Baroness Wolf of Dulwich (CB)

My Lords, as a member of the committee which produced this report, I join others in congratulating the noble Lord, Lord Wood, putting on record my thanks for his outstanding chairing and my thanks to the committee staff. I want to emphasise one of the major conclusions, which the noble Lord, Lord Liddle, and others have highlighted and which I think was for many of us the major new insight: that we must concentrate on raising the participation levels of people in their mid-50s. This is really important. The UK has done pretty well at raising the state pension age, but just putting it up further is not a panacea, as others have explained. Doing that is very unlikely to increase employment levels among the pre-retirement cohort, where many have already dropped out of the labour market. Conversely, raising participation among these 55 to 65 year-olds would make a major difference to our economy, to the public finances and, in many cases, to people’s physical and mental well-being. As our witnesses confirmed time and again, working is really good for people, and being unemployed and economically inactive really is not. This country had a good record over the last few decades of providing jobs and keeping formal unemployment down, and there is now concern, rightly, over the impact of government policy, in both taxes and employment legislation, on employers’ willingness to hire and especially to hire the young. PAYE data shows a fall of 86,000 payrolled employees in April to June 2026, while workforce data shows a fall of 97,000 in the year to March 2026. Although we are very focused on the immediate problems, our participation rates over a longer period do not actually look that wonderful. At a time of lengthening life expectancy, it is true that total employment is up, but that is because of the size of the population. Overall employment rates have been pretty static this century: down a bit for men and up a little bit for women. Meanwhile, unemployment rates are down because of people simply dropping out of the labour market. Again, we know and heard from witnesses that, if you drop out in mid- to later mid-life, you are very unlikely to return. Meanwhile, part-time employment, which is especially attractive to older workers and those with caring responsibilities, has started to fall sharply. This is a major challenge for the Government, and I think that people have not really been aware of it. We asked them to set out their policies and to look at tax and other incentives but, as the noble Lord, Lord Liddle, said, the focus at the moment is very much on the young. The young really matter but, in our ageing society, people in their 50s and 60s matter too.