Lord Turnbull (CB)

My Lords, we have two related debates in successive weeks. Next week we will debate the issue of long-term debt and, this week, we are addressing one of its main drivers: an ageing population. The main elements of this are well known. Older people are putting less into the Exchequer and requiring more assistance from it. There is a sharp decline in the fertility rate. In mid-life, the shape of careers is changing. The old model of education to, say, 16 or 18 and 40-plus years of work followed by a retirement of 15 years has largely broken down. Young people are staying in education longer and taking longer to find settled employment. Taken together, these developments are producing a sharp rise in the dependency ratio, leading to severe pressures on public finances. The EAC report looked at these developments and possible responses. It took the view that there has been significant change in the pension age, often going further than other countries, but that the scope for further rises is small. One change that should be made now—pace my noble friend Lord Redwood—is the abolition of the triple lock, which is, frankly, idiotic. Instead of a considered decision on how, over time, pensions should rise relative to prices or earnings, we have a chaotic system generating random windfall gains—and they are always gains—according to the movement of earnings and prices in particular years. The OBR has estimated that this could cost an extra 2% of GDP. The report is rightly sceptical that the Government should try, or would be able, to influence the birth rate. We could permit greater immigration but not only is this politically sensitive; the effect may only be short term as, eventually, immigrants adopt the work and family patterns of the host nation. This leaves two areas where government action can be justified. The one emphasised most strongly in the report is trying to improve the participation rate in the 50 to 65 or 70 age range. Technological change is affecting how long jobs last. Someone may find that the line of work they have been in for 30 years has ceased to exist and they are therefore likely to need help to change jobs and skills to find new work. Another issue, which gets less prominence in the report, is that many young people are finding it difficult after completing education and training to find fulfilling jobs. This is seen in the rise of the so-called NEETs to more than 1 million. It should be a priority to bring this number down. The policy response has been precisely the opposite of what is needed. Young people need incentives, mentoring and advice to help them into work, while we are in fact consigning them to the dead-end world of disability benefits. The course we are now on makes for sombre reading—there will be more of that next week—but we are not without responses that could improve matters. I hope we will take them up as a matter of urgency.