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Evidence from TAEN has shown that the stereotypes that older workers cost more, are less productive, work less flexibly and take more sick leave are all statistically incorrect. In every case, exactly the opposite is actually true in relation to the younger group. Against that background, it is not indeed shameful that, as a survey revealed, only 9 per cent of the over-50s said that they had never experienced age discrimination? Indeed, a rise in employment among the over-50s makes far more sense. That would lessen the pension burden, lessen costs to the NHS-given the mental and physical benefits of employment-assist in the improvement of inter-generational cohesion, and allow many to realise their desire to continue to work. Opening up new training and retraining to older workers, disseminating good practice, encouraging flexible working and rewarding those employers who hire and employ older workers are other possible routes that the Government could well and truly go down.
My last point is that, sadly, the unemployment of the over-50s is currently rising at a higher rate than for the rest of those in employment. The alarming rise of 71 per cent in those claiming jobseeker's allowance in that age group over the past year surely needs more research and action from the Government. I hope very much that we shall hear some positive signs of what the Government intend to do-and as soon as possible, please.
Lord Hoyle: First, I wish to thank my noble friend for introducing this debate-and it is the right place to have it, if we look around here. It shows that older people have a use after all, and can contribute to society. We might, perhaps, not get everyone to agree but when it is repeatedly said that the debates in here are far superior to those elsewhere, that is something to take credit for. I was pleased with the statistic used, that the average age here is about 69 and rising-of course it is, but does that not prove that it works?
We are not alone in this. It has to be faced that more than a third of the population are now 50 and over, and that that will rise to 40 per cent. We cannot allow those people not to contribute. We are not saying that everybody is the same; they are not. Everybody is different, and while some want to retire, a lot of people-perhaps most-do not want to do so. They want to be able to contribute not least because, as my noble friend said when she opened the debate, one difficulty facing a lot of people now is that the pension is not quite what they imagined it would be when they set off. Many of them are still paying off a mortgage and with many, it is the case that one or other of them has been the only wage or salary earner in that household, so there is a need to look at it and give them that opportunity to work.
We are talking at a time of recession-not just about the recession now, but about coming out of it-but there is no doubt that, as has been said repeatedly
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Another thing is that, if we look at the surveys, many of those people said that, in being refused, they were either too well-qualified or too experienced for the job. Others said that they were just told, "You're too old", and that was the end of it. We have to do a lot of education with employers to get over that kind of difficulty. Another problem is that we should be appealing to employers to provide, throughout an employee's career with them, the necessary training so that they can qualify to do one job or another. As my noble friend said, they do that a lot better in other countries than we do here, and it should be provided, but that does not mean to say that we cannot use the people who are here now. We certainly can, and we ought to do it more.
I shall be very interested to hear my noble friend's reply, for, as he knows, I have always listened to him throughout his career, in many other different phases and spheres-different orbs, if I might say so, than this-but I want to know what he will do in the public sector. When you talk to people, they say it is not just the private sector refusing; equally, the public sector is refusing that. It is all right to talk about senior civil servants, but what about the vast majority underneath them? I cannot believe that we cannot use a lot of the expertise and skill lying there, and I look forward to a positive reply from him.
If people want to work longer, as has been said, they ought to be able to do it, and a lot of attention must be paid to employers who are saying, "The employee has the right to ask whether he can continue", when far too many are just saying "no". That is a blanket "no", where they are not even looking at it. There is a lot to be done, and I am looking forward to my noble friend joining us in offering positive ideas about how we can use the skill and expertise of the growing number of our population who are over 50.
Baroness Neuberger: My Lords, I, too, am extremely grateful to the noble Baroness, Lady Turner of Camden, for initiating this debate on a subject close to my heart. We have heard how the national default retirement age is to be reviewed next year-and, if it were not to be, how a High Court judge, Mr Justice Blake, would recently have required it to be reconsidered. I agree with the noble Baroness, Lady Greengross, and with others all around this Chamber that it is time that the Government got on with it. It would be wonderful if we could hear from the Minister that the review will take place late in this year as well as, perhaps, early into next year. It is time; we have had enough.
I am also extremely grateful to the Age and Employment Network, and Age Concern/Help the Aged for their excellent briefings, particularly for the
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We have got it completely wrong in this country. There is no doubt that older people wish to feel that they are useful members of society and that they are no burden on others. We know that productivity means different things to different people. While I was working on a book on part of this subject, many of my discussions with older people made it clear that they longed to be back at work. For some, it was because they needed more money-doubly true in a recession, or where people have lost pensions-but, clearly, it is about more than money. As the noble Baroness, Lady Turner, said, for many people, it seems to be about a sense of being of value. The more our society judges people by what they do, rather than by who they are, the more older people are going to want to go back to work. My noble friend Lady Scott has already highlighted cases of people being thrown out because of their age, particularly Moira Stuart and Arlene Phillips, but we could think of hundreds and thousands more. There are some who are lucky and carry on working. They tend often to be self-employed. There is Phyllis who is 101 and still does the accounts at the garden centre she founded. There is Jackie Lawson, the online greetings card queen who started her business at 62 and has become a millionaire. There is also the plumber I encountered who did not take the day off on his 100th birthday because he did not want to let his customers down. That is really great.
However, there are huge challenges in finding and keeping a job at a later age, and that is particularly true in areas of high unemployment. Furthermore, as many Members of your Lordships' House have said, there remains a prevailing view, which is completely incorrect, that older workers are too costly and too resistant to change. Nine out of 10 older people believe that employers discriminate against them and a quarter speak from experience, as the noble Lord, Lord Hoyle, said. Some 10 per cent of companies refuse to employ anyone over 50.
There are signs of measures to help. The EU has taken a bit of a lead but has not done as much as Japan where, with the Japan Organisation for Employment of the Elderly and Persons with Disabilities, they are working to police a new law which forces employers to keep people in work until at least 65. We could do with something like that here, so there needs to be a cultural shift. Our present culture that says we retire at 65 must go. The noble Lord, Lord Sheikh, made that point most clearly, and the noble Lord, Lord Selsdon, made the important point that if all the older people who wanted to work found jobs, they would generate an economic output as high as £30 billion. We ought to be able to do something more sensible.
However, I would argue that the real reason the Government have been so slow to encourage change and legislate for it is probably the same reason the employers have been so slow: they discount the skills and experiences of older people and cling to an increasing faith in those of the young. The editor of the Times,
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The default retirement age is one thing, but a real attempt to give older people a chance at apprenticeships and learning skills for new jobs and a chance to show that they bring real experience is sadly lacking. Can the Minister now assure this House that the Government will review the default retirement age immediately, starting now not next year; encourage apprenticeships and other adult learning for new skills for older people in a way that they do not at present; and, as employers, view favourably any request from any government employee to continue working beyond 65?
Lord De Mauley: My Lords, we on these Benches strongly agree that older people should be able, indeed encouraged, to continue to work where they are willing and able to do so. Some people prefer to continue to work as a lifestyle decision-indeed, as my noble friend Lord Selsdon and the noble Lord, Lord Hoyle, said, your Lordships' House is such a good example of how good continuing to work can be for one's health. For others, their pensions may have been destroyed by the abolishment of the ACT credit and falling stock markets, so that they have to continue to work. The noble Baroness, Lady Turner, mentioned that and we are grateful to her for bringing this debate forward. As my noble friend Lord Sheikh and the noble Baroness, Lady Greengross, said, older, experienced workers have so much to offer employers.
The national default retirement age, which is after all at the core of this debate, is currently 65, with a right to request to continue beyond that age. The review of the Government's decision to have a national default retirement age at all has, as the noble Baroness, Lady Neuberger, said, been brought forward to 2010. That is welcome.
Many employers have completely given up trying to comply with the colossal burden of employment legislation brought in over the past few years, which has had such a profoundly negative impact on UK competitiveness. So we can understand if the Government do not want to exacerbate the problem by reducing flexibility in the labour market even further at such a difficult time for business. Even John Hutton has said that there was a,
However, we on these Benches believe that we should be moving towards an environment where retirement is flexible, as my noble friend Lord Sheikh said, and viewed as a process rather than a single event. People with physical jobs should, for example, be able to
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It is important that whatever action is taken in relation to the default retirement age is co-ordinated with that on the state pension age. My honourable friend the shadow Chancellor recently proposed an updated review of the state pension age and that, given the state of the public finances and changing demographic projections, the Government should consider whether the rise from 65 to 66 should be brought forward from their currently planned date of 2026, but starting no earlier than 2016 for men and 2020 for women. The noble Lord, Lord Turner, is quoted in the Daily Telegraph on 3 July this year as having said that if he were to redo his 2005 report he,
The Conservative position is that there should be a renewed commitment to relink the state pension to earnings growth in the next Parliament to ensure a decent standard of living for all in retirement, halt the spread of means-testing and restore incentives to save. If there is to be a default retirement age, it would clearly be inappropriate for it to be lower than the age at which an individual can draw the state pension. That is something that will presumably be recommended by the government default retirement review as a matter of course.
We support the review and are pleased that it has been brought forward to next year. In addition to pension age, it should address, first, whether there should be a default retirement age and if so, secondly, what that age should be. Perhaps the Minister will confirm that the review will indeed address those questions. In addition, I understand that several countries have no default retirement age. Can the Minister also tell us what those countries are and what their experiences are?
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Lord Young of Norwood Green): My Lords, I congratulate my noble friend Lady Turner on initiating this wide-ranging and stimulating debate. I genuinely mean that and it is proof positive of the liveliness of the cerebral cortex of those of us who passed the age of 60 a few years ago. I have probably an impossible task in answering every single point that has been made, but I will do my best in the limited time available. If I cannot do so, I will communicate with noble Lords in writing.
There is no doubt that older workers make a critical contribution to our economy. With the demographic changes that are upon us, the proportion of over-50s in the workforce is set to rise from about 24 per cent now to just under one-third by 2020. We are committed
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Our age discrimination legislation has helped to protect older workers' employment rate by making age-targeted redundancy generally unlawful and by making compulsory retirement ages below 65 generally unlawful, but we need to continue our efforts. Extending working life and raising the state pension age over the longer term are essential for pensions sustainability in our ageing society. The noble Lord, Lord Sheikh, talked about relieving the pressure. The proportion of people of working age to people over state pension age was expected to fall from 5:1 in 1950 to just 2:1 by 2050, but by raising state pension age to 68 by 2048, we can hold the dependency ratio at 3:1. I note what the noble Lord, Lord De Mauley, said about the noble Lord, Lord Turner, and his recent comments that in hindsight he would have been more radical. We have already committed ourselves to restoring the earnings link, and I welcome the conversion to that policy by the opposition Benches.
A number of noble Lords addressed redundancy in recession. Workers of all ages have been affected by the recession. The employment rate of people aged 50 to state pension age has gone down only slightly, down by less than 1 percentage point over the past year, compared to the rate for 25 to 49s, which has gone down by 1.8 percentage points, and for 16 to 24s, which is down by 4.4 percentage points. That shows that attitudes to older people in employment are changing, maybe not as fast as we would like, but those figures are interesting.
In response to the current economic downturn, the Government have committed half a billion pounds of additional support to help prevent people who are out of work from becoming long-term unemployed. The noble Lord, Lord Sheikh, asked about early intervention. We have doubled the resources available to the Rapid Response Service. The service offers support across the country for those facing redundancy with immediate help and advice, including skills assessments and retraining, to ensure that people get back to work as soon as possible. The noble Lord also talked about apprenticeships, and we have taken away the age barrier on apprenticeships. He will be pleased to know that there were some 27,000 adult apprenticeships last year. We have done away with the concept that apprenticeships are just about vocational careers for young people. They are a valuable contribution to people retraining and reskilling.
My noble friend Lady Turner talked about helping people of all ages through the recession. We have provided our Jobcentre Plus advisers with extensive training to ensure that they are able to help all jobseekers. We will continue to develop our advisers and our range of support so that individual jobseekers-older
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My noble friend Lady Turner talked about the fact that many requests to defer retirement are turned down and fewer employers are using flexible pension rules. The survey of employers' policies, practices and preferences will explore these issues. Business organisations such as the CBI and EEF say that most requests are accepted, but we need to examine that evidence, which is critical. My noble friend Lady Turner commented on the judge's comments on the Age Concern judicial review and said that the Government's review of default retirement age should take place immediately. That request was also made by the noble Baroness, Lady Neuberger. We announced earlier this year that the review of the default retirement age will be brought forward from 2011 to 2010, so the direction of travel is right. The judge endorsed that approach-
Lord Lester of Herne Hill: I declare an interest, since I was counsel in that case on behalf of the Equality and Human Rights Commission. Speaking personally, not professionally, I am very glad to hear what has been said. Can the Minister give an assurance that the review will take place in sufficient time, if necessary, to change the law before the next election?
We have said that the review will be brought forward. The judge endorsed that approach. There is no suggestion in the judgment that it should take place any sooner or that the default retirement age should be abolished. It is important that the review be evidence-based. At this stage, I cannot confirm when the review will conclude. We want the review to take place as soon as possible. We want it to be evidence-based and wide-ranging. I assure the House that there is no intention to delay the review. We understand the importance of the timeliness of the review.
The noble Lord, Lord Sheikh, said that people over state pension age cannot access Jobcentre Plus support. I think I have covered that. On the earnings disregard, those claiming benefits can access the same services regardless of age. Those not on benefits can access services through the self-service channels. There are currently no plans to change the earnings disregard. However, people over state pension age do not have to pay national insurance, and those over 65 generally have a higher tax allowance, so they keep more of what they earn. That is not to say that everything is perfect. Some of those issues will need to be raised during the review.
The UK Commission for Employment and Skills assesses that we need to fill 14 million jobs in the next 10 years. The National Institute of Adult Continuing Education says that only 7 million young people are coming through the education system in that time. Therefore, extending working life will be critical to meeting that challenge. I was fascinated by the careful, analytic approach to the different quartiles of life
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As a number of noble Lords said, extending working life will also play an important part in reducing pensioner poverty and ensuring that individuals are able to fulfil their expectations of retirement. A man on average earnings who delays retirement for two years can increase his net income in retirement by 14 per cent.
Many employers are recognising the importance of retaining the valuable skills and experience of older workers to help them through and out of the recession. The noble Baroness, Lady Greengross, made a valid point about their reliability, their sick records, the value of their experience and the cost-benefit analysis of their contribution. Attitudes are changing, but unfortunately age discrimination persists. That is why, through our Age Positive initiative, we are working with business sector leaders and business-led organisations, such as the Chartered Institute for Professional Development, which has been mentioned, the Employers Forum on Age and the Institute of Directors to encourage employers to adopt flexible approaches to work and retirement. We are providing guidance for them on the benefits that many employers have found by employing and retaining older workers, without the need for a fixed retirement age. I make no apology for mentioning companies such as Asda, South Wales Forgemasters, Marks & Spencer, B&Q and the Co-operative Group, which are part of the Age Positive initiative. They display enlightened attitudes and understand the benefit of employing older workers. We are working alongside business-led organisations to develop and launch guidance on sector-based models for flexible approaches to work and retirement.
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