Chamber and committees

Does that reflect how different sectors in the economy are doing, too?

You have very helpfully answered my next question, because what you have said leads on to the potential for public sector reform. I know that you cannot comment on that, because it is a political decision, but it will be predicated on the trends in the data that you have just highlighted.

Is that largely in the 45 to 60-year-old group?

For different reasons, presumably.

Do you have any idea of the numbers that are coming back?

We were talking about that earlier. Obviously, different interpretations can be made of the data that is available to allow the OBR to make its predictions. You are absolutely right to say that the biggest challenge for the UK economy, in order to increase productivity, is to ensure that we get far more people back into the labour market than we have at the moment. However, different age groups seem to have different reasons as to why they are out of the labour market. That is a really big challenge.

Different policies will have different effects on younger cohorts or on older people who are approaching retirement and who happen to have taken it early because of the pandemic. I am interested in what policies we should be pursuing, especially if there are different reasons for people being out of the labour market. Are there specific trends that we should be wary of?

I will come on to inactivity in a minute. On unemployment, are there trends suggesting that there are different parts of the UK where the threat of rising unemployment is worse, or is it too early to tell?

Thank you, that is helpful.

Inactivity is another critical issue for the future of the economy. The Chancellor of the Exchequer has tried various measures—some of them a bit more successful than others—to ensure that inactivity is reduced, which is critical to productivity. Do you see any trends in the different age structures that suggest where people are more likely to come back into the labour market? Could you expand on that a wee bit?

Is early retirement a big factor in that?

It is all a very inexact science; I completely appreciate that, and I know how difficult it is because of the time periods. However, it would be helpful if the accuracy of the forecasting improved; it is critical for Governments to be able to make the right decisions. I am interested to know your views about how we can try to continue to improve forecasting.