The unfair settlement between generations in Britain is an open wound at the heart of society. At the next election Labour will need to set out how it can fairly fix a system that is loaded towards an older generation. There may be some willingness from the public to at least contemplate a change of direction with a staggering 93% of voters in the UK thinking that future generations will be worse off. Jon Cruddas’ policy review needs to develop a Labour solution to this. After all, everyone cares about the future of their children. Indeed, generational issues thread through the three central pillars of his policy review: economics, society and politics.
There are a number of major areas where this is a problem and they are well written about in books such as The Jilted Generation and The Pinch. A good example of how deeply ingrained these issues are appears in the housing market. The baby boomer generation had a huge stock of common wealth built up in council housing. A large part of this has evaporated with right to buy. The wealth released from this policy was simply used up at the the time leaving a huge shortage of social housing. Even in the private market the younger generation is being squeezed. Property developments are skewed towards certain segments of the market – in particular towards buy to let. This is largely because it suits the best buyers around, an older generation that has already benefited from a relatively benign property market. A younger generation sees the cost of rent rise along with the average age for first time buyers.
This just scratches the surface. The younger generation is also being left with heavy environmental and debt burdens as well as bleak employment prospects. The difficulty to finding a solution is that people who have benefited from this situation will need to shoulder some of the burden of solving it. Is this politically impossible? Massive wide ranging reforms possibly are. Nonetheless, straight forward policies such as the reintroduction of MIRAS (Mortgage Interest Relief at source) for first time buyers or building more council houses could receive better acceptance from the electorate if framed as an equitable settlement between generations.
Labour needs to approach this in a way that is meaningful to voters. The Tories have proved that they do not mean it when they say “We’re All In This Together”. It is a phrase that is beyond rescuing and selling t-shirts featuring it isn’t going help. The latest wheeze of some of the best and brightest on the right is to decry baby boomers and British workers as lazy. This is something Labour needs to avoid. We need to develop a positive vision of generational equity that most people can live with and accept, not the sniping and stale sloganeering that the Tories have on offer.
Ed Miliband is heading in the right direction with talk about the ‘British promise’ but the party’s policy review needs to face this challenge head on. Generational issues are going to frame the way people think about life and politics in the years of constrained resources to come. Labour can take a lead in this debate and shape it. A generational ‘grand bargain’ should form a part of whatever the policy review produces. We need to show that a Labour government will leave coming generations in a better position than the ones that have come before. This may sound obvious but it is something the Tories are failing to do. The opportunity is there for Labour and the party needs to take it.