The Week, 1 July 2022

1 July 2022
By Patrick King

Tuesday saw the the release of the first results of the 2021 census. A policy wonk’s dream! The top line? We’re getting older, and fast. The proportion of the population aged 65 years and over is 18.6%, up from 16.4% a decade ago and that means for the first time in history there are more over 65s than under 15s. That’s good news for Saga, but spells trouble ahead for public services. As the population ages, the cost of pensions, health and social care all go up. Meanwhile we’re relying on the taxes of a smaller working-age population to pay for these services.

But any conversation about how to make public spending generationally fair is stifled by the political power of the grey vote. Through numbers alone, the elderly shape political priorities to protect their interests (see this excellent leader in The Times). That means more policies like the pensions triple lock and the cap on care costs and less focus on the challenges that young people and the working-age population face. And the failure to invest in younger generations is actively exacerbating our demographic challenge: who would have children when they can barely pay their rent, let alone fork out the sky high costs of childcare (on average, 30% of the household income of a two earner couple)? This might explain the declining birth rate and the drop in the number of 0 to 4 year olds over the last decade, as seen in the census. 

Elsewhere this week, an announcement from the HMICFRS — the watchdog responsible for police inspection — that the Metropolitan Police has been placed into special measures due to concern about “critical shortcomings” in the performance of the Force. This will require the Met to produce a comprehensive improvement plan to address its litany of failings, and the underlying reasons for them. The scandals that the Met has been embroiled in are already translating into weakening public trust and confidence. Less than half of Londoners now think that the Met “does a good job” of policing their local area. The HMICFRS argues that the failings have been amplified by a “relatively young, inexperienced workforce”, but the years of scandal and cases of corruption show deep-rooted cultural issues, which the new Commissioner must address head-on.

The Met joins five other police forces, including Greater Manchester, now in special measures — meaning that over a quarter of England’s population live in areas with inadequate policing. Something isn't working.

And here’s what we’ve been reading this week…

Firstly, this Financial Times article by Sarah O’Connor on why, despite a positive headline drop in the number of young people who are economically inactive, it is important to dig beneath the surface and ask which groups are still struggling to find employment. O’Connor cites a 78% decrease in NEET young people between 2006 to 2021, chiefly driven by a collapse in the number of young women staying at home to care for children. The number of economically inactive young men meanwhile has climbed from 5% in 2000 to 9% last year, partly due to “ill health, [and] particularly mental health”. With only 32% of workless young men on income-related benefits in 2019 — and job support largely only available to this group — it raises the question of where the remaining two thirds can go to be helped into work.

Secondly, this report by our friends at the Resolution Foundation on Britain’s productivity crisis is worth a read. Quick refresher: the UK’s overall productivity is substantially lower than comparable countries and gaps between regions are large and growing. The challenge that governments face in the coming decades is that there may be a trade off between achieving two worthy policy aims: increasing overall productivity and narrowing disparities between regions. To do the former, it makes most sense to put the rocket boosters under already high productivity areas in London and the South East. Achieving the latter will likely require significant investment in lower-return projects outside of economic hubs. That may in turn make Britain more equal but see us lag even further behind our competitors. Squaring the circle on this one will prove a major headache…