Baroness Neville-Rolfe (Con)

My Lords, this is a valuable and timely report. It continues the tradition of high-quality reports from the Economic Affairs Committee, and I join the tributes to the noble Lord, Lord Wood of Anfield, in his role as chair, to the noble Lord, Lord Liddle, for his clear and compelling opening speech, and indeed to the clerks who have supported the committee. This excellent report sets out with clarity the scale of the demographic challenge facing the country. The UK is ageing rapidly, birth rates have fallen to historic lows and the implications for our labour market, our tax base and our public finances are profound. The noble Lord, Lord Liddle, and my noble friend Lord Lamont were right to emphasise the consequences for fiscal sustainability and to cite the OBR in telling us that, on current forecasts, debt would rise to an unimaginable 270%. My noble friend Lord Willetts emphasised the possibilities of technology and robotics in heading this off, and many noble Lords have rightly focused on the need to increase employment rates among those in their 50s and 60s. That is a theme I will return to later. We also heard from many about the need for transformation of adult care; I think we all wish the noble Baroness, Lady Casey, great success. There has been a debate about pensions, summarised by the noble Lord, Lord Razzall, and articulated very well by my noble friend Lady Coffey from her experience at DWP. There was a lack of agreement, but the arguments for the triple lock were set out very clearly and well by my noble friend Lord Redwood. I thought my noble friend Lady Bottomley was right to mention the value of occupational health, which is something I agree with from my business experience. It is possible, in the time available, to cover only a few points. I will try not to repeat what has already been said, but I draw attention to the Government’s response. Unlike the noble Lord, Lord Razzall, I think it is a respectable one, although sometimes ideology is overinfluential. At the top of page 12, the commitment to “halving the gap in healthy life expectancy between the richest and poorest” is foolish. The Government’s ambition should be to improve healthy life expectancy for everyone, especially the least fortunate. We do not want the gap to be narrowed simply by reducing healthy life expectancy among the rich. It is clear from the report that the problems of our ageing society would be much reduced if we could get our birth rate back up to the replacement rate. Although all countries have found this difficult, more efforts should be made. It is not a lost cause, as my noble friend Lady Penn explained. My view is that more help with nursery provision could make a big difference. Having a childcare system largely geared to school hours and school terms may be convenient to teachers, but it makes it very difficult for most working parents. They do it better elsewhere, not only in Scandinavia but in the United States and, indeed, in France, as described by my noble friend Lady Meyer. I know that from the experience of family members in those countries. The noble Baroness, Lady Nargund, explained that people also need to be taught more about fertility. Of course, the shift to starting families later can lead to lower replacement rates. Otherwise, the best way to mitigate the problems outlined in this important report is to conjure up more economic growth. The then Chief Secretary to the Treasury, James Murray, described this in his response letter as the “central mission” of the Government. It is one of the best ways out of the dilemmas described and, indeed, many of the other problems we face. Unfortunately, many of the actions taken by this Government have reduced growth. Examples include the effective ban on new drilling in the North Sea, leaving Norway to grow instead. That and other policies have led to the highest electricity prices in the developed world. These have ruined our car and cement industries and hit data centres which support AI, one of the key new avenues of growth. We have seen a disastrous attack on large and small businesses: a £25 billion hit on NICs, a very high minimum wage, especially for the young, and the Employment Rights Act, the damaging consequences of which become more apparent by the day. I urge the Government not to launch another attack on wealth creators in the Budget on 28 October. Improving productivity can also contribute. It was rightly on the list from the noble Lord, Lord Razzall. I am more optimistic than he is about the scope for improving productivity if we follow the right policies. Demography is not only about births and deaths—or, indeed, immigration. We face a worrying trend of entrepreneurs and younger talent emigrating because of high taxation and growing burdens on business. If we want people to work longer, to invest more and to innovate here in Britain, we must stop making it harder for them to do so. I ask the Minister for reassurance: how do the Government intend to reverse the outflow of skilled, ambitious workers, who are essential to sustaining our future tax base and supporting our ageing population? We also need a national conversation about retirement expectations. Too many assume that the system will simply provide. Yet, given the demographic realities, younger workers will need to save more for longer and will almost certainly retire later. There are two mitigations in the report that I will highlight in conclusion. The first is to join others in persuading those able to do so to work for longer and allowing them to do that. People live much longer than they did, but a much smaller part of their life is spent in work than when pensions were devised. It is too easy for many of those contributing to the economy to retire early. My father’s farming business failed when he was in his 40s, but he retrained and worked into his 70s. We need more of this, and not only in the House of Lords. To achieve this, we need to call out the culture of age discrimination that I was shocked to discover when preparing my review of the state pension age in 2022. The latest figure from the Centre for Ageing Better suggests that one in three people reports experiencing age discrimination. The right reverend Prelate the Bishop of Coventry rightly described the amazing contribution that older people make to civil society. My second issue is better financial education. It is welcome news that the Government will shortly consult on better provision in the national curriculum. On page 6, the response commendably tells us that, through their reforms, the Government will be “building a generation better equipped to plan for and navigate significant financial decisions, such as those relating to retirement”; obviously, I would add to that investment, which has been a subject of this debate. The response talks about young people learning “about tax, scams, bank accounts, savings and pensions”, to which I would add the power of compound interest when you save. I would also point to the value and importance of financial literacy across the population and in lifelong learning, which is the subject of amendments I have proposed to the financial services Bill. In conclusion, I warmly thank the committee for all it has done in setting the scene in this vital area. I thank the noble Lord, Lord Liddle, all of the committee’s members and all those who have taken part so constructively today. They will, I hope, help the Minister move things forward, and I very much look forward to his response.