Monthly Archives: April 2021

Back in May 2018 the House of Lords appointed a Select Committee on Intergenerational Fairness and Provision. The Committee, which published its report in April 2019, found that while the relationship between older and younger generations was defined by mutual support and affection; an ageing population, the global financial crisis and successive Government policies had failed to fully consider generational issues. More recently, a number of debates and discussions on intergenerational fairness have taken place to try to better understand what impact COVID-19 is having on and between generations. If the pandemic is leading us to think much more about our obligations to each other, how can we keep society together and not favour one generation at the expense of another? Jessica Sellick investigates. 

………………………………………………………………………………………………..

What is intergenerational (un)fairness? In May 2018, the House of Lords launched a Select Committee to consider the long-term implications of Government policy on intergenerational fairness and provision. It was established in response to a concern that intergenerational unfairness was growing as a result of the millennial generation appearing worse off than the baby boomer generation. The Committee’s work was intended to build upon earlier Lords reports on demographic change and social mobility and a debate on intergenerational fairness; as well as a House of Commons report on intergenerational fairness.   

The House of Commons Work and Pensions Committee report published prior to the Committee’s work in November 2016 described how intergenerational fairness is ‘not simply a matter of comparing the circumstances of different age groups at a given point of time, but instead the economic experiences of generations over the course of their lifetimes – but it should not be confused with valid concerns about inequality within generations.  The report centred on an implicit social contract between generations and how this underpins the welfare state – with the older population funded by the taxes of the working population who, in return, expect to receive similar benefits when they are ready to retire. 

In 2019, the House of Lords Select Committee on Intergenerational Fairness and Provision took a broad definition of generations; grouping together people by their current stage of life and their common lived experience rather than by their year of birth. The Committee defined intergenerational fairness as ‘the idea that each cohort should retain a fair expectation of social improvement and can have a fulfilling life without being unduly harmed by the actions of a previous or subsequent cohort’. The Committee suggested this sense of fairness extend to generations just born, or about to be born, that have no voice to advocate for them. The Committee’s view was that ‘unfairness results from not providing appropriate support to people at different stages of the life course’. 

Similarly, according to the Intergenerational Foundation (IF), intergenerational fairness is ‘the idea of fairness between different generations alive today as well as those generations yet to be born….younger generations should have the same standard of living as generations who have gone before’. 

What unites these definitions is their focus on the need to provide support to people at different stages of the ‘life course’ – highlighting the bond between younger and older generations. The ‘fairness’ dimension becomes apparent when they compare the situations of different generations (their economic and lived experiences). 

How much of a problem is it?The House of Commons Work and Pensions Committee report back in 2016 highlighted how the State Pension triple lock [which was introduced in 2012 and annually uprates the state pension by whichever of price inflation, average earnings growth or 2.5% is highest] is leading to the state pension expenditure to account for a greater share of national income at a time when public finances are fragile. Combined with increases in the state pension age, this was seen as disproportionately affecting young people and those socio-economic groups with lower life expectancies in retirement. The report therefore recommended benchmarking the new state pension and basic state pension at levels relative to average full-time earnings they reach in 2020 – with the triple lock replaced by a smoothed earnings link ‘that is more fiscally sustainable and more intergenerationally fair’. In response to COVID-19, the Office for Budget Responsibility’s (OBR) fiscal outlook forecasts how the triple lock will deliver a cumulative increase of 19.3% over the six-year forecast period between 2020-2021 and 2025-2026, compared with 15.2% cumulative growth in average earnings and 9.6% cumulative increase in CPI inflation over the same period.

The Select Committee on Intergenerational Fairness and Provision’s report in 2019 highlighted particular problems and perceptions of younger people. Examples included the student loans system and cost of a university education to students, which were cited as a “fiscal illusion” with many student loans not paid off in full within a 30-year period leaving the taxpayer to foot the bill. Expecting future taxpayers to bear the brunt for funding today’s students was regarded as unfair. According to the Committee, the system also risks perpetuating unfairness within a generation – between those who can access Higher Education and those who cannot. Other examples concerning young people cited in the report included difficulties in finding employment that is secure and well paid, and access to affordable housing. The Committee also collected evidence which highlighted how some Local Authorities charge a lower rate of Council Tax on second properties. This was also viewed as an unfairness that should be redesigned so the rate is related to the size and capital value of the property alongside additional protections for people who are asset-rich but income poor through a system of delayed payments. The Committee reached six main conclusions that had led to unfairness: 

1. Accounting for the future: policy data is not published on generational differences in income and wealth, nor on the potential effects of policy on different generations at the time the policy is being considered.  
2. The housing challenge: an insufficient supply of affordable homes to buy and rent by younger people. 
3. Educating generations: the education and training system is ill equipped for the needs of a rapidly changing labour market. Post-16 vocational education is underfunded and poorly managed. Options to retain and reskill in later life are incoherent and underfunded.  
4. Working: younger generations are more likely to experience slower pay progression and find themselves in insecure employment. They are also unlikely to enjoy the same generation-on-generation income gain that their predecessors received. 
5. All-age communities: communities and a strong sense of place strengthen intergenerational bonds by bringing generations together and sustaining shared loyalties. Communities may also help to tackle skills, care and housing shortages through innovative local initiatives. 
6. Intergenerational taxation: the failure to make proper provision for the costs of social care in the older age category, particularly for people now entering a lengthy retirement who will rely on smaller, younger generations to pay for them. Retired people were found to have higher incomes, on average, than younger working age groups. 

These examples often focus on the barriers and obstacles people in the younger age groups face – although many of the issues highlighted also affect older age groups. They also place an emphasis on central Government to update and revise policies to meet the challenges not only faced by young people but also by people across the life course (e.g. pensions, social care). 

Generations apart – how much of an issue is it in rural areas? There is little work exploring intergenerational fairness in the countryside. Papers and studies that do reference rural focus on ‘age segregation’; that is, the outmigration of young people and older people moving to (and wanting to remain in rural places) – and the increasing divide this leads to (i.e., how some rural places have no children or young people living in them). Research carried out by the IF, for example, found rural areas have aged nearly twice as rapidly as urban ones over the past 25 years and for the typical child in the 25 largest cities, only 5% of their neighbours are now over 65 years of age. The pattern that emerges is one where urban areas are seen as more youthful than rural areas.  

The Select Committee took evidence from Professor Elspeth Graham (University of St Andrews), who suggested, at the extreme, that segregation could threaten social cohesion, because people might vote for different self-interests, or age-related interests. David Kingman (IF), added that a political system based on age-segregated geographical representation would be likely to contribute towards political polarisation, given that age is now the most accurate demographic predictor of which way someone will vote. The Committee also referenced the work of the Pub is the Hub campaign. 

Outside of the Committee’s work, literature on age segregation often cites a lack of affordable and appropriate housing options; the role of connectivity and technology; and access to public transport – and while these issues may resonate with younger people they can affect rural residents of all ages and abilities.  

What has been done to tackle unfairness? The House of Commons Work and Pensions Committee report back in 2016 recommended Government collate and make available reliable and comprehensive information about the intergenerational distribution of public and private resources to estimate the balance of fiscal contributions and withdrawals by different generations over their entire lifetimes. The House of Lords select committee in 2019 extended this view in calling for: 

• A new fiscal rule focused on the Government’s generational balance of debt and assets and a more transparent spending review process. This should draw out a sense of equivalence and fairness about what is contributed over a lifetime and what is received by successive generations. 
• Giving Local Authorities stronger powers to develop housing on publicly owned land and borrow to fund house building. 
• More investment in vocational education and lifelong learning to prepare younger generations for a 100-year life. 
• Further consideration of employment rights by ensuring worker status is the default position; and consider initiatives such as flexible working, mid-life career reviews and tackling ageism in the workplace. 
• Changes are needed to age-related benefits and the taxation system to make proper provision for the costs of social care.  

The Government responded to these recommendations in July 2019: 

• Accounting for the future: The Government agreed that “fully considering the long-term implications of policies is important”. It argued this was evidenced by its fiscal rules, which aimed to ensure “sustainable public finances which lessen the debt interest burden on future generations”. The Government added that it had already “committed to requiring departments to show how their bids deliver long-term” following a National Audit Office report that made recommendations in this area. It also said HM Treasury’s guidance on appraisal and evaluation for programmes, policies and projects (contained in the Green Book) already recommended steps be taken in the preparation of business cases to “ensure that the impacts of an intervention on future generations are fully captured and appraised”.
• Housing: The Government said it was committed to increasing the supply of affordable housing and outlined policy responses designed to increase the supply of homes, including allowing Local Authorities to borrow more to build council homes; releasing Government-held land for home building; and making changes to the planning framework.
• Education: The Government said it was aiming to improve the quality of education provision, particularly in relation to apprenticeships and further and technical education. It added that it was also engaged in testing various retraining and life-long learning programmes for effectiveness.
• Work: The Government said it had committed to a “wide range of policy and legislative changes to ensure that all workers can access fair and decent work, that both employers and workers have the clarity they need to understand their employment relationships, and that the enforcement system is “fair and fit for purpose”. It said it supported flexible working and highlighted that it was now standard practice for all civil service roles to be advertised as available for flexible working unless there was a strong business case otherwise.
• Communities: The Government said it was “committed to bringing people together and enabling communities to influence and act” and outlined different funding streams available to support community organisations and wider civil society in local areas.
• Taxation: The Government disagreed with the committee’s recommendation that the triple lock for the state pension should be removed. The Government said it was “committed to ensuring economic security for people at every stage of their life, including when they reach retirement”. 

The Office for National Statistics (ONS) also responded to the Select Committee, confirming that the body was “already in the process” of taking forward specific aspects of the Committee’s recommendation, including a generational breakdown of the effects of tax and benefits on household income data set and backdating this to the extent that the data allowed.

What has been the impact of COVID-19? Public Health England (PHE) carried out a review of data into disparities in the risk and outcomes from COVID-19. The largest disparity found was by age. Among people already diagnosed with COVID-19; people who were 80 years or older were seventy times more likely to die than those under 40 years of age. Risk of dying among those diagnosed with COVID-19 was also higher in males than females; higher in those living in the more deprived areas than those living in the least deprived; and higher in those in Black, Asian and Minority Ethnic (BAME) groups than in White ethnic groups. These inequalities largely replicate existing inequalities in mortality rates in previous years, except for BAME groups, as mortality was previously higher in White ethnic groups. Several studies, although measuring the different outcomes from COVID-19, report an increased risk of adverse outcomes in obese or morbidly obese people. 

A publication from the Institute for Fiscal Studies (IFS), supported by the Joseph Rowntree Foundation (JRF), examined how living standards – most commonly measured by household incomes – were changing in the UK up to the eve of COVID-19. The report found the COVID-19 crisis had hit at a time when income growth had already been extremely disappointing for some years. Median (middle) household income was revealed to be the same in 2018−2019 (the latest data) as in 2015−2016. For people aged 60 years or over, median income was 12% higher in 2018−2019 than before the previous recession in 2007−2008, and amongst the rest of the population it was only 3% higher. Trends among lower-income households had been worse still – they had experienced five years of real income stagnation between 2013−2014 and 2018−2019. Workers whose livelihoods look most at risk during COVID-19 already tended to have relatively low incomes, and were relatively likely to be in poverty, prior to the onset of the crisis. Employees working in ‘shut-down sectors’, such as hospitality, for example, were already almost twice as likely to be in poverty as other employees, and poverty rates were higher still for self-employed people working in these sectors. Cleaners and hairdressers were highlighted as groups with higher poverty rates than other workers who are unlikely to be able to work from home. Despite temporary increases in benefits announced in response to the pandemic, the benefits system in 2020 was found to provide less support to out-of-work households compared to 2011. Average benefit entitlement among workless households is 10% lower in 2020 than it would have been without any policy changes since 2011, and among workless households with children it is 12% lower.

The IF’s index of young adults’ wellbeing 2020 found average wellbeing declined by 8% in people aged 18-26 years between 1991 and 2017-2018. While overall wellbeing began improving between 1991 and 1999, it worsened (by 19%) at the height of the financial crisis and economic downturn and has not recovered since. Another variable which measures the closeness of relationships between family members has also declined significantly: the proportion of young adults who say that one of their three closest friends is also a relative has fallen from 34% in 1991 to 16% in the most recent year for which data was available. Physical and Mental Wellbeing measures subjective changes in young adults’ physical and mental health. The indicator which measures mental wellbeing suggests that one in five young adults reports suffering from symptoms of moderate mental distress. Economic Wellbeing has improved by a small amount since 1991, but the average working member of this age group is earning only 1% more in real terms than their counterpart in 1991 was, despite being much more likely to have a university degree. The average income of a worker in this age group remains 11% below the pre-2008 level in real terms. Overall, the results of the IF Index suggest that today’s young adults were already falling behind the level of wellbeing which previous generations enjoyed when they were at the same stage in life, and this was before the COVID-19 which may reduce their standard of living yet further.

The Resolution Foundation and Nuffield Foundation published an intergenerational audit in October 2020 to examine the impact of the initial phase of COVID-19 for different generations in Britain. There were four key findings. Firstly, COVID-19 has had profound physical health risks for older adults, and there is a clear distinction between the experiences of older people and working-age families during lockdown. Secondly, the labour market has hit a U shape, affecting the youngest and oldest workers most – although actual incomes fell most during lockdown for those in their late 40s. Thirdly, consumer debt usage accelerated for 35-44 year olds and falling equity prices have dented the wealth of people in their 50s. Fourthly, post-lockdown impacts may be more clearly tilted towards the bottom of the age range. By July 2020, younger adults had become the most likely to fall behind with housing payments; young people risk long-term employment and pay ‘scarring’ effects from starting careers in a downturn; the prospects for a post-coronavirus home ownership increase among aspirant buyers appear limited; and any removal of temporary welfare boosts look set to provide a major drag on the incomes of younger generations.  

Debates have also taken place in the Lords and Commons since the start of the pandemic that have picked up the issues covered in the Select Committee’s 2019 report. This includes a debate in March 2020 which highlighted the importance of intergenerational thinking: “the best old people are those who remember that they were once young, because it is that idealism, vision and hope young people have which carry us to do our best things at all ages. Of course, younger people are only older people in waiting. We all have a common intergenerational interest” (Lord True, chair of the Select Committee). In a debate on COVID-19 recovery strategies in June 2020, Baroness Hayman indicated that “we need fairness between generations, between regions and between industries’; with Lord Tunnicliffee noting that “doing this will require new policies rooted in a new consensus. We need to change, from how we engage with businesses and citizens to how we restructure central Government…the scale of the challenge we face is significant. Very little will come out of COVID-19, but acceptance of the need to reshape our economy could be one glimmer of hope”. Lord Robathan highlighted how “young people in this crisis have seen their education trashed, schools and universities closed, and exams missed. When lockdown is lifted, unemployment will shoot up; it will not be a good time to look for a job. We are facing a deep recession, possibly a global depression…Our prosperity and quality of life will be severely lessened and healthcare will suffer. If we older people are “all right, Jack”, and while our futures are largely behind us, we have mortgaged our country’s future and our children’s future”. Lord Hastings of Scarisbrick concurred in highlighting the number of companies cancelling graduate placements and internship opportunities. Lord Ravensdale called for an evidence-based plan for recovery that fits regions and provide a key reference point linked to the Government’s levelling up agenda. In an economy debate in November 2020 Lord Agnew of Oulton posited that “intergenerational solidarity is vital as we come through this crisis. I worry about the cliff edge of debt that we are generating”. A written statement made by Lord Greenhalgh (Minister of State for Building Safety and Communities) in December 2020 described how the Government ‘want to build more homes as a matter of social justice, of inter-generational fairness and as one of the best proven ways of creating jobs and economic growth’. 

While still at an early stage, all of this work highlights the impact of COVID-19 on different generations – illuminating the disproportionate effects so far on younger and older generations. ‘Unfairness’ has been laid bare during the pandemic in its disproportionate (health, economic, societal) impacts on some people more than others. This is leading to debates about whether fairness should be a core principle in our evidence base, policy making and delivery interventions post COVID-19.  

What more can be done to address unfairness? In March 2020, the Wellbeing of Future Generations Bill was introduced into the House of Commons for its first reading. If it becomes law – and it is not currently supported by the Government – the Bill will require public bodies to act in a way that accords with the ‘future generations principle’ i.e., balancing short-term needs with safeguarding long-term needs, deploying resources to prevent problems occurring or getting worse, forecasting and managing emerging risks. Public bodies would be required to publish future generations impact assessments and a new Commissioner for Future Generations would be appointed to oversee the implementation of the Act. It would also lead to the establishment of a Joint Parliamentary Committee on Future Generations. The bill would build upon the Well-being of Future Generations (Wales) Act 2015 in making provisions for the principle to apply across the UK.  

A briefing paper from the Social Market Foundation (SMF) in April 2020 discussed the need for the economic costs of responding to the pandemic to be shared fairly across the generations. The paper suggests the economic costs of tackling COVID-19 will fall heavily on those of working age, especially in terms of redundancies and lost income – and how the lockdown has been aimed at saving the lives of those at greatest risk (a group that is largely, though not exclusively, made up of older people). While the economic sacrifice is the right things to do, the report argues as we emerge from the crisis ‘older generations must uphold their part of the [social] contract by bearing a fair proportion of future tax rises and welfare reforms’. Echoing other research, the SMF has also called for the replacement of the triple lock with a double lock, whereby the basic state pension is tied to increases to earnings or inflation (whichever is higher). This could contribute £20 billion to deficit reduction over the next five-years. Pensions would still rise, but more slowly, reducing the fiscal burden of the working-age population.  

In January 2021, the House of Lords held a debate on tackling intergenerational unfairness. Contributors raised issues around loneliness, wage levels, debt, the unaffordability of house prices, a low-wage poor-health equilibrium, the state of the welfare safety net, the importance of having a good state pension, the gig economy and the role of churches and faith communities. According to Viscount Chandos “although COVID-19 has posed a far greater direct threat to the health of older people, the broader social and economic impact of the measures taken to control the spread of the virus has affected every generation, and in many respects, particularly the younger ones…that the greatest poverty and unfairness now lies with younger working-age people, is likely to be emphasised by the effects of the pandemic-combating policies of the past year and the months still to come”. As a state and a society the Lords were clear that we need to do more in real-time to get to grips with some of the extraordinary policy challenges that have arisen as a result of the pandemic. 

COVID-19 has brought the Select Committee’s report into renewed sharpness. For the pandemic has highlighted and exacerbated existing intergenerational economic and social inequalities and tensions. On the one hand, research has explored the differential impacts of COVID-19 on different generations. On the other hand, illuminating what different generations have in common and the mutual self-support and aid provided have also been highlighted. Where the ‘intergenerational contract’ fits in a policy context and how plays out in practice [perhaps through the Wellbeing of Future Generations Bill] as we recover from the pandemic is now in focus. 

Whatever we do, and whatever the future holds, this implicit contract between generations lies at the heart of our society. While we are all in this, clearly we have not all been in it together. Whether it’s housing, wages, social care, the environment, or the welfare system, all require some reform so we can create a fairer and better society for all. Importantly, this requires thinking about generational relationships through a rural lens – where the generation gap between young and older is more pronounced. What are the lived and economic experiences of different rural residents? How can we improve data collection to better understand generational similarities and differences in rural areas? And what more can we do to ensure all generations can enjoy healthy and fulfilling lives in rural areas?  

Finally, the All-Party Parliamentary Group (APPG) for Future Generations is carrying out an inquiry into long-termism into policymaking. The inquiry is covering four main questions: (i) to what extent is a lack of long-term thinking a challenge in policymaking – and why is long-term thinking important? (ii) What are the root causes of failures in long-term thinking? (iii) What are some of the success stories – and what are some examples of poor long-term planning? (iv) How can we better incorporate long-term thinking in the policy making process? If the situation we face cannot be solved with short term election cycles or economic production and growth measures such as GDP; will the current inquiry help shift our thinking to address intergenerational challenges? In May 2018, the Wales Audit Office published its assessment of how public bodies in Wales have responded to the 2015 welsh Act. This found public bodies supported the principles of the Act and were taking steps to change how they work (e.g. undertaking wellbeing impact assessments); but inserting change into planning and decision-making processes is a gradual process. Will the Bill and the work of the inquiry help to embed longer-term thinking? And what could it mean for rural places? Watch this space.  

…………………………………………………………………………………………………

Jessica is a researcher/project manager at Rose Regeneration and a senior research fellow at The National Centre for Rural Health and Care (NCRHC). Her current work includes supporting health commissioners and providers to measure their response to COVID-19 and with future planning; and evaluating two employability programmes helping people furthest from the labour market. Jessica also sits on the board of a Housing Association that supports older and vulnerable people. 

She can be contacted by email jessica.sellick@roseregeneration.co.uk. 

Website: http://roseregeneration.co.uk/https://www.ncrhc.org/ 

Blog: http://ruralwords.co.uk/ 

Twitter: @RoseRegen