The House of Lords Committee on Intergenerational Fairness and Provision has called on the Government to take steps to deliver a fairer society by supporting younger people in the housing and employment market, and deliver better in-work training and lifelong learning to prepare the country for the coming 100-year lifespan.
The Committee found that the relationship between older and younger generations is still defined by mutual support and affection, but that is being undermined by the policies of successive governments that have failed to support young people to achieve secure and rewarding jobs and adequate housing, and plan properly for the needs of a larger older population.
The Committee sets out a range of recommendations to meet this challenge across different policy areas.
Tax and spending
While age-based benefits and allowances were justified in the past to tackle pensioner poverty, many pensioner households are now on average better off than many working age households both in terms of income after housing costs and household wealth.
To reflect this the Government should:
• Remove the triple lock for State Pensions and instead uprate the State Pension in line with average earnings.
• Phase out free TV licences based on age. The Government should then decide if it wants to subsidise TV licences based on household income.
• Free bus passes and Winter Fuel Payment should only be available five years after a person becomes eligible for the State Pension.
• Better off workers over the State Pension age should pay National Insurance while they continue to work.
Housing
There is a shortage of affordable housing for young people to buy and rent. The Government is not doing enough to address this.
It should now:
• Grant local authorities a presumption to develop unused land owned by public sector bodies and give them greater freedom to borrow to build.
• Ensure local authorities have specific planning policies to meet the housing needs of younger and older people.
• Government reforms to the rented sector do not do enough to provide tenants with long-term secure tenancies. They should be backed up by a new regulatory framework.
Training and Employment
Insecure employment and a lack of investment in both vocational and in-work training disproportionately affect younger people. As longevity increases more also needs to be done to support older workers to stay in work longer by providing better in-work training and lifelong learning.
The Government should:
• Substantially increase funding for Further Education and vocational training to tackle unfairness between those to go onto Higher Education and those who do not.
• There should be an assumption of the employment status of ‘worker’ by default to protect young people from exploitation or insecurity in the gig economy, while allowing those who wish to stay as self-employed to do so.
• Increase lifelong learning and training. In the context of a 100-year life, continuous training and retraining will become more important. Older people need to be equipped and supported to respond to a changing labour market.
Assessing intergenerational impact of policies
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. This will need to change to ensure policies are fair across generations.
• The Government should introduce new fiscal rule that addresses the whole Government balance sheet as well as the current deficit.
• The Office of National Statistics should introduce a generational breakdown of the Effects of Tax and Benefits on Household income dataset.
• The Treasury should publish a breakdown of the effects of each budget by generation and Government should create Intergenerational Impact Assessments for all draft legislation.
Communities
Policies should promote all age communities as drivers of intergenerational fairness. Local authorities should share intergenerational best practice and local and central government should focus on facilitating community activity and ensure long-term sources of funding are available.
Commenting, Lord True, Chairman of the Committee, said: “We found that intergenerational bonds are still strong, and the evidence suggested both young and older people recognise the contribution the other makes and the challenges they face. However, there is a risk that those connections could be undermined if the Government does not get a grip on key issues such as access to housing, secure employment and fairness in tax and benefits.
“We are calling for some of the outdated benefits based purely on age to be removed. Policies such as the State Pension triple lock and free TV licences for over 75s were justified when pensioner households were at the bottom of the income scale but that is no longer the case.
“Young people told us they feel short changed by the housing market, so we are recommending policies to deliver a significant increase in the supply of social and private housing and recommend protections to give renters long term security be backed a new regulatory framework.
“We also need to change how we view education and training. Longer working lives mean older workers need support to reskill and continue to contribute in the workplace and younger people, particularly those who do not go to university need the government to prioritise and fund further education and vocational training.”
