‘How longer lives can power good growth in every postcode’

Incoming Prime Minister Andy Burnham will make good growth in every postcode his defining mission. To succeed, it is essential to take a wider view of how Britain drives growth and where economic opportunity lies. Lord Wood of Anfield was right when he recently argued for LabourList that an ageing population represents such an opportunity – longer, healthier lives can support greater economic participation. But with a near 20-year difference in healthy life expectancy between the most and least deprived parts of Britain, how can the new leadership hit the ground running to be the circuit breaker the country needs?

The UK has substantial labour supply and consumer demand opportunities from ageing and longer lives. Matching Sweden’s employment rate for workers aged 55–64 would add £78 billion to our GDP. The over-50s already account for 55% of all consumer spending, projected to rise to 63% by 2040. Yet we’re failing to capitalise. 1.5 million people aged 50–65 have been pushed out of work early through redundancy, ill health or caring responsibilities. And we are one of the only developed economies to have gone backwards on employment for NEETs and older workers simultaneously since 2019. Pension rules, social care uncertainty and a lack of suitable housing mean older consumers are sitting on wealth they are not spending. 

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Andy Burnham understands this territory better than most. Greater Manchester has shown what joined-up health, employment and skills support can achieve. Now he has the chance to make it national policy, and his political capital to be bold on economic reform will never be higher than in his first months.

Establishing No.10 North will be one of the first priorities of the new leadership. It must be more than a regional office, testing bold approaches to place-based growth, building capacity into the regions – north and south – and spreading what works. The longevity economy is exactly the opportunity it should be seizing from day one: building an economy that keeps people healthy, socially and economically active for longer, in every part of the country.

Reforming employment support is long overdue. Jobcentre Plus is already being redesigned, but we should imminently rename it the Stronger Working Lives Service, with a mission for good work across the whole of working life. Put combined authorities in charge of local delivery, joining up employment, health and skills support in the way Greater Manchester has already shown works. That direction of travel can be set within days in office, but it needs real investment in building local capacity, particularly where combined authorities are newer and less resourced. No.10 North can help support that capacity where it’s needed most.

Require every local growth plan – and future “good growth funds” – to include healthy ageing as a core outcome of economic strategy. The Northern Health Science Alliance estimated that ill health accounts for around 30% of the productivity gap between the Northern Powerhouse and the rest of England. That gap will not close unless health is treated as economic infrastructure in all places. 

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Part of the problem at national level is accounting: treating preventative spending as current spending rather than investment creates a bias against it. Reclassifying it as similar to capital investment would help correct that, and when the fiscal position allows, can free up the borrowing flexibility to act on it.

Labour should reframe the narrative around care – whether childcare or social care – as essential economic policy. Caring responsibilities keep hundreds of thousands of people, disproportionately women, out of work across the country. Improving social care can help unlock the longevity economy and, as a signal of intent, the new ministerial team must commit to accelerating reform following the Casey review.

In the past, many have pushed back against fiscal devolution because of the fear it could deepen inequalities. This is why embedding the principle in German Basic Law of equivalent living conditions in all regions – which Andy Burnham has invoked – into national policy design is so important. This would not represent a departure from Labour’s 2024 manifesto, but a means of delivering on its promise to spread opportunity and growth to every part of the country. Rapidly introducing new legislation enshrining the right to economic participation across the whole of life, in every place would give the principle real teeth. This would help make equivalent economic conditions something this government and future governments are legally accountable for delivering.

Lord Wood is right that the longevity economy, as in many other ageing countries, will drive future growth and ensure our long-run sustainability. The first 100 days offer the chance to show what that means in practice: employment support built around the whole of working life connecting into local health and skills; preventative spending treated as economic infrastructure; the right to lifelong economic participation enshrined in law; and No.10 North as the institutional engine driving new economic thinking and capacity building into every part of the country. 

With these commitments, the incoming government can show it means business on good growth in all parts of the country, and that longer lives are an asset to be invested in.

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