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Giving millennials £10,000 won’t tackle the generation gap

8 May 2018

1:59 PM

8 May 2018

1:59 PM

David Willetts, one time minister of state for universities and science turned chief spokesperson for baby boomer self-flagellation, is clearly troubled by the year of his birth. Since his 2010 book, The Pinch: How the baby boomers took their children’s future and why they should give it back, he’s been desperately seeking atonement for the privileges that happy date accrued. Now, thanks to a report from the Resolution Foundation, we know the precise cost of easing Willetts’s conscience: £10,000 – to be made payable to every 25 year old.

A cheque for £10,000 landing on the doormat will no doubt make hitting the quarter of a century milestone a little sweeter for Britain’s put-upon millennials. But the assumptions of the report’s authors, the Intergenerational Commission led by Willetts, may well leave a bitter aftertaste.

The Commission argues that mutual bonds tying the generations together are under threat because today’s young adults are considered unlikely to enjoy the same prosperity and social mobility as their parents or grandparents. In response, the authors want a ‘new generational contract’ to even things up a bit. They propose new regulations to improve the lot of young people when it comes to housing, employment and pensions. They want pensioners who are still working to fund a £2.3billion ‘NHS levy’ and a new ‘lifetime receipts tax’ to fund a £10,000 ‘citizen’s inheritance’ – a bonus for young people to put towards buying a house or starting a business.

The Intergenerational Commission clearly thinks that £10,000 is fair compensation for those who have the terrible misfortune to be young today and that this reparation will heal broken generational bonds. But where exactly are these bonds breaking down?

The bank holiday weekend saw parks and beaches packed with grandparents, parents and children all enjoying the sun together. More than a quarter of people aged 20-34 still live in the parental home. There is no doubt that housing costs contribute to this statistic but it also suggests there is no huge push for parents to be shot of their overgrown offspring. Three quarters of women and half of men talk to their mothers on the phone at least once a week. Thousands of working parents depend upon granny for free childcare and almost half of all adults live close to their parents in the area where they were brought up. Generational bonds seem to be alive and well in the vast majority of families.

But the Commission is less concerned with individual families than with cliched perceptions about the generations. Take the assumption that pensioners have money to spare while millennials are struggling to get by. Such sweeping generalisations are always likely to fall wide of the mark: some baby boomers are no doubt wealthy but others are not. The pensioner working in a supermarket long after retirement age is unlikely to be sitting on a huge pot of savings. Currently, 370,000 pensioners live in rented accommodation, a figure predicted to treble by 2035. Those who do own their own homes may have a lifetime of struggle and sacrifice to thank for the privilege. Applying new taxes to older workers or home-owners after they’ve reached retirement age and are seeking financial security hardly seems fair.

None of this is to deny the reality of the problems the Intergenerational Commission highlights. Housing has indeed become unaffordable for many, employment is too often insecure and wages have stagnated. But these are problems experienced by everyone in society, not just millennials. And they are problems that families across the generational divide often try to solve together, whether through grandparents providing free childcare or the ‘bank of mum and dad’ helping to finance a mortgage.

It would be great for everyone if younger generations could enjoy the same national economic prosperity as the baby boomers lived through (and helped create) in the decades after the Second World War. But this won’t happen by doling out generational reparations. Problems with housing, wages and jobs require major political and economic solutions. They demand a radical rethink of how and where we build, work, earn and care for both children and the elderly. The Intergenerational Commission deserve one cheer for beginning to think innovatively about how we can change society for the better. But pitching young against old, taking from boomers to provide handouts to millennials, promotes the very intergenerational conflict they seek to prevent.

Giving 25-year-olds some extra state-funded birthday money is infantilising. It breaks the link between hard work, sacrifice and reward. Worse, directing pots of money to individuals for them to spend on themselves is likely to stop another generation from coming up with the collective solutions to national economic problems we so badly need.


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