Preparing for an Ageing Society (Economic Affairs Committee Report)

Lord Liddle Excerpts

Friday 4th September 2026 Lords Chamber

Moved by

[Lord Liddle]

That this House takes note of the Report from the Economic Affairs Committee Preparing for an Ageing Society (2nd Report, HL Paper 236, Session 2024–26).

[Lord in Waiting/Government Whip (Lord Wilson of Sedgefield) (Lab)]

My Lords, before we start, I want to make a short statement. As set out on Today’s Lists, speeches in all three debates should be limited to three minutes, with the exception of those of the movers, winders and Ministers. I know from experience that if everyone goes over by just a few seconds, those seconds mount up. I am sure I speak on behalf of Members across the House when I say that I would be grateful if Members could stick to the advisory speaking time to ensure that the Ministers have adequate time to respond to the points raised in each of the debates today.

[Lord Liddle (Lab)]

My Lords, it is a great privilege and pleasure to introduce this report on behalf of the Economic Affairs Select Committee of the House in place of our former chair, my noble friend Lord Wood of Anfield. He has, as the Salvationists would say in the 19th century on the death of one of their senior members, been promoted to glory, which in his case is ministerial office as one of Ed Miliband’s Foreign Office Ministers.

I have known Stewart for more than two decades. He demonstrated a very high level of intellect by his appointment as a fellow of Magdalen at a young age. When I was in No. 10, he was a member of Gordon Brown’s council of economic advisers. Although we did not agree on every aspect of government policy, we were both committed European social democrats and were fascinated by the lessons for Britain of post-war Germany. He has been a great chair of our Select Committee to work under, and we owe him a lot.

No report is ever produced without the contribution of the clerks, the expert advisers, our technical and administrative support, and our witnesses. This whole operation was brilliantly orchestrated by our committee clerk, Matthew Manning, to whom I also pay tribute.

We learned a lot from many excellent witnesses. To pick on one is unfair, but I will take the liberty of breaching that rule by paying tribute to Charles Goodhart, the former Bank of England economist. His brother William was a distinguished Member of this House, whose contribution at the age of 89 lost nothing in its clarity and pungency. He is a great exemplar of why we should not be pessimistic about the possibilities of an ageing society. I also pay tribute to other members of the committee, including those rotated off before this debate.

The UK is a rapidly ageing society. The numbers are striking. The Office for Budget Responsibility’s projections say that the old age dependency ratio—that is, the number of people above the state pension age relative to the number of working people—will rise from approximately 31% now to 38% in 2050 and 47% in 2074. Indeed, in the years of the Conservative Governments from 2010 to 2024, the population aged over 65 rose from something like 16.5% to 19%.

The decline in fertility rates is even more striking. In 1964, a peak fertility rate of 2.93 children per woman was achieved. This has fallen precipitously. In 2023, it had reached a new low of 1.44 in England and Wales and 1.25 in Scotland. The long-term replacement rate is 2.08, so we can see the basis of the demographic crisis.

We heard from our witnesses that the prospects for raising the fertility rate are dim and that policy attempts elsewhere to do this have failed. That was a great disappointment to me, because when I worked for the President of the European Commission two decades ago, we had confidence that the adoption of Nordic-style family-friendly policies—subsidised childcare, gender equality and more equally shared responsibility for bringing up children between men and women—would help sustain an adequate fertility rate. Sadly, that has not proved to be the case.

Immigration is likewise not the panacea that in some quarters it is made out to be. It might help if immigration were circular—that is, immigrants returning home as their countries become more prosperous, which to some extent has happened with eastern European immigration. The problem with the immigration from further afield that Britain has experienced since 2019 is that families are more likely to settle here permanently, adding in the short term to public spending costs but not adding to demographic sustainability in the longer term, as second-generation birth rates tend to adjust to UK norms.

Among our witnesses, people were optimistic that the change in profile of the population is manageable. However, the rate at which it is occurring could pose substantial challenges, though it is worth highlighting that some of that is the result of a great success story. Rising life expectancy is something to be celebrated—for girls born today, life expectancy is 90, while for boys it is 86.7—but there is a worrying gap between life expectancy and healthy life expectancy. Healthy life expectancy has actually fallen in the last couple of years. There is already a huge north-south gap emerging; for instance, the gap in healthy life expectancy between London and the north-east is seven years. These are very worrying trends.

The fiscal picture is also stark. In its Fiscal Risks and Sustainability 2025 report, the Office for Budget Responsibility—for which I have great regard, unlike some other people—says that by the early 2070s, on current policy settings, borrowing will be pushed up to a clearly unsustainable 20% a year, and debt will rise to over 270%, which again is clearly unsustainable.

We are not alone in facing this challenge, but that is no source of comfort. The fact that others will be grappling with the same issues could increase competition between nations over a dwindling workforce, at the same time as our economy will be struggling.

This is about more than just the current elderly. The current young population will become the older generation of the future; indeed, thanks to the increases in life expectancy, they will be older for longer.

Yet demography is not destiny. One key conclusion we reached is that the Government need to focus on the older economically inactive who are below state pension age, and I think these facts are not particularly well known. Discussion of raising the state pension age to deal with this problem is, in our view, misplaced. Those still working at the point of state pension age are entitled to claim it but are in fact highly likely to continue working beyond it. The focus has to be on those who exit the workforce before reaching the state pension age.

This is the scale of the problem: at the age of 50, 80% of the age group are still in work, but at the age of 65 the participation rate has fallen to 25% to 30%. That catastrophic fall in the participation rate is the public policy challenge that we feel needs to be addressed. Simply to raise the state pension age would plunge a significant number of people in that late-60s bracket into poverty, as happened when the pension age was raised from 65.

The Government are beginning to think hard about how to promote workforce participation at the other end of the age spectrum, among young people, with the brilliant Milburn review, which is greatly to be welcomed as an outstanding contribution to public policy. However, we hear nothing, or very little, about the scale of what is required to prepare an ageing workforce for those in their mid-50s to mid-60s. The Government’s response is their mid-life MOT programme and targeted jobcentre support for older job seekers. All that is welcome but it hardly seems an ambitious enough response to this crisis, and that is a crucial conclusion of our report.

There are a number of reasons for people to leave the workforce at older ages, which present policy does little to address. Some are benign. People want to stop working if they have the financial resources to do so. Unfortunately for the Treasury, these are often those who contribute the most in taxes, and the Government need to find ways of incentivising these people to remain in or return to work. However, we also heard about those who want to work but are unable to do so because of caring responsibilities, either to ageing parents or to dependants. We recognise that this is a priority for the Government and we are looking forward to the recommendations of the commission that the noble Baroness, Lady Casey of Blackstock, is working on. But you cannot help noting that a number of these grand reviews have been held in the past, with very little action taken. Let us profoundly hope that the Casey review will be the last before concrete policies are announced and enacted.

There has obviously been some focus in discussion on reforming the triple lock. This has proved an expensive driver of real-terms increases in the state pension, due to the recurring volatility of both inflation and earnings, which have led to real-terms increases. Linking pensions to earnings—that is, to the living standards of the working population—is estimated to save some £15.5 billion. That is a significant sum of money. It would take the defence budget up by over 0.5% of GDP. But in our report, rather than focus on that, we have chosen to focus on the much longer-term issue of raising labour force participation among those over 50. The continued yearly focus on the Budget, and the Government’s fiscal headroom and all that, means that there is a danger that we lose sight of the far more serious long-term issues. I am afraid that nothing in what the Government had to say reassured us in this regard.

The Cameron Government, to their credit, made the ageing population one of the subjects of their foresight studies, but this was lost in the aftermath— I would say “chaos”—of Brexit. The present Government, in response to our recommendation that they publish an overarching strategy statement setting out how they plan to address the challenges of an ageing society in a cohesive way, said that an “integrated approach” was

“preferable to a single standalone strategy”.

I do not know quite what that means. They went on to say that they were taking

“a strategic and cross-cutting approach to issues relating to an ageing society”.

Well, without some clear statement of what the strategy that underpins the purported integrated approach is, I find this answer devoid of significant and substantial content.

The lack of any published strategy on ageing is a worrying indication that the Government would prefer not to face up to these challenges as an immediate question, and that the UK is therefore woefully unprepared for the future. This is a harsh conclusion, but the point of having Select Committees is to point out difficult conclusions that our politics is failing to address. On that basis, and with that reason, I beg to move.

--- Later in debate ---

[Lord Liddle (Lab)]

My Lords, I thank all noble Lords who have contributed to this debate, which has thrown up an enormous range of new ideas and thoughts that various committees of the House might take up. I was going to discuss with our clerk how we can summarise all the issues that might be taken up further. I congratulate my noble friend Lord Pitt-Watson on his summing-up. It is very difficult when you are a new Minister to do this, but he did very well, so I thank him.

I feel a little guilty that the report did not directly address the triple lock question. It is obvious that that question must be addressed. My own sympathies are very much with taking the risk of doing it in an appropriate way. We did not do that because we wanted to draw attention to a fundamental problem of this declining participation rate among over-50s. A lot of ideas have come forward on how we could address this question. Therefore, the report and the debate on it have been extremely valuable. I thank everyone most sincerely for the part that they played.

Motion agreed.

King’s Speech

Lord Liddle Excerpts

Thursday 14th May 2026 Lords Chamber

[Lord Liddle (Lab)]

My Lords, it is a great pleasure to follow the noble Lord, Lord Hunt, whose brand of Conservative politics I have always personally admired. He raises very important questions about the steel industry. However, I will make just two points. First, I agree that there is a case for a sovereign capability in steel, and we have to work out a strategy as to how best and most efficiently to do that. But, secondly, it has to be part of a European policy. We have to be there because we have integrated supply chains in the steel industry. A lot of our exports—something like two-thirds—go to the European Union, and there is a similar flow in the other direction, so we cannot have an effective policy without it also having a European dimension.

I want to focus my remarks on the gracious Speech’s commitment to building a much closer partnership with the European Union. I strongly support the Government’s proposed legislation but urge them to make fast progress. As the Prime Minister said, we need to be at the heart of Europe, and it seems to me that that is the only way forward to meet the frightening new geopolitical challenges that Britain now faces. It is also a necessary, but in my view not sufficient, precondition of restoring broad-based economic growth in our country, which has eluded us since the financial crisis, and more particularly since the 2016 referendum.

As we approach the 10th anniversary of the Brexit referendum, we need to ask ourselves what benefits positively have been realised. I am not aware of any respectable economic analysis that demonstrates positive benefits. How much have the so-called Brexit freedoms delivered? Some people here refer to the ability to make our own free trade agreements. My noble friend made an excellent speech this morning and referred to those Brexit freedoms. Let me just point out to the House that the benefits in economic growth to which she referred amount to about 0.5% of GDP per year, when the loss as a result of Brexit is something of the order of 4%, and some economists say far, far higher.

For some people on the other side, none of these questions of fact about the impact matters because what matters to them is that, with Brexit, Britain has regained its sovereignty. In a technical sense in constitutional law, that is correct, but what is worth while about technical, legalistic sovereignty if all that does is impose additional costs and burdens, as in the chemical industry and many other sectors, on whole swathes of our business? This is the challenge that the alignment Bill will address, and I think we should get it through this House as quickly as possible.

The noble Baroness, Lady Finn, made a very good speech, even if I did not agree with it. She asked why we should align ourselves with a stagnant European Union. I have two points about that. First, 40% of our trade is with Europe. Most people think that geography is what determines trade, particularly trade in services, which is our great strength. The reality is that Europe is going to be by far our biggest trading partner for decades ahead, and we have to have a better relationship simply in those terms. I agree with what Chancellor Merz says about the need for regulatory reform in Europe and think the Draghi report is excellent. I would like to see some of its lessons applied in the United Kingdom. One of the reasons why we may find support in key member states for our alignment Bill is that I think Chancellor Merz will see Britain as a potential ally in future on the need for pressing for that regulatory reform.

What we are trying to do is difficult. Nothing to do with the European Union is easy, as I have known for a long time, having worked on these issues. First, we have to face the issue of budget contributions. We have to find a formula that can be applied relating to our share of joint GDP and the economic significance of the particular sector we are talking about.

Secondly, we have to have flexibility on freedom of movement. I think the youth experience scheme is an excellent idea. This House has demanded freedom of movement for artists and performers in Europe, one of the key things that we have lost. The same applies to professional services. I would make these movements on freedom of movement in return for closer co-operation in tackling illegal migration. I find it odd, by the way, that people on the other side can criticise freedom of movement. As soon as they got Brexit, what did they do? They implemented the biggest wave of immigration that we have seen in the post-war era. One of the reasons for the rise of Reform today is that the Conservative Party did exactly the opposite of what it promised in the referendum as far as immigration was concerned.

Thirdly, we have to raise our game in Europe and all that means for rebuilding our Brussels capabilities, having strong co-ordination machinery domestically, having the political will to impose solutions from the centre—from No. 10—where departments disagree, and having a Cabinet that takes the Europe relationship seriously and spends time on it. We have a lot of common interests in joint EU-UK co-operation—in defence procurement, in a joint approach to the regulation of artificial intelligence, in trade and in technology, where we have so much to offer. Jean Monnet said Europe was born in crises; we are certainly living through a big crisis now. We have to think boldly, and I would like to see the possibility of a commitment to rejoin the European Union in the next Labour manifesto.

UK-EU Customs Union

Lord Liddle Excerpts

Thursday 29th January 2026 Lords Chamber

[Lord Liddle (Lab)]

My Lords, it is a great pleasure to welcome my new colleagues who are making their maiden speeches today—my noble friends Lady Gill and Lord Docherty, my good friend who is to come later, and my noble friend Lord Doyle, who is a very close friend and from whom we have just heard an excellent maiden speech. I first came across my noble friend 30 years ago, when he had just arrived in Westminster and was working for the newly elected Labour MPs for East Anglia. He was so keen on this job and he was homeless, so he camped out in Charles Clarke’s office while he sorted out his personal affairs. He always had that trademark, and he has kept it: he is the man with the duffel coat. He always reminds me, whenever I see him, of Paddington Bear. In a way, that is appropriate, because he is a man of great culture and a real expert on film, so he will bring great wisdom on cultural questions to this House.

In the past 30 years since I first met my noble friend, he has done a great variety of very interesting things. He has worked intimately with some of the most consequential people on the centre-left of British politics: first for Tony Blair in No. 10 and then in his role as Middle East peace envoy, then for David Miliband—Labour’s lost leader—in his role with the International Rescue Committee, and finally for Keir Starmer. Working for Keir Starmer, he was not one of the fast-rotating group of people who have been in and out of No. 10; he was a crucial aide. I do know how many people know this, but he sustained Keir Starmer at what was the deepest crisis point of his leadership of the Labour Party after the loss of the Hartlepool by-election in 2021. When he worked on the Batley and Spen by-election, he persuaded Kim Leadbeater, Jo Cox’s sister, to be our candidate and we squeezed home by 300 votes. That is probably one of the most consequential acts of his political career. In his three decades of politics, has shown outstanding loyalty to the bosses he has worked for.

My noble friend is a very considerable person. He is a man of faith who has struggled with some of his inner tensions and conflicts and overcome them. He brings to this House much more than the experience of a press officer; he is well informed across a wide range of national and international issues. He is a committed lifelong social democrat and he is going to make a great contribution to this House.

On the subject of the debate, I will not delay the House long, but I will say this. I have great respect for the intellect of the noble Lord, Lord Lilley, but I have never heard such rubbish on the question of Europe. He referred to his role in the Uruguay round. Let me remind him, it was the European Commission that negotiated the Uruguay round.

[Lord Lilley (Con)]

In fact, it was jointly negotiated by member states and the European Commission. I was there for all nine days of the negotiations in the Heysel stadium, so the noble Lord is wrong.

[Lord Liddle (Lab)]

Do you know why we won the Uruguay round? It is because we had the strength of the bloc of the European Union behind us. It was not just something that Britain achieved on its own.

Secondly, the noble Lord talks about the stagnation in our export of goods and completely ignores the vast expansion of our trade in services with the European Union, which is being put at risk by increasing barriers. He neglects the fact that, in 2016, the British public were promised a growth miracle as a result of leaving the EU. Where are the benefits of all that loosening of rules that were supposed to happen? We were promised the end of free movement, and what did the Conservatives do? They went on to create the biggest inward movement of people into this country we have ever seen, so what hypocrisy they have talked on immigration. If we had stayed in the single market and in Europe, the growth we would have seen as a result would have meant that none of the tax rises that we needed to have since the 2024 general election would have been necessary. Those are facts.

The economic situation is getting worse as we lose the strength of the European bloc. We no longer have the competitive pressure of the single market, which is what makes business efficient. As we lose that competitive pressure, we will find that Brexit is not a one-off loss; it will affect our competitive position for years to come.

I said I would not talk for long, but may I just make one point? We should look at the customs union and try to speed up the reset. I agree with the noble Lord, Lord Hannay: we need independent expert advice on what we would try to achieve and how. This is something of great complexity. We need to look objectively at the consequences of having an independent trade policy. I do not think they are very considerable, but I am willing to be proved wrong in an independent expert inquiry, which I hope Keir Starmer will set up.