The Generation Game
The "battle between the generations" is the great lie of modern British politics. It is a cynical distraction, carefully curated to ensure we are fighting each other rather than looking at the state.
The rise of identity politics means we’ve all been categorised into particular interest groups against our will. Within the artificial bounds of generation classifications—Boomer, X, Millennial, "Zee"—the perceived wisdom prevails.
It is a given that the young are work-shy and feckless, while the old are privileged and asset-rich. This has always been true. Those dark nights when Eve couldn’t sleep wondering where she went wrong with Cain! But in the real world, within our families, we are not as selfish as that analysis suggests.
Whilst the conversations I have with people reflect that narrative when considering the country as a whole, I have met vanishingly few who don’t consider their own family to be an exception.
Plenty of grandparents bemoan a generation of "snowflakes," unwilling to put in the hard hours and too eager to lay back and accept benefit payments—but universally their grandchildren are hard-working, have achieved wonderful things for their tender years, and have great potential.
The view that previous generations had it easy and are currently blocking housing supply and the health service comes into question when young people consider the prospect of their own family members being turfed out of their home, or suffering a wait for medical care.
Either we are all hypocrites, or we need to look at the problem from a different perspective: less through the angry lens of identity politics, and more through the honest compromise of family life.
As a Conservative, the concept of the family is an essential part of my politics. Not through preaching an infallible vision of the nuclear family, but recognising that whatever shape or size your family takes, it is the first building block of support for individuals.
It is through families, not the state, that we are nurtured, learn to thrive, and build strong communities. The state provides education, but a school can never replace a living family, teaching us how to live alongside other people and contribute to something more than our own gratification. Similarly, towards the end of life, many of us will look for the help of the state for health and social care. Yet we know that however dedicated a medical team is, nothing brings greater comfort than the success and the love of those we have supported.
The compromises we make daily for our families to flourish must teach us about public policy and the economic challenges this generation game throws up.
Across the West, our population is ageing. This means people living significantly longer than in what would have been an economically inactive part of their lives, with increasing demand for health and high expectations for those demands being met by the state. This demographic shift has contributed to lower living standards and higher costs falling on active members of the workforce.
The last thirty years have seen a reduction in comparative wealth and the consistent growth of the state in volume - but not beneficial output. The framing of the debate has become divisive on the basis of which generation you are deemed to belong to. The state is simply too big. It needs to be smaller, more effective, and perform a more limited range of functions. We must compromise across the generations and have a public conversation to break down these barriers. To tackle the problems Britain faces, we must convince people that these are acceptable compromises for their own families.
Britain’s benefit bill is unsustainable. Each year we spend more than three hundred billion pounds on benefits, edging closer to four hundred billion by the end of the decade. This burgeoning bill is down to the fact that around half of the overall cost goes on the state pension. People we no longer generally expect to work. This cohort is only going to grow, alongside further costs for health and social care.
The state pension is the country's largest Ponzi scheme. My parents paid directly for the cost of my grandparents' pensions. I am working to pay for the pensions my parents are drawing; and in turn as my children start earning and paying tax they will be paying for my retirement, in the hope that someone will be left to provide for them. This is not an argument against the state pension, but it cannot be a sacred cow. The retirement age was first set at a point beyond which age meant it was harder for people to continue working in manual industries. It has increased incrementally over the years, but the cut-off was always supposed to be the point at which people could not be reasonably expected to work. It has become the point at which many choose to opt out of work, making a conscious lifestyle decision, rather than having actually reached the point beyond which they can no longer be economically active.
The biggest taboo in the pensions debate is the triple-lock—a "boomer bribe" that is politically expedient but dangerous. It cannot be justified with a larger group of pensioners, generally in better health, who see income increases disproportionate to those still in work. It is neither fair nor sustainable.
Turning to those in work, it is not an overstatement to say that our benefits system can provide a real disincentive to seeking employment. Only last week I came across a case of a woman, out of employment for ten years, recently retrained, but unsuccessful at interview. Of course she was disappointed; but her response to not getting the job she wanted, at a salary she was happy with; was to conclude that remaining on benefits was a better option. She is not unable to work, she is not entirely unwilling to work. She is however in a position where she has the luxury of choosing whether to work or not. There are many people in our country who are really struggling. Some who genuinely rely on our welfare system to keep them and their families fed and housed. In a compassionate society we should not begrudge that extra support to those who strive, or to those who really cannot help themselves. Yet to most of those people, the idea of having a choice to work, sounds like the luxury of the super rich, not the choice of their neighbours.
Just as families pull together, expecting everyone to play their part, as a country those who can work should be expected to do so. We protect our family, but that comes with an expectation of contributing. There is nothing compassionate about encouraging citizens to take from society without contributing.
The housing crisis is a direct result of the state’s planning and tax failures, which have turned owning your own home into a luxury item. The UK’s housing crisis has plagued us for decades, and current policy is set to continue to do so. Genuine concern over infrastructure and environmental harm, mixes with NIMBYism - a lively combination stoked by bureaucratic delays and economic disincentives. Once again the family can be a microcosm of the nation. Ultimately when younger generations are unable to afford homes of their own, they end up staying with their parents for longer. It is intrinsically a family problem and so parents compromise on space in their homes. Those who can afford to do so help with a deposit, sometimes grandparents may move, not through necessity but to free up property or cash for younger generations. These are options that are only open to a proportion of the population who already have the asset base to be able to afford them, but the instincts are surely universal. If we restrict this ability further, rather than widening opportunity we will surely only limit the proportion of people who can help themselves.
Supply and demand of course plays a large part in the housing crisis that we face as a country. We need to build more - with all of the inevitable challenges that brings - but the economics of housing affordability are not as simple as the supply of widgets. It is not just a case of supply. Land itself is finite. Land available for housing can be increased, but only at the cost of some other land use, and ultimately the overall availability is confined by our own shores. The cost of housing in absolute cash terms is not the only metric we should consider. Undoubtedly house prices have risen significantly in post-war Britain, seeing many “boomers” build up a comfortable profit for themselves. Lowering house prices therefore is not a simple win for a youthful generation, but comes at a cost to their own parents and grandparents. Family finances, retirement planning, often based on the assumption of high house prices, has hard-wired this cycle into our economy. We could seek to smash that system and accept the inevitable pain, but again the family shows us another solution. Availability of finance for housing is rarely considered, yet it is often the way in which older generations practically support their offspring. We have a large cohort of young professionals earning well, but stuck in rented accommodation. Not earning enough to even think about building up a deposit, and yet paying more in rent each month than the cost of a mortgage. For some people it is not the case that they could not afford the monthly mortgage repayments to keep them on and help them climb the housing ladder, but they simply cannot reach the first rung. So as well as building more homes to match a growing population, we need to consider how we increase access to housing finance through reforming the mortgage market, but also allow, in fact, encourage, the transfer of housing wealth within families.
The state does not have all the answers. Politicians should seek to reduce the size and functions of the state to what is necessary, those things that individuals and families cannot reasonably do for themselves. That is not an argument for worse public services, but fewer services delivered better. The cost of our benefits bill is one of the biggest blockers to both the Government delivering the services we deserve and the private sector delivering the growth we need. Our own families provide a template for how this can be delivered. It needs compromise and compassion, but it also needs the brutal honesty that families can do best. Tackling out-of-work benefits and reigning in the pension bill will be painful, but necessary. To convince people of the need for change, we must abandon the divisive identity politics of the generation war. We need a new social contract: one that prioritises our families over the expansion of the state.
