Intergenerational Foundation https://www.if.org.uk Your Future Now Thu, 12 Nov 2020 12:59:04 +0000 en-GB hourly 1 A green recovery requires transparency – from governments as well as businesses https://www.if.org.uk/2020/11/13/a-green-recovery-requires-transparency/ Fri, 13 Nov 2020 09:00:40 +0000 https://www.if.org.uk/?p=12604 Recent pledges by Chancellor Rishi Sunak suggest a solid and welcome commitment to the transition to a green economy, post-COVID-19. But IF researcher Melissa Bui says there is reason to treat such pronounced good intentions with caution UK Chancellor Rishi Sunak set out a number of commitments towards a green transition at the Green Horizon… Read more »

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Recent pledges by Chancellor Rishi Sunak suggest a solid and welcome commitment to the transition to a green economy, post-COVID-19. But IF researcher Melissa Bui says there is reason to treat such pronounced good intentions with caution

UK Chancellor Rishi Sunak set out a number of commitments towards a green transition at the Green Horizon summit on Monday (9 November). The two that attracted the most attention were the promise to issue the UK’s first green bond in 2021 and to make the disclosure of climate risks for investments in the UK completely obligatory within five years. These moves are part of the government strategy to place the UK as a world leader in the global transition to net zero by 2050.

In theory, these are pledges that should be welcomed. However, amongst all the noise, it is difficult to see clearly whether we are indeed moving towards a green recovery. News of Rishi Sunak’s recent announcement sits alongside numerous other reports which suggest that the government has, contrary to its claims, taken steps back in terms of climate action since the COVID-19 pandemic began.

A green appetite

Despite stock markets across the world taking a hit due to lockdown measures, there still seems to be a healthy global appetite for green investment. As outlined in a previous IF blog, the COVID-19 pandemic has shifted investors’ preferences, many of whom have learnt from this pandemic the need to be prepared for future crises. With governments across the world transitioning towards net zero carbon emissions by 2050, it’s expected that the demand for green businesses will be sustained in the coming years.

Fortunately, the government’s abilities to invest have also opened up. Borrowing has been made much cheaper than previously possible, due to the pandemic crisis: the Bank of England’s interest rates have reached the lowest level ever in its history (0.1%).

In a move that has been described as an attempt to “capitalise” on the rising interest in green investment, Chancellor Rishi Sunak has promised to issue the UK’s first green bond in 2021 as part of the COVID-19 stimulus package, which will mean that the government can only use the funds raised to invest in either clean or renewable energy.

What green recovery? 

However, other news casts doubt on whether these steps announced so far will truly make the UK “a world leader in the use of green finance” as the Chancellor described at the Summit. The UK is not the first to include green bonds as part of its green recovery strategy: these measures have already been included as part of the stimulus packages of Germany, France and the Netherlands.

It is true that the proposed pledge to mandate the disclosure of climate change risks by businesses by 2025 is more ambitious than the measures announced by other countries. This would allow the government and investors to make investment decisions based on how vulnerable businesses are to the climate change crisis – something that can be avoided under other rules proposed by G20 countries, which allow businesses the option to not disclose this if they provide an explanation for doing so.

However, for the issuing of a green bond to be successful, we need to rely on the government to choose the most appropriate investments. Although we have been assured that a framework will be produced to guide the investment decisions, a track record of misleading statistics on climate action calls into question whether this is possible.

Earlier this month, it was revealed that stimulus packages all over the world disproportionately favoured fossil fuel industries over renewable ones, with the UK labelled as the worst culprit. Prior to the green bond announcement, the UK’s stimulus package is estimated to allocate over 32 times more funds on fossil subsidies than it does on renewable energy, amounting to $5 billion in value. It has been suggested that the UK already had an unfortunately growing record of subsidising fossil fuel industries before the pandemic. A recently released report has estimated that the UK has dedicated support for fossil fuel infrastructure worth as much as £12.8 billion between 2017 and 2019, placing the UK amongst the worst offending nations OECD countries.

Confusingly, the government claims to not subsidise fossil fuel industries based on a narrow definition of fossil fuel subsidies.

In addition, Prime Minister Boris Johnson’s recent promises to make the UK the “Saudi Arabia of wind power” has also been criticised for being based on dodgy statistics. An Oxford-based consultancy estimated that we would need to install the equivalent of one wind turbine every weekend for the next decade, which would cost approximately £50 billion, to fulfil the pledge in time. The promise that this investment in wind energy will also create thousands of jobs has been criticised for being misleading, as it includes jobs that have already been created.

Earlier this year, in January, environmental activist Greta Thunberg accused world leaders of repeatedly offering “empty words and promises” on climate change “that give the impression that sufficient action is being taken.” It was something she described as “worse than silence” for younger and future generations, whose futures depend on genuine and rapid climate action.

Unfortunately for younger and future generations, it appears that this accusation still holds ground. If it is in the interest of the government to pave the way for more transparency on climate change risk, the government itself would benefit from mandating the principles of transparency within their own operations.

Photo by Zieben VH on Unsplash: https://unsplash.com/@zieben_vh

Help us to be able to do more 

Now that you’ve reached the end of the article, we want to thank you for being interested in IF’s work standing up for younger and future generations. We’re really proud of what we’ve achieved so far. And with your help we can do much more, so please consider helping to make IF more sustainable. You can do so by following this link: Donate

 

 

 

 

 

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Does the planning white paper really help first-time buyers? https://www.if.org.uk/2020/11/11/does-planning-white-paper-help-first-time-buyers/ Wed, 11 Nov 2020 10:38:49 +0000 https://www.if.org.uk/?p=12593 The government has recently consulted the public on their wide-ranging set of proposed reforms to the planning system in England, which, they argue, will reduce delays and uncertainty for developers and enable more new homes to be built for first-time-buyers. David Kingman explains IF’s position on whether these reforms go far enough to really make… Read more »

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The government has recently consulted the public on their wide-ranging set of proposed reforms to the planning system in England, which, they argue, will reduce delays and uncertainty for developers and enable more new homes to be built for first-time-buyers. David Kingman explains IF’s position on whether these reforms go far enough to really make a difference for first-time-buyers

Everyone knows that we currently have a housing crisis in the UK, for which the planning system is often given a large share of the blame. Earlier this year, the government announced a wide-ranging programme of reforms to the English planning system which it articulated in its policy white paper, Planning for the Future, which attracted a large amount of media coverage and public debate.

Throughout the autumn, the government held a public consultation on the design of its proposals for reforming the planning system through which interested parties were invited to give their views. As we do for lots of public consultations on government policies which will affect younger and future generations, IF made an official response in which we set out what we think of the proposals.

A “zonal” system?

The government’s reforms appear to be designed to move the English planning system somewhat closer to “zoning” systems which operate in some other countries, where land is designated into various “zones” which have different rules governing what can and cannot be built there.

Under the government’s proposals, land will be divided into three categories: “growth”, “renewal” or “protected”. If land is designated for “renewal”, councils will be expected to look favourably on new developments. In “growth” areas, new homes, hospitals and schools will be allowed automatically. Areas of outstanding natural beauty and the Green Belt will come under the “protected” category, while the proposals also say that “beautiful buildings” will be given special priority (although how this will work in practice is unclear).

The plans also include the “first homes scheme”, to provide newly-built homes at a 30% discount for local people, key workers and first-time buyers; this could help younger buyers get onto the property ladder, although the discount is supposed to be maintained in perpetuity (i.e. the purchasers can only sell this home on at a 30% discount to its market value in the future). Developers would be allowed to include these homes within the quota of affordable housing which they have to include on most types of new development.

What does IF think of the proposals?

The white paper’s proposed reforms have drawn a wide range of responses from different commentators.

Some of the proposed reforms concern the local plan-making process and making greater use of digital technology within the planning system, and these have drawn a generally favourable response. Some of the other ideas within the white paper – for example, the proposed changes to the way in which affordable housing will be provided – have been quite heavily criticised.

In our response to the consultation, we focused on making three specific arguments. Firstly, we echoed the criticism that others have made that the proposed reforms don’t include any alterations to the government’s current policy towards the Green Belt (or other protected categories of land, such as conservation areas).

Given that these proposals have been presented as a set of radical reforms to the English planning system, this represents a missed opportunity. The Green Belt now covers around 13% of all of England’s land, compared to only 2.3% which is covered by urban areas, and research has demonstrated that over a third of Green Belt land is used for intensive agriculture which may actually be harmful to biodiversity and the natural environment. Furthermore, by rendering land within cities more expensive, the Green Belt actually makes it harder to create parks and private gardens, which have been shown to support much greater biodiversity than intensive farmland does (not to mention that public parks are usually fully accessible to the general public, unlike most of the Green Belt).

Research has repeatedly shown that the existence of the Green Belt has artificially inflated property prices, particularly in London and the South East, which has contributed to the housing affordability crisis facing young people. Research has also shown that releasing for development small areas of the Green Belt which are close to train stations could create almost 1.5 million new homes in England while having very little impact on biodiversity.

It seems unlikely that the UK’s problem with the undersupply of housing can ever genuinely be solved unless reforming the planning system includes a meaningful review of how we protect green space and what that protection is attempting to achieve – which are questions that the white paper currently ignores.

More democratic?

Secondly, we argued that while using digital technology to make the planning process more democratic sounds good in theory, in reality this process is likely to need careful management to ensure that it doesn’t just result in groups who are opposed to new development being given more opportunities to make their voices heard.

We pointed out in our response that local democracy in the UK has historically tended to empower local elites to make more decisions about what is best for the future of their local areas, rather than attracting a range of views which is genuinely representative of the people who live in them. This is most visible when looking at the demographic profile of the people who serve as local councillors in England and Wales: data from the Local Government Association’s National Census of Local Authority Councillors have consistently shown that local councillors are usually much more likely to be male, above the age of 50, white and university-educated than average for the population of the areas which they represent.

Previous attempts to inject a larger dose of local democracy into the planning process are also not especially encouraging in this regard: research published by the planning consultancy Turley Associates in 2014 found that over half of all the neighbourhood plans which had been submitted to the planning inspectorate since the passage of the 2011 Localism Act had focused on resisting new development.

In order to ensure that a genuinely representative sample of the local population participates in the planning process, it will be important for local authorities to go out of their way to try and engage with other stakeholder groups, particularly including young people, private renters and people who work in an area but can’t afford to live there, to ensure that local plans reflect a diverse range of people’s views on what the future of the places they live and work in should look like.

Quality above quantity

Thirdly, we made the point that any set of reforms to the planning system needs to ensure that there are better legal safeguards which are designed to protect the quality of new homes which are built under permitted development rights, such as the permitted development right to convert former offices into homes.

We were pleased to see the recent policy announcement that new homes which are created under permitted development rights will have to abide by the minimum amounts of living space per unit which is set out in the Nationally Described Space Standards. The fact that many of the dwellings which had been created under the office-to-residential permitted development right were very small was an issue which IF highlighted in a research report we published earlier this year,  where we recommended that space standards should become part of the prior approval process for this type of development.

Other research has highlighted that there is a range of additional problems with the quality of homes which have so far been built under permitted development rights, including a lack of natural light, lack of outdoor space and access to public open space, a poor mix of different sizes of dwellings in these developments, and a tendency for these dwellings to be created in areas with poor access to amenities and public services.

Therefore, given the recent expansion of permitted development rights and the likelihood that a larger share of new housing delivery may come through this route in the future, it would be sensible if reforms to the planning system looked at how the prior approval process can safeguard the quality of these properties more generally.

There were many other points which we could have made in response to the wide-ranging reforms which were set out in the government’s white paper, but we felt that these ones were the most salient issues which needed to be prioritised in the interests of helping more young adults access housing which is affordable, secure and able to provide them with a decent standard of living.

The political debate over these reforms is probably only just beginning, so it will be very interesting to see how many of the ideas that were contained within the white paper eventually end up on the statute book.

Photo by Fas Khan on Unsplash: https://unsplash.com/@fasbytes

Help us to be able to do more 

Now that you’ve reached the end of the article, we want to thank you for being interested in IF’s work standing up for younger and future generations. We’re really proud of what we’ve achieved so far. And with your help we can do much more, so please consider helping to make IF more sustainable. You can do so by following this link: Donate

 

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Revealed: a new picture of young adults’ living standards https://www.if.org.uk/2020/11/04/new-picture-of-young-adults-living-standards/ Wed, 04 Nov 2020 09:00:04 +0000 https://www.if.org.uk/?p=12584 David Kingman looks at what an innovative new source of data can tell us about intergenerational differences in living standards Obtaining a complete picture of different age groups’ living standards is very complicated. Broadly speaking, a household’s living standards are determined by three things: income, expenditure, and wealth. Income can be thought of as a… Read more »

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David Kingman looks at what an innovative new source of data can tell us about intergenerational differences in living standards

Obtaining a complete picture of different age groups’ living standards is very complicated. Broadly speaking, a household’s living standards are determined by three things: income, expenditure, and wealth.

Income can be thought of as a flow of money which comes into the household, as payments for doing work and from other sources. Expenditure is the flow of money which goes out of the household to pay for goods and services. Wealth can be thought of as the stock of money that the household owns, which can be in the form of cash held in bank accounts or other kinds of assets, such as stocks and shares or a second home.

You would expect a household to add to its stock of wealth by saving when its income is greater than its expenditure, and conversely to draw down its stock of wealth in order to maintain the same level of expenditure during periods when its expenditure is greater than its income – for example if someone living in the household who’d previously worked becomes unemployed.

The fact that households’ living standards are determined by the complicated relationship between these three different factors makes comparing different households’ standards of living difficult, because there is no single data source which contains information on all three of them for a representative sample of UK households.

However, the Office for National Statistics (ONS) has recently released a brand new experimental dataset which attempts to overcome this problem. It has also published some interesting analysis alongside the data which draws attention to what it says about the differences between the living standards of households who belong to different age groups.

Imputation

What the ONS did was to use a statistical technique called imputation to combine data from two previously existing household surveys which collect information from a representative sample of UK households each year. These were the Wealth and Assets Survey (WAS), which records data on participating households’ income and assets, but not their expenditure; and the Living Costs and Food Survey (LCFS), which collects data on participating households’ normal patterns of expenditure.

As these two surveys collect data from two different samples of UK households, what the ONS researchers did was to match households within both samples who had similar demographic and socio-economic characteristics, in order to produce a synthetic sample which combined data from the two sources.

It’s worth noting that all of these data were collected during the period between 2016 and 2018, so the conclusions which they’ve drawn from them reflect the situation before the COVID-19 pandemic began.

“Overspending” households

As we explained when we published our research into the spending patterns of different age groups, economic theory suggests that expenditure may provide a more accurate picture of a household’s living standards than looking at its income does. This is because the amount which a household spends tends to be more stable over time, whereas household income is often quite unstable. However, this is still only a partial picture as long as you don’t have data on a household’s wealth.

Thanks to their new experimental dataset, the ONS was able to look at several different aspects of living standards for which it had been impossible to obtain robust data previously.

Firstly, they examined which kinds of households appear to be spending more than their total income each month (“overspending households” was their name for households in this position). In total, 40% of UK households fell into this category, although it varied significantly by age group: over 71% of households where the Household Reference Person (HRP) was aged between 18 and 24 were in this group, as were almost half of households where the HRP was aged 25 to 34. This compared to only 34% of households where the HRP was aged between 65 and 74.

Secondly, the data suggested that households also differ significantly in their ability to sustain their normal level of expenditure following a reduction in their income. Again, the youngest households appear to be the ones who have the least ability to withstand a decline in their income: among overspending households, the average household where the HRP is aged 18 to 24 would only have enough wealth to sustain their usual level of spending for around a month, and it was six months for households where the HRP was aged 25 to 34.

As you might expect, the oldest households covered by the survey could sustain a fall in income for the longest, because this age group tends to have the greatest accumulated wealth and also less need to spend money on housing or raising children.

What do these findings mean for young people?

There are two very important conclusions which we can draw from the ONS research which are relevant to intergenerational fairness.

The first is that the financial situation facing many younger households before the pandemic was even more precarious than our original piece of research had suggested it was, because these data show that younger households have very little in savings in addition to having to devote more of their expenditure budget to essentials.

The second is that it strongly suggests that younger households will have been in the weakest position of any age group when it comes to maintaining their standard of living during the COVID-19 crisis. Given that we know that younger workers have been losing their jobs at a significantly faster rate than any other age group during the crisis, they are very unlikely to have had a large enough pool of savings to tide them over while they try to get new ones.

Photo by Dries Augustyns on Unsplash: https://unsplash.com/@drieaugu

Help us to be able to do more 

Now that you’ve reached the end of the article, we want to thank you for being interested in IF’s work standing up for younger and future generations. We’re really proud of what we’ve achieved so far. And with your help we can do much more, so please consider helping to make IF more sustainable. You can do so by following this link: Donate

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COVID-19 and young people’s mental health https://www.if.org.uk/2020/10/30/covid-19-and-young-peoples-mental-health/ Fri, 30 Oct 2020 09:00:25 +0000 https://www.if.org.uk/?p=12579 NHS Digital recently published one of the first comprehensive studies of the mental health of children and young people during the pandemic. Melissa Bui explains how the bleak picture painted by the findings belongs to the larger narrative surrounding spending on children and young people generally As different parts of the country readjust to tighter… Read more »

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NHS Digital recently published one of the first comprehensive studies of the mental health of children and young people during the pandemic. Melissa Bui explains how the bleak picture painted by the findings belongs to the larger narrative surrounding spending on children and young people generally

As different parts of the country readjust to tighter restrictions under Tier 2 and Tier 3 measures, concern over the mental health cost of the pandemic for children and young people continues to rise. However, as is the case with any major point in history, it’s difficult to gauge the impact of a crisis whilst it is still in motion.

Although early evidence has already provided us with a partial picture of the scale of the impact, large-scale collection of data helps us to build a fuller picture of the patterns across the population, but typically this can take months or years to collate.

NHS Digital has recently released one of the first comprehensive studies into young people’s mental health during the pandemic, conducted by a team of researchers from the Office for National Statistics, National Centre for Social Research, University of Cambridge and University of Exeter. It’s based on data collected from 3,570 children and young people in July 2020 and is the first follow-up to the Mental Health and Young People Survey 2017, England’s leading source of data on trends in child mental health.

One in six children likely to have a mental health disorder

The study focuses on comparing the characteristics and circumstances of young people identified as likely to have a mental health disorder with those unlikely to have one.

The findings confirm common suspicions: there has been a clear decline in mental health amongst children and young people. One in six (16.0%) children aged 5–16 years were identified as having a probable mental disorder in July 2020, a figure which has increased by 10.8% since July 2017. Children with a probable mental health disorder were also considerably more likely to say that lockdown had made their life worse.

While these trends cannot be explained with great certainty at this stage, the study points to a number of possible explanations. During the months preceding the period examined in this study, claims for universal credit from families had already increased by 1.6 million between February to May, according to the Institute for Fiscal Studies (IFS).

In the NHS study, children in families experiencing financial strain were more likely to have poor mental health. One in twelve children studied were found to live in a household that had fallen behind with payments, and those with a probable mental health disorder were more than twice as likely to be in this position than those unlikely to have a disorder.

For one in twelve children, and one in twenty-five young adults, this meant that they could not afford food or had to rely on food banks for nutrition.

Furthermore, with no school, and restricted access to outdoor spaces, children’s everyday routines have been majorly disrupted. Problems with sleeping were commonly reported amongst 28% of all 5–22 year-olds. Young people aged between 17 and 22 with a probable mental health disorder were more likely to report sleeping difficulties than other age groups.

Greater need, but less support

Unfortunately, during the period when children and young people with mental health problems were most in need of support, it seems as though frequency of contact with support systems fell below standard. Children with a probable mental health disorder were 13% less likely to receive regular support from school or college.

With regards to mental health services, early reports have already revealed how access to services has not been possible for many young people during the lockdown. However, the data also suggest that the pandemic has deterred some people from seeking help. Approximately one in five 17–22 year-olds with a probable mental health disorder chose to not seek help over a mental health concern due to the pandemic. A smaller – but still considerable – proportion of parents (8.2%) also chose not to seek help for their child.

The lost generation 

These findings contribute to the mounting evidence being put forward to pressure the government into providing more support for children and young people. Earlier this month government advisors from the Scientific Advisory Group for Emergencies (SAGE) warned that children and young people are at risk of becoming a “lost generation” because of the government’s response to COVID-19.

The area in which the government is facing particular scrutiny is their decision not to extend the free school meals scheme for children in England over the holidays. Although the Prime Minister has claimed that the government will protect children through increasing universal credit payments and spending on local authorities, critics have argued that the numbers don’t add up.

On the other hand, recent IFS estimates suggest that extending free school meals to cover the Christmas and February half-term holidays is relatively affordable; it would only cost an amount equivalent to 0.05% of the direct cost of the measures announced to tackle the pandemic. The findings from the NHS study suggest that doing so could provide a lifeline for numerous children whose families are struggling to afford food.

The government also has a vested interest in increasing spending on children’s and young people’s mental health. Our recent research into the fiscal cost of mental ill health demonstrates that investing more makes not only moral sense, but economic sense too. We found that a single cohort of young people with depression cost the government approximately £2.9 billion in lost net tax revenues. This was estimated using pre-pandemic prevalence rates of depression; if the prevalence of mental health disorders has increased as the NHS study suggests, the fiscal cost is likely to be even higher now.

We expect further comprehensive data on children and young people to be released as the pandemic progresses. However, we do not need – and can not afford – to wait too long if we want to prevent the “lockdown generation” from becoming the “lost generation” further down the line.

Photo by Étienne Godiard on Unsplash: https://unsplash.com/@etiennegodiard

Help us to be able to do more 

Now that you’ve reached the end of the article, we want to thank you for being interested in IF’s work standing up for younger and future generations. We’re really proud of what we’ve achieved so far. And with your help we can do much more, so please consider helping to make IF more sustainable. You can do so by following this link: Donate

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Ever upwards: at what age will Millennials retire? https://www.if.org.uk/2020/10/15/at-what-age-will-millennials-retire/ Thu, 15 Oct 2020 11:38:00 +0000 https://www.if.org.uk/?p=12551 The UK’s State Pension Age has been rising steadily over recent years in response to increasing longevity, and last week it finally reached the new milestone of 66 for both men and women. What will happen to the State Pension Age next? David Kingman explores what this could mean for the future The welfare state… Read more »

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The UK’s State Pension Age has been rising steadily over recent years in response to increasing longevity, and last week it finally reached the new milestone of 66 for both men and women. What will happen to the State Pension Age next? David Kingman explores what this could mean for the future

The welfare state in the UK reached a new milestone last week: the State Pension Age officially reached 66, bringing a temporary halt to a full decade of gradual – and not so gradual – increases to the State Pension Age for both men and women.

This change represents a remarkable development: for the first time since the universal Basic State Pension was introduced in Britain following the Second World War, men and women will now have exactly the same State Pension Age and it will be above the age of 65 for both.

However, this is far from the end of the changes which are likely to happen to the State Pension Age, with the government having already made plans for it to rise to 68 over the next 19 years.

This could have big implications for today’s young adults.

Expensive promises

Ever since its beginning, the UK’s state pension has always operated on a so-called “pay as you go” basis, which means that the pensions for today’s pensioners are paid for out of general taxation; this is in contrast the model used in some other developed countries where there is a stronger actuarial relationship between the amount which an individual has contributed over the course of their working life and the pension which they get in retirement.

Paying the cost of the state pension every year is now one of the single biggest expenditure items on the government’s balance sheet; although a full state pension is only worth £9,110 per year to each pensioner, the government spent £96.7 billion on funding it during the 2017/18 financial year because it goes to 12.7 million people.

The State Pension Age is also used to demarcate the point at which pensioners begin to qualify for a number of other government benefits as well, such as Winter Fuel Payments and the English National Concessionary Travel Scheme, which means that even more government expenditure than the figure given above ultimately depends upon the age at which people reach it.

As most people are probably aware, life expectancy has risen dramatically in the UK in recent decades (although the average figures do disguise significant social and geographical inequalities). When the state pension was introduced in 1948, the average 65 year-old would live for 13.5 years after they started getting it, but by 2017 this had risen to almost 23 years.

Rising life expectancy has been the main driver of increased expenditure on the state pension, which resulted in the UK government first announcing that would begin raising the State Pension Age as long ago as 1995. The fact that women could start claiming the state pension five years before men also began to look increasingly anachronistic once large numbers of women began fully participating in the labour market on an equal footing with men.

The reforms to the State Pension Age which have been enacted so far have happened in two stages. Firstly, the female State Pension Age was equalised with the male State Pension Age gradually between 2010 and 2018. Then, over the past two years the State Pension Ages for both genders have gradually been increased by one year, which is how we’ve got to the point where both genders now have a State Pension Age of 66.

Looking to the future

Under current legislation, the next increase in the State Pension Age – which will see it gradually rise to 67 – is due to be phased in between 2026 and 2028. After that, things look a bit more uncertain: under current legislation it will then be raised again to 68 between 2044 and 2046, but in 2017 the government announced that they had accepted the recommendations of the Cridland Review, which argued that this increase should be brought forward, meaning it would be phased in between 2037 and 2039. However, this change appears not to have been legislated for yet.

For the Millennial generation, whose oldest members are just turning 40, the future is even more uncertain. There appears to be a general view among policy-makers that the State Pension Age will have been raised to at least 70, and possibly beyond, by the time that they are old enough to start claiming it, although any legislation that would give effect to these changes has not yet been discussed.

This was the future scenario which was outlined by a report from the Government Actuary’s Department in 2017, which suggested that it would be necessary in order to maintain the expectation that the average person should spend around a third of their life as a pensioner.

Time to rethink the triple lock?

The news that the State Pension Age had been raised to 66 was accompanied by a confirmation from the government that it intended to maintain the state pension “triple lock” under which it is indexed in line with whichever is highest out of earnings, inflation or a minimum of 2.5% each year, despite a number of organisations calling for it to be rethought during the COVID-19 crisis.

Even though increasing the retirement age has a larger effect on controlling public expenditure on the state pension than the methodology by which its indexed rises does, the cumulative impact of the triple lock over a period of many years will still be significant. The aforementioned Cridland Review estimated that linking indexing the state pension in line with earnings alone would reduce public spending on the state pension from 6.7% of GDP to 5.9% of GDP by 2066.

Given the parlous state of the public finances, the generosity of the triple lock seems like an obvious candidate for reform.

Photo by Kelly Sikkema on Unsplash: https://unsplash.com/@kellysikkema

Help us to be able to do more 

Now that you’ve reached the end of the article, we want to thank you for being interested in IF’s work standing up for younger and future generations. We’re really proud of what we’ve achieved so far. And with your help we can do much more, so please consider helping to make IF more sustainable. You can do so by following this link: Donate

 

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Let’s bury the generational hatchet https://www.if.org.uk/2020/10/12/bury-the-generational-hatchet/ Mon, 12 Oct 2020 08:00:30 +0000 https://www.if.org.uk/?p=12526 The intergenerational divide has been exacerbated by the COVID-19 crisis. IF supporter Rosie Neville maps the reasons why, and explains why bridging the divide is the constructive way forward, to the benefit of both sides “We don’t trust anyone over thirty,” remarked the 1960s environmental activist Jack Weinberg, who was known for his role in… Read more »

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The intergenerational divide has been exacerbated by the COVID-19 crisis. IF supporter Rosie Neville maps the reasons why, and explains why bridging the divide is the constructive way forward, to the benefit of both sides

“We don’t trust anyone over thirty,” remarked the 1960s environmental activist Jack Weinberg, who was known for his role in the Free Speech Movement at the University of California. The issue of intergenerational mistrust is not a new problem. However, in our current COVID post-Brexit post-financial crisis climate, it is often suspected that Britain’s intergenerational divide has never been wider.

Manifestations of the generational divide

The intergenerational divide is apparent at the ballot box – and increasingly so. In 2010, the very year that David Willetts, a Conservative politician, published The Pinch: How the Baby Boomers Stole Their Children’s Future, the gap between levels of Conservative support in the above-65s and those between 25 and 34 was 11%; this rose to 34% in the 2017 election. Furthermore, the age divide in the EU referendum was evident, with 73% of 18–24 year-olds voting to Remain.

Differing generational opinion is not the principal issue; however, this electoral divide becomes worrying when one considers the ageing population of the UK, alongside the higher turnout among older people, which leave young people disillusioned when they watch so many politicians continuing to pursue the grey vote.

The economic disparities between Boomers and Millennials are a very real issue; the long-held convention of children being better off than their parents has waned. Since the financial crisis, real median incomes of young people have fallen 7% whilst those over 60 have seen an 11% increase. This is further emphasised when you factor in the effect of both high housing costs and high student debt on young people’s disposable income.

The gig-economy and the instability of jobs, which has been exacerbated by COVID, also have a disproportionate effect on young people who are new, and more vulnerable, in the job market,

Generational segregation and stereotypes

These generational inequalities cannot be disputed and undoubtedly need to be confronted with a multifaceted approach.

However, what I want to address is the issue of our growing age segregation and intergenerational mistrust, which is likely to be partly fuelled by the aforementioned disparities, but also by generational misunderstanding and misconceptions.

The media have us believing that Boomers perceive Millennials as snowflakes that should stop eating avocados, drinking iced lattes and whining, and then they would be able to get on the property ladder. Meanwhile Millennials see Boomers as the bigoted and intolerant Brexit generation who have left a legacy of environmental disaster.

This issue has somewhat been reinforced by COVID, with the young being blamed for not following the rules, while they will carry most of the financial burden. Simultaneously, the majority of COVID deaths have been among people aged over 65. 

The issue of age segregation is both a mental and a physical issue, with both these issues perpetuating the other as the generational communication-disconnect causes a further mental disconnect and reduced intergenerational empathy. The disconnect also allows stereotypes and generalisation to be left unchallenged, as generations spend more time apart.

The physical disconnect is growing as more young people move into gentrifying city neighbourhoods, while the concentration of older people in suburbs and rural areas is increasing. This means that the customary “meeting point” for intergenerational discussion occurs where both parties only view each other on screens, further weakening the understanding between generations.

Generalised age-based blocks

The generalisation that sprouts from this disconnect, and which is often perpetuated by the media, leaves us with misconceptions. What about the 40% of over-65s who voted Remain in 2016? It seems unfair just to make age-based assumptions which fail to represent the diversity within generations. Do we believe that lumping all Boomers as intolerant Brexiteers helps us progress towards more harmonious generational relations?

Statistically the younger people are, the more left-leaning they are. In their youth, Baby Boomers were one of the generations who protested against Vietnam, oversaw the second wave of feminism, headed up the civil rights movement and went in their thousands to Woodstock.

Where do we go from here?

Breaking down age barriers and facilitating greater cross-generational interaction is vital to our collective sense of wellbeing, especially when the issue of loneliness seems to be having a profound effect on both young and old.

Creating space where both Millennials and Boomers, and anyone in between, can connect will benefit those involved and create a more healthy and less divided society. While generational differences exist, there are also vast areas of common ground where greater intergenerational socialising will help the different generations, such as Boomers and Millennials, to see the other generations for what they are: people. We need to bury the generational hatchet.

Photo by Annie Spratt on Unsplash: https://unsplash.com/@anniespratt

Help us to be able to do more 

Now that you’ve reached the end of the article, we want to thank you for being interested in IF’s work standing up for younger and future generations. We’re really proud of what we’ve achieved so far. And with your help we can do much more, so please consider helping to make IF more sustainable. You can do so by following this link: Donate

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Book Review: OK Boomer, Let’s Talk https://www.if.org.uk/2020/10/08/book-review-ok-boomer-lets-talk/ Thu, 08 Oct 2020 14:59:06 +0000 https://www.if.org.uk/?p=12531 IF Co-founder Angus Hanton recommends Jill Filipovic’s new book, OK Boomer, Let’s Talk: How My Generation Got Left Behind– particularly to Boomers It turns out that Baby Boomers had more sexual partners than Millennials (11 vs 8), but Jill Filipovic takes us through the many other areas where Baby Boomers got more than Millennials. They got… Read more »

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IF Co-founder Angus Hanton recommends Jill Filipovic’s new book, OK Boomer, Let’s Talk: How My Generation Got Left Behind– particularly to Boomers

It turns out that Baby Boomers had more sexual partners than Millennials (11 vs 8), but Jill Filipovic takes us through the many other areas where Baby Boomers got more than Millennials.

They got easier jobs, cheaper housing, more generous pensions, a healthier planet and more leisure time.

By contrast, Millennials often feel stigmatised and blamed for the predicament they are in, as well as for the troubles facing the whole of society.

Intergenerational divides

The book, OK Boomer, Let’s Talk: How My Generation Got Left Behind, concentrates on the intergenerational divides in America and the unfairness between cohorts which has been brought about both by deliberate policy and by accident.

Filipovic recognises how lucky young Americans are by historic or international standards (“Yes, we know that in the grand scope of world history we are phenomenally lucky”), but she wants them “to have a reasonable shot at a good future”.

The book explains why young people wear OK Boomer T-shirts and why in discussions on social media they often despairingly simply post “OK Boomer”. It’s a challenge from the young to the old to realise how much damage the Baby Boomer generation has done and how that group has taken more than its share of society’s resources.

Fixing it

Jill Filipovic wants to move the argument on from an outline of how life is much, much harder for younger people than it was for their parents to a discussion about how things can be arranged more equitably between young and old.

Recognising, perhaps, the Baby Boomers’ grip on power but concern for their own children and grandchildren, Filipovic can sometimes sound like she is begging for help and ends with, “Give us a hand, Boomer – okay?”

Graphic illustrations

OK Boomer‘s graphics are magnificently simple and every diagram shows something you can understand at a glance.

For example, one of them shows that, compared to 1980, Americans work an extra month each year. Another shows that house prices, even after adjusting for inflation, have more than doubled since 1970, and as a result many more young adults live with their parents – about a third of 18–34 year-olds, in fact.

Younger people are on social media a lot more than older generations, but tragically they are also more lonely. One OK Boomer illustration shows that 22% of Millennials say they have no friends, whereas for Boomers it’s only 9%.

Existential threat

In the biggest issue facing all generations, climate change, there is a marked difference in the way generations approach it.

Older generations are more likely to look at the climate crisis with profound grief and join the mainstream media in eulogising what we are losing, whereas Millennials are demanding immediate change. As the Millennial Representative Alexandria Ocasio-Cortez says, “This is our World War II.”

The younger generation (Gen Z, born after 1997) are even keener to see action now rather than at some indistinct future date, as illustrated by Greta Thunberg’s environmental campaign. The climate crisis is so concerning to Millennials like Jill Filipovic and her husband, Ty McCormick, that they are even reluctant to have children.

It’s a book to grab your attention, especially if you are older and want to understand why younger generations are so unhappy.

OK Boomer, please read it!

Jill Filipovic, OK Boomer, Let’s Talk: How My Generation Got Left Behind, Atria/One Signal Publishers (an imprint of Simon & Schuster), September 2020, paperback £10.59

Help us to be able to do more 

Now that you’ve reached the end of the article, we want to thank you for being interested in IF’s work standing up for younger and future generations. We’re really proud of what we’ve achieved so far. And with your help we can do much more, so please consider helping to make IF more sustainable. You can do so by following this link: Donate

 

 

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Age discrimination in a pandemic: a hard call https://www.if.org.uk/2020/10/06/age-discrimination-in-a-pandemic/ Tue, 06 Oct 2020 08:00:39 +0000 https://www.if.org.uk/?p=12521 In extreme circumstances, medics had to prioritise COVID-19 victims who could most benefit from intervention – and that often meant discrimination by age. IF Research Intern Hugo Till looks at the ethical dilemma that this poses Early on in the pandemic, we all heard heart-wrenching stories of Italian doctors rationing out ventilators, and deciding who… Read more »

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In extreme circumstances, medics had to prioritise COVID-19 victims who could most benefit from intervention – and that often meant discrimination by age. IF Research Intern Hugo Till looks at the ethical dilemma that this poses

Early on in the pandemic, we all heard heart-wrenching stories of Italian doctors rationing out ventilators, and deciding who should have a chance at life. Inevitably, some of the criteria that were used attracted controversy, and in particular those that related to age. In Bologna, patients over 80 were not considered for this last-ditch intervention, nor were those over 65 with co-morbidities. But in most cases age discrimination in healthcare is routinised, if far less overt.

DALYs

The World Health Organization (WHO) uses the Disability-Adjusted Life Year (DALY) system to allocate its healthcare resources and research funding, which discounts the value of each additional life year as we reach old age. This means that treatments that give an additional ten years of life to a 20-year-old will be prioritised over those that provide the same benefit to a 70-year-old.

The pandemic has put a finer point on these ethical dilemmas. Ethicists such as Professor Dave Archard have argued that using age as a determinative criterion is “wrongly discriminatory because it licenses differential treatment based on ‘unwarranted animus or prejudice’ against old people” – in principle no different to using race or gender. King’s College London academics have pointed out that being male or a person of colour are also reliable indicators of poor prognosis for COVID-19, but we would not dream of using gender or race as criteria for medical treatment.

But such arguments overlook the fact that in some healthcare scenarios, age is a salient difference (in a way that race and gender differences are not) due to our everyday views about the value of life and the badness of death, and so discrimination and differential treatment can be permissible. However, we should constantly be wary that permissible discrimination against older people does not translate into further stigmatisation and marginalisation.

Equal treatment for all?

According to one interpretation of the principle of equal treatment, the ideal world is one where everyone is difference-blind. People’s rights and opportunities should not depend on accidental and unchosen features such as their gender, race, sexuality, or indeed age. In a just society, people’s group identifications melt away and everyone is treated as an individual, free from harmful stereotypes and prejudice.

But this ideal of equality as the transcendence of group difference has been challenged by critical gender and race theorists. Minority groups might have the formal rights to be judged by the same standards as dominant groups, but these standards themselves are culturally specific and are implicitly defined by and for privileged groups.

For instance, the law guarantees women the same formal rights and opportunities for career progression. But in reality, for women to realise these opportunities they might, for example, have to internalise destructive masculinist norms of overworking, at the expense of neglecting their care-giving responsibilities. The socially necessary and valuable work of pregnancy and childcare means that many women cannot (and indeed should not) adopt these working norms, so women’s generally lower status in the workforce persists.

Unavoidable death

So the non-discriminatory ideal is flawed; sometimes oppression is undermined, and the benefits or “goods” that institutions promote are better realised through policies of explicit discrimination. Therefore, there is no intrinsic reason to suppose that age discrimination in healthcare is wrong. Instead, we need to consider whether the goods that hospitals and other healthcare institutions seek are better realised through age discrimination.

At risk of stating the obvious, hospitals, and the caregivers that make them possible, seek the health of the people they treat, which in turn allows patients to realise more completely all the things that makes life worth living. At the extreme end of this is the avoidance of death.

So a good doctor is one whose medical interventions give their patients with the greatest possibility of securing the goods associated with continued healthy existence. And the patients with the greatest possibility of securing the most future goods are overwhelmingly young people. Indeed this is reflected in our everyday views about what makes death bad or even tragic.

The death of Anne Frank at 15 or John Keats at 25 is regarded as tragic in a way that the death of Thomas Hardy at 82 or Rosa Parks at 92 is not. The former pair’s death deprived them of many years of life that were allowed to the latter, so in a sense their loss and misfortune was greater.

In a first-person sense, our lives seem to stretch out indefinitely in front of us in a series of open-ended possibilities, so we might regard death at 92 or even 902, however inevitable, as a tragic and permanent cancellation of the possibility of all future goods.

But viewed from outside, we know that even now, most people do not live much past 100. The possibility of living for another 50 years was much more distant for Hardy and Parks than it was for Anne Frank or Keats, so its deprivation is less of a tragedy. It becomes hard to see the natural limits of human life as themselves a misfortune: in the same way that blindness is not unfortunate for moles, neither is mortality for people. Although in a first-person sense, a tragic end might be in store for us all, viewed from outside, some deaths are more tragic than others.

And it is not just that when young people die, they fall short of the possible life-span of a person. If their death comes abruptly, they will have life-plans that will remain unfulfilled, dreams yet to be realised. Older people do not have their whole lives ahead of them in quite the same way: although of course they will have plans for the future, in most cases they will already have had opportunities to meet some of their goals. Given the natural limits on our lives, it would be unwise to save up all of the things you want to do in life for your 90s

The rule of diminishing returns

All of these considerations are relevant for healthcare. The fact is that on average, an 80-year-old is far less likely to get 50 years of additional life from being on a ventilator than an 18-year-old. And even if they did, it would be less likely still that these would be 50 years of healthy living that would allow that person to pursue their conception of the good life. And so their death, although of course terrible, is less of a tragedy and ultimately less bad.

Thus in conditions of genuine medical scarcity, but also in more routine contexts such as the question of where the WHO should allocate its research funding, age is a salient factor, not dissimilar from the obviously uncontroversial practice of discriminating by whether people are actually ill. For not only by tending to the sick, but also by tending to those that have most of their lives ahead of them, can hospitals and doctors most nearly realise their purpose of giving people the best chance to live a healthy and fulfilled life. And this judgment is not a consequence of ageism or prejudice, but views that we all share to a large extent about what makes life worth living, and death a tragedy.

Apply with care

But we should be constantly vigilant that legitimate age discrimination does not translate into the further marginalisation and stigmatisation of older people. They already suffer from stereotypes of fragility, and are often subject to condescending treatment due to the false presumption that they are unable to carry significant responsibilities, both professional and personal – worse still if they were widely treated like parasites on public resources, whose increasingly inevitable death would be no great tragedy.

The fact that, all else being equal, an 18-year-old has a stronger claim to a ventilator than an 80-year-old under conditions of desperate scarcity does not and should not imply that the latter’s life is not of immense value, and that they are not entitled to a range of public goods. The oppression of older people in certain social contexts is a very real problem, but is not necessarily worsened by legitimate age discrimination in healthcare.

Photo by Natanael Melchor on Unsplash: https://unsplash.com/@nmelchorh

Help us to be able to do more 

Now that you’ve reached the end of the article, we want to thank you for being interested in IF’s work standing up for younger and future generations. We’re really proud of what we’ve achieved so far. And with your help we can do much more, so please consider helping to make IF more sustainable. You can do so by following this link: Donate

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Environment in the media: not always following the science https://www.if.org.uk/2020/10/05/environment-media-not-always-following-science/ Mon, 05 Oct 2020 08:00:32 +0000 https://www.if.org.uk/?p=12513 Media coverage of environmental issues – such as plastic and climate change – has helped to trigger global environmental movements over the years. Although we have a lot of reasons to be grateful that these issues have become particularly newsworthy, what happens when the key environmental priorities reported in the media do not align with… Read more »

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Media coverage of environmental issues – such as plastic and climate change – has helped to trigger global environmental movements over the years. Although we have a lot of reasons to be grateful that these issues have become particularly newsworthy, what happens when the key environmental priorities reported in the media do not align with those within the scientific community? Melissa Bui explores the problem

If you watched the latest episode of the BBC’s War on Plastic series, then you would have discovered that approximately 11.6 billion microplastic particles are released from a single teabag, according to researchers from McGill University in Montreal, Canada. Advances in measuring techniques have meant that scientists can more accurately detect the presence and concentration of microplastics, which have led to the discovery that they can be found in almost every part of our everyday life – not only in our teabags, but also in our food, the air, our water – at surprising levels of concentration. One study by the World Wide Fund for Nature estimated that we consume the equivalent of a credit card’s worth of microplastics a week.

Microplastics is the umbrella term for plastics which range from 0.05 to 5mm in size and exist either because they have been designed to be small (for example in the case of microbeads used in “rinse off” skincare products), or form after breaking off from larger pieces of plastic.

In the UK, the government has already decided to take some action against microplastics. They joined a number of countries in banning the use of microplastics in cosmetic products in 2018, which was estimated to reduce the amount of microplastics entering the ocean by 1-2% by 2025.

However, there is no scientific consensus on the risks posed by microplastics. Some members of the scientific community have expressed their irritation at how environmental issues are being covered in the media – and that includes the coverage of issues around microplastics.

False alarm?

Whilst these findings are certainly alarming, our understanding of the consequences is still limited.

Researchers have speculated that microplastics may pose a danger if they can harbour diseases and bacteria which can be passed on to animals, although this has yet to be demonstrated experimentally. There has also been evidence suggesting microplastics can affect the digestive and reproductive ability of marine animals if ingested, although this has only been found to occur at concentrations that are higher than what exists in reality.

Nevertheless, it is possible that this may change in the future as the concentration of microplastics increases. Two academics from the University of Gothenburg and Norwegian University of Science and Technology have estimated that, if we continue producing plastic at current rates, microplastic concentration levels could pose environmental risks in 15–30 years, although the researchers note that these are “back-of-an-envelope” approximations.

Do we need to have a scientific consensus to take action? Not necessarily. Policy-makers face the difficult choice between waiting until a scientific consensus has been formed and taking action before our ability to reverse any damage dwindles.

If we find that we do need to reduce the amount of microplastics in the environment, this would require drastic changes to be implemented, as most of our current filtration systems are not effective with microplastics.

The role of the media 

Still, scientists have emphasised the need to not over-emphasise the importance of issues whilst the evidence about their consequences is still premature.

Microplastics are just one example of an issue that many experts feel has been sensationalised over the years. Overstating what we do know about the risks can have negative externalities; for instance, it can distribute money away from research that is considered to be higher priority in the scientific community.

One study into the framing of microplastics in the literature and in media found that, whilst only 24% of scientific studies present microplastic risks as established, 93% of media articles imply that the risks exist and that it is highly probable that there are harmful consequences. These media reports play a key role in framing scientific knowledge to the public.

The same academics who produced the “back-of-an-envelope” estimates mentioned earlier also argue that they can provide “perverse incentives” for academics to focus on searching for new risks that have yet to be widely publicised.

Furthermore, we need to be careful whether our current alternatives are any better. As written in a previous IF blog, alternatives to plastic – including glass containers – are typically much heavier and thus require considerably more energy to transport. The recent findings of microplastics in teabags has led to a surge in interest in plastic-free teabags, including ones made of plant-based paper. As is the case with bags used for shopping, making teabags using paper or plant-based materials uses a lot more resources than plastic.

Our decisions on what to do about microplastics must also take into consideration whether the alternatives will make us worse off.

Photo by Drew Taylor on Unsplash: https://unsplash.com/@replicantman

Help us to be able to do more 

Now that you’ve reached the end of the article, we want to thank you for being interested in IF’s work standing up for younger and future generations. We’re really proud of what we’ve achieved so far. And with your help we can do much more, so please consider helping to make IF more sustainable. You can do so by following this link: Donate

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Government should lift the state pension “triple lock” next year, argues Treasury Select Committee https://www.if.org.uk/2020/10/02/lift-triple-lock-argues-treasury-select-committee/ Fri, 02 Oct 2020 08:00:24 +0000 https://www.if.org.uk/?p=12483 A new report from the House of Commons Treasury Select Committee has made a range of recommendations regarding how the government should address some of the economic challenges which the COVID-19 crisis has caused. One of its most eye-catching suggestions is that the “triple lock” on the State Pension should be lifted next year to… Read more »

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A new report from the House of Commons Treasury Select Committee has made a range of recommendations regarding how the government should address some of the economic challenges which the COVID-19 crisis has caused. One of its most eye-catching suggestions is that the “triple lock” on the State Pension should be lifted next year to avoid the State Pension being artificially inflated. David Kingman looks at what their report could mean for intergenerational fairness

The economic harm caused by the COVID-19 crisis has been immense, and with a significant rise in unemployment being forecast for the latter months of this year and a possible second wave of infections looking increasingly likely, it seems almost certain to get worse before it gets better.

So far, the government has implemented a range of policy measures which were designed to try to mitigate the economic fallout from the pandemic, most notably by spending billions of pounds through the Coronavirus Job Retention Scheme and the Self-Employment Income Support Scheme to try to protect people’s jobs – although these schemes are now being wound down ahead of their complete removal in October.

A recent report by the House of Commons Treasury Select Committee made a series of recommendations about what else the government should do to try to reduce the economic damage which is being caused by COVID-19, which included a couple of eye-catching proposals that would have significant impacts for young people and intergenerational fairness.

An unequal crisis

The Select Committee’s report highlighted that the COVID-19 crisis has hit some groups within society much harder than others. In particular, people working in low-paid sectors, people who belong to ethnic minorities, women with childcare responsibilities, and – most significantly from IF’s perspective – younger adults and private renters, were identified as the groups who’ve felt the biggest negative impacts from the crisis.

Specifically with regard to younger adults, the Select Committee presented evidence in their report which showed that the relationship between someone’s risk of being either furloughed or losing their job and their age appears to be U-shaped, with much higher job losses for both workers aged 18–24 and those who are in their 60s than have been experienced by those in the age groups in between.

Some of the evidence which was presented to the Select Committee also highlighted the problems which large numbers of private renters have had paying their housing costs, as it appears that private renters have been 50% more likely than people with mortgages to have experienced difficulties in this area.

The Coronavirus Job Retention Scheme

The higher levels of furloughing and redundancies which younger workers have experienced since the COVID-19 crisis began have largely occurred because these workers are disproportionately likely to work in the sectors of the economy that rely the most on in-person interaction, such as hospitality, retail, leisure and tourism.

The government has put in place a number of measures which are designed to try to prevent very high unemployment amongst workers who are at the beginning of their careers, as there is evidence from previous recessions to show that being unemployed when you are young can result in a “wage-scarring” effect which significantly retards your earning power for many years afterwards.

These have included the Coronavirus Job Retention Scheme and similar support for self-employed workers, as well as the Job Retention Bonus Scheme (which will give employers £1,000 for each worker who they keep on up to next January) and the Kickstart Scheme, which will provide additional funding for employers to create placements for 16–24 year-olds.

The living standards of young adults who lose their jobs have also been protected to some extent through increases to the generosity of the main welfare benefit, Universal Credit, which have made it easier for young renters in particular to access.

However, the Treasury Select Committee warned that there is a serious danger that unemployment could rise significantly once the Coronavirus Job Retention Scheme is removed in October, given that there are still many employers whose businesses are unlikely to be economically viable as long as social distancing remains necessary.

Their report argued that there is a strong case for keeping the scheme in place for some time to come, at least for those sectors which are worst-affected by social-distancing, such as the hospitality industry, as the cost of doing so may be worthwhile compared to the social and economic costs of higher unemployment.

Should the triple-lock be suspended?

Another point which the Treasury Select Committee made in their report was that the cost to the government of maintaining the state pension “triple lock” could be artificially inflated to a very high level next year because of the relationship between it and average income growth.

Under the “triple lock” policy, the value of the state pension rises every year in line with whichever is highest out of inflation, earnings growth or a floor rate of 2.5%. As the furlough scheme may have temporarily reduced the incomes of people who have been furloughed (because the government will only pay up to 80% of the salaries of furloughed staff, with a cap which is equivalent to £30,000 per year), it’s possible that when large numbers of employees are taken off furlough and go back to earning their previous salaries there will be a large one-off rise in average earnings growth which will be much larger than the types of increase which normally occur in a typical year.

The Treasury Select Committee argued that given that this would be entirely a consequence of the furlough scheme, and also because of the wider pressure which public finances are under, the government should seriously consider suspending the triple lock for the next year. The report leaves how they should do this up to the government, but one obvious way would be to only uprate it in line with inflation, which is likely to be significantly lower than earnings growth.

Since the report’s publication, the government has confirmed that the triple lock rule will be applied to pensions next April, but there is considerable doubt over whether it will be maintained thereafter, and pressure across the political spectrum to put it under review.

Photo by David Clode on Unsplash: https://unsplash.com/@davidclode

Help us to be able to do more 

Now that you’ve reached the end of the article, we want to thank you for being interested in IF’s work standing up for younger and future generations. We’re really proud of what we’ve achieved so far. And with your help we can do much more, so please consider helping to make IF more sustainable. You can do so by following this link: Donate

 

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