Tackling intergenerational unfairness Contents


Intergenerational fairness is an increasingly pressing concern for both policy makers and the public. It is exacerbated by an ageing population, the global financial crisis and successive government policies that have failed to consider generational issues. We believe the issue of intergenerational fairness needs to be addressed.

The relationship between older and younger generations is still defined by mutual support and affection. However, the action and inaction of successive governments risks undermining the foundation of this relationship. Many in younger generations are struggling to find secure, well-paid jobs and secure, affordable housing, while many in older generations risk not receiving the support they need because government after government has failed to plan for a long-term generational timescale.

Our report has reached six main conclusions:

(1)Lack of political will has meant that data is not published on generational differences in income and wealth, nor on the potential effects of policy on different generations at the time policy is being considered. Both the Government’s fiscal rules and the way it conducts spending reviews encourage an often damaging short-term approach. They need to be reformed with a new fiscal rule focused on the Government’s generational balance of debt and assets and a more transparent spending review process. There should be a broad equivalence, and a sense of equivalence and fairness, about what is contributed over a lifetime and what is received by successive generations.

(2)Many younger people are struggling to secure affordable housing. This is caused by the failure of successive governments to ensure a sufficient supply of affordable homes to buy and to rent. Although the Government states that housing supply is one of its priorities, it is still not doing enough to address this problem. It could go further by giving local authorities much stronger powers to develop housing on publicly owned land and to borrow to fund house building. It has also failed to ensure that the private rented sector is a viable tenure for people to live in for the long-term. Tenants in the private rented sector need much greater security and stability.

(3)Younger people are also disadvantaged by an education and training system that is ill equipped for the needs of the rapidly changing labour market and all generations will need support in adapting to technological change in the course of what will be longer working lives. Post-16 vocational education is underfunded and poorly managed. The Government’s apprenticeships strategy is confused and has not achieved the desired effect. In addition, the options to retrain and reskill in later life are incoherent and underfunded. Much more investment is needed in both vocational education and lifelong learning to prepare younger generations for a 100-year life.

(4)Pay progression has slowed for younger generations. They are unlikely to enjoy the same generation on generation income gains that their predecessors received. Younger generations are also more likely to find themselves in insecure employment, without the rights that come with worker status. The Government should ensure that employment rights cover all those in genuine employment by ensuring that worker status is the default position. Longer working lives will require greater consideration for initiatives such as flexible working, mid-life career reviews and tackling ageism in the workforce.

(5)Active communities have a key role to play in meeting these generational challenges. Communities and a strong sense of place strengthen intergenerational bonds by bringing generations together and sustaining shared loyalties. Communities may also help to directly tackle skills, care and housing shortages through innovative local initiatives.

(6)The tax and spending policies of successive governments have failed to pay sufficient regard to longer term policy consequences. This is an endemic failure of policy making. It has undermined intergenerational fairness, including for generations yet to be born. Successive governments have failed to make proper provision for the costs of social care in old age for the large post war cohort who are now entering a lengthy retirement and who will rely on smaller, younger generations to pay for them. More recently, governments have prioritised social security spending for older people. This was originally justified. But now retired people have higher incomes on average than many younger groups. Changes are necessary to both age-related benefits and the taxation system to address these issues.

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