Intergenerational Fairness in Government Policy

Lord Filkin Excerpts

Thursday 26th October 2017 Lords Chamber

[Lord Filkin (Non-Afl)]

My Lords, I congratulate the noble Baroness, Lady Smith, on this important debate. I declare two interests. First, I am delighted to be a member of the Intergenerational Commission, chaired by the noble Lord, Lord Willetts. It has been one of the most thoughtful processes I have ever been involved in. Secondly, I chair the Centre for Ageing Better, an independent body promoted by government, committed to trying to make it possible for many more people, young and old, to benefit from their longer lives. That is the focus I will bring to this question on intergenerational fairness: how do we make it possible for more of today’s and tomorrow’s older people to benefit from their longer lives?

Many of us in this House know the benefits of longer lives. We are enjoying them daily. We know that there are great intergenerational benefits from that. So many grandchildren have relationships with their grandparents in ways that were less common 50 years or so ago. That leads to an enormous increase in societal well-being. We know that this process has not stopped. Demographers forecast that 50% of girls born today will live to be aged 100 or more. These are great societal gains and we should celebrate them.

However, they do not come without risks, of which there are a number, but I will focus on just two. The first is income. The noble Lord, Lord Turner, put it graphically and truthfully in his famous report that longer lives mean we have to work longer, save more or both. There are no other options. Contrast that with the Financial Conduct Authority’s significant survey last week of I think about 13,000 non-pensioner adults, of which 31% had no private pension. They were relying on either the state or their spouse. I will leave it to noble Lords to decide which of those is riskier.

Great progress has been made on auto-enrolment, which we should celebrate, but none of us would have thought this was a particularly sensible system, which effectively puts all the responsibility and risk on the individual to save for their own pension, to have foresight and to be able to make sacrifices. It also shunts all the investment and longevity risks. Not many other countries in the world have such a risky platform for later-life income and we should not think for a second that the job of pension reform is done, even though progress has been made, not least by the noble Baroness, Lady Altmann, and many others.

What is to be done about this? I shall say two things quickly. Keeping in the labour market—particularly helping today’s 50 year-olds keep in the labour market—is fundamental. So is increasing the housing supply radically: that does not necessarily mean more owner-occupiers; what we are concerned about is increasing the supply of good-quality housing which enables people in later life not to have the burden of increased housing costs. If today’s 30 and 40 year-olds have to pay high rents in later life, they have to increase their savings yet further, and they will struggle to do so.

The second big issue we need much more debate about is that because there are going to be many more of us, for many reasons, there is going to be a very significant increase in the demand for and the cost of the NHS and social care. We are not just debating about now, we are also debating what is pretty certainly going to happen over 10 years. There are many reasons for NHS cost increases, and I will not go into them, but longer lives is one of them—if you are alive another 10 years you have many more episodes of health treatment. Secondly, many more older people generate more costs. Between 2010 and 2030 there will be 50% more 65 year-olds and 100% more 85 year-olds and they all go into those last years of life at some point, when their cost burden will increase.

The Lancet in April produced an epidemiological report which said that there will be a 25% increase in the number of disabled people in our society in 10 years’ time. That, for planning purposes, is now and we have, therefore, to face up to the increased health and care demand and cost over the next decade. As part of this, we clearly need a proper social care settlement, as was well said by the noble Lord, Lord Turnbull. We cannot fudge this, we have to get the right balance between risk and contribution and between public and private expenditure. Wherever that balance is struck, it will certainly require more public expenditure, either to compensate for caps or to face up to the underfunding of people with moderate needs who are currently going without any social care at all: there will be many more of them over the next decade.

When I talk in private to leading economists and ask for a rough view of what they think the increase in NHS and social care costs will be in 10 years’ time, I get a figure of 2%. That is a very small figure, but a 2% increase in GDP, which is what we are talking about, is equivalent to £1,400 more in taxation for the average family. There is no science in that figure of £1,400, but if we can keep it to less than £1,000, we will be incredibly lucky. This is not the end of civilisation. The issue is that today’s and tomorrow’s younger people have a right and expectation in our society for decent health and social care standards, but we have to recognise that we have to pay for that. No Government, I fear, are going to stand up and say that each family will have to pay £1,000 more tax in 10 years’ time, but we need at least to promote a debate on that and recognise that the funding of that has to have some basic principles. If we are to meet those standards, we have to take account of people’s needs, but also of their means to pay—wealth as well as income—because that is the ignored issue, as the noble Lord, Lord Turnbull, said. We have to take account of both, and age as a filter as to whether you need help or not is an increasingly obsolete measure.

I hope that out of this, and out of our work, we will affirm the fundamental importance of good later life for tomorrow’s older people as well as today’s and face up to some of these significant public policy challenges that are implicit in longer lives and more older people.

Strengthened Statutory Procedures for the Scrutiny of Delegated Legislation: DPRRC Report

Lord Filkin Excerpts

Tuesday 5th March 2013 Lords Chamber

[Lord Filkin]

My Lords, along with others, I thank the noble Baroness, Lady Thomas, on the one hand, for initiating this debate, but on the other regret that she invited me to take part in it, although that is perhaps churlish. I speak with respect for, but not much knowledge of, the Delegated Powers Committee and with too many years serving before the mast as chairman of what was then called the Merits of Statutory Instruments Committee. Having been there, I have an abiding interest in and commitment to the importance of this place’s scrutiny of secondary legislation, which is of course what we are debating tonight. I essentially want to ask the House whether those two committees, although they have undoubtedly improved the House’s procedures, have improved legislation. I do not think it obvious that the merits committee, at least, has, although I cannot speak for the Delegated Powers Committee.

I will advance the argument as to why. I start by reflecting on how government works. Many of us know how government works, either from the outside or the inside. Governments, quite rightly, are in power to do things. They have a manifesto—or even a modern version of it in the coalition agreement—and are massively busy and challenged, and are committed to delivering on what they think is either their manifesto or coalition programme and, they hope, getting another innings after the next election. Legislation is a necessary evil. It is a distraction from what Ministers really want to do but is necessary because that is how our constitution works. By and large, they want to get their legislation through the House as quickly, and with as little damage to it, as possible.

Ministers also believe they are right. Civil servants believe they are right, by and large, because they are usually more expert on a subject than most parliamentarians. Ministers believe they are right because they have to, otherwise they would not have the confidence to sustain doing a difficult job. That sense of confidence as a Minister or as an official does not make you sufficiently persuadable to change your mind, particularly when you have got to the position where you have committed your Government to legislation, in either primary or secondary form. It is not obvious that the processes of the House themselves will naturally lead Ministers to change their minds. Why should we expect that they will do so?

We know how we change their minds on primary legislation but let us consider, as my good friend the noble Lord, Lord Butler, has spelled out, what happens on secondary legislation. We cannot amend it, and it is quite right that we cannot amend it, for good technical reasons which I will not go into. We decide, although we are able to reject it, that we will not do so. By our own self-denying ordinances, we can neither amend nor reject an instrument: so why do we assume that that is going to change anything? The only thing that shifts Ministers and shifts policy is either the fear or reality of adverse publicity, or a defeat. That is a statement, for most of us, of the blindingly obvious. We get zero publicity on primary legislation, except when there is a defeat, and we get even less publicity—if you can have a negative—on secondary instruments, for pretty obvious reasons. It is hardly the stuff of the Dog and Duck. On that argument, we have a situation where it is not the media that will change Ministers’ minds but only defeats. However, we have said that we will never defeat the Government, for reasons that I struggle to understand.

The consequence of this—this is my central argument—is that the legislation that comes in through one door, in all its hundreds of pieces, exits the other door in all those hundreds totally unchanged. So what have we done in this processing factory to affect that legislation? I am open to persuasion that in some way the feel or quality of the aura of the legislation is better but the words are exactly the same. So what are we doing? Where is the evidence we are improving secondary legislation by our processes? I struggle to understand it. If noble Lords accept my argument—from too many years, probably, serving on the merits committee—that the processes are superb but that what the Chamber itself does is fundamentally flawed because it will not do anything about it when it thinks it is wrong, what should we do about it?

I will not waste your Lordships’ time on considering the alternative mechanisms. Wakeham made a very sensible recommendation, which was perfectly possible and came from a totally eminent committee. It was a very sane and sensible proposal. I thought that Goodlad, as explained by the noble Lord, Lord Butler, made an equally sensible one. These recommendations are significantly less frightening than our convention on primary legislation.

We defeat primary legislation up hill and down dale whenever we do not like the policy. It would be completely improper to defeat a secondary instrument when we did not like the policy because that would be to frustrate the will of Parliament, which had put that policy into practice in the primary legislation. So the only way that this House can legitimately reject a secondary instrument is because it is fundamentally flawed in some way, either in its execution or its policy design, or it does not actually reflect the instrument. In such cases, if the House thinks it is flawed, it ought to have the guts to do something about it and reject it.

Why do we get so excited about that? I do not understand it. As the noble Lord, Lord Butler, said so clearly, you probably could not bring an SI back next week but you could certainly bring an SI back in a month’s time with a better Explanatory Memorandum explaining why you thought the House was wrong and therefore you relaid the same order, or substantially the same order; or you said you had listened to the House and you thought it could be improved, in which case you would lay down a secondary order. The Government would lose a month or two on their processes; they might lose a bit of face—I do not think they would lose much face as not many people are watching—but as a consequence the House would have added something to the process.

Unless we are prepared to do something like that, with the greatest courtesy to my good friends on the committee, we are largely open to the charge of wasting time by debating these things, because debates by themselves change nothing. Unless we are prepared to reject bad secondary legislation, we would be better doing other things with our lives.