natural rebound as that population realised, first, that they did not want to retire at 55 and live to 95; and, secondly, that they could not afford to do that.
After the 2008-09 financial crash, of interest particularly in the financial sector is that, for the very first time, we saw that older workers were not just cast out but retained. If any workers were cast out, it was the younger workers; that is, I think, because we began to realise the values that older workers bring. We have to change the attitudes and expectations of our population. Those are definitely changing. We have seen, as I say, an increase in the number of older workers staying. We currently have roughly around 70% of that group in employment. We need to increase that. It faltered under Covid, but that needs to be increased.
It is about changing attitudes and expectations, including changing the attitudes of employers. There is a lot of evidence around changing work practices: things around human resources, ergonomics, flexible working, working from home and part-time work. We know that older adults prefer that but, nowadays, so do younger adults. Older adults have care responsibilities and so do younger adults.
We know that skills are really important; lifelong learning and skills updating are important. There is a big government question around that: who is going to pay for that? Are individuals going to be expected to keep their skills up across the life-course? Should it be employers? Should it be the Government who are going to do that?
We know what the levers are and we are seeing a willingness in the older population to stay in the labour market. We are increasing pension age, which tends to be related to retirement, but a lot more work can be done. All over the country, we have these little schemes, whereas it needs to be a bigger government push where we tackle the employers and workers and look at government policies supporting older people to stay in the workplace. From a life-course point of view, we must improve health and education. There are real policies that we can do now to encourage people to remain in employment, but a lot of it is just changing expectations.
Baroness Liddell of Coatdyke: I have a follow-up question about the structure of superannuation, because we have a lot of people who have commercial superannuation when they get to 55. It might not be huge numbers, but it can often be quite highly skilled people. What are the exchanges there with the commercial companies that offer these kinds of deals? One of the most dramatic ones is the one that is available to doctors, where there is an incentive for doctors to retire at 55 rather than going on. That seems counterintuitive to me.
Professor Sarah Harper: I am not a financial pension expert; I am sure that you will be calling those later on. I know that one of the biggest changes was when it was possible to draw down on your employer pension and stay in employment. That had a huge impact. When I talked about government interventions, employers and employees, things such as those kinds of financial initiatives and tweaks are an example of where the Government could come in and change those incentives. I am not a financial expert, though, so superannuation schemes are a little outside my exact expertise.
Q5 Lord Londesborough: In relation to the declining birth rate, particularly across the western world, you, Professor Harper, have comprehensively covered economic, employment and health issues. What about the cultural and lifestyle, or life choice, issues—in particular, a preference for having smaller families or a single child? Indeed, there is an increasing trend of having no children. How is that playing out? Is it a big factor in terms of putting the economic and health factors to one side?
Professor Sarah Harper: If we look at what other countries are doing, as I said, we have seen this gradual change in childbearing or total fertility rate. We know what the big drivers are. A big driver is an increase in the health of the population. When you increase the health of the population, in particular, you tend to reduce infant and child mortality. Right at the beginning of this transition, women understand that, if they are going to have 10 pregnancies, they may well end up with eight children that they have to bring up. That is a really big driver in the first case.
The second thing is education and keeping women out of the marriage market—if we can keep them in school longer—empowering them and giving them skills. The third thing is access to contraception. We saw all that play out across the 20th century in most parts of the world, except for sub-Saharan Africa; it had already begun to play out quite strongly in European societies.
We have now seen almost a second transition, with these very low total fertility rates. You are right: a lot of that is much more around choice and attitude. We can definitely look at economic incentives, economic security, job security and housing. Without any doubt, one of the biggest things that tends to come through in the surveys is gender equality. Women want gender equality in the workplace, at home and in parenting, with positive parenting. It is right for us to ensure that those policies are in place.
Without any doubt, in those countries that have implemented them, particularly the Scandinavian countries, we have seen not so much an increase in total fertility but a maintaining of a total fertility rate between 1.5 and 2; round about 2.12, roughly, is going to be replacement. When it comes to, beyond that, things such as cash bonuses for babies and different tax incentives, all the evidence is that that does not have a long-term playout. Japan and Korea are trying things at the moment. Hungary has tried things. There is the baby bonus idea, which Sweden implemented in the 1990s and Australia in the first decade of this century. They had a little baby boom but then there was a crash because women were only going to have one child, maybe two at most.
How I see it playing out from a policy point of view is that we must acknowledge that there are a growing number of women who want to be child-free. That is for all sorts of reasons, typically around the environment and worries about overpopulation, civil strife and such things. We are seeing that in most high-income countries. We also have a growing group of women who want to have children later and may want to have only one child. We must ensure that those women or couples are well supported, but I cannot see the idea that we are going to be able to replace ourselves by births alone coming back.
Q6 The Chair: Can I quickly ask you one other follow-up question before we go to a question on immigration? Is there a birth rate level below which the red lights start flashing and the sustainability of a population is called into question? Obviously, migration is always a countering variable in this, but is there a general answer to that?
Professor Sarah Harper: We used to say 1.5. The reason was that, if societies dipped down below 1.5, they went from a two-child norm to a one‑child norm. That is exactly what we saw in China, but we have also seen it in other parts of the world. It means that you grow up in a society where everyone has one child, so your society is geared up to having just one child. It was then argued that it is very difficult to rise that up to having two or three children.
The real fear is occurring in those countries— the UK may get there, but at the moment we are not there—where you are seeing below 1, or even 1.2 or 1.3. It is more the speed at which this is happening. In single generations, you are seeing women who may have several siblings, and they are having one or no children. It is the speed and the way that we need to adjust to this quite quickly that is more of a concern.
Q7 Lord Turnbull: Can you do a bit of quantification—a simple piece of arithmetic? Take the present fertility rate in Britain; let us say it is 1.6. We call that the delta R: the increase in the ex ante population. Then there is migration. Put the two together and you get population growth. If it is 1.6, in terms of hundreds of thousands, what would be the change in the UK population; and, therefore, what would migration need to be to keep population growth at zero?
Professor Sarah Harper: We used to have about 250,000 net migration. The other thing that you have to put into the picture is that migrants tend to boost your total fertility rate as well. All the evidence is that, when you have higher migration in your population, you tend to have an increase in your total fertility rate. There is a variety of reasons for that. I think I am right in saying—I would like to check this—that, when we had a mainly European population coming in but we also had a large ethnic population, the white British-born total fertility rate was about 1.8 and the total fertility rate of overseas-born women or women from ethnic-minority backgrounds was about 2.4. There are lots of reasons for that, but that is why the equation is more complicated. Not only do you need your migrants; your migrants are going to increase your total fertility rate, typically.
Lord Turnbull: You do not have a figure of what the population would tend to grow or contract by with a fertility rate of 1.6.
Professor Sarah Harper: I cannot give you that off the top of my head, just because it is 1.6. The population would decline without migration.
Lord Turnbull: Therefore, what is the migration that would exactly offset that?
Professor Sarah Harper: Again, I would have to go away and look at all the complexity of that, because that is not quite how we tend to think. I can definitely do those sums for you and send them to you.
Q8 Lord Lamont of Lerwick: Coming back to the question of a declining population, if we get to that point—I do not know whether it is 10 years away or however far away—what will the problems of a declining but old population be that are different from the problems you are going to have with just an ageing society? What specifically would change, get worse or get better with a population that goes down?
Professor Sarah Harper: I do not think that it is going to be 10 years away. I do not think that the UK population is going to decline within 10 years.
Lord Lamont of Lerwick: I meant in Europe, actually.
Professor Sarah Harper: Okay. Obviously, there are parts of Europe that are declining. They tend to be regionally based at the moment. If we take Greece, Greece is very worried about its potentially declining population. With a declining population, once your population starts to decline, it is not comparable because it is differential decline. Part of the problem with a country such as Greece is that you have increased outmigration of young people away from the country. You get differential age groups, typically young people, out-migrating. You get regional concentrations and rural areas becoming really depopulated. To me, this is a little hypothetical. I do not think that we will be talking about the depopulation of Europe, because migration will always come in and compensate.
The other thing you have to put into the picture is that, at the moment, we are taking it for granted that we need young people to drive our economies. Going forward, in the 21st century that we have, particularly with AI and technology, the number of people is probably not going to be as significant as the quality of the population. Some people argue that we can cope with a smaller population so long as they have the ability to drive that economy.
Things are changing very quickly but, basically, we have a large mobile population who are born in one country, working in another country, but registered as living in a third country. There is an argument that we have to sort out the taxation system, because where do you pay taxes? Do you pay taxes in the country you were born in, the countries you are currently working in, or the countries you are registered in? Going forward, because of things such the mobility of work, particularly due to technology and AI taking so many jobs away, we have to stand back and look at it from a much more macro picture in terms of how the world of work, in particular taxation, is going to change. What is that going to do for the ability of countries to support the dependants within their country?
Q9 Lord Liddle: When I looked at this 20 years ago, I thought that the education level of women was very much related to the birth rate. Presumably, as the education level of women and gender equality in jobs increases, we can expect a further decline in birth rate. On that, is there any evidence that, in countries that have tried to do something about this— such as Sweden, which has consciously tried to pursue policies where child-rearing roles are shared between men and women and has tried to incentivise that—such things have made any difference to birth rates?
Professor Sarah Harper: If we look at lower-income and middle-income countries, and Europe historically, education played a huge impact in changing the total fertility or childbearing rate. There is a small amount of diversity in this country, but we now know that even those women who have lower levels of education, particularly those who do not have further or higher education, are still choosing to delay having children.
The average age of first birth in most European countries—I think it is true here—is now 31. We have gone from the 1970s, which is 40 to 50 years ago, where the average age of first birth would be 22 or 23. It has now moved on not quite 10 years; it is now about 30 or 31.
In relation to your second question about gender equality, absolutely, the one thing that seems to work in allowing particularly women to make the decision to have the first and possibly second child, if they can, is gender equality. That is what the survey research is telling us. You are right. In Sweden, Denmark and Norway, those Scandinavian countries, gender equality and good-quality childcare—that is another really important factor—seem to have been responsible for keeping their birth rate higher than, for example, in the southern European countries, where we have seen very low birth rates.
Part of the reason why we have seen such low birth rates in the southern European countries is that they typically have not had gender-equal policies in the workplace. They are probably improving on this. Secondly, they have traditionally relied very much on the family to provide the childcare. We know that that childcare from families has also broken down, partly because women in their 50s and 60s in those countries are now in the workforce too so they are not providing childcare. Gender equality and good-quality childcare seem to keep the total fertility rate higher, but they do not lift it to above replacement level. There is no evidence anywhere in Europe where that has been achievable—even in France, where they combined that with financial incentives.
Baroness Wolf of Dulwich: I am conscious that we are spending a lot of time on this and that there are plenty of other questions, but I have one specific follow-up question. You have talked about Europe but the lowest fertility rates are in east Asia, in very prosperous countries. Are there specific factors there, or is it basically the things you have just been talking about in southern Europe?
Professor Sarah Harper: On attitudes, the survey research has shown that, in east and south-east Asia, southern Europe and, to a certain extent, eastern Europe, the changing attitudes of young women seem dominant in those decisions. As I say, it is more to do with the dramatic speed with which we have seen these total fertility rates fall in one generation.
The Chair: We are going to move on to immigration now. Thank you for those answers; they were excellent.
Q10 Lord Blackwell: I was going to ask you a lot about immigration. You have already spoken a lot about that, but there are a couple of points I would like to raise; I will then move on to another question. On immigration, to be clear, I would like to understand how you view the contribution of immigration to this issue in the recent past versus in the future.
In the past 20 years, we have had growing immigration—originally, as you said, from Europe—at a time when the fertility rate has been declining. The first question is, leaving aside the social issues so just from an economic point of view, in the past, has that immigration been an effective counter to the population birth rate decline? Secondly, going forward, given that every other country other than South Africa is suffering the same issues in terms of declining birth rates—and, as you said, the nature of immigration going forward will be different, again leaving aside the social issues—is it possible that immigration could be an effective counter to our own birth rate decline?
Professor Sarah Harper: All the evidence—again, there is a wide body of literature on this—is that immigrants can both boost the output of a country and contribute to the long-term fiscal balance because they typically make the age distribution of high-income countries more balanced. Immigrants into our country, but not necessarily into all countries, tend to overwhelmingly be younger people. We know that immigrants traditionally have undertaken what we call supplementary work. They tend to take on jobs that are different from and supplementary to those of the native workers; the evidence was that they tend not to compete with native workers. There has also been quite a bit of research showing that the effect of immigration on the average wages of native workers is minimal.
They can also boost economies in several ways, particularly around local demand. Their spending and investments create demand for goods and services. That can lead to increased job opportunities for local workers. We saw that very clearly in the period after Brexit. When we had a retraction, particularly of European workers, we saw other industries that had more local workers in them collapsing. There is that classic case from Lincolnshire: there was suddenly an inability to pack the fruit and vegetables the agricultural sector was producing, because that was very reliant on European migrants. The knock-on effect was that the transport of agricultural goods in that area started to decline. There were other simple things, such as the firms making packing boxes, which typically tended to have more local workers, going into decline. There was that general knock-on effect.
The other important thing is that, because a lot of immigrant labour goes into service and healthcare, they often release particularly women to come into the workforce. That also has an impact on productivity. Of course, it also means that, because you have immigrants who are employed, they are paying taxes. That obviously contributes to the financial viability of a country. The evidence is that immigrants are good for a society if you look at it purely from what they are doing in the labour market.
Lord Blackwell: That evidence may have been true in the past decade or two but, going forward, other countries will also be short of young people. Secondly, as you said, the nature of immigration is more likely to be people from countries further away who will bring more dependants. Is it still likely to be true that it will rebalance the population towards a younger population?
Professor Sarah Harper: We have, I think, 780,000 net immigrants at the moment, but that has been complicated by Ukraine and Hong Kong, so we know that that probably will come down. Because we are tending to get these longer-distance migrants, my understanding is that at least 45% of these work visas are given to their dependants, because they are bringing dependants in, and they are probably less likely to return, so that argument probably has less force.
The other possible argument is that these longer-distance migrants tend to come into the country with particular skills. If that skill is then no longer required, they are less likely to return to their source country. The type of migration is important. The evidence is that shorter-term, regional migration is probably more effective than longer-term, long-stay migration in balancing our population. You are right: because almost the whole world is going to be ageing, the competition for skills is going to be huge. Particularly, we know that low-income and middle-income countries, as they increase their economic viability, are going to want to retain their skills. Migration is useful but there are caveats. That is what I am trying to say.
Lord Blackwell: I do not want to put words in your mouth but, again, leaving aside the social issues, it sounds as though what you are saying is that we cannot rely on immigration over the next couple of decades to resolve our own issues.
Professor Sarah Harper: In the long term, it will be more challenging to rely on immigration; that is why we have to look at increasing the productivity of our own population. One way to do that is to look, as I said, at that group aged 50 to 70. There is a lot of pent-up potential productivity in that group that the Government should be looking to capitalise on.
Lord Blackwell: Can I go back to one of the points that you made earlier about income and wealth distribution between the older and younger populations? If you think about GDP in terms of the output of those working, the number of people consuming that output will be increasing relative to each worker unless there is a massive increase in productivity. The risk, potentially, is that, while we have worried a lot about ensuring that old people have pensions and saved-up wealth, if they have more wealth, they will end up consuming too much of the output relative to the working population. Is the issue that we need to be less generous towards the older generation, as well as getting them to work harder and longer?
Professor Sarah Harper: There are several factors that one can look at. First, we have to be realistic about the growing percentage of older people who will be totally reliant on a state pension plus benefits, which is very low. We do not want to go back to the 1970s, where pensioner poverty was a real issue for this country. Secondly, if we keep up the health of our population and keep them in the labour market until 70, rather than them stopping being economically active in their 50s, to a certain extent, we will rebalance that relationship.
The other thing people sometimes forget is that, in your 20s and 30s, you have a lifetime of being able to increase your wealth and earning capacity. When you hit 60, 65 or even 70, very few people have the ability to increase that. If we are going to start reducing pensions and the wealth or income of people over 60, they will have no spare capacity in the future to increase that. Sometimes that is forgotten.
I also think that there is a real misunderstanding about the housing wealth in this country, because we know that a lot of housing wealth tends to accumulate in the over-50s. To a certain extent, one would expect that. We know that it is particularly acute at the moment. There are concerns that younger people are staying in rental accommodation, or even living at home, for far longer. However, there will be a generational shift. Within the next 20 years, we are going to have huge numbers of houses coming on to the housing market as older adults die, downsize or go into care homes. Sometimes people say that the current cohorts are going to be in rental accommodation all their lives. That is highly unlikely. There was all this fear about what was going to happen to the so-called millennials, who are people born in the 1980s and 1990s, yet we already know that it is inequality within that generation that is so important. If you look at high-income millennials, they are better off than their parents were.
It is true that we have to look at intergenerational equity. Part of it is the public rhetoric, which has led to many young people feeling that the opportunities are not there for them in education and employment when, in actual fact, they are more available. It is more important to tackle the growing inequality that we see at younger ages, because that difference gets really extrapolated as these populations age. Across our life-course, we know that there are increasing inequalities and that they get wider.
Q11 Lord Burns: We have seen the Foresight review that you led. I think it was in 2016; I am not sure precisely what the date was. We wonder whether there have been any significant developments since the review. Have there been surprises? I noticed that the emphasis in the report is very much on 50 to 65 year-olds, whereas you started today by saying that we should now be thinking of 50 to 70 year-olds. What are the challenges? What will be the most taxing aspect of all of this for government? I do not mean taxing in the financial sense, but in terms of the things that are most difficult to deal with.
Professor Sarah Harper: It is interesting that, 10 years ago, when we were looking at the state pension age, it was 65. Now, it is heading to 70, and I am sure that we will hit 70. There is a greater awareness that we have healthier, better-educated cohorts coming through.
On the things that have happened since Foresight, to start with, we have had an increase in our net debt as a nation. I do not think that we foresaw that. Obviously, we did not foresee Brexit, which made us more vulnerable and less resilient to the shocks of Covid and Ukraine, potentially to now. We did not see that happening. We also did not understand that there would be such a delay in social care reform. At the same time as I was doing Foresight, I was sitting on groups looking at potential White Papers around social care. We are now 10 years on. We had no idea that that would happen; that has made the whole issue of social care so much worse.
In terms of housing, we did not realise that the market would still dominate so much. We somehow had this idea that the Government would return to providing appropriate housing for different generations, particularly for older adults. That definitely has not happened.
There has been an increase in older workers in the labour force, naturally; that was until Covid. The 50-to-65s, I think, potentially reached 72% in 2019, although it has now fallen back. We obviously did not see the post-Covid changes, which have been negative in terms of health. We know that one reason why this group, as with younger people, is economically inactive is around long Covid and the mental health concerns that have come out. We also, of course, did not understand that there would be flexible working and working from home, which is exactly what many older adults were asking for, so that is a positive.
Healthy life expectancy has fallen since Covid. It is now down by about two years for the group aged 65. We have also seen a continued increase between the more affluent and less affluent populations. In a way, the inequality was a trend, but we did not realise what Covid would do to that.
We did not understand how rapid technological change would be. We did a huge piece around connectivity, looking at different types of physical, social and technological connectivity. I do not think that we foresaw the rapid technological change. We did not see the role of AI, particularly in the employment market, which has both positive and negative effects on older adults. In fact, if you remember, we wrote quite positively about how technology could maintain older people in the labour market, particularly the cohorts coming through who are much more technologically advanced. We did not understand the increased connectivity that technology would bring because of Covid. We have a far more connected older adults, simply because of things such as Zoom. We did not understand that that was going to happen.
I do not think that we realised how much this increase in inequality would continue. If you remember, we were doing this at a time when we had George Osborne and the northern powerhouse. We did a lot of work around regional inequality and silos. We were in a much more positive state of mind. Almost 10 years on—it was 2014-16 and then in 2017—we would be surprised, I think, that we have not made as much progress as we had hoped we would have made when that report came out.
Lord Burns: I have a supplementary question. On housing, should we be seeking to incentivise people to downsize?
Professor Sarah Harper: Yes.
Lord Burns: At the moment, we are facing the very big challenge of transaction costs for people who wish to do that. Is this something we should be working on?
Professor Sarah Harper: That is a really important point. You have to think, “Why don’t older people want to downsize?” There are probably three reasons there. One is very much cultural and social. A house is not just a house or a piece of property. It is a home. There is a lot of evidence that people find it very difficult to move out of that home.
Secondly, we know that a lot of young people, because of this housing crisis, are moving back home or maintaining strong links with their parents and grandparents. Since Covid, we have seen a slight increase in that.
You are absolutely right that older people are hit by stamp duty and those costs. In fact, I recently saw some research that suggested that, if you stay within your same region, because of the costs of downsizing, even if you downsize to a much smaller property, you are not that much economically better off. I completely agree that that is something you could look at.
Lord Burns: I have no idea of the answer to this question at all, but have the costs per person gone up, say, for the last 10 years of their life? We talk about the costs of looking after the elderly and the increased number. If one is looking at this on a per-head basis, does it cost more now in terms of the last 10 years of people’s lives? Are they in poorer health than they were previously in the last 10 years of their lives?
The Chair: Do you mean the taxpayer costs?
Lord Burns: I mean the health and social care costs.
Professor Sarah Harper: There is a variety of factors there. Without doubt, we have people living longer with chronic disease. Part of that is pharma and drugs. Part of that is medical intervention. Part of that is public health, and that particularly affects men. To put it very generally, until the 1980s, we had a large percentage of men in their 50s and 60s, in particular, who were dying from smoking-related diseases, cancers, strokes and cardiovascular diseases. They now tend to be living on. The health profile and the ways in which we are able to support people with chronic diseases have increased costs.
We also know that, not so much in the last 10 years but definitely in the last 20 to 30 years, because the whole family structure has changed, far more women are working full-time in the labour market. We now have women in their 60s working in full-time careers almost for the first time. Therefore, the idea that there are women volunteers in our communities who could care for older people, and women in families who could care for older people, has changed dramatically. That is to do with university education, particularly of women, and women going into full-time occupations and careers. This means that there are financial costs for individuals who have to pay for care, either through an agency for social care at home or going into a nursing home.
We also know that the costs of social care and nursing homes have gone up. There is a huge number of reasons for this. Part of it is definitely that, if you like, the financial sector has moved into nursing homes, so nursing homes have become for profit rather than not for profit. Yes, those last 10 years have become more expensive for individuals, local authorities and the country in general, but it is a complicated set of drivers.
Q12 Lord Londesborough: Can we move on to the challenging subject of productivity? Here in the UK and Europe, we have ageing populations, and, within those populations, ageing workforces. As you were suggesting earlier on, those workforces are almost certainly going to have to age more if we are going to be encouraging more of the 50 to 70 year-old cohort. I have two questions. First, is there any evidence of an inverse relationship between productivity and age, whether we are talking about manual and physically demanding labour or general service sector labour?
Professor Sarah Harper: We know that productivity, particularly in our service and knowledge economy, has been shown to increase up to the age of 65. However, there are still a lot of myths and stereotypical views around that. We know that, if we look at the capabilities of older adults, there is now a lot of biological evidence coming out. Some Governments, particularly Australia—I have been involved there—are taking this very seriously. In a modern knowledge economy, older adults have many of the skills required.
To put it very simply, we tend to go from having fluid intelligence when we are young—this basically means that we can process data very quickly; we have speed—to shifting to what we call crystallised intelligence as we get older. That covers things around enhanced verbal capabilities and communication skills. Apparently, we tend to get advanced inductive reasoning and superior problem-solving abilities. There is lots of evidence now around the enhanced productivity of mixed-age teams.
If we look at productivity itself, there have been quite a few of what we call systematic reviews, looking at all the literature on this. They are basically saying that, if we look at productivity as a whole and at performance—obviously, there are different ways of measuring those things; these reviews suggest that, for performance, we can take the sum of productivity and combine it with factors such as absenteeism and what they call presenteeism—older adults have higher performance.
If we look at pure productivity measured by effectiveness and efficiency, there seems to be very little difference by age. However, there has been a recent post-Covid study that suggested that the over-55s had higher productivity than the under-25s in the current cohort. I think that that is something more to do with what is happening to the under-25s.
If we look at things such as absenteeism, absenteeism is when you are absent from work but still paid. It is typically for health, but that can be physical, mental or emotional health. That tends to be higher among older workers. When these surveys looked at what they call presenteeism—that means that you have ill health, which could be emotional or mental ill-health, but you go to work and therefore your productivity is considerably reduced—that is much higher among younger workers.
We can sum it up by saying that there are a lot of preconceptions that productivity goes down as we get older. We know that that is the case in hard physical labour—obviously, we still have jobs in that area—but, in the modern knowledge economy and the service economy, the overarching evidence is that there seems to be little difference. Some studies actually suggest that older workers may be more productive. Mixed-age teams are very productive, and we have known that for decades.
Lord Londesborough: That is interesting. Moving on to technology and AI, looking backwards, for the last 20 years or so of the digital transformation, have we seen evidence that that has enabled productivity for the older cohort; or has it raised some bigger challenges, such as the reskilling and lifelong learning you were mentioning earlier on? This is a bit of a crystal ball question in relation to the future: is AI going to play a positive role for the productivity of an ageing workforce?
Professor Sarah Harper: I am not an expert on AI. However, my understanding of the way that technology has worked is that, with previous cohorts, there were real problems with older workers and technology. That has more or less gone with the current over-50s because we all grew up with technology and we are therefore far more technologically savvy.
There are examples. In fact, even in Foresight, we had examples of where retraining older workers in factories to use computers enabled them to operate robots and to stay in work far longer. They were the group who were much more happy with all those shifts that younger workers did not want, which is one reason for mixed-age teams. They were happy to do night shifts or weekend shifts.
The AI piece, which is interesting, is that, as we have a more digitally and technologically savvy older population, it is highly likely that they will be as able to work with AI as a younger population can. There is also the argument, or idea, around going on to further education: maybe you stop your education in your 20s and never reskill across the life-course. That has gone. Most people in the world of work, nowadays through online courses, are constantly having to upskill in order to keep up with work.
Then there is the argument that AI is going to remove jobs. If it is not going to remove jobs, it probably is going to re-bundle skill sets. Going back to what I said about our increasing understanding of how the ageing brain works, there is an argument that, currently, the kinds of job that AI is very good at are the fast, data-driven jobs that younger people tend to be good at. At the moment, AI is finding it far more challenging to make an impact on those more complicated decisions and superior problem-solving communication, which older adults are better at. This probably will be temporary. As I say, I am not an expert on AI, but my presumption is that AI will be able to move into those jobs.
In terms of a population that can cope with digital technology and AI in their 50s just as they could in their 20s and 30s, and which is constantly upskilled, who will pay for that? What is the initiative behind that? At the moment, a lot of it is definitely on the employer/employee, rather than the Government. It goes right back to what I said when Lord Lamont asked me a question. This idea that we will need lots of young people to drive our economies probably will not be the case, because we will be using technology. The whole question will be, “What do we do with the world of work?”
Then we have an argument that says that we are moving into flexible working, including part-time, working from home, taking career breaks, et cetera. Maybe we will work the same number of hours, but we will stretch them across the life-course. Flexible working and technology may be the way to solve this problem of AI taking away our jobs.
Lord Blackwell: On the productivity point, we have seen studies that have suggested that, if productivity growth continues into the future at the rate it has been recently, which is quite low, that would not be sufficient to offset the increasing number of people living off every worker’s output. In other words, living standards would fall. Have you seen or are you aware of any studies that have suggested what level of productivity growth would be necessary to maintain living standards?
Professor Sarah Harper: I am not an economist. That is not to say that they are not there, but that is not something that I have a particular expertise in. They may well be there.
Q13 Lord Petitgas: In response to Lord Londesborough, you talked about the fact that older workers, because of the crystallised intelligence they have, will perform better with technology. I have seen studies that suggest that a society that is ageing is less good and adept at adopting, or even creating, innovation. Is that something that we should be worried about as a society? It is good that we are adopting technology, but, to be fair, that technology has been invented somewhere else, to a large degree. Is that an issue for us as an ageing society? Are we more or less likely to be good at adoption or outright innovation, which, ultimately, is the source of growth and productivity?
Professor Sarah Harper: We did a very interesting study at Oxford. We looked at men in their 50s who were made redundant and decided to set up IT, self-employment, small or medium enterprises. At that time, the evidence was—this was from the Labour Force Survey, as well as the fact that we did in-depth work with them—that the most successful IT companies, by virtue of the fact that they lasted more than five years, were men over 50 rather than men in their 20s, the reason being that the men over 50 had capital, networks and experience. Although we saw far more of these companies being set up by the younger populations, they were not sustainable.
One problem is that we all have a view of what it is like to be in our 50s, 60s and 70s. In many cases, that is based on our views of our parents and grandparents. We have to accept that the current cohort of people in their 50s and 60s is very different. That is one of the problems. I talked about the systematic reviews, which look at things such as productivity, but they may look at studies over the past 20 years; you have a very different population at that time.
There is quite a lot of work that happens around older people and creativity. There is a huge amount of research now that has come out of, for example, the arts industry, showing that older adults are very creative; it is just that they are creative in a different way. That is not to say that I can definitely say that people over 50 are more innovative than people under 50, but we have to be very careful about current age categories that are based on previous age categories and extrapolating them forward.
Q14 Lord Davies of Brixton: I have been struck by two things that you have said today. You have laid a lot of emphasis on increasing the productivity and use, if you can use that word, of the 50 to 70 age group. That seems to be a key part of how you think we will move forward as an ageing society. You have also laid stress on improving the quality rather than the number to make them more productive; I am sure we can all agree on that. What role does the private sector have in ensuring that these things happen? How can we encourage the private sector to do that job?
Professor Sarah Harper: The private sector is waking up to the fact that there is a global skills shortage and that they need to look at the DNA of their companies. We have definitely seen a shift in that. I remember being at a conference. One of the people there was a woman who had worked very hard on the gender equalities Act and on trying to get women into the workforce in the 1960s and 1970s. Her strong argument was that it was very difficult to get companies to employ women and to see the value in employing women until they needed to. It is exactly the same argument with older adults. When the private sector sees that it needs, if you like, to look at the DNA of its own company and that it is losing so much skill and expertise, at that stage, those companies change.
Over the past 20 years, there has definitely been a huge change in private companies, particularly large ones, looking at their HR policies and ways of keeping older adults—particularly, however, the more highly‑educated older people or workers, whom they feel can contribute. Therefore, it sadly comes back to that inequality piece because, inevitably, there are going to be poorer, sicker, less-qualified, less-skilled older people left behind. In a way, that is maybe where the Government have to step in, particularly as we are raising the state pension age. If we are not careful, we are going to get a growing number of older people who are 55 to now 66 or 67 who will be on benefits while they wait for their state pension. That is a worry.
Lord Davies of Brixton: As a follow-up, do you think that part of the problem is self‑imposed lack of involvement? You suggested that there had been a change in attitudes, but there is that heavy overlay of the past. To me, it seems that very many people just think, “Oh, I cannot do that”.
Professor Sarah Harper: That is absolutely true. I remember doing some survey work about 10 years ago. We were looking at why healthy, active men in their 50s were retiring. The reason was that their peers were retiring. Because their peers were retiring, they felt that there was pressure on them also to retire. Societal attitudes and changing societal attitudes are important.
Our awareness of the ageing of the population is just so much greater, and it is out in the public domain. I do not even know whether this should be recorded, but let me give you an anecdote. I think it was on Radio 5 Live. I did a phone-ins with respondents from the north of England. I was talking about people in their 60s and 70s nowadays being much more able and wanting to contribute to society. My fear was that talking to that kind of population would not be accepted, but the feedback on the phone-in was from so many people in their 70s who said, “Yes, we sometimes feel that we are written off, and we are not. We are looking after grandchildren. I am still doing part-time work”. That is very anecdotal, but I think that our population is changing in its attitudes and beginning to understand that we can be fit and healthy in our 50s, 60s and 70s, and contribute to society.
Q15 Lord Razzall: You have made a number of references in your answers to what has happened in some other countries. We are aware that, outside sub-Saharan Africa, virtually all of our major competitors have similar problems to us, ranging from Japan to Italy, to take two extreme examples a lot closer. Are there any experiences or recommendations from what other people are doing, apart from possibly having a better sort of immigration, that you think we should follow?
Professor Sarah Harper: The UN recently produced a report. It looked at the top 14 policies that Governments across the world were implementing. Interestingly, even lower-income and middle-income countries are beginning to implement some of these policies. I will tell you what they are then give you some case studies.
For example, 100% of European countries now have active healthy ageing policies; 80% have lifelong learning policies; 80% have long-term care policies; 80% have age-friendly city or community policies; 75% have family care policies; and 55% have housing policies. Only 70% have work policies that encourage older adults. Looking at Europe as a whole, we can say that many European Governments are putting specific policies in place.
When we look at individual countries, we always have to bear in mind the social and cultural aspects. For example, I am often asked what good examples of countries are. We can look at places such as Japan and Korea, which are really trying to tackle this. In many ways, because they do not have a preference for immigration—although migration is becoming more prevalent, particularly in Japan—they tend to look at different ways of using technology, including technology in the workplace and around care. There is a variety of new technologies that seem to be accepted by the Japanese population, whereas one would have to ask whether a British population, for example, would be so accepting of some of these robotic technologies.
If you look at a country such as Denmark, it has very good institutional care that is highly respected. They are in a society where, when you become frail and unable to live on your own at home, rather than the family feeling that they have an obligation to take that older person in, it is perfectly acceptable to go into an institution. Its institutions are well funded, but it is a society that has far higher welfare spending across the life-course and far higher taxes, specifically to support welfare spending.
You can look at a country such as Australia, which has, for a long time—30 years or so—been looking at the ageing of its population. It is a small country, although it is becoming much less homogeneous than it used to be. You can look at, for example, what it did with its pension system and what it calls its “Super”, as well as how it encouraged, maybe even legislated, that people had to invest in the Australian stock market. As a consequence, it has a population that is far more financially savvy with their pensions. Across their life-course, they are aware of what their pension is doing. There was a lot of promotion there around savings and how that was enhancing the Australian economy.
Finally, you can look at a country such as Singapore. Singapore probably has the best set of ageing policies in the world. It has had a series of five‑year plans. My institute went out to Singapore regularly and helped train their civil servants around how to implement these plans. They are a bit like the Foresight review. They are very inclusive. They are looking at work, family, housing, healthcare, employment, et cetera. But it is a very different society from the UK. It is a very homogeneous society, apart from the expat community, which is getting smaller. It is a society that is much more used to having things mandated.
We can take somewhere such as Korea, which looked at its retirement age. It decided that it wanted older workers to work longer. However, it knew that there would be a financial cost, so it introduced a policy whereby you would be encouraged to work longer but on a lower salary. The Korean population accepted that. Again, that would be culturally more difficult in this country.
There are lots of examples of where people have tried policies but they are, in many cases, quite culturally specific to that population. Therefore, it is important that we look at our population in the whole—that is, we look at life-course factors and inequalities, and we suggest policy interventions and policy levers that will fit our population.
Lord Razzall: If you were to pick one of the list you started with that you would regard as the gold standard for us, what would it be?
Professor Sarah Harper: Do you mean in terms of a policy?
Lord Razzall: Yes, a policy.
Professor Sarah Harper: We are facing two big challenges. One is the falling total fertility rate, which is reducing the number of young people in our population and, therefore, potentially, productivity. We have to tackle the return to economic activity or the retaining of older people in the labour market. That is absolutely crucial.
On the other hand, we also have to look at the other big driver, which is falling late-life mortality. We have to accept that we are going to have more people with chronic conditions within our population and that, therefore, we must tackle health and social care, particularly social care. That is such a big issue. I would say those two. All the others, in a way—learning, housing, community, transport, family, et cetera—come in to support that.
Lord Razzall: It would be interesting if we put those two as our major items in our report.
Professor Sarah Harper: That would be good.
Q16 Lord Verjee: Have there been any studies around what we can learn or glean from what is happening in the two biggest populations in the world: India and China? What is happening in their populations? What is happening with their population growth or reduction, and what effect will that have? India is a big supplier of labour and immigration around the world. What effect is that having on India’s growth now? What effect is that going to have on our society here?
Professor Sarah Harper: To a certain extent, we are benefiting from the fact that we are getting those skills from south Asia coming into our population. If you look at what is happening, I always think that the problem with India, as you will know far better than I do, is that India is like a series of countries. Therefore, what is happening in one part of India may be very different from what is happening in another part. We know that the middle classes are growing tremendously, both in numbers and in economic wealth. We know that the total fertility rate is now very low in urban middle-class populations but, in the states, which have a higher rural population, they still have higher total fertility rates, so there is quite a lot of differences within that population.
China is very interesting. When China introduced the One Child Policy, it had about 70 dependants to every 100 workers. The reason was because it had so many children. It dramatically reduced the number of young children being born through the One Child Policy. If you look at what was happening in the wider Asian region, exactly the same thing was happening between 1980 and 2000. In those 20 years, we saw a dramatic drop in population in east Asia and south-east Asia, even though that was happening through health, education and economic incentives.
At the moment, China is trying to encourage women there to have more children. It has not been very successful, partly because there are a lot of economic pressures on that young population and partly because they are a one-child society. All the evidence we have at the moment shows that, if women are having a second child, it tends to be older women. This is women in their late 30s, even early 40s, who are having that second child because they could not when they had their first child. We are not seeing at the moment a dramatic impact on young women deciding to have two or three children, but it is very early on.
It is also doing a lot of work at the moment around care. An issue that it has now, particularly among its middle classes, is that it has educated children who are now living in urban areas separated from their older parents, who are isolated in rural areas. Its feeling at the moment seems to be that the ageing of the population will have a dramatic impact on its growth. It is, I know, particularly worried because, in terms of the number of young workers coming into the workforce, India is going to overtake China, within the next decade. If you just look at productivity vis-à-vis the number of young workers, by that equation, it feels threatened.
It is, I suppose, trying to pull the same levers that other countries are trying to pull. At the moment, even though it could be more directive, one feels that it is not being as directive as it could be. It is looking at the whole social security situation. It is looking at housing in urban areas and whether it can relocate poor people into urban areas to live with middle-class children. It is trying a variety of policies.
Q17 Baroness Liddell of Coatdyke: I want to take a look at risk. What are the most serious risks for the economy, apart from public finance issues, of not responding to the ageing society?
Professor Sarah Harper: There has been a lot of rhetoric. Some people come out and say that economies and health services will collapse, et cetera. My view is that individuals, families and communities will be under tremendous pressure, but I do not think that economies are going to collapse because of the ageing of the population. It is more that there is going to be an increase in ill health, a decrease in well-being and pressures on families and communities to pick up the tabs.
In a way, that is probably what we have seen. If you look at what is happening in terms of health, the NHS is really suffering for all sorts of reasons, but one of them is because there is not decent social care. That just means that families are bearing the brunt. Communities are also bearing the brunt because local authorities are having to spend more money on adult social care than they would otherwise. My own specific view is that it is more that the standard of living of individuals in a society will be under pressure. To a certain extent, we are seeing that happen now in this country. I keep going back to inequality. People with wealth are able to buy. People without wealth are the ones who will suffer. That presumably has knock-on effects around deprivation, poverty, crime, et cetera.
Q18 Lord Turnbull: During the conversation, the position of 50 to 70 year-olds has come up often, as well as a lot of benefits in getting them to stay longer in the workforce. We have not talked a great deal about the other end of the population: the NEETs. Ten or 15 years ago, we were trying to eliminate them, but we seem to have seen the unwelcome reappearance of them. The only good news seems to be that, eventually, if they wait long enough, they will get granny’s house. There are a lot of problems in that age group: getting into the labour force; getting jobs that are meaningful for them; and getting a relationship with an employer. They are being forced into the gig economy. It is not surprising that quite a lot of them are pretty dissatisfied with life. Should we not forget them at the same time as we are trying to improve the economic performance of the late middle-aged?
Professor Sarah Harper: If you remember, right at the beginning, when I looked at those four challenges, one was intergenerational equality. Particularly, as we saw a shift of resources to older adults as they become a higher percentage of the population, we had to ensure that the younger generations did not lose out economically, in terms of resources or just in this feeling that society cared about them. You are absolutely right.
I do not think that it should be a generational competition. If we go back to jobs in the labour market and not having enough young people to fill them, then we are saying that we need to keep older adults in the labour market to keep our productivity up, in a way, that should work only if we have younger productivity as well. It seems that, because of post-Covid society, or the post-Covid generation, we have a growing number—it is now 13%—of young people not in employment, education or training. Compare that with what it is for older people: 25% of people aged 50 to 65. That is obviously one of the issues we must look at.
As I also said, my understanding of the way in which new technology, particularly AI, is going to operate is that it will take away the jobs of the younger population, rather than the jobs of the older population, so I agree that it is an issue. Still, we come back to the fact that inequality within generations is probably higher than inequality between generations, and that is growing.
Q19 Lord Lamont of Lerwick: My final round-up question has already been answered several times. What are the main recommendations that you would prioritise to the Government? I guess you would start with the cohort of 50 to 70 year-olds and getting them to work longer.
Professor Sarah Harper: It would be to facilitate the return to economic activity of older adults, and to tackle the fact that we are going to have an increasing very old population. We know that that is very likely to happen; that is the 85 to 100s. How are we going to deal with long-term care? That means both health and social care. How are we going to support those dependants financially in an intergenerationally equitable way? Finally, as I said, from an opportunity point of view, how can we look at our society and harness this fantastic group of older, active people in our population and make sure that they are included in our population, not excluded? We need an age-integrated society.
The Chair: Thank you for that very brief answer to the round-up question. Professor Harper, thank you so much for your time and for such a comprehensive coverage of all the questions. We really appreciate it. I remind you again that we will make a transcript available for you to correct any unwitting mistakes at our end. Thank you again.
