Motion to Take Note
Thank you. I first declare an interest as set out in the register. I am delighted to open this debate on behalf of my noble friend Lord True, who was chair of the committee. Due to his good work, he is now a government Minister, which should be a warning to all of us. The committee comprised the noble Baroness, Lady Bakewell, the noble Lord, Lord Bichard, the noble Baroness, Lady Blackstone, the noble Viscount, Lord Chandos, the noble Baroness, Lady Crawley, the noble Baroness, Lady Greengross, the noble Lord, Lord Horlick, my noble friends Lord Holmes of Richmond and Lady Jenkin of Kennington, the noble Baroness, Lady Thornhill, and, last but not least, the noble Baroness, Lady Tyler of Enfield, who proposed the committee. On behalf of my noble friend Lord True, I thank all noble Lords for being on the committee and for their service. I also, on behalf of the committee, thank the officials: the clerk to begin with, Judith Brooke, and then Olivia Crabtree; Tim Stacey, Hannah Murdoch and our special adviser, Professor Jane Falkingham from Southampton University. Of course, on behalf of the committee, I also thank all those who came to give evidence.
The debate on the intergenerational fairness report, although late, is now more prescient. Its good intention came from wanting to examine the impact on the different generational cohorts in the decade that followed the financial crisis of 2008 and to recommend actions if required that would ensure a more equitable contribution to society going forward. It is worth remembering that, at the height of the financial crisis in 2010, the Government borrowed £150 billion in that financial year and that, in spite of tax rises and public spending cuts, our national debt rose from around £500 billion in 2007 to £1.8 trillion in 2018. In this financial year, the Government will borrow around £450 billion—three times the level of the peak of the financial crisis in 2010—taking our national debt to £2.1 trillion. Next year there are forecasts of another £200 billion of borrowing.
While some will argue that servicing this level of debt with low interest rates is affordable, it is worth remembering that our national debt repayments are currently the fourth-highest area of government spending. The Government in time will need to address our country’s debt and borrowing and, when they do, I hope that they will revisit this report and ensure a fair proportion of the repayment burden falls across all generations. I am delighted that the Office for National Statistics accepted the committee’s recommendation and is now reporting new intergenerational analysis and looking to do more. Only by having and sharing this data can we achieve the broad equivalence and fairness of contribution and receipt by each generation that the committee wanted to achieve.
The committee highlighted six conclusions: on data, housing, active communities, tax and spending, and two on the younger generation. It is on these final areas that I will focus my remarks. It was clear from the evidence we received that, post the financial crisis, pay progression for those in their 20s slowed compared to that of previous generations, and employment became less secure, with more temporary work, zero-hours contracts and unskilled work. As a consequence, it is now unlikely that this group will enjoy the generation-on-generation income gains seen in the past.
Furthermore, housing became more expensive and difficult for young people to buy as a result of QE, which made money cheaper for the older and more stable in society, fuelling house and share price growth. Looking to today and our handling of this pandemic, we see stamp duty temporarily suspended and QE again boosting house prices by circa 7% in 2020, once again making it even harder for those joining the labour market to afford a home of their own.
The pandemic will lead to more flexible working: two-thirds of employees completing the Happiness@Work survey said that they wanted a mix of office and home working, while 18% of mainly older employees do not want to return to the office at all. In the same research, under-29s were concerned for their career development and training in lockdown and beyond, and young managers were far less happy than their older counterparts as training, advice and guidance are now less easy to receive, as middle management is stripped out and work pressures increase.
Jobs in hospitality and retail have been decimated—sadly, we have seen more evidence of that again today—and these are often places where the young start their careers. As the report points out, there is also a need for more structured mid-career training to help employees adapt to the new world, and that is true now more than ever. And, with unemployment predicted to rise rapidly, there is a need to get the young who are leaving school and university into work, as well as on in work. For example, schemes such as Kickstart should be welcomed, but they need to be more available to SMEs if they are to make a substantive impact.
So now would be a good time for the Government to reassess the work of the Intergenerational Fairness Committee and the recommendations in its report. I beg to move.
My Lords, this report was published in April 2019, nearly two years ago, and it makes a nonsense of the long-established system of debating Select Committee reports in the House that so much time has elapsed since its publication. It is also regrettable that the Government have rejected so many of the report’s recommendations. However, like the noble Lord, Lord Price, I thank ONS for its decision to undertake a generational breakdown of the effects of tax and benefits on household income. It is admirable that it has already begun publishing an intergenerational analysis of the data it holds, and that it is consulting on ways to improve its data on transfers between generations, as the committee recommended.
I will focus on the need to understand, and take action on, the social and economic circumstances of young people in their 20s and 30s. In order to improve their well-being and to meet their aspirations, more public expenditure should be directed at this group. To make that easier, in the context of the debt burden just described by the noble Lord, Lord Price, there needs to be a reconfiguration of the generous tax and benefits position of those over 60. There was a time when the elderly were in a relatively weak financial situation compared with younger generations in employment. This is no longer the case. In order to achieve more vertical, as opposed to horizontal, fairness, the committee recommended that the triple lock for state pensions should be removed, and that instead the state pension should be uprated in line with average earnings to ensure parity with working people. The Government’s refusal to budge is costing the Treasury huge sums each year, and in the longer term is unsustainable. The triple lock has done its job and the Government should have the courage to drop it.
The tax system is also unfair, explicitly giving advantages to those over pension age by waiving national insurance contributions even if they are still working. Anyone who is working, whatever their age, should be taxed in the same way. The mythology that national insurance is a simple contributory scheme should be dropped. Professor John Hills, who sadly died recently, told the committee that is was an “accounting fiction”. In his excellent evidence, he also commented on other age-related social security payments, telling us, for example, that winter fuel payments towards the heating bills of those over 65
“are almost the least effective way of coping with fuel poverty.”
This is another unfair policy, since single parents are much more likely to be in fuel poverty than those over 65. The fact that the Government have rejected the committee’s recommendation to abolish it is another example of them taking the easy way out by defending the status quo.
I assume that the Minister accepts that there is also a need for a realistic assessment of the impact of longevity on the need to extend working life, leading to higher age thresholds for all age-related benefits, including the state pension. There should surely be an acceleration of raising the age of eligibility for state pensions. Failure to do so will place ever-greater burdens on the younger generations, who are paying an ever-larger bill for the costs of retirement of the older generations.
Let me turn now to young people themselves. The committee largely accepted the views of the Resolution Foundation and others that they are relatively worse off than their parents and grandparents were at a similar age. To help rectify this requires a massive investment in social and affordable housing, as implied by the noble Lord, Lord Price. The supply of this nowhere near meets demand, driving younger generations into poor-quality and insecure privately rented accommodation. Again, the Government failed to respond to the committee’s recommendations. One consequence of this failure is that the lack of an adequate home is magnifying the disadvantages suffered by the ever-growing number of children of those in their 30s who are now living in poverty.
I end by reflecting on the job opportunities and the linked issue of education and training for those in their 20s and 30s, compared with earlier generations, who have benefited from full employment for most of the last four or five decades. Young people face uncertain prospects of permanent employment. This is magnified by a global pandemic, which has done untold damage to our economy. However, there were already worrying trends in the growth of the gig economy, with its many downsides, well before Covid-19. Many thousands of jobs will need to be created, in particular in the green economy, to counteract climate change. Failure to meet our net-zero target will of course affect younger generations more than those of us who have lived most of our lives.
Many of these new jobs will require high levels of skill, which will be achieved only with more investment in education and training—notably in FE, which has been decimated by this Government and their predecessor. However, I welcome the Government’s change of heart on FE, even though it is too little and too late. This is urgent, since so many young people in their 20s have already missed out. They will need to be rescued and provided with learning opportunities that they have been denied in the past through newly invigorated and properly resourced FE programmes. Finally, as the report made clear, they will need to be supported by high-quality, lifelong learning to meet the needs of a 100-year life.
I am pleased to follow the noble Baroness, Lady Blackstone, who demonstrated her mastery of the art of diplomatic disagreement and tenacity in some passionate exchanges during our discussions. This was the first Select Committee that I have been on since coming into your Lordships’ House, and I will confess to being both excited and nervous when I saw who were going to be my colleagues. I looked everyone up and knew that it would be a privilege to work with such a distinguished group.
I was also pleased to find another cheerleader for local government in the shape of our chairman, the noble Lord, Lord True. His experience and understanding of the role that local government can play in this area helped me in my role. I pay thanks and tribute to our community contact group, who gave up their time to come to Westminster on several occasions and contribute to our work. It certainly gave us a reality check to balance against the theories of our expert witnesses.
There is good news from our inquiry: that a strong and positive relationship exists between generations, even though there are serious concerns about fairness in public policy. Any policy based on the expectation that future generations will pick up the tab and pay disproportionately for present or past consumption cannot be considered either fair or just. Generations should not be unduly harmed by the actions of a previous or subsequent cohort, and there is a reasonable expectation that life should improve for the next generation. This is certainly a wicked issue, and the complexities and interrelatedness of so many of the questions raised led us to feel that all policy should have to answer at least two questions. What impact will this have on future generations in the short and long term, and how can we take this into account in setting policy? We were left in no doubt that this was an important aspect of all policy-making.
The report had at its heart the concept of the 100-year life course, which runs through all our themes. One in three babies born today will reach their 100th birthday. We are living longer and are mostly healthier for longer, but does public policy really take account of this? Do we take account of it in our own lives? All our assumptions were questioned and tested by our witnesses.
We learned that there is a structural shift taking place, with younger generations not seeing the increase in living standards enjoyed by previous generations. At the same time, older generations face a society that is not prepared for their numbers or needs as they age. Many young people, and their parents and grandparents, worry about whether they will be able to afford a home or achieve a secure, well-paying job. This is the result of a failure of successive Governments to plan for the future and prepare for the social, economic and technological changes that are rapidly taking place. Across all the themes in the report, from education to housing through taxation and benefits, work and skills, our evidence demonstrates that this is rarely taken into account.
Perhaps it was no surprise, then, to find that witness after witness commented on the lack of meaningful and appropriate datasets and statistical evidence for their work—although, as we have already heard, the Office for National Statistics is to be thanked for its immediate response to the report in which it accepted all the committee’s recommendations that were pertinent to it. It has since begun publishing new intergenerational analysis of the data it holds and has committed to including that analysis in future data releases. This was encouraging—unlike the Government’s response, which was disappointing to say the least. The Government responded to only 29 of our 41 recommendations, and of those 29 they rejected 21, thus rather proving the point of the core finding of our evidence: that intergenerational fairness is not currently considered relevant or pertinent to policy-making.
This indifference has been further heightened by the 18 months taken to bring the report to the House. Although I accept that Brexit and the pandemic have clearly had to be priorities, it is still disappointing. Reading through our recommendations to prepare for this debate, I was forcefully struck by the fact that many have been made more pertinent and urgent by both these events, as amplified by the noble Lord, Lord Price. The pandemic has changed forever the way that we work. Closing and opening schools has worsened inequalities. The impact of the coronavirus will be one of the defining features of a whole generation of British schoolchildren. The Chartered Institute of Housing recently warned that the UK is ill-prepared to deal with the housing needs that have now been made so much worse, that it is young households which will suffer the most, and that the crushing debt our society now carries will have to mean a serious rethink of who pays for what, and how, in the future. Now, more than ever, it is time to think in terms of intergenerational fairness.
I call the next speaker: the noble Lord, Lord Bichard. Lord Bichard? I will have to move on to call the right reverend Prelate the Bishop of Oxford.
It is. I thought I was being unmuted. I have now unmuted myself, and I apologise to Members for that.
If I may continue, I will say that I share the frustration and disappointment already expressed about the delay in bringing this report to the House. But I also agree with the noble Baroness, Lady Thornhill, that when you come to reread the report now it seems, in many ways. more relevant than when we wrote it two long years ago, and I want to focus on two issues where that is particularly the case.
Some people will have been surprised that the committee concluded that what we call “the intergenerational compact” remains strong. However, we found little evidence that one generation blamed another for the problems that it faced, and much evidence that different generations were providing each other with support, especially within communities and families. In a world that has become much more polarised during the pandemic, we should value and protect that compact. As the divisions between rich and poor, black and white, north and south, and leave and remain have become more pronounced, we really cannot afford to overlay them with intergenerational rifts.
Yet some generational groups will exit the pandemic harbouring a sense of injustice and looking to be reassured. As the report points out, to sustain or rediscover a positive relationship between generations, there needs to be
“a broad equivalence, and a sense of equivalence, about what is contributed … and what is received”
from the state during a lifetime. Quite simply, generations need to feel that they are getting a fair deal. For that to be achieved, Governments need to be—at the very least—aware of and able to explain the consequences of new policy proposals across the generations, as well as the changing impact of existing policies. That is why the committee made what I think are some very straightforward and simple recommendations. For example, it suggests:
“The Government should create Intergenerational Impact Assessments for all draft legislation … invest in developing its capacity to model the generational effects of tax and benefits policies”
and focus more on the long term. As the report says, to tackle a problem properly you need to understand it. I think we were saying that we do not yet have the data to understand it well.
As has been said, the Government’s response to these proposals has been, frankly, disappointing. The emphasis on reduced borrowing to lessen the debt burden on future generations never addressed the report’s recommendations and now looks sadly out of touch with the reality of public finances. The promise to continue to publish “a full Spending Review” at the conclusion of any comprehensive spending review does nothing to deliver the longer-term focus that the committee argued was needed, and the reference to the Treasury’s Green Book does little to respond to the simple suggestion that there should be intergenerational impact assessments. As has been said—I will not labour the point—the ONS response was much more positive. Is it too much to ask the new Government to look again at the committee’s recommendations on accounting for the future? I hope not.
The other section of the report that I want to touch on is chapter 6 and the importance of communities, about which the committee felt strongly. It stated:
“Community initiatives that bring generations together are an important way of cementing intergenerational bonds”
and tackling social problems such as loneliness and rough sleeping. They certainly are. The Government should therefore enable, rather than police, community activity. This theme was picked up on very strongly by the Public Services Committee in its recent interim report. The committee felt that what we saw were a series of initiatives on community activity but not a coherent strategy. I fear that that is still the situation and will remain the case until we get the long-awaited devolution White Paper. We are still not giving sufficient emphasis to places, communities and devolution. I hope that we will do so in future, and that this report will help us in that.
My Lords, I welcome this key report on intergenerational unfairness and this debate. It is a privilege to take part. I want to focus my contribution on three issues.
The first concerns education and training. I welcome the report’s perspective and recommendations; as others have said, they are even more relevant now. However, as we know, the landscape is shifting significantly beneath our feet because of the immediate demands of the pandemic and the likely longer-term shifts in working patterns created by the fourth industrial revolution. We are sorely in need of creative, imaginative, cross-party and cross-society intergenerational thinking on education for life, not simply for work.
Last week, I spent some time listening to colleagues whose role it is to support more than 280 Church of England schools in the diocese of Oxford, together responsible for the education of almost 60,000 children. While they reported the extraordinary creativity and commitment of their heads, teachers and governors, they also report that morale and energy in our schools are absolutely at rock bottom. Will the Government act to restore and build up the morale of the teaching profession at the moment? Will teachers be prioritised in the vaccination programme to enable schools to begin on-site teaching again more widely? Will the Government act to bring together the best minds of the day to focus on the challenge of all-age education through a royal commission or similar?
The second issue is that of the changing world of work and the rise of the gig economy. Many gig workers in our country are without rights; this disproportionately affects young adults. The proportion of the workforce in zero-hours and gig work is increasing. Low-paid workers in the UK are more than twice as likely to lose their jobs in the pandemic. The Government have accepted the need for a good work plan and have committed to legislating to improve the clarity of employment status. The need is even more urgent now than a year ago, yet there is still no new employment strategy and no apparent progress to remedy a situation that is getting worse every month.
The third issue is that of all-age communities. I welcome the survey and recommendations, especially the part played in the report by the people of Doncaster—part of my former diocese, Sheffield. However, the report and the Government’s response seem to be blind to the impact of churches and faith communities in building all-age social capital across communities and generations. The value of the services and support that church buildings alone provide, and the health and well-being that they create, has been calculated at £12.4 billion per annum. Churches were involved in running more than 35,000 projects before Covid, including food banks, parent and toddler groups, night shelters and breakfast clubs. Mosques, synagogues and gurdwaras are making a similar contribution within and across generations. Will the report’s authors and the Government give greater recognition to the vital role that faith communities play in the social fabric of the nation as builders of intergenerational fairness?
My Lords, I congratulate the Select Committee on an informative and constructive report on tackling intergenerational unfairness. I appreciate that there is overlap with other Select Committees in both Houses, which has an impact on the issues raised on the subject. However, I want to discuss in greater detail one important policy area that is touched on in the report: the lack of focus on the importance of active aging and the impact of providing opportunities for an active lifestyle to bridge the generational gap, with a particular focus on the elderly.
This is relevant to the committee’s findings on facilitating community activity. In paragraph 210, the report states:
“Local authorities should share intergenerational best practice and publish practical examples and information relating to community-run services and community assets.”
“At all levels, government should be an enabler of community activity.”
This should be clearly linked to the importance of addressing loneliness. The report disappointingly notes in paragraph 15 that
“older generations face their own challenges in a society that is ill-prepared for their numbers and needs as they age. The generation born between 1946 and 1965 is substantially larger than subsequent or preceding ones.”
In paragraph 16, it states:
“Alongside these challenges to specific age groups the increased atomisation of our society also poses a threat to intergenerational fairness. The breakdown of common institutions has allowed loneliness to proliferate in both young and old people as well as creating a breeding ground for ill-informed stereotypes about other generations.”
Sadly, the section on the power of community action also notes, in paragraph 199:
“We are encouraged that there has been a recognition of youth loneliness but are eager that there should be more focus on … intergenerational connections. Our request to hear from a DCMS Minister on this and other intergenerational issues was rejected, despite the ministerial team on the loneliness strategy being located in that department. When we questioned Ministers from the MHCLG, the DWP and the DfE, none of them was able to answer questions on the Government’s loneliness strategy other than stating that there would be cross-departmental working. They were also not aware, until we prompted them, who was the lead on delivering the loneliness strategy since the previous Minister for Loneliness resigned. The current ministerial responsibility lies with the Minister for Civil Society, who at the time this report was published was Mims Davies. That suggests, despite the Government’s written evidence stating, ‘Central government will provide national leadership on this [loneliness] agenda’, it is not a priority for the Government and cross-departmental working has not been successfully achieved.”
The disappointment of the committee at this response is now magnified significantly as a result of Covid-19, the lockdowns, and the absolute priority which should be attached to addressing loneliness in this context. The key component of how we should help people remain independent and active as they age is a recognition that as people are living longer, we need to improve their quality of life. The toll taken on healthcare and social security systems can be significantly reduced. It is my view that loneliness and an active lifestyle should be considered together, and that government, health providers and professionals should take a lead if we are to achieve the goals of reducing loneliness and ensure that healthy older persons remain a resource to their families, communities and economies.
The World Health Organization’s report Active Ageing: A Policy Framework addresses these challenges. It recognises that active ageing is the process of optimising opportunities for health, participation and security to enhance quality of life as people age. Guild Living’s report Why is Social Connectedness Important? states:
“One way of achieving this is by creating mix-use areas in urban environments. These areas boast shared services (e.g. healthcare centres) alongside the later living options, which encourage increased social connections. Adding a weekend market, commuter route or a gym facility to a mix-use community area can quickly influence people’s daily activities and routines within a city. In doing so, we can then begin to reduce age segregation and decrease isolation in the third age.”
Clearly, intergenerational living can have a multitude of benefits, from reducing individual isolation at a personal level to improving the urban environment more broadly: a society that values quality human relationships but also helps to create versatile communities. In 2019, almost 4.5 million older people claimed to be lonely in the UK, with over half a million of those claiming that it stops them going out and about in everyday life. There is a very real social issue, so it is vital that we create communities with social connectedness and interaction at the forefront of the design to help reduce this isolation. By creating intergenerational community gardens, libraries, public parks and retail spaces as part of these developments, we can increase cross-generational interaction and encourage a more balanced society in general.
In closing, there is social prescribing, sometimes also referred to as community referral, as a means of enabling health professionals to refer people, not least the lonely, to a range of local, non-clinical services. Schemes delivering social prescribing can involve a range of activities, including, for example, volunteering, arts activities, group learning, gardening, nutritional advice and a range of sports.
What is missing in this excellent report is a focus on loneliness and a focus and a plan on the importance of an active lifestyle to bridge intergenerational gaps, loneliness and unfairness.
My Lords, I thank the noble Lord, Lord Price, for his clear introduction to the report by the committee. I was privileged to be a member of the committee and witnessed the contribution he made, along with that of other members, many of whom have spoken or are speaking today. As the noble Lord, Lord Price, noted, the committee’s chair, the noble Lord, Lord True, has gone on to even greater things. Although I look forward to hearing the noble Baroness, Lady Penn, winding up for the Government, I can only regret that we could not see the noble Lord, Lord True, with his customary agile footwork, both introducing the debate on his report and responding to it from his position on the Government Front Bench.
The noble Lord, Lord True, would have been more likely to have been able to present the report to your Lordships if it had not taken 21 months from its publication to it being debated, as my noble friend Lady Blackstone and others have noted. Even in the turbulent time that saw the parliamentary conflict over Brexit, a general election and the onset of the Covid crisis, this delay is regrettable, as is, even more so, the anodyne and disappointing written response given by the Government in July 2019, even if it was at least prompt. That said, like others, I believe that the report’s conclusions and recommendations are as valid now as two years ago—probably more so. Although Covid 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. The broad thrust of the report therefore, after the last Labour Government’s action to address pensioner poverty, 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.
Even though a number of the report’s recommendations, such as those on the pension triple lock, free television licences and other pensioner benefits, generated concern and criticism from interested parties, the costs of those must be appraised relative to the needs in younger cohorts of the population. Some of the actions that could make the greatest difference to younger people, such as in the area of housing, would not however require much if any revenue funding. Improved rights for tenants of private landlords would provide vitally enhanced security for generations for whom home ownership is at least being delayed compared to earlier generations, and in many cases realistically ruled out for the foreseeable future. Improving the supply of affordable housing will require capital funding, whether through government or the private sector, rather than revenue funding.
I will conclude by focusing on an issue only really just touched on by the committee: the way the taxation of capital compared to that of income gives rise to some of the greatest inequity between the generations. Over the past 30 years, the value of assets relative to GDP in the UK has more than doubled, whereas average earnings have hardly grown at all. Over any period, let alone one which has seen such a pronounced increase in the value of residential housing and stock market securities, capital will generally be concentrated in the hands of older cohorts. If capital is relatively lightly taxed compared to income, as it generally is, that will inevitably favour older cohorts of the population. The report states:
“Inheritance Tax is capricious and not currently fit for purpose. Consideration needs to be given to whether and how assets should be taxed on death or transfer in a way that ensures fairness between generations.”
Inheritance tax is not the only way of taxing capital, but by definition, bequests on death and life-bound gifts are events at which time tax can be raised most easily and painlessly. The noble Lord, Lord Willetts, who has been such a powerful voice on the issue of intergenerational fairness, wrote in 2017 that
“we see inheritance as the next intergenerational frontier, particularly for those interested in the dynamic relationship between inter- and intra-generational inequalities.”
The committee’s excellent special adviser, Professor Jane Falkingham, argued early on in our sittings that intragenerational issues were inextricably bound up with the consideration of intergenerational ones. I suspect that the committee’s consensus might not have survived any attempt to define these intragenerational issues in respect of the reform of capital taxation, even if only limited inheritance tax. Until there is the commitment, courage and altruism on the part of government to address this issue, there will remain severe inequalities between generations and within them.
My Lords, I congratulate the committee on its work and the quality of this report, but I wish to take issue with recommendations 33 and 34—the proposal to end the triple lock as well as removing and reducing benefits provided to pensioners.
The triple lock has meant that the state pension has recovered some though not all of its value since it was introduced in 2011. I am sure that those who depend on the state pension would not agree that the job of the triple lock is done. The UK state pension is still one of the lowest in Europe, so it is vitally important to low earners and many women who have no private pensions, having spent much of their working lives caring for families. If this report is considering redistribution, we need to think about distribution not just between generations but between rich and poor and men and women. A highly redistributed flat-rate state pension does quite a lot on the latter two. Contributions into the state pension are progressive, in that you pay more national insurance contribution as you earn more, but the payout is broadly flat; then the state pension is taxed, so top earners put a lot more in and get less out.
Young people will be old one day. They will not have access to generous defined benefit schemes unless they work in the public sector and, if their wages are depressed by Covid and other influences that we have heard about here, the rates of return on investments on direct contribution pensions are likely to be modest for years to come. They are not going to have very good private pensions, which makes a good state pension really important for them.
The triple lock also helps to reduce the need to claim pension credit, which is very poorly taken up and which penalises those with modest amounts of savings. Also, many older pensioners who are dependent on the state pension have told me that they are deeply suspicious of means tests. Having paid national insurance all their lives, they believed that there was a guarantee that they would be looked after in their old and failing years and not left a devalued state pension that puts them into a life of poverty. Let us not forget that older pensioners did not receive the 2014 increase.
Are we so confident that future generations, including women and low earners, will have healthy private pensions—so happy with that that we are happy also to see the state pension further devalued by being raised only at the increase of average earnings, as this report recommends? The poorest pensioners are those most dependent on the triple lock; the fact that wealthy pensioners do not need the state pension and can well afford to pay for the benefits that they receive should not be a reason for making the poorest and oldest pensioners worse off. It is like saying that, as the average income in Surrey is twice that of Cornwall, to be fair to the people of Cornwall we should make the people of Surrey worse off. I was surprised that the report did not appear to consider more progressive approaches to ensure that those who can afford it should pay for their benefits or not receive them. There are certainly other ways of paying for the state pension. As the noble Baroness, Lady Blackstone, said, raising the eligible age in line with life expectancy is one way, so long as advance notice is given at an early stage—and, of course, as she said, working pensioners should pay national insurance.
The most glaring inequality between the generations is, of course, to do with housing, as other noble Lords have said, and being able to afford to buy a home. There is no doubt that younger people are now having to wait longer before they can afford to buy a first home. The key point is surely that the rise in housing wealth is currently with the older generation; it is going to cascade through the generations as each generation dies so, although wealth is currently stuck in the hands of pensioners, it will in due course pass on to each succeeding generation. A problem with this is that the typical inheritance happens too late, roughly at the age of 60.
The noble Viscount, Lord Chandos, brought in a few suggestions in this area, in considering how the older generation could share their wealth with younger generations before they die. This is sometimes called “giving while living”. In that way, the older generation actually get to enjoy seeing the next generations benefit from their wealth and may even have a say in what it gets spent on, and the younger generation get a predictable amount at a predictable time instead of the lottery of when their parents or grandparents die. That is something that the report could have considered; it is a policy area that has been very much neglected, although I was encouraged to hear the noble Viscount talking about different forms of taxation to try to enable some more of the transfer of this wealth.
It is sad that this issue is often used to sow dissent and dissatisfaction between generations, and I am grateful for the sensitive way in which the committee has approached the subject, with generosity and open-mindedness. I am grateful also for the many positive recommendations within the report.
My Lords, I very much welcome the opportunity to speak in this very important debate. It is a complex issue with many facets. The Covid pandemic and the Government’s response to it has highlighted many of the issues relevant to the overall discussion. The virus has had a disproportionately savage effect on the health and lives of older people and, at the same time, we are witnessing extreme economic pressures on the younger generation and severe educational impacts on our very youngest. I worry about the long-term consequences of the repeated lockdowns, necessary as they are, on the educational attainment, mental health and general well-being of our children and young people. Then, of course, there are the huge amounts of government spending that the Government have rightly committed to get us through this pandemic, which is creating a legacy of debt for future generations.
As others have said, we must set ourselves against anything that contributes to setting generation against generation. After the Brexit referendum, we saw some disgraceful attacks on older people in this country; they were lumped together and ascribed with a viewpoint, almost to the point where some suggested that they should not be allowed to vote or have any say in our country’s future. This is a generation of people who have contributed all their lives, and the pitting of one generation against another, stoked up by some who should know better, including elements of the media, has been one of the more disgraceful episodes in the life of our country in recent decades.
Today’s young people are tomorrow’s pensioners and it is important that every generation feels fully valued, government policy properly reflects long-term impacts and there is a sense of fairness throughout all sections of our society. There have been some immense challenges for government to ensure that there is adequate and affordable housing, and more must be done to address the lack of suitable housing. As has been said, that is the biggest challenge in relation to young people. The Government must give a much greater priority to lifelong learning. Providing easy routes into more flexible working arrangements and training throughout people’s working lives is essential. We have seen some dramatic changes to work patterns in the course of the last year because of the pandemic, accelerating in many instances what was inevitable or likely in any case. It is essential that government policy keeps up with the needs of workers in the 22nd-century economy.
The issue of age discrimination in the workplace needs to be tackled. That is an issue affecting not just older but young people as well. Many of those issues are areas of policy that need to be addressed not just in the context of intergenerational fairness—many of the issues apply within generations and not just between them. They need to be considered in their own right, with policies sustainable for the long term.
On tax, pensions and benefits, pensioners and young people are of course not homogeneous groups; there are many differences in levels of wealth and income among pensioners. It is wrong to generalise and imply that all pensioners are better off. About 1 million pensioners rely solely on the state for their income, and we know that the United Kingdom has one of the lowest state pensions in the world. Many pensioners have struggled all their lives to provide for their families and put some savings aside for some comfort in retirement. Illness and bad health are of course more likely, and even after pensions and healthcare spending, today’s pensioners contribute something in the region of an additional £40 billion through taxes, volunteering and unpaid caring duties.
In relation to the triple lock on pensions, it is essential that pension incomes keep pace with those of the rest of the population, and a means must be found to ensure that those income levels are maintained. The triple lock has gone some way towards rectifying the steady erosion of pensioner incomes, but of course nothing will replace a proper level of state pension overall.
The universality of benefits has been criticised. Although I have to say that they ensure that the stigma of means testing, which many feel today, is removed for many pensioners who therefore benefit in greater numbers than they otherwise would—these are benefits to which they are entitled—it is still the case that as a result of means testing many people miss out on benefits that they are entitled to, and that side of the equation has to be taken into account. We need to keep a balance in all these matters.
In closing, there is one urgent, essential matter that the Government need to get to grips with: the provision of social care in old age. The current position is unsustainable and the underfunding of social care is a national scandal. The decline of family and community networks is increasing demands on public services. The cost of social care is a significant burden and fear for many older people. Older people need to know that they are going to be able to live rich and fulfilling lives, and that the care system will be there for them if they need it. This needs a national solution and there has been too much prevarication.
My Lords, in welcoming the report from the Select Committee on Intergenerational Fairness and Provision and its raft of sensible policy recommendations, I applaud the very thoughtful contributions that we have had in this debate, starting with the noble Lord, Lord Price.
Having been a government Minister for 12 years, seven of them in the Cabinet, I have seen how easy it is for a Government to get consumed by day-to-day pressures and the short term. Yet, as this debate and the committee’s report have highlighted, there are serious and fundamental problems facing our society, including the question of long-term social care and its completely inadequate funding, as well as widening inequality.
I want to praise and focus on the Welsh Government’s pathbreaking Well-being of Future Generations (Wales) Act, which was passed in 2015. Under it, 44 public bodies, including the Welsh Government themselves and local authorities, are obligated to promote sustainable development, to set well-being objectives and steps that maximise contributions to Wales’s national well-being goals, and to consider the five ways of working in their particular activity. The Act also establishes a Future Generations Commissioner to act as the guardian of the interests of future generations, to advise and support public bodies and to monitor and assess their progress and application. The commissioner, Sophie Howe, has argued:
“By taking bold decisions and actions now we can ensure that our children and our children’s children have a happy, healthy and secure future ahead of them.”
She emphasises the need to look 25 years ahead, if not more—a welcome change from the short-termism of much government policy. She also advises and challenges public bodies to consider how their activity supports the breaking of negative cycles and/or intergenerational challenges such as poverty, poor health, environmental damage and loss of biodiversity. The 1987 Brundtland report stated:
“Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”
This principle sits at the heart of the Well-being of Future Generations (Wales) Act and of intergenerational fairness.
Mary Robinson, chair of The Elders and a former United Nations High Commissioner for Human Rights, said:
“There is a moral imperative to ensure that future generations of humanity can live full and healthy lives, underpinned by the dignity and rights promised by the Universal Declaration of Human Rights. However, due to climate change, unsustainable resource exploitation and worsening global inequality, the window of opportunity to leave a safe and fair world to future generations is rapidly closing. In order to consider their needs, we must look upon the decisions we take today through the eyes of future generations and allow our actions to be guided by the concept of intergenerational equity.”
One practical example comes from Cardiff City Council, where a public health consultant was seconded from the health board to lead on transportation strategy. Applying a public health lens to a transport problem produced a quite different set of solutions. The council’s transport white paper, for example, prioritised clean air and instigated a shift from private car travel to walking, cycling and public transport. The council also worked with parents to pilot a car ban in five primary schools in Cardiff. Cardiff’s doctors can now issue prescriptions for free bike hire for those who would benefit from increasing their physical activity.
Another example of innovative policy comes from the city of Brussels, which is supporting initiatives where older people offer a room in their home to a younger person to help to combat loneliness and issues around housing affordability. Projects are already under way in the city to create 350 new intergenerational homes as part of its public housing policy.
Led by the noble Lord, Lord Bird, there is a campaign for the enactment of a future generations Bill in this Parliament. I hope that this debate and the committee’s report will encourage that and, like Wales, we will recognise the importance of intergenerational fairness as a priority, thereby helping to ensure that the long-term implications for future generations will be at the heart of formulating new policies and ensuring that intergenerational inequalities in housing, pensions, higher education, income and climate change can rise to the top of the political agenda to protect their well-being.
My Lords, I am privileged to have been involved in this work, and I also declare an interest as chair of the Intergenerational Fairness Forum.
This report highlights many of the important intergenerational challenges that we face. One important topic that is not fully covered in the report ought to be spoken about, which is what I intend to do: the retirement prospects for Generation X and subsequent generations. The International Longevity Centre UK, which I am proud to head up, published a study in November 2020 that found that 57% of people in the UK born between 1965 and 1980—Generation X—said they would like to save more for their retirement but were struggling to do so. The Covid pandemic has resulted in the second global economic recession in 12 years. This, along with the issues highlighted in the Select Committee report, make the prospect of saving for retirement increasingly challenging for those currently working.
Recommendation 17 of the report calls for increased funding of higher education. University students in England currently pay the highest course fees in Europe. Unlike 30 years ago, when student fees in this country were low, the average student debt in England is now about £40,000—in contrast to Germany, where the average student debt is only £1,600.
Rates of home ownership have fallen in the past 20 years due to rising house prices. ONS figures for 2020 show that adults aged 35 to 45 are three times more likely to be renting and not own a home than 20 years ago. Recommendation 7 of the Select Committee report calls for policy changes to support long-term renters, while recommendations 9 to 14 call on the Government and local authorities to address planning and housing supply issues. Implementation of these recommendations is crucial to ensure that future generations are not locked out of the housing market, instead spending a significant proportion of their income on rent all their lives.
Recommendations 22 to 27 address current issues in the labour market. We know that more and more people are insecure in work. ONS figures for 2019 show that at least 3.7 million people are in roles where they have no security in relation to the hours they work or their income. For people in this position, it is not possible to get a mortgage to buy a home. Saving for one’s retirement when in insecure work is near impossible. From 2008 to 2014 was the longest period of falling wages in the UK since the end of the Second World War. The impact of the current Covid-19 crisis only a few years later will cause wages to decline further. Implementing the recommendations in this report is essential if there is to be any significant shift that will support future generations to save for their retirement. The ILC-UK report highlights that one in three members of generation X in the UK are at risk of retirement incomes that would result in minimum standards of living, increasing student debt, stagnant wage movement, growing levels of insecure employment and falling home ownership, all of which could be even worse for those born after 1980.
Policymakers have an obligation to uphold the intergenerational contract and to ensure that future generations do not see a decline in their quality of life. Unless the recommendations in this report along with other policy changes are implemented, future generations will not enjoy the same quality of life in retirement as their parents’ generation. This would be disastrous.
My Lords, pondering the original report before I had another look at it after all these months, I thought about which evidence sessions had stuck in my mind. They included the initial briefings by my noble friend Lord Willetts and evidence from Paul Johnson of the Institute for Fiscal Studies and Professor Sir John Hills. I take this opportunity to say what a loss his untimely death is, not just to family, friends and colleagues at the LSE but to the wider world of social policy, which might have hoped to have had his thinking available to it for many years ahead. I also remember my noble friend Lord Forsyth’s powerful evidence on student finance. Other evidence sessions were of course very useful and interesting and well worth reading again. I for one want to thank all those who participated and helped the committee as we inched our way towards an agreed report.
Given the complexities of the topic, I want also to thank both our chair, my noble friend Lord True, and the committee staff for their hard work in getting the report into good shape. The subject matter is enormously wide and complex. Once we had agreed the focus of the report, it took discipline to keep us on track and not to wander down a number of tempting rabbit holes.
Debating the report now in January 2021 rather than, as might have been expected, a year or more ago has of course shifted the context in a way we could not have imagined when we reported, but Covid has certainly served to amplify the themes and analysis which we picked up in the report in 2019. As with so many aspects of its social and economic impacts, Covid-19 has highlighted and exacerbated existing intergenerational economic and social inequalities and tensions.
Given the time constraints and like many others—we have not conferred—I shall focus my comments on housing and loneliness. We all know what the problem with housing is and the solution to it, and I was glad to see the recent Written Statement by the noble Lord, Lord Greenhalgh, in which he reminded the House of the Government’s manifesto pledge to
“deliver a million homes over the course of this Parliament and … seek to increase housebuilding towards 300,000 new homes a year.”
He added that the Government wanted 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.”
A lot of people will be watching, particularly when planning applications for good, low- cost, well-designed, zero-carbon and multigenerational housing, with all facilities within walking distance, are not supported by local councils. Very mixed messages are still coming out of government on planning, and this has to be sorted out.
One of the committee’s evidence sessions I remember best was that in which Sir John Hills said:
“In England, the last time I looked at it … we had more residential floor space per person than we have ever had, and yet we have a housing crisis. One of our problems is that we are not making optimal use of the space we have.”
I mentioned at the time that I lived in a multigenerational home. Until my mother died in August aged 96, there were four generations, or 12 people, in one home, which until 10 years ago was lived in by one old lady on her own. I am back in the bedroom I shared with my sister 60 years ago and, during lockdown in particular, we have been lucky enough to live, work and eat together in a way that once would have been the norm, thereby making good space of a big old house which otherwise would have been a white elephant. It also enabled my mother to die at home, surrounded by family who lived with her and loved her. Of course, this is not an option for many people, but I hope that the Government will look at innovative ways of using existing space.
I particularly like the Homeshare model, which is the exchange of housing for help in the house. Householders and home sharers share home life, time, skills and experience. This enables the householder to stay independently at home for longer, provides affordable accommodation at a time of housing shortage and high rent, and gives family and friends comfort that the householder has someone keeping an eye open for them. I urge the Government to encourage schemes of this kind, which work for everyone, old and young alike. This model also has the advantage of dealing with loneliness, another issue addressed in the report.
We heard from the Cares Family and others about loneliness, which was a problem then but is far more so as a result of enforced isolation and having a devastating impact on young and old. Research by the British Red Cross last year showed that 39% of adults have not had a meaningful conversation in two weeks, and that one in three worry that something will happen to them and no one will notice. ONS data consistently shows how 18 to 24 year-olds are more intensely and more often lonely than their older neighbours.
Yet while it has felt at times like Covid has been hellbent on pulling us apart, in other ways it has pushed us towards one another: from the record-breaking sign-ups for the NHS volunteer scheme to the 8 million of us who stepped in to offer a helping hand through mutual aid and volunteering or simply by reaching out a hand of friendship across hallways and on street corners. Much has been highlighted through this crisis about what different generations have in common. These are the green shoots of a new, renewed or deepened intergenerational understanding, connection and solidarity.
That two in three of us now believe we can make a difference in our community—a 16% increase from pre-pandemic levels—is a statistic that shows the benefit of ongoing volunteering and social relationships. Now is the opportunity for long-term thinking, with a laser-sharp focus on building back a better-connected and fairer society for all generations. I urge my noble friend the Minister to ensure that intergenerational fairness is at the heart of the Government’s social, digital, educational and economic recovery and rebuild plans.
My Lords, when I first saw this report on the Order Paper, I felt that I should make one or two points. They were about points (2) and (3) in the summary, regarding housing supply and education and training. Of course, about two minutes later, we discover that the Government’s White Paper on lifelong learning is coming out and we have a Statement tomorrow. I will therefore restrict my remarks on the education facet to ones of a general quality.
We have a society that is obsessed with home ownership and in which we encourage people to take up home ownership. This means that if you cannot do it, you have effectively lost out. We have been told for many years that this is the way we should be living. Unless we get back to a situation where renting a house is normal, you are not discriminated against for doing it and you have some security when you are doing it, we are always going to have this problem. In the light of what has been pointed out here—it is a very recognised problem; there is no way that this is news to anybody—what are the Government going to do about securing the tenure of renters and making it economically advantageous for landlords to provide long-term tenure?
At the moment, with low interest rates and rising property values, it is always going to be tempting to sell a property or get rid of tenants and re-let. This means that the person who is renting is always going to be under pressure and looking over their shoulder because they do not know whether they have security. This does not encourage them to do anything on a fixed-term basis. It will discourage them from, for instance, getting married, having children and securing places where they can go to school. It does not help. I hope that the Minister will be able to give us some idea about what the Government intend to do here.
It is a recognised problem and this Government have to deal with it. It is a real problem and has been there for a long time. We need to know what the thinking is and how that ties in, for instance, with other government activity. One of the points you could raise in almost any debate is: what is the cross-departmental attitude and approach to it? How are the departments communicating? We all know that cross-departmental approaches happen only if some people at the top of both groups make sure that they do—preferably the Prime Minister, but at least Secretaries of State, making a fuss. Otherwise, people sit in their little silos—I say that as I sit in my little goldfish bowl here, slightly more isolated and looking at what is going on.
Furthermore, one of the most depressing things about the report was discovering that I am a baby boomer and not part of Generation X. We must look at the training profile of what is going on here. I know that the Government are responding but I am not sure whether the Minister will respond tomorrow on this subject; I suspect not, but it is possible—we may find that out in the summing up. If we are going to encourage people to get trained for the jobs they are confronting at the moment, we must have a much more flexible approach. I see that this is suggested in the initial discussions on this. How does this tie into this structure? A job for life is something that is no longer there.
We have encouraged people towards other models of training in the past. A few years ago, everything was solved by making sure that everybody was a graduate, possibly because all the people who were proposing it were graduates and they had done okay. Then apprenticeships were the answer. They promised great things. Apprenticeships have a horrible problem of disappearing when economic problems come up or you are not recruiting. At the moment, we are hitting a depression—not caused by government action but maybe encouraged by it—so you will not get many apprenticeships coming up. The current government approach seems to be that of lifelong learning. Will the Government give us a general assurance today that if, for instance, you get a degree—a level 6 qualification—you will be able to get qualifications at lower levels, levels 4 and 5, to make yourself more relevant for jobs as they occur and change?
I mentioned my age before. I am of the age to have hit the depression of the late 1970s and early 1980s when the huge structure of production line jobs disappeared. We went to white-collar, retail and support jobs. Those jobs are disappearing now for other jobs based online. Will we take a flexible approach to make sure that people can retrain again? Otherwise, we are going to repeat the problems of the past.
My Lords, the decrease in the rates of home ownership for the younger generation is a major issue and not one of their own making. As this excellent report demonstrates, it is an important factor in addressing issues of intergenerational fairness. For many years, there has been a failure to supply housing adequately—an issue exacerbated by a cycle of stagnation fuelled by low market absorption rates and stalled developments.
The Letwin report suggests that one of the most important reasons for this is that developers will build new homes only at a rate that the market can absorb and that, by diversifying housing products, rates of absorption will increase. However, when I put down Written Questions to Her Majesty’s Government on this topic, never once has it been acknowledged that it might be in the interest of developers to land bank, as increased supply is likely to reduce house prices. While I believe that this has contributed to the lack of supply, I agree that low absorption remains a real issue. However, I do not think that diversification alone will solve it.
Since the 2008 financial crisis, like many other nations, we have pursued a monetary policy that increased asset prices. Quantitative easing has proved to be an effective mechanism for announcing budget deficits but, like any policy, it has both its benefits and its costs; in this case, it inflates assets. Of course, for those with assets, such as property, this is a very agreeable state to be in. It tends to benefit the older and the wealthier. However, for many young people, it has made property increasingly unaffordable. This report recognises that a decline in home ownership is partly due to house prices being inflated by monetary policy. This problem has been made worse by negative real interest rates and high rental costs, particularly in the more popular areas, making it almost impossible to save for a mortgage deposit. I acknowledge that tightening monetary policy may not reduce house prices, as there would be higher interest rates on mortgages, yet even the possibility of putting down a deposit and getting a mortgage is difficult when the monetary system is pitted against you.
The key point is that quantitative easing is not a win-win policy. Indeed, it is having a significant negative impact on many young people. I was therefore surprised when I asked the Government about this and received a Written Answer that said:
“The separation of fiscal and monetary policy is a key feature of the UK’s economic framework, and the Government does not comment on the conduct and effectiveness of monetary policy.”
This is not entirely correct as quantitative easing requires authorisation from the Treasury. If house prices are becoming unaffordable as a result of decisions made by the Government, they should not hide behind this separation. House prices have outstripped wage growth consistently over the past 20 years; I believe this to be the reason for lower ownership rates among our young people. Rising house prices are very lucrative for asset holders and corporate developers, but if Her Majesty’s Government genuinely want to help young people to get on the housing ladder, they need to be honest about the situation regarding corporate land banking or quantitative easing. It is therefore disappointing that the Government’s response to recommendation 6 focuses on inputs instead of setting out an ambitious programme based on outputs. I hope that Her Majesty’s Government will revisit this vital area as we try to work towards more intergenerational fairness as we emerge from the Covid pandemic.
I would very much like to begin by thanking the noble Lord, Lord Hain, for promoting the Bill that I have going through the Lords; it is going through the Commons under Caroline Lucas. I thank the noble Lord very much—that saves me having to talk about it.
Why are we here? Where are we? Why are we talking about unfairness? This is an historical issue. One of the big problems that we have is the fact that we are a low-wage economy. We were one for most of the 20th century. If you go back to the 19th century, you will see that it was much easier for investors to invest in services and industry. It did not involve an awful lot of risk. As a low-wage economy, one thing is that, when there are a lot of low-wage jobs around, you can mop everybody up and everybody can be given something to do.
Unfortunately, in 1944 the Butler Education Act was enacted. It left about 35% of our children without schooling. Therefore, even today, we fail about 35% of our children at school and, because of that, dealing with them takes up to 70% of the time of both Houses of Parliament and local authorities. These social echoes are created because of the fact that there are people who have not been educated and have low wages. They are the working poor; they are the long-term unemployed; they are the people who use A&E departments. Unfortunately, as in my case, they fill up our prisons and institutions too. If you actually look at the low-wage economy, that is what is behind everything that we are talking about today.
Living in a low-wage economy, how does somebody create some wealth? Is it by saving their pennies and all sorts of things like that? How do people find their way out of a low-wage job so that they can move on? The way to do that is buying property. So we have the crown jewels. In Great Britain, they are the fact that you get on the housing ladder. That is virtually the only way that most ordinary people—people who want to move up socially—can get anywhere in life. Until we break that situation, we are not going anywhere. When 79% of the investments and concerns of our high street banks are to do with buying and selling property, you have 21% going on the development of businesses and investment in new businesses. Compare this with Germany, where 20% of banks’ time and investment is spent on the buying and selling of property, and 80% is spent on businesses and the creation of a high-wage economy. Germany has the opportunity to morph people out of poverty because it is a high-wage economy.
We must look at the fact that we in Great Britain have a very difficult investment history going back to the time of the Empire. We must start to make these big changes—that is, as in Germany, the Government becoming the big investors in new industries and technology so that we can morph people out of poverty and move them on. We have to move away from the fact that the only way you can become middle-class, socially mobile or prosperous in Britain is through buying and selling property.
The unfortunate thing is that, as well as creating a low-wage economy, you therefore have low-wage health, as we have realised in the Covid situation. What actually happened is this: our hospitals were 85% full before we even got into Covid. If you analyse those people who were in hospital, a lot of them were quite old and had passed through poverty. A lot of them had nutritional issues; 50% of people in our hospitals have nutritional issues because they have only been able to afford to eat stuff that is next to rubbish.
In my opinion, until we face up to these things—until the Government stop and have an audit of what is going well and going wrong—we will always be going round and asking “Is it this? Is it that?” The biggest thing that we can do at the moment is keeping our young people in their homes so that they have a future. Do not evict them; that is the big pressing issue. We must not prepare the children of tomorrow for the evictions and homelessness that could come at this particular time.
My Lords, it is a pleasure to participate in this afternoon’s debate. In doing so, I declare my interests as set out in the register.
It was a privilege to serve alongside colleagues, many of whom have spoken or will speak this afternoon, on the Select Committee under the excellent chairmanship of the noble Lord, Lord True. I congratulate my noble friend Lord Price on his excellent introduction and on deploying so many stats to such good effect in it. Similarly, I congratulate my noble friend Lord Moynihan on highlighting three key issues: loneliness, the public realm, which he rightly championed, and social prescribing.
As colleagues have already noted, the report is as pertinent today as it was when it was published some 21 months ago. The recommendations therein remain so. The Covid context has merely added extra piquancy to the report’s findings. In many ways, Covid is emblematic of the whole, with intergenerational issues and complexity. The health crisis has disproportionately affected our older citizens and taken many of them well before their time. On the flipside, it has decimated businesses, employment and education, particularly that of our young people.
As our report set out, and as Covid has demonstrated, we as a state and a society need to do far more with data and far more in real time to get to grips with some of these extraordinary policy challenges, which, as noble Lords have mentioned, are people challenges. When it comes to education, how will we enable our young people, kept away from school from so long, to recover and not be scarred for life by this educational shutout? When will the schools go back? What action is being taken urgently to enable this to happen? What plans are we putting in place to superserve those people and enable them to be in the position they would have been in had their education continued?
As other colleagues have mentioned, the skills White Paper is an excellent intervention in this space—not least the lifetime skills guarantee, which cuts through that often generational issue and understanding around education and skills, and the greater role for business and employers to set the skills that we will require to grow our economy when we come out of this terrible Covid crisis.
I want to add something on the issue of unpaid internships and their blighting impact, particularly on young people. Will my noble friend the Minister support my Private Member’s Bill seeking a prohibition on all work experience exceeding four weeks? In a modern economy, there should be no unpaid internships.
Other noble Lords have mentioned housing, which is a key issue, not least with the highly inflated assets resulting from quantitative easing. When it comes to London, is it still sensible that we are shooting for a 10 million population for it? Londoners were never consulted in the first instance, nor was the nation. Would it make more sense for London, as the capital, to be right-sized rather than supersized? Similarly, when it comes to levelling up, there are so many brownfield sites in and around all our towns and great cities up and down the country. What efforts are the Government making to get more housing developed on such brownfield sites, not least with factory builds, which can put up quality housing at greater speed to address the extraordinary housing need that we currently face?
The truth is that we are all in this, but currently we are not all in it together. We have to ensure that we all emerge from this Covid crisis together or we will not really emerge at all. I believe that will come from the right combination of talent and technology, inclusion and innovation. Does my noble friend the Minister agree that the United Kingdom—the great fabric in the tapestry that runs through us all—is all about people, place and potential?
My Lords, I take this opportunity to congratulate the noble Lord, Lord Price, and his special scrutiny committee on this report and on setting the context for this very important and appropriate debate. It raises issues around generational policy matters which have been brought into sharper focus as a result of Covid-19 and its associated impacts on health, the economy, education and recreation, and how they differ between and within generations. I think the noble Lord, Lord Price, referred to the report as being particularly prescient and I would have to agree with him.
I note that the committee published its report in April 2019, and that it alleged that
“the action and inaction of successive governments”
had risked undermining fairness between generations and called for improvements in six areas to tackle this: accounting for policies and data, housing, education, work, communities, and tax and benefits. In setting up the report, the Liaison Committee stated in March 2018 that concern for intergenerational fairness was growing
“as the millennial generation appears to be worse off than the baby boomer generation were at a similar age”.
That is probably now even more acute with the added layer of Covid.
The report referred to other factors which had exacerbated the situation for generations: an ageing population, the global financial crisis and successive government policies that have failed to consider generational issues. It also referred to the inability to access social and affordable housing among young people. What plans do the Government have, working with the devolved Administrations—as housing is a devolved issue—to increase the supply of affordable and social housing?
The Government tried in their response to demonstrate how they are tackling the issues but, as many have pointed out, their scorecard would state that they should have performed better, with a more caring, empathetic response focusing on the needs of the young, working families and the older generation. A new direction is required in reforming taxation and welfare—two issues that were mentioned in last Thursday’s debate—so as to focus on generational issues, particularly the needs of the younger generation.
This report, and the Government’s response to it, have now been overtaken by Covid and its consequences for a wide spectrum of society and environment. In fact, it has accelerated the fairness issue between the generations and accentuated the divisions in our communities. That is particularly true for young people, as they are now forced into online learning and tuition whether at school, college of further education or university. There is also uncertainty over trade apprenticeships and the potential for jobs in an economy facing a double-dip recession. Those who are or were in jobs in the hospitality sector are facing, in some instances, the fact that furloughing is no longer available; they are now out of work, with no resources, and do not know whether they will have jobs to go back to. With lockdowns, there is little opportunity for social interaction, although they are needed to press down the level of infection. All this can bring about mental ill-health issues.
For all generations, there is a need to look at reforming the taxation and welfare systems to focus on need. Accessibility to the benefits system is also needed, as is fairness. The Government’s policy, emerging from the Conservative Party manifesto, was to focus on a low-tax economy that benefits the rich but does little to help those in receipt of low incomes. There have been several reports since this one from the special Select Committee, including from the Resolution Foundation, the Intergenerational Foundation and the Institute for Fiscal Studies, which focused on the disproportionate impact on younger people.
What action will the Government therefore take across departments and agencies to address intra- and intergenerational fairness? The issue has been apparent for many years, but the unfairness has now been accentuated by Covid and its consequences. In so doing, will they implement policy changes in welfare, housing, education, taxation and health systems that focus on the values and principles of social justice and equity? What will the Government do to reform welfare and taxation? Both are crying out for reform as we try to create that better, egalitarian society.
My Lords, I am happy to take note of this report and pleased that, somewhat belatedly, it is being given the attention it deserves. It represents an important piece of work and we should thank the members of the Select Committee for their efforts. There is much of the report with which I agree, particularly where it talks about the problems faced by young people. However, I am afraid that the underlying thesis, while widely held, is misconceived. What I find lacking in any discussion of intergenerational fairness is a clear exposition of the mechanics of how one generation can gain at the expense of another. We are never told exactly how it is possible for a current generation to force future generations to pay for our current consumption.
We have the independent Office for Budget Responsibility continuing to project growth in national income per head, so future generations overall are expected to be richer than we are. We are not eating the seed corn for future generations, let alone consuming now what future generations might produce. Overall, they will be better off. To the extent that there are groups within future generations who feel they are being treated unfairly, they need to look to their fellow citizens for fairness, not their parents and grandparents.
If we focus on the main conclusions of the report, a majority of them identify important social ills—but ills that have nothing to do with intergenerational fairness. There is no doubt that public services have got worse over time, so it is true that the education system
“is ill equipped for the needs of the rapidly changing labour market”
and that we need
“to directly tackle skills, care and housing shortages”.
But these problems stand by themselves; they really have nothing to do with generations having conflicting interests.
The problems we do face are real enough, but they are political in nature and looking at them within a framework of intergenerational fairness does not help in any way in finding a solution. What we have here is a confounding variable. Wealth is being conflated with age. There are clearly massive inequalities in Britain today, but they are inequalities of capital and income and have little to do with age. They will not be resolved by picking on one generation or another to bear the brunt of any solution.
It is true that not all pensioners are poor, in the same way that not all 20 year-olds are poor. While austerity measures in Britain continue to hit the poorest families hardest, those in a wealthy elite have seen their incomes spiral upwards. This is a question not of age but of social class and wealth. The answer is that as a society we should do much more to raise revenues from those who can afford it, including but not limited to the elderly, rather than relying on cuts to services, pensions and benefits that have a disproportionate impact on the poorest in society.
One of my biggest complains about the report is the statement that
“retired people have higher incomes on average than many younger groups.”
It is grossly misleading to focus on pensioners’ average incomes, because they vary widely. It is equally true that young people have higher incomes on average than many groups of pensioners. So long as there remain many poor pensioners—the millions who rely on state benefits—I will remain a strong defender of the triple lock. We should remember that the triple lock applies only to a limited part of pensioner incomes, namely the basic state pension and the new state pension, which are at only £134 and £170 a week respectively. I do not think that that is enough and, so long as that is the case, I will support the triple lock to produce a more adequate level.
It should also be understood that it is future generations of pensioners who will benefit most from the triple lock, as they will accrue higher pensions when they retire. Young people’s falling long-term economic prospects are not down to older people in society hoarding all the wealth. Increased university fees, unemployment, poorer job opportunities, lower pay and rapid house price inflation are the real causes of hardship among the young. Restricting the support that pensioners receive from the state would therefore do little to address the difficulties that young people face.
I understand that the noble Baroness, Lady Fox of Buckley, has withdrawn, so I call the noble Baroness, Lady Wheatcroft.
My Lords, I thank members of the committee for the hard work they put into producing this report, but I must say that I agree with a great deal of what the noble Lord, Lord Davies of Brixton, said. Reading through the committee’s report again, I increasingly came to the view that, while there are some issues that undoubtedly disadvantage the younger generation, the key issue is fairness across the board. After all, for most of those who are born to well-off parents, many of the problems highlighted in the report will simply not exist. They will go to good schools, will stand a better than average chance of getting a good job and will have a helping hand on to the housing ladder, before inheriting a home when their parents die.
They will also have a better than average chance of sustainable good health. In the western world obesity, for instance, is disproportionately a reflection of social class. This pandemic has shone a brutal torch on the pernicious effects of the inequalities in our society, so I believe that there has to be an increased emphasis on fairness generally as a means of dealing with perceived intergenerational unfairness.
Potentially the greatest intergenerational unfairness we risk passing on is from climate change, and every one of us can have an impact in trying to ameliorate its effects: handing over a world in better climatic shape would be a great start to improving the life chances of future generations. As the report points out, our elderly population is expensive in terms of not just pensions but social and medical care. Sadly, the funding of that burden is falling on a diminishing pool, not only because of a sliding birth rate but because of the inevitable effects of Brexit, which has sent hundreds of thousands of predominantly young EU citizens back to their home countries, stopping them paying taxes into the UK’s coffers. They were net contributors to our finances, not dependants.
The balance of income between the elderly and the young is now—despite the noble Lord, Lord Davies, taking exception to the phrase—in favour of the elderly on average. Averages are always difficult, of course. Nevertheless, it means that the triple lock needs to be re-examined. Many of the people in the older generation have had the benefit of defined pensions: a luxury that increasingly few will now have, and that the young barely stand a chance of gaining.
There has to be a long-term plan for dealing with an issue that has been so often thrown into the long grass: the provision of social care. It has to be approached in a long-term way. I was very grateful to the noble Lord, Lord Moynihan, for explaining the benefits of active old age, and what a difference that can make to promoting health and combating loneliness. His prescription for being active and for community centres that can be enjoyed is absolutely right. Loneliness is a huge problem: it makes people ill and sends them to doctors. We need to tackle it in a different way. Prescriptions for art and culture can also be very effective.
This leads me to an issue highlighted in the report: the need for all-age communities. There are huge benefits to be had from encouraging the young and old to be mutually supportive. I point to the highly successful experiments in putting nursery schools into shared-provision properties with the elderly: both sides benefit hugely. Equally, I would endorse schemes for sharing accommodation where the elderly with spare space hand it over to younger people in return for help around the house. The noble Baroness, Lady Jenkin, and the noble Lord, Lord Hain, spoke about this. Local authorities should embrace such schemes.
The report highlights the changing employment market that will face the younger generation, with the need to retrain regularly and to up their skills. Inevitably, jobs will evolve as technology impacts extensively on our lives, and reskilling will be something that government and employers need to invest in. We need to keep improving our productivity. But do we really need to accept the idea of a gig economy, which is so cruel to so many? There used to be a relationship between employer and employee that had mutual obligations. We should ask government to examine what it could do to encourage that sort of mutual support again, rather than just accepting a task/reward type of relationship.
However, more than 1 million households—2.4 million people—were destitute at some point in 2019. That was an increase of 35% on the year before. Some 550,000 of those people were children. There can be no worse start in life than to grow up in destitution. This is why, as the noble Viscount, Lord Chandos, said, we need to look at intragenerational fairness if we are to deal with this problem.
My Lords, I will start with a general admonishment of the way that this House runs its affairs. It really is scandalous that this debate is taking place 21 months after the report was published. The excuses of Covid and Brexit are frankly not good enough. If we have agreed to set up special committees to investigate cross-cutting issues that we think are of public importance, the Government and the usual channels have got to show greater willingness to take them seriously. I would like the Minister to respond specifically to that point in her conclusion.
I welcome the noble Lord, Lord Price, to this role as stand-in chair. I got to know the noble Lord well when I chaired the Lancaster University council, of which he, an alumnus of the university, was a very wise member. I hope he will be able to play a big role in public policy in future because he combines the originality of the brilliant businessman that he is with an acute social conscience.
The report represents progress in illuminating the question of intergenerational fairness. It is very encouraging that the Office for National Statistics, run by another former member of the Lancaster University council, Sir Ian Diamond, is responding positively to its conclusions and, hopefully, is helpfully going to give us more information on whether this is a real problem, as I think it is, or not, as some other noble Lords believe.
I think it is a real problem when it comes to the question, “Where do Governments make their choices when they face harsh decisions on public spending?” In the 2010s the coalition and then the Conservative Government got that badly wrong. They prioritised preserving benefits for the over-60s while cutting them for families, which is one reason why child poverty is rising in such an alarming way. They showed that we were not all this together through the necessary austerity of these years. We chose to back one generation over another, and that was a great mistake.
We also face a grim financial position for the future—the noble Lord, Lord Price, painted the financial backcloth very well—and choices are going to become more acute. We have to face the fact that the welfare state that we have is unsustainable on the present tax base because of demographic pressures. That means the pressures of the rising demands of health and pensions and addressing the crisis in social care will increase public spending and, unless we are prepared to make our tax base more generous, we will not be able to afford to fund our services as they should be funded. The Covid crisis has made those choices worse. It has shown how threadbare our welfare safety net is and how deep the problem is of low pay in many sectors of the economy, particularly in essential public services. So we are going to face tough choices soon and my big fear is that crucial investments, such as in education, will be squeezed in the face of a Government who once again decide to prioritise the older age groups.
Of course, some of this can be addressed by some increase in taxation, which I favour, and I hope the Chancellor addresses that in his Budgets this year. We need a reform of council tax into a much fairer property tax. We need to equalise capital gains tax with income. We need to tackle tax expenditures, which are far too generous towards the wealthy on saving for their pensions. All those things are right. but our society is still going to be faced with very tough choices. The question is whether the political power of the elderly once again win out or we can actually find the will not to ignore the needs and opportunities of the young—because this must not be allowed to happen.
My lords, this has been an excellent debate, ably opened by the noble Lord, Lord Price. It is also overdue. Like many noble Lords, I do not find it acceptable—pandemics notwithstanding—that we are debating this very important report and government response nearly two years after their publication.
Intergenerational fairness is the notion of different generations supporting each other throughout their lives. From giving children the best start in life to caring for people in their old age, it is fundamental to our entire social fabric and cohesion. As we have heard today, we live in a time when the notion of intergenerational fairness is threatened. The accepted post-war norm had been for successive generations to experience better lives than their parents’. That is not true anymore for the younger generation. Instead they are experiencing worse outcomes in terms of pay, job security and housing. Now, as we have heard today, we must also factor in the devastating impact of the pandemic, particularly on younger people.
It was a pleasure and a privilege to serve on the select committee under the leadership of the noble Lord, Lord True, who sadly is not present today, and to wrestle with these big, complex and interrelated areas of social and economic policy. I associate myself with the sentiments expressed by other noble Lords on the very sad loss of Professor Sir John Hills, with whom it was my privilege to work over many years on a range of social policy issues.
I sympathise with noble Lords who have raised the issues of intragenerational fairness and how they play out with intergenerational fairness. I simply say that that was not within our committee’s remit.
I cannot pretend to feel anything other than deep disappointment at the Government’s response. They responded to 29 of the committee’s 41 conclusions and recommendations, rejecting 21 of them. That left a grand total of two recommendations that they accepted. I always try to remain positive but at one point I was left wondering why we had bothered. However, I was cheered up when I noted that the Office for National Statistics had accepted the committee’s recommendations, and it has already begun publishing new intergenerational analysis of the data that it holds. I join other noble Lords today in thanking the ONS for its very positive response. I was heartened by that. It might all sound rather dull and technical, but I felt it went to the heart of what we were proposing in terms of both government and external commentators having the data to assess the intergenerational impact of the Government’s tax-and-spend decisions and their ability to take long-term, sustainable spending decisions. In short, we called on the Government to accept the principles of inter-generational accounting, and I repeat that call today.
When we launched our report in March 2019, we found out that this is not always an easy issue to debate. Unless carefully handled, it can stoke up all sort of anxieties and resentments. I think that we on the committee were very careful not to pitch generations against each other. I was therefore pleased when I looked back at the statement in the front of the report:
“The relationship between older and younger generations is still defined by mutual support and affection. However, the action and inaction of successive governments risks undermining the foundation of this relationship. Many in younger generations are struggling to find secure, well-paid jobs and secure, affordable housing, while many in older generations risk not receiving the support they need because government after government has failed to plan for a long-term generational timescale.”
I asked an Oral Question in May 2019 about the specific steps that the Government were taking to collect regular data on the intergenerational impact of tax and spend decisions. In responding, the noble Lord, Lord Young of Cookham, said:
“One of the ways of reducing intergenerational unfairness is to take further steps to reduce the deficit, and the report explains exactly why it is unfair for any Government to go on borrowing and borrowing and load on to subsequent generations ever higher debt.”—[Official Report, 20/5/19; col. 1773.]
As the noble Lord, Lord Price, said at the start of the debate, given the unprecedented level of borrowing to deal with the immediate impact of the pandemic on people’s livelihoods, it is worth noting the example of Quebec, which has set up a generations fund dedicated exclusively to repaying Quebec’s debt with a strong focus on royalties from sustainable water power and private producers of hydroelectricity. I am not for one minute saying that that precise mechanism is directly transferable, but the concept is interesting and worthy of further exploration as we start to grapple with the huge debt that we are facing.
A key finding of our report was that young people were being held back by an education system that is not preparing them for a changing labour market and longer working life, setting them up to face major challenges in finding stable employment and good housing. There was too strong an emphasis on higher education; at the same time, the Government have restricted choices for young people by consistently underfunding further education. We noted that, since 2010,
“sixth forms have faced budget cuts of 21 per cent per student”.
This reiterated the argument of the Lords Select Committee on Social Mobility, which I also served on and which drew attention to the major funding disparities between further and higher education. By far the starkest statistic was a roughly £6,000 difference per student per year between those who study higher education courses at university and those who study further education courses at colleges—a staggering figure and, in my view, a major social injustice.
I welcome the direction of travel and many of the proposals contained in the Government’s Skills for Jobs White Paper, published last week, to improve access to vocational learning and match skills development to the needs of the local economy. That is part of a longer-term and very overdue move towards real parity of esteem between academic and vocational routes. What is needed now, as our Select Committee report clearly calls for, is funding for further and vocational education on a scale that matches the boldness of the proposals and continues to reverse decades of under-investment in FE. What assurances can the Minister give us about the action that the Government are taking on this point?
The pandemic—particularly how to pay for the immense but very necessary increases in public spending and crisis income support—throws the issue of intergenerational fairness into even sharper relief. Various external commentators and think tanks have already been sounding alarm bells, including the Social Market Foundation, the Institute for Fiscal Studies and the Resolution Foundation, which underlined that the virus is having a dramatically different effect on different generations. Old people are much more likely to get severely ill but young people are taking a much worse economic hit. In partnership with the Nuffield Foundation, which is now producing an annual generational audit, tracking changes in the balance between the generations, this first assessment shows that, if you turn the focus from physical to mental health, the virus is actually having a severe health effect on young people too. I join other noble Lords this afternoon in saying that we must not let coronavirus exacerbate Britain’s inter-generational inequalities still further.
Finally, on social care, which some of us will debate later in the week, the funding of social care is yet another of those wicked policy issues that is generally put in the “too difficult” file and left to fester. I believe that we should look for a solution for sustainable funding for adult social care through the lens of intergenerational fairness. No one pretends that it will be easy, but we need to develop a way of providing sustainable funding for adult social care in which all generations contribute but no generation feels unfairly treated. This will be vital to ensure greater buy-in across generations. I also feel that a bold move in this direction could make it easier to reopen the deeply contested debate about some of the age-related benefits that our report showed are no longer targeting the issue that they were intended to solve or are simply going to sections of that age group that just do not need them—something that the noble Viscount, Lord Chandos, powerfully set out. I also hope that it will provide the scope to look again at the case for individuals over state pension age who choose to continue to work making national insurance contributions, as the committee recommended.
I conclude by joining the noble Lord, Lord Price, in asking the Government to review and reassess all the committee’s recommendations in the light of the unprecedented circumstances we find ourselves in. As the noble Lord, Lord Bichard, said, they remain as relevant today as they were two years ago.
I also thank the noble Lord, Lord Price, for introducing the report. I congratulate the noble Lord, Lord True, on producing it—clearly with an eye on moving into government, as there is nothing terribly radical in it. Despite that, as the noble Baroness, Lady Tyler, said, the Government still could not accept most of it.
The report is peppered with real and challenging questions. I hope that the Minister will have some answers, not least to its comments on death duties—which, as my noble friend Lord Chandos reminded us, the committee called “capricious”—as well as on national insurance contributions and benefits and how they affect intergenerational and wider fairness.
On re-reading the report, it is clear that the issues highlighted in it have become supercharged as a result of the pandemic. It warned of slow pay progression for young workers and, historically uniquely, lower lifetime expectations than the current generation’s parents and grandparents. Covid has worsened what was written in 2019. We have seen the gig economy, where younger workers dominate, more affected by Covid. As last week’s ONS report showed, UK inequality was already at its highest point for a decade when coronavirus hit. Since then, labour market shocks have particularly hit the under-30s, who are a third more likely to be furloughed than the general population.
The younger generation’s insecure rental tenancies and, for those studying, the massive impact on their education and future work prospects, leave them with a vastly different outlook on life than my generation had at their age. Their homes are more insecure, with a completely unsatisfactory private rented sector unable to meet the challenge. The PRS has grown substantially, now catering for 20% of English households, as it tries to fill the gap left by the lack of social housing. Housing for Generation Rent must be tackled urgently. It is partly about quality and quantity, but also about fairness of treatment.
The Government have said that they will agree to regulate property agents as recommended in the report from the noble Lord, Lord Best. Work is taking place; I declare my interest in that I chair a group drawing up a code of conduct for when the Government establish the regulator. Perhaps the Minister could inform the Grand Committee when we might see action on this. High rents, inadequate income and high house prices mean that young people cannot save even for the deposit to get on the housing ladder, as the noble Baroness, Lady Greengross, and the right reverend Prelate the Bishop of St Albans noted. We cannot sit by and let this generation down, bequeathing them a life prospect vastly inferior to previous generations.
Meanwhile, at the other end of the age spectrum, the elderly have been badly affected by the virus itself, whether in care homes or through being physically more at risk than younger bodies. While in income terms the elderly have fared relatively better than those in work—with their pensions protected by the triple lock and most having been of the generation to retire at 60 or 65—their worries about their final years in older age are real and have yet to be protected by long-term social care provision, despite promises made by the Government. The current situation of these two ends of the age spectrum highlights pre-existing problems that scream out for action.
Clearly, as the committee stressed, better vocational training is needed—but so are rights at work, where trade unions have a role to play. The changing nature of work has made it harder for young people to be represented. Can the Minister confirm that, in all the Government’s interventions, whether on employment, training or industrial policy, they will fully engage with unions and encourage employers to see them as a constructive way forward in upskilling and respecting the workforce? Will she take note of the comments made by the noble Lord, Lord Bird?
Apprenticeships need a higher priority. Labour’s 2019 ambition was to create 80,000 climate apprenticeships, especially as, even before the virus, some 750,000 young people were not in education, employment or training. Since then, missed apprenticeships and school leavers unable to get jobs will have added to that number.
It is not just young people; the pandemic is wreaking havoc across the generations, as the right reverend Prelate the Bishop of Oxford, and the noble Lord, Lord Dodds, noted. My noble friend Lady Blackstone talked about lifelong learning, and the former MP Gordon Marsden chaired a commission on this, which recommended a right to paid time off to reskill, with retraining fully funded up to level 3, a national careers service and flexible structures to accredit a wide range of learning. We hope that the Minister will be listening to these sorts of ideas.
My generation—which was also that of my noble friend Lord Davies—was the golden one. Born in the NHS, educated for free—right up to and through university, for those few of us able to access higher education—the post-1960s cohort had access to a wide range of freedoms, access to the pill, which meant we could plan our families, a health service, and a pension scheme which, for me, kicked in at 60. But we should not take any of that for granted. We were the lucky ones, but when I started work in 1970, “pensioner poverty” was rife, partly as a result of industrial pensions not being inflation proofed, so millions who had paid in to a pension scheme for their whole working life found that what started for men at 65 was pretty worthless 10 years later. Government intervention removed that inequity, but we must ensure that similar disparities do not again creep into systems set up to protect people. We must also heed the wise comments of the noble Lord, Lord Moynihan, on loneliness and an active lifestyle in later life.
Our society is based on the desire of different generations to support one another. Parents care for children, their working lives pay tax and pension contributions to fund current care and their own futures, and—yes—to provide for their own grandchildren. In their old age, their children and grandchildren in turn tend and care for them—a compact, I think the noble Lord, Lord Bichard, called it. So it is for the whole of society, but things have got out of kilter, with today’s younger people reaping few of the benefits in terms of secure jobs, decent homes or even the guarantee of pensions long into the future. For today’s children, a year’s loss of schooling and social development will demand a policy response to right the impact that the pandemic is having on their lives. This generation of pupils will need particular attention if they are not to face a life reduced by the Covid experience. As the Conservative Tom Tugendhat said:
“Closed schools increase inequality, expose the most vulnerable, and create gaps that cannot be filled”.
As my noble friend Lord Liddle said, we must also find the political will to fill those gaps and ensure that we do not have a lost generation, and that today’s lack of intergenerational fairness is reversed in the future. As my noble friend Lord Hain said, it is a moral imperative.
This week, as I celebrate the arrival of a new grandson, Zakariya, like many in your Lordships’ House, I am deeply aware that what I wish for him is what the whole of today’s society must wish for future generations.
My Lords, I join other noble Lords in congratulating my noble friend Lord Price on securing this debate, and the members of the committee which produced this excellent report. This is a far-reaching issue, which is amply demonstrated by the range and insight of the contributions made by noble Lords today. The Government welcomed the publication of the original report of the Select Committee in July 2019, expressed their gratitude to the committee at the time and published a detailed written response, taking each recommendation in turn. In those cases where the Government did not agree with the committee’s recommendation, we explained why. I note noble Lords’ disappointment that this House has not had the opportunity to discuss this important report until now, although noble Lords did recognise the joint pressures of Brexit and responding to the current global pandemic in influencing that timing.
I agree with the noble Lord, Lord Price, the noble Baroness, Lady Thornhill, and the other noble Lords who commented that the current pandemic has made the debate on intergenerational fairness all the more pertinent. We need to reassess the report in the light of today’s circumstances. The Government are acutely aware of the pandemic’s impact and the fact that it is not borne equally by different generations; their response has been developed with that in mind.
I will touch on that response later. First, I want to address in turn the major themes in the Select Committee’s report. On data and the policy-making approach of government, I assure noble Lords that accounting for the interests of future generations is a core consideration in the Government’s policy-making process, which requires that all programmes, projects and policies demonstrate the costs, benefits and risks associated with the intervention over their whole lifetime, in line with the Government’s Green Book. This includes both the social costs and social benefits of an intervention. Where long-term effects are expected to occur, the appraisal of proposals may involve longer timescales with declining discount rates and further sensitivity analysis. This helps to ensure that, where relevant, the costs and benefits of an intervention to future generations are captured.
The Government agree that the generational breakdowns are informative. We also welcome the new ONS generational breakdowns and their data. This adds to the DWP’s own data on households below average income, which also allows for generational analysis.
Among others, the noble Lords, Lord Dodds and Lord Addington, the noble Baronesses, Lady Greengross and Lady Ritchie, and the right reverend Prelate the Bishop of Oxford mentioned affordable housing— a key consideration in the committee’s report. The Government are committed to delivering more and better-designed homes, and to doing so faster. Investment in affordable housing is a priority. Last November’s spending review reconfirmed funding for the affordable homes programme, bringing total funding between 2021-22 and 2025-26 to £12.2 billion—and that is just the start. To tackle the root cause of a lack of affordability, we have set a target of building 300,000 homes a year. We are making good progress against that ambition, with last year seeing the delivery of around 244,000 additional homes—the highest level in more than 30 years.
A number of noble Lords, including the noble Lord, Lord Addington, emphasised the importance of not just improving home ownership but recognising improved circumstances for renters. I declare an interest as a member of Generation Rent or as a millennial—there are a number of other such terms—and as someone who rents but cannot yet afford to buy their own home. The Government are absolutely committed to improving the regulation of renting at the same time as increasing the supply of housing. We will introduce a renters’ reform Bill, which will create a fairer and more balanced rental market for all tenants, including younger renters. That will include removing Section 21 of the Housing Act 1988, enhancing renters’ security by ending no-fault evictions. We are also introducing lifetime deposits to improve affordability for tenants when moving from one tenancy to the next.
The noble Baroness, Lady Hayter, asked about the report from the noble Lord, Lord Best, which we welcome. It contained 53 detailed recommendations, which we are committed to considering in the light of the broader changes that we are making to deliver a better deal for renters. However, I must confess to the noble Baroness that our most recent efforts have focused on responding to the urgencies of the Covid pandemic. We will return to our efforts to respond to the wider recommendations in due course.
I want to mention social housing, which did not come up as much in this debate as it might have done. The solution to the housing crisis cannot just be about home ownership and more support and security in private rents; it must also be about having more socially rented homes for those who cannot afford the commercial rates that we now face. The Government are committed to increasing the supply of social housing, not just affordable housing. We have taken action to help councils to build more homes, for example through the removal of the cap on borrowing on the housing revenue account.
The noble Baronesses, Lady Jenkin and Lady Wheatcroft, and the noble Lord, Lord Hain, spoke about the potential for local government to use its planning powers to create more healthy intergenerational communities, while the noble Lord, Lord Moynihan, emphasised the importance of active ageing. They all touched on the impact of these measures on tackling loneliness. I reassure noble Lords that the Government’s commitment to these issues, particularly tackling loneliness, is central. This includes the first ever government strategy on loneliness and a Minister to lead this work, the current Minister being my noble friend Lady Barran.
My noble friend Lord Moynihan spoke of social prescribing. The Government are pioneering in their use of this tool. The NHS long-term plan committed to ensuring that at least 900,000 people will be referred to social prescribing by 2023-24.
On a fairer tax and benefits system, the Government are committed to ensuring economic security for people at every stage of their life, including when they reach retirement. Older people should be able to live with the dignity and respect they deserve, and the state pension is the foundation of support for older people.
Today’s debate has illustrated that the question of the appropriate level of that pension and the triple lock is not straightforward, although there was more consensus on the need to ensure that the state pension age is sustainable and maintains fairness between generations in future. To do this, the Government are committed to aiming for up to 32% in the long run as the right proportion of adult life to spend in receipt of the state pension. We have set in progress reforms to ensure that that is reviewed and updated regularly to maintain it. That and auto-enrolment are two examples of policies introduced under Governments of different colours that have been sustained over a period of time to help address some of the challenges that we face with intergenerational fairness.
I note that the committee and noble Lords today made several recommendations to reform taxes. As we set out in our response, changes are not always straightforward, but I reassure noble Lords that the Government keep all aspects of the tax system under review. However, any future changes will be made as part of the annual Budget process, which I do not plan to preview any further here. I shall also refrain from wading into the question of the independence of the Bank of England, raised by a number of noble Lords.
When it comes to employment, the Government are committed to improving the quality of work in the United Kingdom, recognising that those involved in insecure work are often younger. The noble Lord, Lord Bird, raised low pay. The Government accepted all the recommendations from the independent Low Pay Commission for the April 2021 national living wage and national minimum wage. That means that, despite challenging economic circumstances, those on the minimum wages will see another pay rise from April. For the first time since its introduction in 2016, the national living wage will be extended to those aged 23 and over from April 2021.
The Government are also committed to making the UK the best place in the world to work. As laid out in our manifesto, we will bring forward measures to establish an employment framework which is fit for purpose and keeps pace with the needs of the modern workplace, following the important review by Matthew Taylor. We have already made significant progress in implementing aspects of that review, including by improving worker protections, legislating for stronger protections for vulnerable agency workers and extending the right to a written statement to workers of their rights.
The noble Baroness, Lady Blackstone, spoke of the importance of green jobs and the green economy. Alongside the spending review, the Prime Minister announced a 10-point plan for the green industrial revolution which will mobilise £12 billion of government investment to create and support up to 250,000 highly-skilled green jobs.
The Government recognise the vital role that further education and vocational provision play in helping people develop the skills they need for work. That is why the Government invested £400 million in 2020-21, and an additional £291 million for the following year, into education for 16 to 19 year-olds, recognising the vital role of this sector in delivering the skills needed for the UK. As a number of noble Lords also noted, the Government’s skills White Paper published last week details our plans to take forward our commitment to lifelong skills, including the lifetime skills guarantee. The noble Lord, Lord Addington, was right that we will be debating the ministerial Statement on that White Paper tomorrow, but it will be my noble friend Lady Berridge who takes that debate.
Education is also an area that has been hit hard by the pandemic. I thought my noble friend Lord Holmes and the noble Baroness, Lady Tyler, put it well: the pandemic has highlighted the uneven generational impacts that we have been discussing in this debate, from the fact that the oldest and those with underlying health conditions are the most at risk from the virus to the devastating impact of lockdowns on children and their parents, with schools closed and businesses forced to shut their doors. As I said, the Government are conscious of this uneven impact, and our response is focused on helping those who are hardest hit.
On education, our absolute priority is to get schools back. The right reverend Prelate the Bishop of Oxford asked about the provision of vaccinations for teachers. As noble Lords will know, phase 1 of the vaccinations has been set out by the JCVI. That has been focused on protecting another group—those most vulnerable to the virus—from its worst effects, which will also have the effect of protecting our health system. For phase 2, the Government are in the process of considering the latest data from the first phase of vaccinations and other emerging evidence, and of course the importance of key workers, including teachers and school staff, will be part of that consideration.
However, noble Lords are right that, even when we get schools back, we will have a lot of work to do to ensure that those who have missed weeks of school get the help that they need to catch up. The Government have a £1 billion catch-up plan to help support children, which includes tutoring. We also have a plan in place to help ensure that those children who need it get access to remote IT provision to help them access education while schools are still closed. For those who are the most vulnerable, including those who cannot access remote education during school closures, school doors remain open.
Young people are at particular risk of unemployment due to the economic consequences of the pandemic. That is why the Government have put such an emphasis on employment support, a key part of which is the £2 billion Kickstart scheme that has created over 100,000 job opportunities so far for young people who are unemployed. Finally, last November’s spending review provided £3.6 billion of additional funding for the Department for Work and Pensions to deliver labour market support.
We cannot talk about the pandemic without talking about the additional support that we have put into our National Health Service. The Treasury has approved £52 billion for front-line health services to respond to the pandemic in 2020-21, including £9.5 billion of extra day-to-day funding for the NHS to care for Covid-19 patients while continuing to deliver routine services. The spending review recommitted to the historic settlement for the NHS. It also committed an additional £3 billion to the NHS in the coming year to support its recovery from the impacts of Covid-19. That will have wide-reaching benefits for older generations.
The original Select Committee report contained the following simple line:
“Intergenerational fairness should offer the opportunity of a fulfilling life.”
Giving people up and down the land the opportunity of a fulfilling life is a philosophy that this Government share and champion. It is embodied in our determination to level up and build back better. Achieving inter-generational fairness requires ambition, imagination and action, and the Government are committed to all three.
My Lords, I once again begin by thanking the noble Lord, Lord True, for his excellent chairmanship of the committee and for bringing us to this point. I also thank the noble Baroness, Lady Tyler of Enfield, for having the foresight to propose the committee, which I and other members thoroughly enjoyed serving on.
The contributions from noble Lords today were thoughtful and challenging, particularly given the circumstances in which we find ourselves. I thank the Minister for responding so ably and in detail to the various points that were made. However, it strikes me that the position that we are in now is completely unprecedented; people use that term too frequently, but it really is.
I was delighted to hear the Minister talking at the end about our levelling-up agenda. That has to be just as much about intergenerational and intragenerational fairness as it is about geography. I very much hope that, as we come out of this pandemic and the Government face the enormous challenges that lie ahead, such as balancing the books and thinking about a whole-nation society, they can once again look at the committee’s recommendations and reflect on them and on the difference they could potentially make at such a challenging time.
With that, I would like to conclude by once again thanking the committee, all contributors and the Minister.