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UK's Ageing Workforce Will Decide Our Future After Brexit

20/06/2017 16:12
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Here are some numbers for you to conjure with. In the 10 years to 2022, some 12.5 million jobs will be opened up in the UK through people leaving the workforce, mostly through retirement or ill-health. Over the same period an estimated two million new jobs will be created, given a fair economic wind. Yet based on the number of young people reaching adulthood, just seven million will enter the workforce. Even allowing for the vagaries of economic forecasting, it is clear that we have a problem.

The UK population is becoming older. This is not something that will affect us in the distant future, but is happening right now. We have entered a period, likely to last for many years, when more people will be retiring than are old enough to begin full-time work. By delaying the retirement age, we begin to address this issue, but it is only a start. For example, it does not even come close to compensating for the steep fall in full-time employment that affects the over 50s. There are some three million people out of work aged between 50 and the state pension age. Poor health is a significant factor for this, but so too are recruitment policies that discriminate against older men and women, regardless of skills and experience.

The figures I quote are from one of the Government's own reports, Future of an Ageing Population, which you can find them here https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/535187/gs-16-10-future-of-an-ageing-population.pdf at the Office for Science.

The work is robust, as you would expect from research led by Sir Mark Walport, the Government's Chief Scientific Adviser, and Professor Sarah Harper, who established Oxford's Institute of Population Ageing. The foreword was written by Oliver Letwin, who was then at the Cabinet Office, and with responsibility for the Office for Science. So, it was clearly supported at the highest level.

This report passed unnoticed when it was made public almost one year ago, in the aftermath of the referendum vote to leave the European Union. Despite the obvious implications for an ageing workforce, the report conspicuously avoided mentioning Brexit, and the impact of expected restrictions on immigration after the UK leaves the EU.

Its clear focus was the need for employers to consider how they can recruit and retain more employees over the age of 50 to avoid a shortage of staff and expertise. The emphasis was on recruitment practices, training provision for older workers and workplace adjustments, including investment in equipment to avoid heavy lifting.

Yet as I revisit the report with Brexit negotiations underway finally, it feels like a missed opportunity. Given the timing, it should have been the start of an honest and open debate about the profound implications of an ageing UK workforce, including the economic impact. Instead, this landmark report was reduced to little more than a call to organisations to improve employment practices.

Yes, we can retrain people, provide incentives for them to remain in work for longer, and possibly afford to pay them a bit more for to secure their skills and expertise. But the harsh reality is that the numbers just don't add up. By their own admission, the authors of the Go Science report conclude that Britain will be short of millions of workers, at every level, early in the next decade. There are simply too few young employees coming into the workforce to replace those who are leaving.

Whatever one's views about Brexit, it is important that decisions are taken based on facts, and based on evidence. For many voters, Brexit must mean that fewer foreign workers will be allowed to enter the UK. But the implications of this are rarely spelled out.

Britain is currently as close as it can possibly be to full employment. The unemployment rate is at a 42-year low of 4.6 per cent, and a record number of people are in work. Even with immigration at current levels, there is little or no spare capacity in the workforce. It is not the case (and never has been) that there are jobs that British workers won't do. Quite simply, they are busy doing other jobs.

Even before the rules have changed, foreign workers are voting with their feet. The number of nurses from the European Union registering to work in the UK has fallen by 96 per cent since the Brexit vote last year. Figures collated by the Nursing & Midwifery Council show that the number of new applicants from the EU fell from 1,304 in July last year to just 46 in April this year. Already there is a shortage of around 30,000 nurses in the NHS. Over time, more UK nurses can be trained. But given the numbers of young people available, this may simply create skills shortages elsewhere in the workforce.

Britain cannot escape from the reality of its demographics. We are an ageing nation, in need of young people to sustain the society we take for granted. Our current response to this predicament is akin to squaring a circle.

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