Examination of Witnesses (Questions 100
- 119)
WEDNESDAY 8 NOVEMBER 2006
MR PATRICK
GRATTAN, MR
ANDREW HARROP
AND MR
RICHARD EXELL
Q100 Chairman: Good morning and welcome.
Richard, there are some people who think you are a member of this
Committee, you spend that much time in this room! Would you mind
briefly introducing yourselves.
Mr Grattan: I am Patrick Grattan
and I run TAEN, The Age and Employment Network, which has been
the centre of expertise on this subject and we have been involved
with all the major public policy issues in this area. We are a
membership organisation and we are part-sponsored by Help the
Aged, so I speak for Help the Aged and TAEN.
Mr Harrop: I am Andrew Harrop,
Head of Policy at Age Concern, and I have been leading our work
on employment and skills for the over-50s.
Mr Exell: I am Richard Exell.
I am a senior policy officer at the TUC and I am the author of
our report, Ready, Willing and Able.
Q101 Justine Greening: Obviously
the Government's aim is to increase the number of over-50s in
work by one million, but there is no particular timescale for
that. Do you think that is challenging enough given what changes
we are going to see anyway in the working population?
Mr Exell: If you go by what the
Pensions Commission report said of course, then it is a very challenging
target. When they looked at what they called the `high participation
scenario' for labour market outcomes in the medium to long term,
they thought it was quite unlikely that there would be a significant
increase in employment rates because there would always be large
numbers of disabled people who would not get jobs, large numbers
of carers and that there would be a continuing desire for early
retirement, so in one sense there is an authoritative body saying
that it is a very challenging target, but we strongly disagree
with that view. There is considerable evidence nowadays that there
is a large group of people aged between 50 and state retirement
age who are in voluntarily early retired and there is some evidence
of employer discrimination, which we may want to come back to
later on, which makes it difficult for people in that age group
who have lost their jobs to return to employment. On the other
hand, the opportunities for the Government here are really quite
good. If you look at working age employment rates, between summer
2001 and summer 2006 they only increased by 0.3 percentage points,
whereas employment rates for people aged over state retirement
age in the same period decreased by 2.5 percentage points, so—
Q102 Justine Greening: Is it true
though that with the over-50s, even if the employment rate stays
exactly the same, we will still have that one million extra older
workers coming in?
Mr Harrop: Yes, it is. By about
2016 to 2020, so looking a decade ahead, we would have an extra
million just from the growth of the cohort, so we would support
the one million target, but only if it is over and above gains
just from demographic change so that it is a change in the employment
rate for the 50-to-69 age group rather than just the size of that
age group.
Q103 Justine Greening: So in many
respects the one million target is not a strategy, it is merely
describing what is likely to happen?
Mr Harrop: It is a welcome aspiration
because it has focused attention of the DWP on older workers where
they had taken their eye off that particular client group, but
it has never been defined either in timescales or in exactly what
it means. We think it is really important, as part of the process
of refreshing the Department's PSAs at the Comprehensive Spending
Review, that a real target in terms of the employment rate for
this age group is agreed.
Mr Grattan: If you can put it
in a historical context, we have had an increase of 1.4 million
people over 50 in work since 1997 and two out of three of the
increase in the workforce have been people over 50, which is pretty
encouraging. That is split roughly 800,000, if you like, caused
by age population shift and 600,000 by an increase in the actual
employment rate, so 800,000 is standing still, if you like, and
600,000. We would support the one million on certain conditions,
firstly, that it is one million plus half a million of people
off incapacity benefit. Now, the DWP submission does say that
those are not the same people, but, as you know, half the people
on IB are over 50 and you have done a report on that, so it is
one million plus half a million and I would add half a million
people over the state pension age. Andrew, in his submission,
talks about three million, and we need a timescale for this. One
is talking about the workforce increasing by three million of
which two million are over 50, sticking to roughly the two out
of three, and that is a picture we have seen. We need the timescale
because the DWP evidence kind of floats it back towards 2050 when
a lot of the world will have changed, and also, as Andrew says,
we need to tighten up the PSA target which the DWP currently has
which is an extremely modest and unmeasured one of simply decreasing
the gap in the employment rate between the under- and over-50s.
Q104 Justine Greening: Let us assume
that we get some clarification and we have a target that is broadly
assumed to be challenging and it will be a stretch to reach it.
What sorts of things do you think will need to change, if you
like, to help the over-50s going forward get into work, perhaps
more than we have done in the past, and not just helping them
get into work, but helping them to keep jobs?
Mr Harrop: I think it is really
important to make a distinction between people in work at the
moment and helping them stay in work for as long as they wish
to and people who are out of work, which is around one million
people, who want to get back into work, over 50, and who are not
working at the moment. That group faces quite significant barriers
in terms of things like health, poor skills and caring responsibilities
and that is where the Government needs to be quite interventionist
in the support on offer. When it comes to people in work, it is
obviously going to be much more about setting the scene and getting
the right employer/employee relationship, particularly in terms
of reinvesting in people's skills throughout their careers and
in terms of occupational health so that people with emerging health
issues are able to stay in the workplace rather than being forced
to leave work. There, it is going to be leadership from the Government
setting the tone rather than the Government having as many direct
levers to influence the outcomes between an individual and their
employer.
Q105 Justine Greening: We will come
on to talk about discrimination later, but certainly I had a constituent
who came to me for help. He was being made to go into retirement,
he had a job doing maintenance at a local sports club, and he
was perfectly capable and wanted to stay on. I talked to the board
of directors and found that one of them was 67 and still on the
board of directors, clearly perfectly capable of doing the job,
yet the person who was in the Bank of England Sports Club doing
maintenance around the place, apparently when he got over 65,
was not. Do you think that is one of the key issues we would need
to address?
Mr Grattan: I think that to achieve
this, there are several things. We have to maintain the pressure
for change in employment and the work that is going on with the
Age Positive Programme, the work of people like the Employers'
Forum on age and showing, by good example, that it pays in business
terms, we have to maintain that. We have to make the legislation
work and not just be a one-week wonder for October 2006, but something
that is effective down the road. Most of all, and I am sure we
will come back to this, we have to address the world of skills
and retraining for everybody, that which will help individuals
get back into work. Those are three major things we have to do.
Mr Harrop: On the specific point
of forced retirement, Age Concern and our new membership organisation,
Heyday, are judicially reviewing the regulations because of the
inclusion of a forced retirement clause in the law which that
they do not effectively apply over 65. One of the main reasons
we are doing that is because it is being interpreted by employers
to mean, "We had better get rid of people over 65 because
we might face risks if we don't", so rather than being a
rarely used exception, the early evidence seems to be that it
is becoming a default that employers do it unless they have a
very good reason not to. That is really important for people's
opportunities over the age of 65, but it also sets the tone for
employment for at least five years before that, possibly longer,
because you have a countdown to a fixed arbitrary age rather than
it being about the individual employment relationship, how good
any one employee is and how long they wish to carry on for.
Q106 Justine Greening: I am conscious
of the time, so I will move on to my final area which is the way
in which the calculation is made, this sort of employment rate.
The Department for Work and Pensions is thinking of moving to
use the OECD measurement which would essentially divide the total
number of people working by the 16-to-64 population. Do you think
that is a good idea?
Mr Harrop: Yes, that is what Age
Concern has recommended.
Mr Exell: The TUC does not have
an official position on this, but it is a matter of horses for
courses. If what we are trying to measure is the total level of
slack in the labour market, then the OECD measure is a better
measure.
Mr Grattan: We have made a number
of suggestions in our submission for you on this. Of course it
is unusual to have a measure where you compare apples with oranges,
which is what this is. That is not the normal way statisticians
work, I do not think.
Q107 Justine Greening: Obviously
it will exclude people who are working over retirement age.
Mr Grattan: No, surely the measure
is of anybody working over 16 and up to death compared to the
population up to 65, so it is apples and oranges in that sense.
The advantages of it are, in my view, simplicity and the fact
that it does away with an age like 65 and it just lumps everybody
in, and I think that there are advantages of it. Just to be clear,
we put forward one proposal related to young people and questioned
whether this measure should really start at age 25 because actually
the overwhelming public policy objectives about people under 25
are to get them all into education and the lower the employment
rate for at least the under-20s, the better.
Q108 Justine Greening: Are you trying
to suggest that government policy is not joined up properly?
Mr Grattan: I will leave you to
decide that. That of course makes the target harder to achieve
and, in the interests of simplicity, I think it may be better
to go with the OECD style, but we need to be very clear about
what is happening in the 16-to-25 age group where the employment
is now down around 50% or something. The second thing we suggested,
which was a different approach, was that there should be a specific
focus on the over-65s, the pensioner population, which is currently
about one million in employment and we see the potential for at
least half a million, as I just said. The third point is let us
be very clear in measuring this and what is happening in IB because
several of the things in the Government's approach really amount
to just saying, "Let time pass, people die off and bring
in the younger people which will switch the other lot out at the
other end", and, just the same as with the skills objectives,
you can do nothing for five years and you have half met your objective.
Mr Exell: One point that is worth
adding is that of course we are going to see over the coming years
significant changes in retirement ages and, without a change like
this, it is going to be really quite difficult to compare one
year with another.
Q109 Justine Greening: Do you think
we might be trying to force-fit a strategy into a calculation
and actually what we ought to do is not get so hung up about this
particular calculation, but actually get an overall strategy for
getting the over-50s back into work, maybe sub-divided into different
groups, and perhaps even for the under-25s, as you said, and actually
tailor some measurements which fit the strategy rather than trying
to force-fit the strategy into this possibly, as you say, quite
blunt instrument of a measurement?
Mr Exell: I have not considered
that, but it is an attractive idea, on the face of it.
Mr Harrop: I think the simplest
way to look at it is to go back to the numbers. What we all want
is an extra three million people in work and many of those should
be over 50, and we do not need to argue too much about whether
it is two thirds or a half, but the overall outcome should be
higher employment than we have today and that will be a success.
Q110 Justine Greening: We just had
people in talking about lone parents and one of the issues that
came up was that often they have informal care. Are you aware
of any evidence that suggests to what extent informal care might
be compromised by having a successful strategy for over-50s, that
there simply are not those people in the broader family to take
care of children because they are now working too? Have you any
assessment of that?
Mr Grattan: Again we are not talking
about a large homogenous group of people. There are people who
want to be very ambitious, people who want to combine caring for
elderly relatives and people who want to combine grandparenting
and work. Flexible working and changing patterns of work is one
reason why the retail sector has managed well in this area, that
they can offer in the 7-24 scheme of things. You only need to
go to a supermarket and observe which age group is on the cash-out
at different times during the week and on different days of the
week, it is fascinating, you see those patterns revealed, so I
think that it is about combining those things.
Q111 Greg Mulholland: Andrew, you
mentioned barriers to employment and the question for all of you
we ought to ask is: how big a problem is age discrimination and
how widespread do you think it is?
Mr Harrop: Age discrimination
is interesting compared to other types of discrimination because
up until now employers have been quite open about admitting it.
Even last year a survey had 1 in 10 saying that they discriminate
in recruitment and I suspect a lot more who do not own up to it
still have those sorts of attitudes in their recruitment practice.
The latest evidence is that a third of people in the course of
a year say they have experienced age discrimination which is extraordinarily
high. We have also just done some qualitative research with people
over 50 looking for work and they mentioned age discrimination
early and consistently throughout the research as the major barrier
that they were facing. These were not people that you would in
any way think of as difficult to employ. They were capable, they
had done a wide range of jobs, they had the sort of life skills
that employers cry out for and they just were not getting a chance.
That was a consistent message from six different focus groups.
Mr Exell: Most of the evidence
we have about age discrimination against older workers is indirect,
but it is quite persuasive. It is very common for older people
to report age discrimination. Our Chesterfield Unemployed Centre
did a survey in a very depressed part of north Derbyshire and
found in this survey of people outside the labour market that
age discrimination was by far the commonest form of discrimination
to be reported, and there were other surveys which have come up
with similar results. We also have lots of evidence of stereotypical
attitudes amongst employers. The evidence about the actual discrimination
is harder to come by, but those two pieces of evidence together
are very suggestive indeed.
Mr Grattan: There is of course
a huge overlap between age, gender, disability and geography and
that is one of the reasons why we are moving to a single equality
body. If you look at the data by geography, so age is not a kind
of thing you just put in a silo by itself, in looking at employment
policies, the crucial issue here is how employment policies are
multi-targeted, including on age, and I am sure we will come back
to that.
Mr Harrop: Age discrimination
is as significant in influencing under-employment, people being
employed beneath their capabilities and skills, as it is to just
getting into the labour market at all.
Q112 Greg Mulholland: How confident
are you that the new age discrimination legislation will be effective
and do you also think that more needs to be done in terms of engaging
employers? Is that really what needs to be done?
Mr Harrop: I have already mentioned
our concerns about forced retirement ages and the message that
sends out. Apart from that, there are two key issues. One is adequate
test cases to get the interpretation of the law sorted out clearly
and robustly. There is an awful lot that is not yet clear in the
legislation particularly about how easy it will be to justify
direct discrimination. In other areas of discrimination law, you
cannot justify direct discrimination, but with age you can, so
the early test cases on what that means in practice will be crucial.
Secondly, it is about awareness both for employers and employees.
Obviously it is high in the public's mind at the moment because
of the launch of the legislation, but what will be happening a
year or two years from now? There is going to have to be sustained
awareness-raising, including from the new Commission for Equality
and Human Rights.
Mr Grattan: I think my short answer
would be that this autumn has been different than if we had not
been having age legislation. It has clearly raised the profile
of the issue and I think it will be very like gender and race,
that in 25 years' time we will be saying that it is not the whole
answer, but without a doubt it is part of the answer. The work
with employers is just an ongoing thing. The continued effort
for the Age Positive campaign has been a good feature of the DWP's
work in this area and there is already quite a lot of change,
but there is a heck of a lot more.
Mr Exell: The international evidence
from countries that have already introduced age discrimination
legislation suggests that the effect is positive, but that it
is not going to be enough by itself, which is why, in addition
to campaigning for age discrimination legislation, in our recent
report we have also put a great deal of emphasis on developing
the business case for not discriminating and some of the facts
to use against stereotypes.
Q113 Miss Begg: You mentioned the
need for flexible working because of caring responsibilities and
you have just talked about age discrimination being a barrier
to getting older people into work. What are the other significant
barriers, as you see it, and, as you are answering that, can you
maybe pick up Patrick's point where he said that age is not in
a silo on its own and there may be an inter-relationship between
all the different barriers? How common is that and are multiple
barriers the biggest issue rather than the single barrier?
Mr Grattan: I think it is veow
How Howry important to recognise, and perhaps we did not when
we started out, that there are barriers created by employer attitudes
and barriers created by ourselves and our own attitudes and clearly
those are most focused in those who have multiple barriers. One
of the things we would say is absolutely essential, and this takes
us over to DfES, Education and Skills, is that we move forward
on changing attitudes towards advice and career change and development
and that we have better adult careers services. If we are going
to be having longer, more varied working lives which means having
people returning at all sorts of stages to the workforce and retraining,
what you did when you were 20 is not exactly very significant
in training terms and at the moment there are very, very few opportunities,
so a big barrier is the absence of opportunities to train and
the motivation and skills and working on motivation and skills
to help people make a fresh start because I think it is very important
to emphasise the huge socioeconomic diversity. There is a vast
difference between people with qualifications and skills who may
have some capacity to step out in a new direction and many people
who have no qualifications and have no relevant experience of
tackling this and who will just accept that their time has passed.
It is a very common attitude, especially in areas of low employment.
In inner London and inner Manchester only just over half of the
over-50s are in work. If that is the case, then your conclusion
is that you are not likely to get a job, so why try.
Q114 Miss Begg: Can I follow up on
that? SWOOP argue that a lack of skills is often seen as a barrier
to employment, which you have just argued, but they say that in
their experience "absence of formal qualifications in no
way reflects an absence of skills", and they describe the
portrayal of older people as poorly skilled as being inaccurate
and unhelpful. That seems to contradict what you have just said.
Mr Grattan: Our view is that the
skills strategy is not fit for purpose for this age group; it
is all about formal full level 2s. We have a big argument going
on with the DfES—and Andrew is involved and others—that
in the Leitch Review this has to change because our common approach
is saying: "Here is a qualification designed for an 18-year-old
and you over 55-year-old should do it." If you want to go
back into nursing, shall we say, or start as a nurse and you have
had 30 years as an adult, is that the right kind of qualification?
So it is not fit for purpose, and the stats show it.
Mr Harrop: In the research we
have just done people talked about a range of training needs and,
as Patrick said, it is a one-size-fits-all policy. At one end
people with a lot of skills, possibly with qualifications possibly
not, often leave a career and do not have the skills, or the piece
of paper to show that they have got those skills, to get a new
job or a new career. They do not necessarily need a full level
2 or a full level 3; what they need is bite-sized, tailored training
to meet the particular skills gaps they have got. At the other
end, some people changing career say they are very frustrated
that they are getting an offer of quite low-level training but,
actually, what they want to do is take part in a substantial challenging
qualification, which means they have got something to show. They
do not feel that is on offer either.
Mr Exell: There are economic studies
that suggest that one of the effects of a combination of being
older and having low levels of qualifications is that the low
level of qualifications exacerbates the age penalty, so that men
with qualifications start facing real difficulty in getting jobs
in their late-50s; men without qualifications started facing the
same problems in their early-50s. You were asking about multiple
barriers. We also know about the relationship between age and
disability. We know that at all ages disabled people are less
likely to be in employment than non-disabled people and we know
that older people, whether they are disabled or not, are less
likely to be in employment than people in prime age—as it
is insultingly called. What is particularly noticeable is when
you look at the older age groups and make the comparison between
disabled and non-disabled people because then the employment rates
for disabled people in that age group are half what they are for
the non-disabled people, whereas the difference is about a third
or a quarter in younger age groups. So there is a very strong
combined effect of disability and age.
Mr Harrop: Can I add to that that
disability, age and poor qualifications is the most significant
driver of that relationship Richard has just talked about. If
you do not have level 2 qualifications and have a disability you
only have a one-in-three chance of being in work. It is higher
if you are disabled but have skills, and it is very high indeed
if you are non-disabled and have skills. Age is not much of a
barrier; for this group.
Q115 Miss Begg: Can I explore with
Andrew and Richard the point that Patrick picked up about the
individual's attitude to work? What I have noticed since I turned
50 is that most of my friends are now counting the days until
they can get retirement. They may be a different group inasmuch
as they are in well-paid employment and they will have a good
pension. Is there a different attitude from people who have been
forced out of the workplace—so-called taking early retirement
when, in fact, it is really a disguise for redundancy? Are you
sure that the older workers really do want to work?
Mr Exell: Beattie and Fothergill
found that there was a really important breakdown into at least
two distinct groups here, certainly amongst men (we have got better
evidence for men than we have for women). There seems to be a
small group, about 12%, who are what you could call "early
retired"; generally speaking worked in well-paid jobs during
their careers, have good occupational pensions, maybe looking
for a little bit of work to supplement their retirement income
but, on the whole, they are voluntary early retired. For a majority
of older non-employed people, even when they are describing themselves
as early retired, actually it was not a voluntary decision; they
have got very low levels of income, they are heavily reliant on
state benefits and most of them say that it is not what they had
planned for their future.
Mr Harrop: In addition to that,
the Turner Commission pointed out there is a group of people slightly
above that for whom it would be in their own best interests to
be working for longer even if they are just about getting by—in
their best interests now but also because they have not necessarily
planned their retirement income adequately. Working for a few
more years would increase their income for the rest of their life.
Mr Grattan: I trust you are not
counting the day until you are deselected, Anne!
Q116 Miss Begg: Certainly not. I
am odd amongst my age group!
Mr Grattan: Let us make a distinction
between the desire to retire and the desire for change. Anybody
who has done anything for 30 years—goodness knows, surely
they desire to retire. It is right that people are counting the
days and the right to retire is hugely important, but if you look
at the stats there is a huge socio-economic angle, as has been
said, and it is about giving more people the choice to retire
from a first career and find an alternative and do something else.
If you look at the stats there is something totally bizarre about
them; people with degrees, on average, retire earlier but the
population that is working—one million—past State
Pension Age has a high representation of people with degrees.
So the stats do not add up. What do we mean by "when do we
retire"? So it is a desire for change, and we are talking
about a world where we move towards the American picture of people
doing bridging jobs and change, but of course that is a privilege
of only part of society at the moment.
Q117 Miss Begg: Are there barriers
to making that change? Certainly one of the issues raised when
we were looking at pensions and the development of pensions was
that what people want is not to retire but a new job. However,
the fact that you have pensions based on final salary schemes
means there is almost a pressure to retire because that is the
only way you can maximise your income through your pension; in
the way that pensions are configured at the moment, there is no
encouragement to change career and retain all the pension benefits.
Mr Grattan: In the public sector.
Q118 John Penrose: I would like to
thank Anne for the insight into one or two of her colleagues'
attitudes when they are over 50. I just wanted to pick up on the
point about skills, and not just the point you made about appropriateness
of skills training for people over 50 but also ask you about the
quantity of skills training for people over 50. I am a governor
of my local FE college and, basically, if it is not level 2 or
lower and you are not under 19 or, at a pinch, under 25 the money
available for retraining anybody is being slashed. What are your
views on the availability of training, whether or not it is actually
appropriate?
Mr Exell: Older workers are getting
hit from two directions because there is the change in the priorities
for publicly provided education, although of course there are
older people who will gain from the guarantee of up to NVQ level
2 training. Also, there is the reluctance of many employers to
provide training for older workers, and sometimes that is an economically
rational decision because the worker is not going to be with them
for long enough to guarantee a sufficient return on the investment
in their training. We would say there is a strong case for a public
subsidy for employers providing training to older employees to
get over that problem.
Q119 John Penrose: I am sorry, are
you saying that older employees are more likely to leave work
sooner? There is a faster rate of turnover?
Mr Exell: If you have got a set
retirement age then there is a limited number of years till they
are going to be moving on, is there not?
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