IF Webinar Chaired by Keith Madeley
Keith Madeley took the chair for Intelligence Forums’ webinar on 17 September 2020, and over thirty members joined from across the country.
Our first speaker, Baron Newby of Rothwell in the County of West Yorkshire, has been the Leader of the Liberal Democrats in the House of Lords since September 2016. Formerly National Secretary of the SDP (1983 -1988) he was appointed an OBE in 1990 and created a life peer in 1997. In 2012, he was appointed Treasury spokesman and served as the Deputy Government Chief Whip in the House of Lords (2012- 2015), continuing as the Liberal Democrat Chief Whip until 2016.
Lord Newby posed the question “How do we rebalance the UK economy towards the North in general and Yorkshire and The Humber in particular?”, adding that the North is poorer than other regions of the UK and most people would agree that an advanced economy should not permit significant imbalances of wealth within it.
Yorkshire and The Humber, he said, comes near the bottom in a ranking of UK GDP by region, and is not fulfilling its potential. It is true, he said that infrastructure spending is lower in the region than in other parts of the country (it is one third of that in London, for example), but its manufacturing, agriculture and tourism industries, and educational institutions, provide the bedrock for a diverse and resilient economy. What then, should be done realise this potential?
Lord Newby grew up in Rothwell at a time when the textiles and engineering industries in Leeds dominated the local economy. The region went through a slow and gradual change as these businesses declined but today Leeds itself is significantly more prosperous than other parts of Yorkshire. He believes that this is because investment has been made in its universities and healthcare institutions and in relocating some of the country’s civil servants to the city. In addition, grants have been made to institutions such as English National Opera North to support the Arts. Business costs are lower in Leeds, and law and accountancy practices, for example, are able to carry out the same work as their London counterparts for up to 30% less. Consequent demand for such services has further added to its prosperity.
What is needed for the region as a whole, he suggested, is a government “kick-start”, by way of targeted investment across the Yorkshire and The Humber region and the North in general, in the following categories
Improved transport links, both north/south and east/west. This means more and better cross Pennine links in addition to HS2. (When challenged, he accepted that the forecast increase in business travel that underpins the HS2 investment case may now seem to be hugely overestimated, as a result of COVID, but contended that the investment remains valid. The case for freight is unaffected. We need to encourage more freight onto rail, he said, and there are already capacity constraints. The UK rail network is significantly behind those in Spain and other parts of the EU. HS2 will take time to build but will hopefully endure for 50 to 100 years. Just as infrastructure investments made by the Victorians are still in use today, HS2 will, over time, be useful to the economy in future years even though at today's level of economic activity this may not be the case. That said, transport spending pressure in London will disappear as result of the changes in peoples working habits, so the demand for services is unlikely to return to pre-COVID levels. Crossrail 3 is probably not necessary.)
Greater research spending in the North and less in the golden triangle of Oxford, Cambridge and London.
Improved broadband - reliability, capacity and connectivity are fundamental.
The region should also capitalise on the Government’s commitment on climate change by, for example
taking advantage of the opportunities to retrofit buildings for fuel efficiency;
using the regional knowledge of ground source heating from coalmines;
investing in windfarms;
capitalising on the bioenergy carbon capture and storage (BECCS) technology being used in the pilot scheme at Drax Power Station.
However, he believes the fundamental issue to be one of political representation. The size and scope of the Yorkshire and The Humber region is not reflected in its voice at Westminster. Greater devolution is needed and the “One Yorkshire” campaign, (supported by the CBI/TUC / IoD/Archbishop of York) has already set out to the Prime Minister new proposals to start unlocking the benefits of devolution across the region with a target of full devolution in 2022. Greater devolution would allow Yorkshire MPs to focus more on local issues where they can see that they can really make a change, in a similar way that Scottish MP’s, for example, can focus on Scotland.
Political rebalancing through devolution of power from Westminster to the regions and a move away from local authorities towards unitary councils will, he believes, result in economic rebalancing. The Government needs no greater incentive to invest in the North than the electoral advantage, because failure to do so will put its newly won Northern seats at risk.
Robert Kent Smith of the Office for National Statistics (“ONS”) was our second speaker. The ONS is an independent organisation which sets out to provide government, business and other organisations with appropriate statistical data upon which to base their decisions. Robert is responsible for the GDP figures as well as subnational statistics, and thanked everyone who completes the ONS data forms, without which, he said, his work could not proceed.
“So what is going on in the UK Economy?” he asked. There have been a number of very depressing graphs since COVID began. In Q2 2020, the UK’s GDP fell by around 20%, a fall 10 times greater than in any period during the recession following the 2008 financial crisis. The good news is that almost half of this been recovered, although here have been differences across sectors. The bright spots have been:
Education. Schools are included in the statistics, so the return to school has contributed positively
Car sale - this does not include car manufacturing
Restaurants and hairdressers
Accommodation – self-catering but not business travel
Manufacturing and construction – which have seen a widespread recovery
The hardest hit sectors have unfortunately been
Hospitality
Arts and entertainment ; and unsurprisingly
Employment agencies
However, as the economy begins to pick up, we are not yet seeing significant redundancies in these sectors. Unfortunately, he cautioned, more than 11% of businesses do feel at moderate or severe risk of insolvency, and may only have survived through government support.
In the labour market.
Approx. 10% of employees are still on furlough.
Job vacancies are picking up; but
Unemployment numbers do not yet reflect the damage to the economy.
Older people and those in the 16 to 24 age group have been particularly hard hit.
A key determinant for GDP will be how the labour market evolves. The UK labour market is resilient, and this was evidenced in when unemployment following the 2008 financial crisis was lower than expected due to labour market flexibility. This has continued as large numbers have adapted to working from home and others to meet the needs of companies which have diversified and/or retooled to follow social distancing requirements.
When questioned whether GDP would ever be replaced by a better, more holistic measure, Robert said that although he agrees with the sentiment and there are other measures that might be used (e.g. environmental measures, happiness index) there is none presently available which is better. He mentioned faster indicator surveys it is possible to combine data from traditional surveys with technological data from, say, cargo ship transponders or traffic cameras to gauge the general level of economic activity.
Another questioner highlighted the shortcomings of the National Census, citing population growth in Bradford, for example, which is so rapid that the most recent Census data has fast become inaccurate. Robert reminded us that while the Census is a rich source of data, the size and the cost of the exercise means it can only be undertaken every 10 years. Although the next Census is in March 2021, he agreed that a more robust way to build up the data for the intervening years is needed. For example, it may be possible to adjust the most recent Census for the number of new health registrations to provide a better population estimate in the intervening years.
Next to speak was Stuart Lewis , the Founder and Chief Executive of Rest Less, a digital membership community founded in 2018, to help people aged between 50 and 70 to maintain their sense of purpose through a significant life transition. Rest Less seeks to help its members make the most of their retirement, helping them to find fulfilling work or volunteering opportunities, or even a new career path. It now has over 280,000 members and covers issues such as employment healthcare and pensions.
Stuart recognised the need for such an organisation when he reflected that his father, at the time of his death, had lived for almost as many years after retirement as he had spent working. He also took inspiration from a Channel 4 film “Old Peoples Home for 4 year Olds” in which 11 pensioners shared a nursery with four-year-olds…..for six weeks! At start of the period almost half of these pensioners were suffering with depression – and by the end, not only had such symptoms disappeared, but there was a distinct improvement in their cognitive abilities.
Rest Less began as a job and volunteering site for the over 50’s, but pivoted early in its journey. It initially targeted those approaching retirement, expecting they would be aged around the state pension age, in their mid-60s, but quickly recognised the average age to be about 55. Rest Less was appealing to a rapidly growing cohort who, on turning 50, realised that they might have another 20 years of work ahead of them. Some needed guidance, inspiration and practical support with career changes / progression or simply to work fewer hours / part time. Others needed tailored support in finding a job, whether due to redundancy, long term unemployment, or age discrimination.
Stuart highlighted several of what he termed, “Age Myths”:
First Myth: “Ageing is all about silver hair and white trousers, dentures and incontinence pads”.
40% of the UK population is over 50, he said, so simply addressing an “over 50’s” age group is hugely misleading. Who we consider to be old is relative. A 15-year-old may see the age of 50 as “old”; a 50-year-old may see the age of 90 as “old”. People probably think of someone who is about 20 years older than themselves to be old, but we only have to look at what people like Sir David Attenborough and Captain Sir Tom Moore have done for the country, and how much of this they have achieved in their nineties, to explode the myth.
Stuart argued that the challenges that face the young and the very old haven't changed significantly over time. What has changed is the 50 to 70-year-old range, where health and life expectancy improvements have resulted in a more active and extended “middle-aged” group.
Second Myth: “There is significant wealth inequality between the old and the young because the “baby boomers have all the money”.
It is a common misconception, he said, that people over a certain age all have final salary pension schemes. This is not/no longer true. In fact more than 620,000 people aged over 50 are on Universal Credit, which indicates that they have less than £16,000 of savings (being the threshold above which a claim cannot be made).
And the problem with wealth inequality is that it is correlated with health inequality. In 2001, the differences in life expectancy between the least and most deprived area quintiles were 7.4yrs for men and 5.0yrs for women, and by 2017 these differences had widened to 7.7yrs and 6.1yrs, respectively,.
While government policy has rightly focussed on unemployment for young people, particularly during the COVID recession, there is also a challenge for older people. Often they are told simply that they are overqualified for certain jobs, so more needs to be done to encourage them along more lateral career paths.
Third Myth: “Older people cannot cope with technology”.
That there are over 12 million Facebook profiles in the UK for those over 50, and significant numbers of the same group using dating apps, suggests that this is an ill founded view. Increasing numbers of 50+ year-olds are tech savvy and during COVID, more have of necessity, become so. Further evidence comes from the exceptional increase in tech share prices over the past months which has partly been driven by the demand from an older generation who have had to embrace technology during periods of isolation. (Lord Newby, too, mentioned that despite the average age of the House of Lords being 69 years, peers have risen to the challenge of using technology to remotely register their votes!)
When questioned how Rest Less interacts with younger people to challenge the Age Myths, Stuart conceded that it is a big challenge. However the organisation seeks to engage and provide people with the facts to make informed decisions.