In this analysis of the main party manifestos we highlight a failure to respond to demographic change and long term population ageing.
In a summary of the main party manifesto commitments, we point out that without better long term planning, UK PLC faces significant fiscal and economic challenges. We argue that a failure to respond to these challenges could result in rising poverty, poorer health and the erosion of social care for those in old age over the coming decades. We also point out that a failure to respond better to ageing will hit all ages and could result in a drag on economic growth and the future delivery of public services.
We argue that whoever wins the election should focus on a five point plan to begin to respond to the major challenge of population ageing.
We argue the next Government should focus on
- Raising the productivity of the UK’s workforce: The UK faces a “productivity puzzle” where we have a record number of people in work but where overall output per worker is no higher than it was before the financial crisis eight years ago. Unless we find ways to make work more productive, an ageing population will result in economic stagnation.
- Extending working lives: An increasing number and proportion of people are staying in the workforce as they age but still only around 1 in 10 people aged over 65 are working. Meaningful employment for the over 60s, allied to increased productivity for those in work will help to drive-up growth and prosperity into the middle of this century.
- Delivering smarter public services: We need a rethink about the delivery of public services in the UK and in particular health and social care. Building a sustainable and tailored health and social care system to meet the preferences of a diverse population requires innovative thinking, careful planning and thorough consultation.
- Being honest about the future responsibilities of the State versus the individual: We must make it explicit to UK citizens that the responsibility for the three pillars of the welfare state; securing a basic retirement income, help during periods of unemployment, and support for health and social care will lie both with the individual as well as with the State. The State should always be there to provide a base level of support for those in need, but it may not be practical to promise anything more than this over an extended time horizon.
- Delivering viable individualised solutions: Given that the state cannot guarantee anything other than a base level of support over the long term, there must be viable alternative solutions that individuals can opt into to fill the gap. In practise, this means effective private savings and investment vehicles, accessible income protection insurance for the unemployed and insurance to cover some health and social care needs. To be clear, these private-led solutions should not replace the basic social safety net provided by the state, but be allied to it to ensure that people have adequate support at times of need.