Compact between old and young at risk of breakdown, say peers

The tacit deal between young and old to support each other through life could break down because of major problems with housing, work and tax, a 12-month parliamentary inquiry has concluded.

The growth of the gig economy, soaring housing costs and fiscal giveaways for older people are driving a wedge between generations in Britain, according to a cross-party House of Lords inquiry into tackling intergenerational unfairness.

The committee of peers (average age 67) recommended policy changes that risk angering older voters, including axing free TV licences for the over-75s, delaying winter fuel payments and bus passes by five years, and removing the “triple lock” on the state pension that guarantees inflation-linked annual increases.

To help the young, the peers are calling for councils to be given new rights to build housing on public land, more radical reform of private renting and an end to the use of gig economy workers by companies such as Uber and Deliveroo unless people explicitly want to work under those terms.

“If society continues on its current trajectory and the government takes no action, there could be a breakdown in the intergenerational compact,” they warn. “Over the coming decades some young people could grow to resent older people for having the property security that they lack and having benefited from a lifetime of well-paid secure employment of which younger generations can only dream.”

The warning is the latest of several issued recently about growing intergenerational tensions, which have been exposed by Brexit and climate change debates. Last year, a two-year study by the Resolution Foundation led by the former science minister David Willetts concluded that every person in Britain should receive £10,000 when they turn 25 to help redress the imbalance between millennials and baby boomers, a suggestion branded a gimmick by some.

The House of Lords committee included Michael Bichard, the former director of the Institute of Government, Sally Greengross, the former director of Age Concern, and Mark Price, the former managing director of Waitrose. Concerns included:

• Student loans, most of which will not be paid off, which means “the cost of educating today’s students would be paid by taxpayers 30 years from now”.

• A failure to repair school buildings, which will store up more costly problems in the future.

• A slump in housebuilding that has resulted in millennials spending 150% more on housing at the age of 25 than baby boomers spent at that age despite increasingly cramped conditions.

The committee said successive governments had failed to respond to the current prediction that a third of people born today will live to the age of 100 and said “short-termism has also caused intergenerational tensions through bad, politically driven accounting choices”. It called for future administrations to publish a breakdown of the impact of fiscal policies on each generation and to assess the impact on intergenerational tension of all draft laws.

However, the Centre for Ageing Better charity criticised peers for “headline-grabbing proposals such as abolishing free TV licences”, which “risk distracting from the big structural changes needed across housing, work and communities”.

“This is not about old versus young, it’s about creating a society where everyone regardless of income or background can enjoy every stage of life,” said Anna Dixon, the charity’s chief executive.

Peers said relations between generations were good, and found “little public support for the idea that older people are to blame for the woes of younger generations or that one generation has wilfully robbed another”.

They cited research that found that more than a quarter of parents with adult children gave them regular financial help and that grandparents helped families with a working or studying mother and a nine-month-old baby in almost three quarters of cases.

However, they warned that younger people increasingly feared they would not be able to do the same for their children.

“The needs and disappointed expectations of the current younger generations in housing and the workplace are the greatest near-term dangers to the intergenerational compact,” they said. Looming care costs for the growing older population presented a longer-term danger.

They also raised concerns that the “increased atomisation of society” posed a threat to intergenerational fairness, with reduced community activity and the breakdown of institutions reducing the opportunity for interaction between generations. Rural areas have aged twice as fast as urban areas in the last 25 years, and only 5% of the neighbours of the typical city child are over 65, according to research by the Intergenerational Foundation.

The peers’ study cited research from Age UK that shows people are more likely to view older people as friendly and warm than competent, while the peers’ own panel of younger people said they were treated badly by older people who considered them “trouble” or “soft”.