Employment Levels of Older People

Lord Bhattacharyya Excerpts

Thursday 5th March 2015 Grand Committee

[Lord Bhattacharyya (Lab)]

My Lords, I thank the noble Baroness, Lady Greengross, for securing this important debate. She is a superb advocate for the elderly, and this debate demonstrates her sharp concern for old and young alike. It is appropriate that we are having this debate in the Moses Room. The Bible tells us that Moses lived for 120 years, and even at that age, his eyes were clear and his vigour unabated. Sadly, history is silent on the effect on the Old Testament labour market. British life spans have not reached biblical levels, but many Britons are now working well into their 60s, and 1.1 million workers are now over 65. That is a quarter of a million more than when default retirement was abolished four years ago. That has had a major effect, but broader social trends are also at work. The number of older people working has increased throughout the past two decades. The decline of heavy manual work, improved health and the rise of part-time working are all making a contribution. We cannot turn back these trends, nor should we try to. For one thing, the earnings of older workers create demand and jobs. For another, the impact on full-time workers is smaller than it appears. Fewer than 20% of over-65s have a traditional full-time job. Most are part-time or self-employed. The vast majority of young people want full-time jobs, so they will not feel direct competition.

However, the ability to retain skilled workers will impact on companies’ decisions to hire new people. For higher-paid workers, this can be partly dealt with by employers offering lower wages as workers learn their trade. However, at lower levels of pay, the minimum wage rightly limits this approach. This should not change. We have the minimum wage in order to prevent exploitation of all workers.

We must find another way to help younger workers, especially those on the edges of the labour market. The key is to improve the skills of those young people who struggle to find full-time work. We offer significant support to university students, but our offer to those who do not take that route is much less effective. The crucial group is the NEETs: young people not in work, school or vocational education. For all the media stereotypes, what sets NEETs apart is that they do not have good GCSEs. This means they often pursue low-level qualifications which lead only to casual work and frequent unemployment. Bluntly, the Government are failing these teenagers, at school, after school and in the job centre.

How can we do better? First, we must offer all young people the chance to advance their careers while still at school, not just those destined for higher education. This requires a greater variety of educational provision, which could be delivered through vocational courses, specialist schools, university technical colleges or even by industrial partners—provision by industrial partners is growing. Next, we need every young person to get maths and English qualifications, even well after they finish school. All the evidence shows that these core qualifications are vital to finding work. The Government have made the right choice by insisting students who do not get good maths and English GCSEs take these courses as part of vocational education or apprenticeships, yet many drop out or do not pass. Data from the Centre for Economic and Social Inclusion show that more than a quarter of apprentices do not successfully complete their course, a far higher rate than for A-level students. That is a disturbing figure, as those young people are precisely those likely to struggle in the labour market.

Our aim should be that every single 21 year-old has maths and English qualifications. We should not stop educating them until they do, whatever it takes. For example, that might mean paying employers to support failed apprentices studying for an extra year and at the same time having some mentoring by older people who are beyond retirement age. This will mean working unconventionally, whether with employers or with health and social work teams that pick up the hardest-to-reach young people.

Finally, we must expose young people to the world of work much earlier, so that they can build links with employers and understand what is required to hold down a good job. To do that, we need local employers, councils and colleges to work together to improve education and training courses. This will help employers anticipate the problems some young people have in adapting to work, such as with the structure of the working day. This is not an impossible challenge. In most cities, just a few hundred young people need this kind of focused support each year. Each worker over retirement age could be a mentor, providing early work experience and career support, and putting young people on the right course to get a good job.

In an age when the competition for work is greater than ever, our challenge lies with the neglected young people who deserve better from us. We cannot prevent older workers earning, and we should not race to the bottom on wages. That means that we must resolve to do better for those at the margins of the labour market.