Intergenerational Fairness in Government Policy

Thursday 26th October 2017 Lords Chamber

Motion to Take Note

11:50

Moved by

[Baroness Smith of Newnham]

That this House takes note of the case for intergenerational fairness to form a core part of government policy across all departments.

[Baroness Smith of Newnham (LD)]

My Lords, unusually, this is not a topic that I dreamed up for myself; it is rather a Liberal Democrat-led debate. The Motion is extremely complex and multifaceted and I am not expecting all the answers to come today; nor am I even going to raise all the questions. I can already see a smile coming across the face of the noble Lord, Lord Young of Cookham, who is going to respond to this debate. I had put in my notes that I was not expecting all the answers and thought that he might be relieved about this, particularly as at Questions yesterday it seemed that every Question on the Order Paper was addressed to him.

I propose today to look at some very broad issues, and I am aware that the Motion is one that taxed even your Lordships’ Library. As ever, it provided an excellent briefing, but the author was quick to point out that he was looking at particularly prominent aspects of the debate: unemployment and earnings; pensions and pensioner benefits; and housing, including supply and tenure. The Library did not in any way try to cover every conceivable aspect of intergenerational fairness. The examination question that we set ourselves was based on the idea that intergenerational fairness should form a core part of government policy across all departments, going far beyond the current debate that we have had about young versus old and millennials versus baby boomers. I intend, in the first few minutes of my speech, to talk about some of the international aspects of intergenerational fairness, because this is not only a domestic matter: the international consequences are also important.

I want to challenge Her Majesty’s Government and your Lordships as well—if your Lordships are willing—to be more ambitious and comprehensive in exploring questions of intergenerational fairness. It is all too easy to look at the immediate question of how today’s young people are faring against today’s pensioners or against the baby boomers. We perhaps saw it put most explicitly in a recent piece in the Daily Mail by the noble Lord, Lord Lamont, who is not in his place. He said that giving tax increases to the old in order to woo the young would be political suicide. That is one of the problems that we face when we think about questions of intergenerational fairness. In a democracy, elected politicians—or those who seek to be elected—inevitably look toward the short-term horizon of the next election. We normally expect that horizon to be four or five years. If we are moving to an electoral horizon that is only two years, then perhaps it will be even more difficult to engage in long-term planning. I am assuming that an election in 2017—so soon after 2015—was an aberration, but nevertheless the fact remains that, if you are seeking election, you are looking to the short term rather than the longer term.

Intergenerational fairness is hugely important; it needs to be thought about and planned for. It can be measured objectively yet it is not. Clearly, this applies only up to a point, as there may be future issues that we cannot predict. In my Cambridge college, however, the finance committee looks at the balance between current expenditure on current students and the endowment along with the prospects for future students. Her Majesty’s Government might like to think about that in their long-term cross-departmental planning. Intergenerational fairness is about not just current generations—our children and grandchildren—but generations as yet unborn. It applies to global matters as much as domestic ones. I plan to talk quite a lot about the global because I am very aware that my noble friends and other Members of your Lordships’ House will talk about a range of domestic issues.

The international is hugely important—oh! I apologise. I normally never have a written speech to read but I thought that as I am moving this Motion, I had better have one; that was clearly not the best thing to do. In terms of the international, one key issue that needs to be addressed is climate change. For those climate sceptics in the Chamber or elsewhere, this is not to suggest that we need to look again at the causes of climate change. That can become a sterile debate because whether you believe that its causes are manmade or not, its implications and long-term consequences are absolutely clear. The policies that need to be undertaken are needed regardless of what the causes of climate change are. Long-term thinking and an understanding of the science is required; equally, it is crucial to understand the potential consequences in environmental issues and the possible loss of whole territories. There are countries that may be simply submerged by water. I am sure that my noble friend Lady Featherstone will talk about climate change issues in her contribution.

Mitigation may be possible and adaptation may be necessary, but if we ignore the global picture we will be ignoring the consequences that impact not just in far-flung parts of the globe but here in the United Kingdom. Issues of human security are to the fore elsewhere. They may not be at the forefront of policymakers’ minds in the United Kingdom, but perhaps they should be. “Climate refugees” may not yet be a term recognised in international law but the reality is of millions of people who may be displaced by floods and other climate factors—perhaps not in the UK but further afield. That movement of people, with its mass migration, stands to create significant problems with resources in some of the poorest parts of the world. It will potentially create conflict and certainly create challenges to resources, with the potential for resource depletion and destabilised states.

All that is surely a matter of consequence to the United Kingdom, particularly one that believes in going global in the context of Brexit. Surely DfID should think about this matter. If it is looking at some of the intergenerational consequences in the parts of the world where it has an interest, it might also look at the fact that older women tend to be those left behind when there is mass migration, as they are not economically active. Is DfID looking at that and, if not, why not? The UK prides itself on spending 0.7% of GDP on development aid yet critics will say, “It’s a waste of money. Why aren’t we spending that money at home?”. It is done partly out of self-interest. Yes, there is a degree of moral obligation but there is also a reason to say that we should invest globally to ensure that we alleviate problems before they have knock-on effects for our security, as well as the security of other parts of the world.

There is a link between climate issues, forced migration, development and, inevitably, the roles of the Foreign and Commonwealth Office and the Ministry of Defence. After all, the response to Hurricane Irma could be financially through DfID, but the reality on the ground was delivered by our Armed Forces. The MoD needed to play a role and our ships and planes were required. There are international issues that go beyond traditional military conflict that need to be thought about and planned for.

By now your Lordships may be thinking, “This is all about the international. Has she forgotten the intergenerational aspects of fairness at home?”. No, I am going to move swiftly from the international to the domestic via the Department for Exiting the European Union, which I think is meant to be time-limited. In that sense, perhaps it does not need to think about the long term. I believe it should end in 2019 or in 2021 after a transitional period or at some date as yet undefined. The prospect of exiting the European Union is presumably meant to have an end-point, but the consequences of the negotiations to leave, the transitional arrangements and, in particular, the arrangements for a future relationship with the European Union will fundamentally affect the life chances of our young people, and in particular their children and their grandchildren. So what work is the right honourable David Davis, the Secretary of State for the Department for Exiting the European Union, doing about the future, about long-term planning? What sort of questions is he thinking about and raising about Erasmus, Horizon 2020 and other policies that will affect the long-term future of our country? I refer to my interests as an academic at Cambridge University.

By way of an aside, I understand that one of the Government Whips was asking who teaches European politics in universities, what they teach about Brexit and whether he could see their syllabi. I pointed out to my students last week that my views about Brexit are on the record but as an academic I understand fundamentally that it is my duty to educate and inform. My views are personal, but my job is to inspire people to think and criticise, and that applies in all areas of policy. I am very happy to send Mr Heaton-Harris a copy of my book.

Educating young people, whether through higher education or schools, is clearly part of the question of intergenerational fairness. Social mobility has gone down in this country. We have lost the ability to think long term and to plan for the long term. If we look back to Beveridge, we see insight and inspiration. If we look at housing, we look back to Macmillan and see policies that affected the life chances of millions of people. Where is that vision in the 21st century? We do not get it from politicians who are simply looking to the next election, who are simply asking “How do I buy votes today?”—obviously, that is metaphorically buying—and “How do I woo voters today?” and are not thinking about the long-term future. It is profoundly short-sighted simply to listen to focus groups or to look at opinion polls and think that something will secure a majority among the old or the young. That is not leadership. It is not worthy of leaders of this country. It is also ultimately self-defeating. It is clearly important that politicians listen to what the public want, but there is surely a degree to which they also need to set an agenda, take responsibility about the long term and stand up and say, on a whole set of issues, that we need to go beyond two years or three years to 20 years or 30 years. Of course, in countries that are not democratic—Saudi Arabia or China—it is a little easier. You can have Saudi 2030. You can have multiannual plans in China knowing that you are not going to have to face the electorate. Clearly we do not want to move away from our democratic ideals, but we need to make sure that democratically elected politicians think through the consequences of their actions not just for today, not just for the next five years or the next 10 years but for future generations.

There are a whole set of areas where this country has engaged in short-termism and where we need to think about the long term. Education is one of them, and I am sure my noble friend Lord Storey will talk about young people and children. The pupil premium went some way in the direction of helping to deal with the issues of the left-behind and intragenerational issues, but we could go so much further. We need to deal with the issues not just of intergenerational fairness but of intragenerational fairness.

Education is part of that, but so is how we deal with the health service and social care. We are all part of an intergenerational community, and the issues of ageing and social care affect all of us, whether we are carers or old and expecting to be looked after. So much of the caring profession, like so much of the National Health Service, depends on immigrants, whether from the EU or beyond, so there is a role and a question for the Home Office. Has the Home Secretary thought about the implications of demographic change in terms of intergenerational fairness and the need to respond now to questions of long-term planning? Immigration will matter and it is something we do not necessarily link back to domestic policy sufficiently often.

I have touched on some of the departments that might wish to take a view of intergenerational fairness in the long term. My colleagues and other Members of your Lordships’ House will undoubtedly talk about pensions, housing, education and the myriad other issues at stake, but the time has surely come when we look beyond the short term to the far horizon and think about a vision for the United Kingdom that enables us to have fairness within generations and for future generations. I beg to move.

12:07

[Lord Willetts (Con)]

My Lords, I congratulate the noble Baroness, Lady Smith of Newnham, on bringing this debate to the House today. It is a very important subject. I should perhaps declare my interest as a baby boomer, but I should also declare my interest as the executive chair of the Resolution Foundation, which is doing a lot of research on this subject. Indeed, I am chairing an intergenerational commission on this very topic which is graced by, among others, the noble Lord, Lord Filkin, as one of my fellow commissioners.

At the heart of this debate is a fundamental part of the social contract that holds a society together. By six to one, British people expect younger generations to be better off than they are. It is supposed to be part of the promise of a modern, liberal, capitalist society that successive generations will be more prosperous. However, we have now reached the stage in which by two to one, citizens in this country fear that the future generations will not be better off. Something that should be the promise of a modern, liberal society is not being delivered.

The noble Baroness took this as an international challenge, and she is right to look at it internationally. Indeed, I would say that the debate on climate change has led to some of the most sophisticated investigations of how we should properly value the future and value the interests of future generations, and perhaps even value the interests of generations as yet unborn. But I hope she will permit me to focus on the vivid evidence of what is going wrong in this country.

The most powerful evidence of all is on housing. The noble Baroness referred to the 300,000 homes a year that were built during the 1950s and 1960s, whereas now, under successive parties in government, we struggle to build half that—150,000 houses. Someone aged 30 is half as likely now to be a home owner as they were a generation ago. This is not because there has been a fundamental shift in popular attitudes away from home ownership—far from it: 60% of renters aged 18 to 40 say they would like to own a home. This is an aspiration that we on these Benches strongly support, and the fact that for so many young people it is an aspiration they are no longer able to fulfil must be something that we would wish to tackle. I hope we will hear from the Minister when he replies to this debate about what more can be done on that.

As well as helping people into home ownership, there is also the issue of housing costs, where rents which used to take 8% of the income of boomers, when we were younger, now take up 25% of the income of the younger generation today. That is one reason why they are consuming less than previous generations. Their discretionary income has fallen; many of them are renting, sometimes in scandalously poor-quality accommodation with very weak rights as tenants. It would be great to see more protection there as well.

I personally think that the worries about housing costs lie behind some of the anxieties around higher education and the fees and loan system which I myself as a Minister was involved in. A lot of people fear that somehow the so-called graduate debt is a barrier to getting started in the housing market, but fortunately it is not a real debt, like an overdraft or a credit card debt or a mortgage. In my conversations with the Council of Mortgage Lenders, it fully understood that this was not like a commercial loan; it was instead a fixed outgoing that would be taken into account as an expenditure item rather than as a liability.

If anything, the real challenge on education is that the rate of improvement in human capital—the rate of investment, and the rate at which we are raising our skills in this country—is, as a recent OECD report has shown, shockingly low. That is why I want us to continue to see more people going into higher education, and I want that higher education properly resourced. But, of course, it is also very important that we invest in vocational and technical routes outside higher education.

As well as housing and the need to invest in skills, there is also the challenge of jobs and wages—and again, the evidence is dispiriting. The wages of someone in their late twenties today are lower than they were for someone in their late twenties 10 or 15 years ago. When we tried to understand why this is happening, we found that one reason is the decline in the rate of job mobility—people not moving jobs as frequently as they used to. That seems to be why younger generations are finding it hard to see their living standards rise.

This all feeds through into government policy, and it is very important that government policy properly take into account the challenge of intergenerational equity. I am afraid that when we look at tax and benefits, the picture is again very dispiriting. The freeze in working-age benefits, combined with other tax changes, means that, in the next few years, the combined effect of all these policy changes is to reduce the incomes of millennials born between 1980 and 2000 by about £475 a year; to reduce the incomes of people born in the 1970s by £390 a year; but to reduce the incomes of boomers by £10 a year.

I do not believe in generational warfare. I do believe that different generations care about each other. Grandparents want to see their children and grandchildren living well, and grandchildren expect their grandparents’ pensions to be properly looked after. So I thought that a lot of what my noble friend Lord Lamont said in that very spirited article in the Daily Mail is correct. I do not want to see generational warfare. But, especially as a former Chancellor, he will recognise that when resources are limited, the question is: what is the equitable distribution of those resources? To have such sustained and continuing increases in state expenditure on pension benefits is a very striking contrast to the freeze in the value of all benefits for working-age families. There are other peculiarities of the system as well: national insurance contributions for employees not collected from people of pension age.

So I think there is not just an intergenerational contract—there is indeed genuine interest and concern by generations in each other. Successive Governments, represented by three political parties in this Chamber, just have not attached enough weight to this issue of different generations. We are aware of class differences. We are aware of people from disadvantaged backgrounds. We are aware of ethnic differences. We have not been so aware of the differences between the treatment of different generations, and the time has now come to put that principle of equity at the heart of government policy-making.

12:14

[Lord Storey (LD)]

My Lords, I thank my noble friend Lady Smith for enabling this debate and—whether it was delivered with notes or not—for her excellent speech.

Here is a sobering thought: in the UK, 65 to 74 year-olds now hold more wealth than the entire population under 45 years old—a group, by the way, twice their size. All parents have hopes for their children’s future: a successful education, perhaps a place at university or college, an apprenticeship, a good career, a home of their own, and for them to be reasonably financially secure and able to save for their retirement. It is clear that the so-called baby boomers—those aged 52 to 70 in 2016—have benefited from free education, generous pensions and the housing boom, while the millennials, aged between 16 and 31, face greater challenges with home ownership and saving for retirement.

It may seem strange that we are debating intergenerational fairness in a Chamber that consists, with very few exceptions, of the generation now known as the baby boomers. Indeed, some of our number predate that generation.

I did not hear Harold Macmillan’s speech telling us that we had never had it so good, partly because I was not an avid listener to the Home Service at the age of nine and partly because the Prime Minister was preaching to the Tory choir. However, with the benefit of hindsight, my generation, by and large, had it as good as it could be. When I went off to college to train as a teacher, I received a full grant and, to be honest, was better off than I had ever been. If I needed to stay at college during the long vacation, I could apply for a vacation grant which, at £10 a week, was enough to live on. As a “good honours” graduate, I was paid the princely sum of £30 a week, enough to get a mortgage on a £5,000 house.

Compare this with someone starting as a newly qualified teacher this September. An NQT will start at about £22,000, and will already have a massive debt burden of more than twice their annual salary. I disagree with the noble Lord, Lord Willetts, in that when I speak to young students thinking about going to university or at university, they really worry about this debt hanging over them. You say to them, “Well, it’s not a debt, it’s a bit like your credit card; don’t worry about it, you will never have to pay it—or you might, but only in small amounts”, but they really worry about it. It is of little comfort that they are unlikely ever to earn enough to pay off the debt. Of even less comfort is the fact that they will need close to 10 times their salary to be able to afford to buy a modest first home.

Of course, they are the lucky ones. Many of today’s millennials, even some of those with a good degree, will be working as a barista in a coffee chain for not much more than the minimum wage. Others will be working in the so-called gig economy, with a portfolio of employers who may or may not ring them up and offer them a few hours’ work. I was talking yesterday to a young graduate who had moved to London to take up a job. About 52% of her salary went on rent and utility bills, making a trip to a coffee chain something that required more than a little thought. Those young people who, for whatever reason, do not go into higher education may well be doing an apprenticeship for £3.50 an hour, or earning less than £6 an hour if they are employed in a full-time job.

Intergenerational fairness is not just about money. Young people today are growing up subject to pressures that futurologists such as Alvin Toffler or even Jules Verne could not have foreseen. Earlier generations, including mine, have failed to protect them from the internet. We—in particular, the business community—have let the genie grow so large that we are now told that we cannot put it back in the bottle. Yes, we can teach them about the dangers of the internet, but nearly every teenager will have made the necessary three clicks, and many primary school children will have seen videos that would make us all blush.

Social media, since it developed just 20 years ago, has turned out to be a curse as well as a blessing. Facebook, Snapchat, Twitter and Instagram are now revealing some of their darker colours. With cyberbullying reaching epidemic proportions, our Government were pathetically grateful when Facebook put £1 million—significantly less than one hour’s profit—into appointing cyberbullying ambassadors.

Of course, this week we have seen the comments that O’Mara posted. The attention and disgust has rightly been directed towards him—but think about how the women feel whom he has abused. And remember that this is going on all the time: millions of young people are being abused and feel totally and utterly devalued and threatened.

The pressures on young people are unimaginable. Advertising targets them, encouraging lifestyles which are not only unobtainable but unfair and unhealthy. Advertising glamorising gambling is pumped out—and then we wonder why we have a problem with gambling addiction among young people. We allow reality TV shows to glamorise smoking among young people—and then wonder why smoking among young girls has increased. Incidentally, when I asked the Minister a Question about this last week, it was treated with flippant disregard. He said, “Oh, there have only been 70 complaints to Ofcom—so what?”.

Intergenerational unfairness seems to operate at every level. I guess all of us here have a bus pass. I never pay for bus travel, while in rural areas young people have to pay a fortune to travel to the nearest FE college or place of work. “I’ve worked all my life”, the political narrative goes, “I deserve it”. But what about young people in rural areas?

The winds of change are blowing, and young people have woken up to the power of the ballot box—and political parties are waking up to the problems faced by that age group and generation. Labour is promising to abolish student loans, which, incidentally, they introduced, and even promising to wipe out every student’s debt. How fair that is to the 60% of young people who do not go to university and will have to pay for the policy, I am not sure. The Government are also responding to the changing political climate by looking at policies that will help young people. The noble Lord, Lord Willetts, said, that he would be interested to hear what the Minister says about policies that will help young people.

Finally, a taxi driver said to me today, “I don’t know anything about politics—they’re all the same”. No they are not—but choosing not to know perpetuates inequality, unfairness, shortened life expectancy and poverty.

12:21

[Lord Best (CB)]

My Lords, as the noble Baroness, Lady Smith of Newnham, has noted and as the noble Lord, Lord Willetts, explained so well, the obvious manifestation of intergenerational unfairness in the UK is found in this country’s housing circumstances for young and old. Clearly, the UK needs to redress the imbalance between, on the one hand, the majority of those over 60 who are home owners with a substantial capital asset, security, and more than adequate space and, on the other hand, the majority of those under 40 who have the heavy burden of paying a disproportionate amount of their income for accommodation that seldom suits their needs. Yet the successive deep cuts in housing support to those on the lowest incomes are hitting the under-35s hardest of all. However, today, counterintuitively, I am going to suggest more support specifically targeting older people, rather than advocating brave but vote-losing measures that tax or penalise them.

Much of this country’s housing comprises three and four-bedroom suburban houses with gardens, occupied by one or two elderly people. This accommodation will become increasingly problematic to manage and maintain and, with its steps and stairs, increasingly inaccessible. But where are the spacious, light and airy homes that are easy to heat and maintain, in convenient locations, and designed with older people in mind? Only when demand is stimulated and supply is generated will those of us in our extended middle age take the plunge and rightsize before a crisis forces us to move. Such a move would free up the family homes that the next generation so badly needs.

I strongly commend the measures devised by the All-Party Parliamentary Group on Housing and Care for Older People, which I co-chair with Peter Aldous MP. The APPG has set out a three-part help-to-move package to change attitudes and behaviours. We propose, first, stamp duty exemption for purpose-built, age-exclusive housing; secondly, equity mortgages to top up purchase costs for older people, as Help to Buy does for the young; and thirdly, good financial advice on housing from an extension to the Government’s Pension Wise advisory service.

Helping and incentivising older people to rightsize to new accommodation could contribute massively to intergenerational fairness by releasing significant numbers of family houses on to the market, as happens in so many European countries, the USA and Australasia. Even sales of expensive homes have a knock-on impact that works its way down, releasing property for those on the lower rungs of the ladder. It would also inject some momentum into the stagnant wider housing market, with the economic stimulus of an average of three subsequent movements down the property chain. HM Treasury, although forfeiting stamp duty on the new homes bought by older people, would collect far more stamp duty from the three other movers. So the help-to-move package would cost the Government nothing.

In addition, there would be significant savings to health and social care budgets. Hospital admissions frequently follow accidents in the home; subsequent delayed discharge—bed-blocking, as it is horribly called —is often caused by people being unable to leave hospital or being readmitted because their home cannot take them back. Admission to expensive and unpopular residential care can be prevented or postponed when people move to accessible, care-ready new housing.

Rather than risking the wrath of the electorate with sensible but politically problematic measures, I ask the Minister to lead the charge in backing a help-to-move package which would lead to the redistribution of housing from old to young and free up resources for the NHS and local authority care budgets. This could be the winning formula for some real intergenerational fairness.

12:27

[Lord Tugendhat (Con)]

My Lords, my noble friend Lord Willetts declared an interest as a member of the baby boomer generation. I am older than he is, and I gather that mine is the silent generation—perhaps because it is thought that we are no longer capable of speech.

I congratulate the noble Baroness, Lady Smith of Newnham, on bringing this matter to the attention of the House. It is one of the great issues of the present time. It has been given added topicality by the report of the FCA on young people’s finances, published in the last week or ten days. I am also conscious that not only my noble friend Lord Willetts but my noble friend Lady Altmann and the noble Baroness, Lady Greengross, have great expertise in this area, which I certainly do not.

The issue can be quite simply stated. We of the older generation have, in recent years, acquired a disproportionate share of the nation’s wealth. Not only that but, because of the triple lock and various other devices, we enjoy greater protection against the vagaries of economic life than any other generation. This is the result of decisions taken in the past which were themselves designed to bring about intergenerational fairness. Previous generations of pensioners endured the hardships of the 1930s and the Second World War. When the rest of the country was getting richer, for a long time they lagged behind. Decisions were taken that enabled them to catch up and safeguard their position. At the time, those were correct decisions.

We ought now to be thinking in terms of the same generosity of spirit for the generations that come behind us. We are now in a situation where, except for the very oldest members of the silent generation, those who are drawing a pension have grown up during the years of prosperity and peace. As everybody in this House knows, we have reached a point where the typical pensioner household is now better off than the typical family of working age. That cannot be right, given the responsibilities that families of working age have and the position of people whose responsibilities have very largely been discharged. Of course, I agree very strongly with my noble friend Lord Willetts that we are not talking about intergenerational warfare but intergenerational mutual support. The older generation supports the younger generation in a variety of ways, depending on the prosperity of the families concerned, but they also look to the younger generation for other kinds of support. To achieve that support in the circumstances that now exist, some redistribution is necessary.

There has been talk recently of tax breaks for people in their 20s and 30s. I am not a fan of that device because, were there to be tax breaks for people in one decade or another, inevitably unfairness would arise. If you give tax breaks to those in their 20s and 30s, you could have people earning a great deal of money in their 20s paying less tax than people earning less money in their 50s, so I do not think that is the right way to go. However, there is scope for more inducements for hypothecated savings—for example, to save for pensions and in ways that the saver is unable to get at in the short term. There is obviously scope for reducing stamp duty but I do not think there is any point doing that unless we combine it with a considerable increase in housebuilding: otherwise, it would merely have the effect of pushing up house prices. We need to reduce stamp duty for younger people, perhaps for first-time buyers, but do it in conjunction with a much more ambitious housebuilding programme.

The findings in the recent report of the Social Mobility Commission have a considerable role to play in resolving the issues that we face today, particularly what it said about apprenticeship policy and persuading universities to link courses more directly to employment opportunities and to provide better advice to students during their university careers and when they graduate on where their education can be put to best advantage. We also need to give a good deal more thought than we have done to the other possibilities offered by tertiary education, and to the balance between different forms of tertiary education in this country.

Anything that we do to resolve this issue will cost money. There is no escape from grasping the nettle and starting to cut back some of the privileges that we of the silent generation and the baby boomers enjoy. In particular, a start must be made on phasing out the triple lock, which next year will yield a particular bonanza because of the September inflation figure.

Finally, I urge the young to vote. The reason the older generation has so many privileges that are so difficult to tackle is because old people vote and young people do not. We saw the result of that in the referendum and in a different and, from my point of view, rather less fortunate, fashion at the last general election. However, if younger people would vote in the same numbers as older people, it would be a great deal less difficult for Governments to tackle the issues that need to be tackled if we are to secure a greater degree of intergenerational fairness.

12:34

[The Lord Bishop of Salisbury]

My Lords, I too think this is one of the key issues facing our society, so I am grateful for this debate.

Like just about everybody else in this Chamber, I declare an interest as somebody who grew up in the 1950s and 1960s, when not only had we never had it so good but things could only get better. Many youngsters are struggling with the burden of debt which can be managed only with either a higher-than-average income or parental help, but many have neither. I have been struck by the quality of contributions to this debate so far, particularly that of the noble Lord, Lord Willetts, but I too disagree: this burden of student debt is not just a technical debt but a real one—and it is not just a financial burden. The noble Lord said that it was dispiriting. That is my point. This generation is having its hope sapped because of the burden of debt and the ways in which we are not addressing its changing needs. This is a matter of hope and values, not just finance.

On Tuesday, I hosted a group of 20 young people who came to the UK from the Calais Jungle. It was the first anniversary of the clearance of the Jungle, but many youngsters are still hiding there. It was one of the most moving encounters of my life. Fahred Barakzai left Helmand Province aged 15 because he was faced with a choice between fighting or being killed. He had lived in the Calais Jungle for six months and it was clearly hell. As an 18 year-old, he is now faced with the prospect of being sent home, after living for two years in the United Kingdom. That cannot be right.

Ishmael, now 18, who came from Syria, thanked the British Parliament and people for giving them a new home. He said, “It is our duty now in our new country to be part of the British community and help build it together. I believe my country is Britain now. Nothing in the world can change that. The country who kills their own sons is not a country”.

These youngsters presented Parliament with a plaque. It was given to the noble Lord, Lord Dubs, who came to this country in not dissimilar circumstances with the Kindertransport, and is similar to the one commemorating those who came then. The actress, Juliet Stevenson, read the plaque:

“We thank the British people and Parliament for giving us peace. We found a beautiful life in the UK, so different to the life we fled. We were suffering, but now we are safe”.


The MP for Brent North said at the meeting that these youngsters were among the most courageous people in the world. It was striking to see them face to face. The welcome and hospitality we show them reveal something about ourselves and the values of our society. My sense is that this country wishes to take in these unaccompanied children, and that it is therefore a scandal that 280 places offered for refugee children by local authorities remain unfilled. We could do so much better.

I tell that story partly to ensure that the thanks of the young refugees is a matter of record in this House, but also to raise the continuing plight of those who now fear being sent back as young adults, and of those who still wait in danger while we fail to determine their future. I tell it also because they show very clearly the best of British values, which they represent to us, and the failure of our values to address the changing needs of young people.

Much of this debate will focus, rightly, on our own national needs, but I am grateful to the noble Baroness for the way in which she focused on international matters in her introduction. We do not live in isolation, as the young refugees make very clear to us. Similarly, environmental issues do not know national boundaries. Much is happening to address these issues. We are in the early stages of what I am sure is an industrial revolution. The clean growth strategy is encouraging, if not sufficient.

The impact of human-fuelled global warming, the depletion of biodiversity, the degradation of the environment and the despoliation of our common home is one hell of a legacy to bequeath successor generations. As we prepare for the continuation of the Conference of the Parties in Bonn, it is worth reminding ourselves of the very powerful speech made by the then Prime Minister, David Cameron, at the opening of the UN Paris summit on climate change. He talked about what we can say to our grandchildren if we fail to make commitments and live up to what we promise.

This debate addresses issues which have been vividly exposed to us through the democratic processes of the referendum and the last election, when young people clearly voted differently from those who are older. Young people see their futures differently from their elders. We need to hear them and address their needs. It is our values that are being exposed and hope needs to be restored. I am grateful to the noble Baroness for bringing forward this debate.

12:41

[Baroness Featherstone (LD)]

My Lords, first, I congratulate my noble friend Lady Smith on bringing this important debate to the Floor of this House. It is a pleasure to follow the right reverend Prelate, and I too will speak on climate change in due course.

I first came to this House to stand at the Bar to listen to the debate on same-sex marriage, and I believe that, unlike some parts of our population, this House is considerate of the generations to come. In that debate I heard a number of your Lordships say that they were not necessarily totally convinced themselves but, following discussions with their children and grandchildren, who had said that they would never speak to them again if they voted the wrong way, they had changed their mind. It was that consideration for the generations to come and the sort of world that would be created that I noted.

Since coming to this House myself, I have not been able to help but notice that there seems more of an acceptance that remaining in the EU might not be such a bad thing because of the great act of self-harm that leaving may be for future generations, who, in the same way, may not forgive their parents and grandparents for what is to come. Therefore, I think that your Lordships consider intergenerational fairness in a way that the population in general does not.

The well-being of future generations depends on the actions that we take today. Each generation has a responsibility to pass on this earth in at least as good a condition as the one that we inherited from our forebears. There can be no more intergenerational harm than that which will be done by climate change. If we do not hold the rise in temperature to 1.5 degrees, or at the very least to under 2 degrees, future generations will suffer the consequences. It is our duty to hand on to our children their share of the planet’s natural resources and to ensure that our profligate use does not damage their futures. If we do not, future generations will suffer the detrimental effects that they are left to survive, together with the higher costs that will be forced on them by having to adapt to a future where the extremes of weather which we have all seen to date will be as nothing compared to what will come.

Climate change raises serious issues of justice between the present generation and future generations. We will feel the effect in the United Kingdom, of course, but, while we will suffer here, it will be as nothing compared with the ravages that will take hold elsewhere, mostly in the parts of the world where the poorest and most vulnerable live.

When I was a Minister in DfID, I experienced the effects that climate change are already having. I felt the desertification under my feet in Darfur and I saw for myself what too much water in Asia and too little water in Africa can do. It is no use thinking that we will be okay because we are not in the front line of climate change: there will be not only wars over water but, as my noble friend said, flows of migration escaping famine, drought and floods that will make the streams of refugees we have seen fleeing conflict as nothing.

Climate change will make the already stark inequalities in our world much worse than they already are. Not only are the societal impacts clear but the economic consequences of dislocation will be catastrophic. Our natural world will suffer horrendous loss—the loss of existing species, both flora and fauna, and the loss of diversity, which will consequentially mean that future generations do not have options: they will lose the range of options that we currently enjoy in addressing the needs of our own era. So we have a clear duty and responsibility to the future. It is clear that, if we do not take radical action, weather will become more extreme. Coastal areas, even in the United Kingdom, will flood and precipitation patterns will change.

However, we are not powerless in this. We, and the world, can take radical action. The Paris agreement, which has been referred to, saw the world come together and sign up to keeping the rise in temperature to 2 degrees or less. The signing of that agreement was a glorious moment in time: thinking of future generations, accepting responsibility for our own actions and the consequences thereof, and taking real action to turn the tide. But there has been no change of pace since we signed the agreement.

When I came into post as energy and climate change spokesperson, what struck me most was that there was no sense of urgency, but this is urgent. We need to have zero carbon by 2050 to meet our Paris agreement commitment. That is Liberal Democrat policy. We recently published a report, A Vision for Britain: Clean, Green and Carbon Free, in case noble Lords wish to read it. It is possible to get there but, to do so, we have to go further and faster than this country’s current commitment to an 80% reduction in emissions by 2050. We have to aim to reduce greenhouse gases by 80% by 2040, if not earlier.

As I said, to get there, we have to go further and faster, forging ahead on every front. We have to have more investment in renewables and in innovative technology. We definitely have to have carbon capture and storage, otherwise we have no hope of making it. We need a major programme on energy efficiency, and there we should think of future generations, because currently we are just wasting energy, generally allowing it to exit through the roofs of our homes. We need to accelerate the deployment of renewables. We need a new governance structure, a rapid rollout of storage technologies and an integrated electricity systems operator. We have to reduce demand. We have to address aviation and shipping, optimise supply chains, tackle industry, ensure a circular economy, have support for low-carbon heat and low-carbon transport, and afforestation. We also need close co-operation with the EU—I wish.

And what about our peatlands? They are not even counted in our emissions. What about community energy, housing standards, as mentioned earlier today in Questions, and onshore wind? What about heat pumps and tidal lagoons? For goodness’ sake, let us give the go-ahead to Swansea Bay as the first of many tidal lagoons. What about biogas? And what about climate risk in terms of the financial exposure of our great corporations? All that has to be done—that is the scary thing. Every single bit of it has to be done to the max, and it can be done only with political will. If are to deliver on our pledge to future generations, we have a long way to go, but what we are proposing at the moment does not go far enough. However, we owe it to the future. We have been a profligate generation but we are also the generation that can save the future if we act now.

12:49

[Baroness Altmann (Con)]

My Lords, I too congratulate the noble Baroness, Lady Smith of Newnham, on securing this important debate. The issue of intergenerational fairness has been rising up the political agenda, and I find this trend deeply troubling. By pitting one generation against another, instead of generations working together and supporting each other, society is damaged.

First, like my noble friend Lord Willetts, I understand the concerns that young people express, particularly when it comes to housing, student debt and irresponsible credit card and loan practices. But those are issues related specifically to the housing market, the financial system and higher education. They are not really generational fairness factors.

The enormous rise in house prices across the UK has also driven up rents, which means that tenants of all ages have less disposable income for other expenditure. But that relates to the shortage of new homes and, to some extent at least, the Bank of England’s policy of quantitative easing, which was deliberately designed to inflate asset prices as an indirect means of stimulating the economy. Problems of housing affordability for younger people will not be most effectively solved just by giving young people more money to buy a home. In fact, such policies may further increase upward pressure on house prices. Increasing supply would be more beneficial. We are probably at the top of the housing price cycle. The ratio of house prices to earnings is clearly unsustainable, but it may not last. We have seen house price cycles before. Indeed, just because house prices have risen and many older people own their own homes does not actually improve living standards for older generations. They live in their homes and their income is not normally improved when house prices rise. The noble Lord, Lord Best, however, is right to focus on the need to encourage older people to downsize and free up family homes for younger people.

Another significant problem for younger generations is the sharp increase in the cost of funding higher education. Once more, that is not the fault of older generations, most of whom never had a chance to go to university—less than 10% of today’s retirees actually went to university. Older people are too often portrayed as undeservedly wealthy, having been lucky throughout their lives in ways that young people cannot hope for. But, quite frankly, I feel that such stereotypes are dangerous simplifications. There is an enormous range of income and wealth among pensioners. Lumping all those over pension age together and looking at their average wealth or income per person gives a misleading picture. Also, lumping the entire age group together is highly misleading. Most over-75s and certainly over-80s are not well-off at all. They live on low incomes with half or so needing means-tested assistance.

UK state pensions are among the lowest in the developed world. Pensioners overall are no more likely than other groups to be in poverty, but that is success and marks real social progress. It is not a signal that somehow we have done something wrong. In fact, pensioner poverty is most pernicious, because once a pensioner is poor they cannot normally hope to improve their future financial position. Younger people have their future career and earnings to look forward to, whereas pensioner poverty is most often permanent. However, the triple lock has been another example of a political construct that has become totemic and has proved damaging. I agree with my noble friend Lord Tugendhat that it may have outlived its usefulness, but it is also important to remember that the triple lock is rather misleading because the poorest pensioners are not actually protected and the triple lock gives much more protection to the younger, better-off pensioners than to the oldest and poorest, which is clearly the wrong way round.

Another factor that is too often overlooked is that young people are starting their careers and their earning years much later than previous generations did. Comparing today’s twentysomethings with those of prior cohorts is not quite comparing like with like. If young people today are starting work, say, five years later than was previously the norm, their income position should be compared with people five years older than them rather than of the same age. If the young also ultimately benefit from the extra qualifications, they should increase their earnings more as they progress through their careers and should not therefore stay behind previous generations. The best route out of poverty is employment, and we should congratulate the Government that employment rates for young people are around record levels with very low unemployment. Meanwhile, older generations are staying in work much longer than ever before. The numbers of older people in work are at record levels, as older generations keep contributing more to the economy.

I find it strange that there is so much concern about the so-called baby boomers having good pensions and owning more assets. Surely, in a societal sense, that is to be welcomed, partly because they are at the end of their careers rather than at the beginning or halfway through, but also because as more older people live longer, increasing numbers will need more money to support them through their expected extended later life. Extreme old age will increasingly become the norm rather than exception. More will need money to pay for social care, and if they have no money they will have to be supported by younger taxpayers.

We should perhaps be celebrating that today’s older people are better off than previous generations, while also encouraging those who can to earmark some of their money in case they need later-life care. I urge my noble friend the Chancellor to introduce measures that will address that, such as incentives to keep some of their pensions or ISAs or allocate a share of the value of their home to a fund that would be set aside for later-life care in case they need it. That would at last begin to bring in much-needed funding before the care crisis brings down the NHS and places ever more burdens on young taxpayers. It is also true that there is an intergenerational imbalance in pension coverage, but that is partly a function of the unrealistically expensive pension promises that were made by past employers, who did not anticipate the range of changes that have increased the costs of providing a final salary-type pension to around 50% of salary.

I caution strongly against pitting one generation against another. Older generations already do much to support the young. Society is a nation of generations, each of which needs to live together in harmony. The bank of mum and dad—and often the bank of grandma and grandad—is helping younger generations. Relationships between old and young people are so important, both in our communities and in the workplace. I urge noble Lords to be mindful of the need for intergenerational cohesion.

[Baroness Goldie (Con)]

My Lords, we are tight for time, so I ask your Lordships to pay attention to the seven-minute timetable, please.

12:57

[Lord Turnbull (CB)]

My Lords, I very much welcome this debate, which brings intergenerational fairness—a subject previously confined to the higher realms of philosophy and welfare economics—to the forefront of current government policies. It seems that a new division in society is not class, around which the two main parties have been organised for nearly a century, but around age. We may deplore that fact, but I do not think that we can ignore it.

It may seem difficult to believe that younger generations will not be better off than their predecessors when they will enjoy the enormous benefits of science and technology—the genome, the internet and mobile phones. But getting an Uber in three minutes may be scant consolation when you cannot find a home that you can afford to buy or rent. There are many benefits that the young will almost certainly not see: such as free university education, although it was only available to a small fraction of the cohort; defined benefit pension schemes; retirement at 60 or 65; a foot on the housing ladder by their mid-20s and mortgage paid off by 55; and wages more or less guaranteed to rise faster than prices. So it is right to examine the current state of policies through the lens of intergenerational fairness.

Much of the Government’s rhetoric has been spent on government borrowing and debt, but is that really the main problem? Fifteen years ago, the debt to GDP ratio was about 40%. Now it is close to 80%, although it is beginning to decline, and that has been described by successive Chancellors as impoverishing future generations. In my view, this argument is exaggerated. The debt to GDP ratio is a poor metric for fairness. It ignores the decline in the cost of servicing debt. While the ratio has doubled, debt servicing, which was 2.4% 20 years ago, is still 2.4%. Secondly and more importantly, the ratio ignores the asset side of the balance sheet. If government borrowing is reflected in productive investment—for example, housing—the net wealth of the nation may well be increased.

So I put higher up my list of issues a decade of quantitative easing. Its effect is to lower interest rates and boost asset prices, the benefit of which goes mostly to those who own assets, be it land, commercial property, houses or shares, and these are overwhelmingly older people. The other beneficiaries are company executives, who are paid—unlike most of us—partly in cash and partly in shares.

We also need to be precise about terms. Inequality of incomes has not widened in the past 25 years—post tax and benefits, it has stayed virtually the same. It is the widening inequality in wealth that I think is a greater worry, and it is that to which we should address remedies.

Next on my list is pensions. There are virtually no new entrants to DB schemes, some of which are being converted to direct contribution schemes, which then struggle to earn decent returns. Nevertheless, there is still a large number of DB liabilities to be met, and the lower returns are causing huge deficits in company pension schemes, which they have to plug by reducing investment, raising prices or increasing contributions, all to the detriment of younger generations. Meanwhile, free prescriptions are still available from age 60, and the triple lock on pensions has entrenched the position of the elderly.

I do not need to say much about housing, important as it is. We have had two good debates in this House, one only last week, so I have just two comments. The Government’s White Paper confessed that, for those on the housing ladder, the average house “earned” in capital appreciation more than the average earnings of those living in it. While earnings are heavily taxed, those capital gains are not, and inheritance tax is being eased. We need action on all fronts and for all tenures, with less emphasis placed on Help to Buy and more on building affordable homes for rent, which is the epicentre of the housing crisis.

The funding of higher education also raises issues of who should pay. The system that we now have has some important principles at its heart: those who earn more as a result of acquiring a degree should make a contribution and not rely on the taxes of people many of whom will be poorer than they are; contributions should be assessed on future earnings and not on what parents were earning at the time; the funding framework should enable the Government to draw back from detailed control of numbers and courses; and, importantly, students from poorer backgrounds should have better access to higher education. What we have at the moment is a mess. It is misrepresented as a loans scheme, which makes it look more frightening than it really is. The interest rate is indefensible—it is funny how HMG always choose which of RPI or CPI suits them best for any particular circumstance. The scheme has become almost incomprehensible after many changes, and the freezing of the income threshold with retrospective effect was a disgrace. In short, a scheme that has some sound and justifiable principles behind it has been undermined by Treasury greed and opportunism in exploiting the way in which the Government’s accounts are put together. There needs to be a review, but I hope that it will correct the injustices but not be panicked into throwing out what is sound.

Then there is the issue of long-term care. We were edging towards a sensible definition of care and a fair balance between what is paid by the family and what is paid by taxpayers generally. We were also looking at what level of assets should be protected and what assets should be taken into account. In my view, it is right that the family house should be included in wealth, particularly when there is a scheme to provide deferral of payment. The Conservative Party manifesto blew this consensus wide open by knocking out a crucial element; that is, the protection given to the small number of families who incur massive bills for care. This is an issue not of intergenerational fairness but of intragenerational fairness, but it nevertheless needs to be addressed. We need to go back to the drawing board and to take the courage to get past the taunts of “dementia tax”.

Finally, there is an issue right here in this House. Many people would welcome the opportunity to serve here, so my final question is: is it fair that, once appointed, some people can serve 20 years, 30 years or 40 years, thereby reducing the opportunity to generations behind them?

13:05

[Lord True (Con)]

My Lords, I, too, congratulate the noble Baroness on introducing the debate. It has been diverting to hear about intergenerational fairness from the Benches opposite who have just elected a new leader aged 75. Could they not find anyone younger?

I agree with so much that has been said by so many but, like my noble friend Lady Altmann, I must take a different tack, because I dislike this rhetoric of intergenerational fairness. Others may respond that it is not about division but all about fairness, but calling for fairness implies that some unprincipled people are in clover at the expense of others. What increasingly echoes back from the wall of social media are the cries “unfair”, “older people are to blame” and “let’s take it back”.

My noble friend Lord Willetts, who spoke so brilliantly, as always, today, marred his important and thoughtful book with a deliberately provocative title. In it, he likened our generation, so-called baby boomers, to a “selfish giant” and said that we had, “taken our children’s future”, a phrase rehashed very swiftly by the Guardian as “stolen”.

We should be careful to avoid political rhetoric, as my noble friend lately said, that sets group against group. In particular, I deplore anything that, wittingly or unwittingly, provokes the old people of the future against the young people of the past. The excellent report of the Work and Pensions Committee in another place rightly ended with a strong warning on adversarial language. I know that is not my noble friend’s intention or that of anyone else who has spoken—quite the reverse: what an intelligent and interesting debate we have had—but what we need is not the sledgehammer of a potentially divisive soundbite or the stereotyping of groups but the scalpel of intelligent and targeted policy, at which my noble friend and so many others who have spoken excel.

“Fairness” can be measured in many varied ways and cannot be analysed in arid economic statistics alone. Young people today, and how good that is, have opportunities and advantages that young baby boomers, or indeed the silent, never had. I give a small example. For some reason, my noble friend’s Intergenerational Commission’s latest interesting publication has guacamole on its cover, coming from a continent, South America, that none of us at school ever dreamed of being able to see. In fact, I find that avocados were first sold at Sainsbury’s in 1962 and at Marks & Spencer in 1968. It goes to illustrate that the cornucopia of food choices that we have today was simply not available.

Thank God that this generation has not—yet—had to contend with 9%, 10% and far higher mortgage rates that we selfish ones did. Today, too, we have all the benefits of an information and technological revolution unknown to those of us who waited months for our first landline from the kind of state monopoly that the party opposite wants to bring back. Frankly, how infuriating it has been for so many older people to watch on while Governments led by those who are now our juniors ravaged the pensions system, stoked a housing asset bubble—as the noble Lord, Lord Turnbull, said, through quantitative easing, pummelling savers along the way—and piled unimaginable quantities of debt on future generations. There are two recent Chancellors whom I will not name who bear a heavy responsibility for that.

Let us not fall for a lump of prosperity fallacy to be addressed by taxing Doris to pay Dan. High tax is part of the problem for us all. Most older people want to see what they have built going to help their children and grandchildren, but inheritance tax take is projected to rise by 30% in the next five years, with the state destroying £27.7 billion of potential family support by 2022.

Housing is an issue. I agree with many of the things said by the noble Lord, Lord Best. By the way, I would look at allowing councils to give themselves planning permission to build on unused public sector brown land where the owners are unwilling or require execution of planning permissions given. High stamp duty, as others have said, has been a disaster. In many areas, starter homes have disappeared as people have extended up and out rather than move out and pay the tax. Indeed, the small, two-bedroom house where I started a family with my wife is now a 4.5-bedroom house, inaccessible to a young family for this very reason. The take from this distorting tax is planned to rise by over 60% by 2022, with the Treasury grabbing £74 billion in the next five years from the aspiration to own a new home.

I would not have introduced or sustained the triple lock. I would have ended the extension of the welfare state to the well off through universal winter fuel payments, universal free school meals and so-called free 30 hours of childcare. I would look at a capital contribution to the cost of care at home. Parties opposite, as well as the incompetence of my own party, bear a heavy blame for the shameful role they had in stifling discussion on such options. There is much, as so many in the debate have wisely said, that we can and should do, but let it not be couched in the language of “we woz robbed”.

As I face sitting down again with an attack of sciatica, I recall the end of Compton Mackenzie’s Sinister Street, where the main character is overheard musing on the tragedies of youth. A passer-by comments, “There is only one tragedy for youth”. “And that is”? “Age”, said the stranger. Youth and age are concepts experienced by all who are fortunate enough to live long in the same mind and the same body. We are all one. Each generation and each age group faces its own varied and diverse challenges, measured against diverse attitudes and aspirations, as does each person. For all its indignities, even old age today is enriched and eased today by things we never had in the past. How bitter a gall it would be if, by provoking fear of so-called intergenerational unfairness, we set the youth of the present against the youth of the past. That would indeed be a tragedy, for youth and age alike.

13:12

[Lord Addington (LD)]

My Lords, first I thank my noble friend Lady Smith for introducing the debate. It is a speech I do not think I would have cared to try. Next, I have to slightly rap my noble friend Lord Storey across the knuckles. Not everybody in this debate has got their bus pass yet. One or two of us still have a wee bit of time to go.

Having said that, I wish to talk about the student experience. The first time I spoke about that in a meaningful way was over a quarter of a century ago, when I was able to state that I was talking about it as the person who had the most recent experience of that situation. If it was not 1990, it was 1991, when we first started discussing the process that removed the grant system, then the personal maintenance loan. Since then, we have been moving away from a system that is now seen to be something of a golden age. That golden age has probably become slightly more golden with the glow of our looking back at it. I remember students complaining that they did not have enough grant to live on—another pretty steady experience back then. That was a well-worn path, even by the time I arrived in the early 1980s.

So, what have we got here? Students going through university today perceive that they are being unfairly treated. Noble Lords can argue about that perception until the cows come home, but the fact is that it is there. We have effectively “monetised”—I searched long and hard for the expression—the value of the university experience by having this great burden of debt. Whether that is the reality, whether students are expected to pay it off or do anything with it, it is still there. It has a monetary value, which means the experience of being at university has become a sort of money, cashback, return, value-for-investment process, which was not there a few years ago. A debt of £50,000 has been mentioned, but the figures change, along with the number of people currently taking higher education degrees compared with the past. I find it rather odd that people doing polytechnic degrees were not counted in half the statistics I looked at. Good old-fashioned educational snob value; there we are.

However, we have this idea of debt going through—and what do we get back from it? That means the entire education process is being looked at in a slightly different way. Anybody taking an arts course now says, “I don’t get enough hours of contact. I’m paying all this money, so why don’t I get the hours”? As an arts student, I was given guidance and lots of books, then told to go away, study, do the work, come back and see where I made mistakes and where I could improve. Are students being taken through it in a step-by-step process? They think, “We’re paying for it. We should get some more help”.

Perhaps we need to look at this in a slightly different way. The idea of what students are getting seems to be changing rapidly, as is the role of the parents supporting those students—the bank of mum and dad, as has been referred to. They are asking what their child should get with all this debt, regardless of whether they are actually going to pay it back or not. We need to look at that. The perception of what is happening is very important, because as we all know, perception becomes knowledge and knowledge becomes reality, regardless of how flimsy the foundation is. That is the process; people behave in reaction to that knowledge and reality. If, as seems to be going on right now, people are voting against something because it is terribly unfair, and we say we will change it—I put that promise right up there with free beer for everybody.

However, if that is what people are doing, that is the way they get in. It distorts the argument. We have to look at what they are going to get out of the experience and package it differently. We may well have to change that burden of debt from being an individual thing to a societal thing once more. I cannot see any solution other than some form of graduate tax, because the burden will get bigger and the perception—you will not be able to write it off or do anything with it—will get bigger. We will have to repackage it. Is that not what finance does all the time? I suggest we start doing the same thing quite quickly.

Finally, on the idea of perception, I want to raise another issue, which may be outside the debate. Special educational needs in universities is now much more a problem of the institutions themselves. When we considered the Higher Education and Research Bill, I tried to see whether we could get a good guide to the job of the universities when dealing with the lower levels of this issue. I am still waiting for a good answer. I am still waiting for somebody to counter the argument that we should let the courts sort out universities’ level of responsibility. When we are looking at the idea of perception, I hope that such issues can be included in the thinking. I hope I will not have to bring that subject back to this House.

13:18

[Lord Balfe (Con)]

My Lords, I also begin by thanking Lady Smith for a wide-ranging and useful debate. I am a member of silent generation; however, I am not a member of the silent party. One of the most astonishing things about the debate is the total absence of Labour speakers, apart from the noble Lord, Lord Hunt. It is not as though Labour has nothing to say on the subject. I would be interested if the noble Lord could tell us whether this was an instruction from the Whips—or is the Labour Party genuinely mute? I will try to make up for them by making one or two mildly radical suggestions.

First, we are told that pensioner poverty has halved between 1997 and today. That means there are still a lot of pensioners living in poverty. We should not forget that. Secondly, this intergenerational argument should not be regarded as an opportunity to bash the old. The basic problem is that the wage economy has collapsed in the last 15 years but the pensioner economy has been maintained thanks to the input of largely public money.

The great problem that exists between the generations, including this third generation, is that some of us are much better off than others, often because we bought our houses many years ago and were in defined benefit pension schemes if, as in my case, you spent your entire life in the public sector. I left school at 16. I did not have a single day’s unemployment until I retired at the age of 60. I did not have to sign on. I was in a number of jobs but they linked, one to the other. That is a quite different experience from today.

I shall make a few suggestions on having a slightly fairer taxation system for the elderly. The first concerns TV licences. In a couple of years mine will be free. Why should it not be a taxable benefit? I am not saying it should not be free for poor pensioners, but why not make it a taxable benefit so you declare on your tax return that you have a television licence, just as you declare you have a pension? The winter fuel payment is another. It is astonishing that, seven years into our Government, we are still defending what Labour did in creating a benefit that goes to millionaires, tax free. At the time I remember saying this was impossible. Gordon Brown had a very wishy-washy explanation as to why it was needed, but I still do not see why I, as a 40% tax payer, should get a benefit that is substantially more for me than it is for an old-age pensioner. You do not have to save the money; you could redistribute the winter fuel payment so the poor pensioner has more and the richer pensioner pays for it.

It is high time to look at the administrative costs, as well. There are nonsenses such as the £10 Christmas bonus, introduced by Barbara Castle, of blessed memory, 30 years or more ago. Some of these benefits hang around for ever, such as the 25p a week extra that I will get in my pension when I reach 80. All this has an administrative cost. We could look at that.

Reference has been made to the exemption from national insurance. If I am lucky enough to earn extra money on which I will pay tax, why should I not pay national insurance, when the noble Baroness who moved this Motion—who is also not in receipt of a bus pass—would pay? Yet, I could be lecturing, as I have, in the very same building she works in. We could be in the same classroom giving a talk to the same people—even that has happened—and we could receive cheques on which I would not pay national insurance and she would. Frankly, this does not make sense.

The old are healthier and they also live longer. They can cost more in end-of-life care, but there is a tendency for us to think that because they get old, they cost a lot more. In fact, most health expenditure is in the last 24 months of life. The two basic problems we have are, first, the rise in the cost of the NHS, which has always moved ahead of inflation—most of the savings the Government have made have been swallowed up in this. Secondly, we have to look at the fact that the elderly are not smoking or drinking as much, so they are not putting as much back into the Exchequer in excise duties. I am not suggesting they should, but the pattern of excise duties is moving.

I will say a quick word about the young. Earnings have fallen and housing is difficult, but, to echo the sentiments of some noble Lords, more needs to be done. Messing around at the margin with tax relief and other reliefs will only generate price increases, as, of course, has quantitative easing. The fact that mortgages are so cheap makes them much more affordable, which means house prices go up.

At some point we need to recognise that for the older generation, class continues to divide the income groups more than anything else. For every poor pensioner there is a rich pensioner, but for both there is a strong class factor. If you live in the north on a council estate and start work at 18, you are more likely to be poor. It is as simple as that.

My final suggestion is: when we look at pension ages, why do we not base them on years of national insurance contributions? Why do we not say that if you start work at 18, work for 45 years and pay into the NI fund, you should be able to retire at the age of 63? If you go to university and pay for 45 years into the NI fund, you would retire at 68. We know that there is a mortality differential associated with income and occupation. These are one or two of the things we should look at when we consider intergenerational fairness. It is a far more complex issue than many outside this House imagine.

[Baroness Goldie]

My Lords, I apologise for further interruption. We have a quite serious slippage of time. When the Clock shows seven, will noble Lords please terminate their remarks and sit down?

13:26

[Lord Filkin (Non-Afl)]

My Lords, I congratulate the noble Baroness, Lady Smith, on this important debate. I declare two interests. First, I am delighted to be a member of the Intergenerational Commission, chaired by the noble Lord, Lord Willetts. It has been one of the most thoughtful processes I have ever been involved in. Secondly, I chair the Centre for Ageing Better, an independent body promoted by government, committed to trying to make it possible for many more people, young and old, to benefit from their longer lives. That is the focus I will bring to this question on intergenerational fairness: how do we make it possible for more of today’s and tomorrow’s older people to benefit from their longer lives?

Many of us in this House know the benefits of longer lives. We are enjoying them daily. We know that there are great intergenerational benefits from that. So many grandchildren have relationships with their grandparents in ways that were less common 50 years or so ago. That leads to an enormous increase in societal well-being. We know that this process has not stopped. Demographers forecast that 50% of girls born today will live to be aged 100 or more. These are great societal gains and we should celebrate them.

However, they do not come without risks, of which there are a number, but I will focus on just two. The first is income. The noble Lord, Lord Turner, put it graphically and truthfully in his famous report that longer lives mean we have to work longer, save more or both. There are no other options. Contrast that with the Financial Conduct Authority’s significant survey last week of I think about 13,000 non-pensioner adults, of which 31% had no private pension. They were relying on either the state or their spouse. I will leave it to noble Lords to decide which of those is riskier.

Great progress has been made on auto-enrolment, which we should celebrate, but none of us would have thought this was a particularly sensible system, which effectively puts all the responsibility and risk on the individual to save for their own pension, to have foresight and to be able to make sacrifices. It also shunts all the investment and longevity risks. Not many other countries in the world have such a risky platform for later-life income and we should not think for a second that the job of pension reform is done, even though progress has been made, not least by the noble Baroness, Lady Altmann, and many others.

What is to be done about this? I shall say two things quickly. Keeping in the labour market—particularly helping today’s 50 year-olds keep in the labour market—is fundamental. So is increasing the housing supply radically: that does not necessarily mean more owner-occupiers; what we are concerned about is increasing the supply of good-quality housing which enables people in later life not to have the burden of increased housing costs. If today’s 30 and 40 year-olds have to pay high rents in later life, they have to increase their savings yet further, and they will struggle to do so.

The second big issue we need much more debate about is that because there are going to be many more of us, for many reasons, there is going to be a very significant increase in the demand for and the cost of the NHS and social care. We are not just debating about now, we are also debating what is pretty certainly going to happen over 10 years. There are many reasons for NHS cost increases, and I will not go into them, but longer lives is one of them—if you are alive another 10 years you have many more episodes of health treatment. Secondly, many more older people generate more costs. Between 2010 and 2030 there will be 50% more 65 year-olds and 100% more 85 year-olds and they all go into those last years of life at some point, when their cost burden will increase.

The Lancet in April produced an epidemiological report which said that there will be a 25% increase in the number of disabled people in our society in 10 years’ time. That, for planning purposes, is now and we have, therefore, to face up to the increased health and care demand and cost over the next decade. As part of this, we clearly need a proper social care settlement, as was well said by the noble Lord, Lord Turnbull. We cannot fudge this, we have to get the right balance between risk and contribution and between public and private expenditure. Wherever that balance is struck, it will certainly require more public expenditure, either to compensate for caps or to face up to the underfunding of people with moderate needs who are currently going without any social care at all: there will be many more of them over the next decade.

When I talk in private to leading economists and ask for a rough view of what they think the increase in NHS and social care costs will be in 10 years’ time, I get a figure of 2%. That is a very small figure, but a 2% increase in GDP, which is what we are talking about, is equivalent to £1,400 more in taxation for the average family. There is no science in that figure of £1,400, but if we can keep it to less than £1,000, we will be incredibly lucky. This is not the end of civilisation. The issue is that today’s and tomorrow’s younger people have a right and expectation in our society for decent health and social care standards, but we have to recognise that we have to pay for that. No Government, I fear, are going to stand up and say that each family will have to pay £1,000 more tax in 10 years’ time, but we need at least to promote a debate on that and recognise that the funding of that has to have some basic principles. If we are to meet those standards, we have to take account of people’s needs, but also of their means to pay—wealth as well as income—because that is the ignored issue, as the noble Lord, Lord Turnbull, said. We have to take account of both, and age as a filter as to whether you need help or not is an increasingly obsolete measure.

I hope that out of this, and out of our work, we will affirm the fundamental importance of good later life for tomorrow’s older people as well as today’s and face up to some of these significant public policy challenges that are implicit in longer lives and more older people.

13:34

[Lord Bird (CB)]

My Lords, I am very pleased to be talking on this subject and I thank the noble Baroness, Lady Smith of Newnham, for the opportunity. I am interested in it because when I decided to apply to become a Cross-Bencher—and was accepted—it was because I realised that all the work I was trying to do around social intervention was always passing through the prism of government. For instance, in the early 1990s I could give homeless people an opportunity to stand on their own two feet, earn their own money and morph their way out of poverty, while at that very moment—this is not a party-political point—Mr Blair started to put a shedload of money into giving people who were on the streets social security and got rid of a whole group of people. We were trying to turn them into workers while they were turning into beneficiaries. That is one reason there is such a clogging-up in areas of social housing even today. I decided that I would try to get into government and do something, and the thing I want to do is to prevent poverty happening.

I am very happy that the noble Baroness, Lady Smith, raised the case for intergenerational fairness forming a core part of government policy. I would like to add to—or maybe subtract from—that and put the case for prevention across all government departments, so that they are charged with preventing things happening, rather than being very clever and astute, which is what they do. As I have said in the House, we have so many clever people who are very good at fixing the stable door after the horse has bolted.

If we look at the National Health Service, it is an absolute abomination that we are not all asking: when are we going to fulfil what Nye Bevan said in 1948? He said that within 50 years the people of Britain will be a lot healthier, live a lot longer and be in control of their own health. Yet we have a situation now where we have lost the prevention budgets of those early days when, because they did not have so much money, people went into the schools and taught people like me not to get ill. We have destroyed all that, destroyed all social medicine, and now we have to spend ever more on people who are not really unwell at birth or in the early stages of their lives, but become unwell because they are eating the wrong stuff, drinking the wrong stuff and not having the right exercise. When are we going to have a National Health Service, rather than a national “let us get back to health” service? We could send a coach and horses through all the budgets we have talked about today.

The other reason I came into the House of Lords was to be practical. I notice that 64% of the younger generation, those between the ages of 16 and 24, are stuck in rented accommodation and this figure will go up and up. What can we do to help them have a better life? Noble Lords will know that I have been working on the Creditworthiness Assessment Bill, which is a very simple thing. Why are we ruling out those people who have a rent record and not a mortgage record? Why are they paying more for credit? Why can we not bring those people into the property market by giving them the chance of not paying so much for their credit, so that they can then start enjoying some of the largesse that others of us have enjoyed? My Bill is soon to have a Second Reading; I am sorry to promote it but I hope noble Lords will jump in and enjoy it. We have cross-party interest.

When you look at Britain, 87% of all money lent by banks is lent in and around property—the buying and selling of property—we have a real problem. Where is the money to build the new generations of work? Why are we going to have baristas? Why do we have to have people with cheap jobs—the £8 an hour or £10 an hour jobs? Where are the real jobs going to come from? I want to know when we are going to start spending on the new generations. When will we start spending on the industries and new investment? If we do not get that right, we shall be in a situation where, increasingly, we will just get poorer and poorer.

It is interesting to consider a sum of money in the region of £50 trillion: it is the largest amount of money in the world and it drives capitalism, Goldman Sachs and all the big operators. That £50 trillion is the world’s pensions. Is there a way that we can tap into that enormous wealth and get it creating the new work for the new generations? I would like those kinds of things to be done. Most of all, however, I would like social security to be turned into social opportunity, because those people who are left behind are costing us an arm and a leg as they tread water. What we should be doing is freeing them up so that they can participate in society as well.

13:41

[Lord Shipley (LD)]

My Lords, I too thank my noble friend Lady Smith of Newnham for enabling us to have this debate. It is a particular pleasure to follow the noble Lord, Lord Bird, and to listen to his experience, because that experience is of such enormous value to this House, particularly that relating to the prevention of poverty and ill health. I wish him very well with his campaigning.

I, too, am a baby boomer. I was born into a very different world, with very limited opportunities for travel, for example, and many more limits in terms of consumer goods and communications. I entered married life when we saved up to buy things, and we had no credit cards. I noted the comments of the noble Lord, Lord True, about the fact that we are simply in a very different world. It is not necessarily a better world or a worse world: it is simply a different world. I had the benefit of a final salary pension, which I obviously still enjoy. I went to university with my fees paid and I had a grant towards living costs. Of course, in those days, very few people went to university; these days, many people go to university, and, as we have learned, there is now a huge national debate taking place about issues of student support.

I thought that my noble friend Lady Smith of Newnham was right to say that this is a long-term issue that needs vision and inclusive thinking. I also think that the contribution of the noble Lord, Lord Willetts, was particularly important, partly because he is a member of the Intergenerational Commission. He reminded us that the equitable distribution of resources should be at the heart of government policy, and I concur with what he said. If our debate today helps that national debate, we will have done the issue a service. I emphasise that I, too, do not see the debate on this issue as being about conflict between generations. It is, rather, about being aware that today, average pensioner household incomes exceed those of non-pensioners after housing costs are taken into account. That is evidence of intergenerational unfairness.

The latest facts on housing are of great concern. In July this year, the average price of a domestic property was £226,000. It had risen by £11,000—or 5%—over the previous year. The number of new affordable homes —that is, the sum of those at affordable rent, social rent, intermediate rent and affordable home ownership—fell in England from 66,000 in 2014-15 to just 32,000 in 2015-16. The English Housing Survey tells us that, on average, households in the private rented sector had higher housing costs than those with a mortgage.

The Government have undertaken a number of measures in an attempt to alleviate some of the problems relating to housing. They have introduced Help to Buy, which was needed to help those facing high prices with limited incomes. It has helped people to buy some 135,000 properties, which in turn has helped to boost housing supply in a limited way. There is, however, also evidence that it has encouraged an increase in house prices and supported the speculative development model which results in builders paying high prices for land and subsequently land banking it. As I have said on a number of occasions, we need taxation to be levied on those who deliberately sit on land on which they have secured planning permission but not built.

The Government have undertaken a number of measures, such as the housing infrastructure fund and the homebuilding fund, which have only tinkered with the problem of demand vastly outrunning supply—for the big problem in housing is supply. The Government have published a White Paper about it and are about to publish a Green Paper on the future of social housing. Then, last weekend, the Secretary of State intervened to say that the Government should borrow more to build homes, something that these Benches have regularly called for. Although he was right to do so, the Treasury is being difficult. We therefore now have an unhelpful public disagreement within government. The Government have a problem with their commitment to build 1.5 million new homes by 2022, but it is essential that those homes get built to reduce the impact of the shortage of homes not only over that period but in succeeding years. Doing so will require public support for direct government intervention in further measures that will directly help young people.

The evidence of inequalities is becoming pretty stark. The OECD recently said that the Government have allowed regional and intergenerational divisions to worsen, leaving millions outside the south-east in low-skilled jobs. The Financial Conduct Authority has said that one person in six would not cope with an increase of £50 in monthly bills. Many of those are young. The Institute for Public Policy Research this month reported that young people were being left further behind. Half our country—many of them young—have average household wealth of £3,200, whereas the richest 10% own 45% of the country’s wealth. The International Monetary Fund said very recently that it is time to tax the rich to help the poor. I concur with that. When we read that 15 million people of working age in this country are not paying into a pension, we should be very worried.

As an example of what the Government are doing wrong, we could look at the changes made earlier this year in housing benefit entitlements for 18 to 21 year-olds, when the age of majority is 18. It is a form of discrimination as it takes money away from younger people. Let the Government build more houses by direct intervention and let us now lead a national debate to ensure that we improve intergenerational fairness and not simply think about who can secure the most votes at the next election.

13:48

[Baroness Jenkin of Kennington (Con)]

My Lords, I too am grateful to the noble Baroness, Lady Smith, for introducing this excellent debate, and I particularly endorse her comments about the short-termist approach by all Governments, which is so damaging to this country. I suspect that this is quite an uncomfortable subject for most us in this Chamber, and the more research I did for the debate, the more uncomfortable I have felt. Most of us are sitting on a very substantial asset, or, in many cases, more than one. We own assets that young people of the age we were when we bought our homes—27 years ago in my case, with a couple of young children—cannot even dream of. Here in this Chamber today we are, as we have admitted, mostly baby boomers born between 1946 and 1965. As we have heard, there are also members of the Silent Generation—or Traditionalists; those born before 1945—and we even have the odd member of Generation X, covering 1966 to 1980. But we do not have a single millennial here to tell us for themselves how they feel about the intergenerational shift in wealth and services from young to old. What is more, I doubt that many committees here ever hear from them as witnesses.

I am particularly grateful to have heard from the patron saint of millennials, my noble friend Lord Willetts. I am only sorry that not enough of the baby boomers who now run this country listened to him at the time of the publication of The Pinch, some seven years ago. I congratulate him on the work of the Resolution Foundation and in particular the Intergenerational Commission, which is doing so much important work and thinking in this space.

I first became aware that the millennials had had enough a few years ago when my own children started to get angry on behalf of their generation. It has been a long while in the making but the situation has now come to a head, and as we have heard, there is a risk that the millennials will be the first-ever generation to record lower lifetime earnings than their predecessors. While there is no natural right for succeeding generations to be better off, the cards in this game seem to be unfairly stacked against them.

Hot on their heels and about to jump into the workplace melting pot of Traditionalists, baby boomers, Generation X and millennials are the centennials, who will account for 30% of the global workforce by 2025 and have different characteristics again. They have no idea about a world without digital technology. From the moment they were born, technology has touched every part of their lives. They have never had to cash a cheque, use a hard encyclopaedia for homework or even open a filing cabinet. They have also grown up in the public eye. Social media took off in 2000, so it is in their nature to document their lives online for all to see. Their knowledge of social media can be a great asset. Their phones, which they stick to as glue, are their computers, and it is completely natural for them to take notes on them in meetings and the workplace. They are totally digital natives.

What is urgent for policymakers—and frankly, for all of us—is the revolution under way that will leave our labour market changed beyond recognition. Most pertinent here is that so many of the jobs that were enablers of social mobility from the 1960s onwards will be swept away on a tide of turmoil and tech. In the UK, 35% of jobs are in danger of automation; by the same token, over 1 million new jobs will be required in the digital sector by the end of this decade alone. By the time these centennials enter the job market, it will be unrecognisable to those of us in the Chamber today. But that group of very young people are for another day.

A number of noble Lords have concentrated their remarks on housing, employment and earnings, pensions and pensioner benefits, and the political difficulties in challenging the current position on those. I will highlight just one example of the kind that the noble Lord, Lord Storey, also highlighted. I am 61 and for nearly two years I have been entitled to free public transport in London under the concessionary travel scheme. Frankly, that is ridiculous. This generosity has also had an unintended side-effect because, as the number of people who work beyond state pension age has risen—many of whom work flexibly, without being stuck with regular hours—concessionary fares have enabled more and more of them to travel to work free of charge. Of the over-60s who use the London Underground or Overground network on a given day, at least 25% travel to work free of charge, saving thousands of pounds a year. Surely this benefit should at least be in line with the retirement age.

Many of our generation are fitter today than we were 20 years ago and we intend to remain fit and healthy into old age—or at least I certainly hope so. We have a duty to do so, not only for a more personally enjoyable old age but to reduce our own intergenerational footprint by keeping out of hospitals and adult social care for as long as possible.

No one today has mentioned the cost of sustained immigration. I accept that this issue is very sensitive but with an average of more than 250,000 immigrants every year for the past 10 years, we cannot ignore the effect that this also has on services and therefore on this debate.

This is challenging and difficult stuff and there are no easy answers. The material sent to us all by Age UK, for example, makes a powerful argument in favour of support for pensioners—for the triple lock and so on. The younger generation has no such powerful group to argue similarly on its behalf, but I end with a message of hope. The millennials I know are more thoughtful, more creative, talented and educated, and more resourceful than we were, and thank goodness for that.

13:54

[Baroness Greengross (CB)]

My Lords, I declare an interest as the CEO of the International Longevity Centre-UK, a think tank which helps people to plan for the future in the light of demographic change. I am also chair of a new intergenerational fairness forum, which will probably morph again into an all-party group on intergenerational fairness. We want to work together with many noble Lords who have spoken on these issues to devise and promote policies that support intergenerational fairness. The first inquiry that the forum is undertaking is on funding for higher education. I am sure that the noble Baroness, Lady Smith, will be pleased about that and I hope that she will be involved.

One idea that I sometimes dream about, having been a former commissioner at the Equality and Human Rights Commission, is that the Government could perhaps introduce intergenerational impact statements in new policy and legislative change, just as they look now at the impact on equalities and the environment. Whatever happens, it is important that Ministers consider the impact of policy on intergenerational relationships and in terms of intergenerational fairness. That would not just make public policy more equitable but encourage long-term thinking.

I commend the work which we have heard about from many noble Lords—colleagues working in these fields—and particularly that of the noble Lord, Lord Willetts. I hope very much to continue working with him on some of these issues. I like the way that he recognises in his commission that we need business, academia and policy-making people to come together if we are really to repair the social contract where it is not still effective, as it must be.

The Social Mobility Commission has published reports in recent months examining these issues in some detail. It reported that pensioner households now have incomes £20 a week higher than those of working-age households, whereas the number of home owners aged under 25 has more than halved. There are many gross inequalities that we need to look at closely. We must always bear in mind that, as I think we know, the share of the population aged 65 and over is projected to grow from 18% in 2014 to 24% by 2039, which is not far away.

I was also pleased to see the Government’s welcome for the Work and Pensions Select Committee’s report on intergenerational fairness and, importantly, that the Government agree that the debate on this should not be conducted in divisive or adversarial terms. But so far, the Government’s approach to this issue has mainly been through the lens of ensuring economic security for working people at every stage of their life, including retirement. That is a very important part of the debate and I would be grateful to know whether the Minister has anything to offer us by way of an update on those perspectives.

We have heard the warning from the noble Baroness, Lady Altmann, whose special competence in these issues is amazing, that we must be careful to remember that many older people still struggle very much to live well on their pensions. It is terribly important to make sure that we are being fair while we look at fairness, because we know that recent research has shown that between 2005 and 2013, while the risk of poverty among the 65-plus has fallen by 8.2 percentage points, or a third, many old people are still not able to live well on their pensions. We need a balanced view all the time.

We have an amazing range of public services in this country, which a lot of other countries do not have, and our ambition must be to make sure that the UK is the best place to grow old. To get that right, we have to make public policy support both older and younger workers if we are to make sure that this continues to be fair and is not rocketed into unfairness.

More very old and very young people in the workforce are the people we have to worry about. Those in middle age, particularly those under 50, are doing much better in terms of income generation. We know that at 50 your work plans are at risk. In fact, they are better when you are 60-plus. We have to look at all those issues and what we mean by older and younger. However, let us not forget those in the middle who are doing the most to increase our income from taxation. We must not pitch generations against each other.

Today the Sutton Trust came up with worrying statistics about education. We have to be careful to see that a poor education and an inability to save for a pension will inevitably lead to poverty in later life. Future spending reviews must not undermine the drivers of increased longevity either. Preventing ill health and inequalities in life expectancy must remain a priority.

The work that the noble Lord, Lord Filkin, and those working with him have done is to be appreciated and I thank him for it. He made clear that the Government must not in any way underestimate this.

I shall end with a comment on housing policy. I feel very strongly that housing with care for older people would benefit not only older people but the young as older people would move out of their homes. If we could get rid of the unlevel playing field so that builders of retirement housing with care could compete with the wider building industry, we could solve a lot of our problems in housing policy, the NHS and social care.

14:02

[Baroness Stowell of Beeston (Con)]

My Lords, it is great honour to follow the noble Baroness, Lady Greengross, who is a leading authority on so many of the topics encompassed by this debate led by the noble Baroness, Lady Smith of Newnham.

It interests me that the two groups in society who feel very unhappy at the moment and who want things to change are highly educated young people and less well-educated older people. Clearly they are using different vehicles to express their desire for change, but both these groups feel that their views are not taken seriously and that they are somewhat misunderstood.

In my remarks, I shall focus in particular, certainly initially, on older, less well-educated people. I might describe them as working-class pensioners, but when I say that I do not mean working-class pensioners who are currently poor but those who have worked hard and struggled to achieve their modest financial security. If we need to rebalance the economic situation between the old and the young described by my noble friend Lord Willetts and many others today, we must understand why some older people feel ignored and disappointed, even though they have a better financial situation now. The answer to that is twofold. One part is that we do not recognise and discuss often enough the challenges that they overcame to succeed. I know there has been passing reference to this today, and I shall come back to that. The other thing we do not do is see how their experience and knowledge in overcoming those challenges would help us support young people better to meet their needs. As has already been said, older people want to help younger people, and they have a lot of knowledge, experience and wisdom that could be put to good effect.

I was born in 1967 and grew up in the 1970s, so I think that means I am a young Generation X. I lived in a place where the factory at the end of the street employed thousands of people. My parents and my friends’ parents worked there or in the building trade. Their purpose in life was to provide security for themselves and their family. In trying to do that, they had to battle with a lot of things such as the three-day week, petrol shortages and factory closures. They were trying to fulfil that purpose in the face of quite a lot of difficulty, but they succeeded, and a lot of them were the first generation of their family to buy a house. They got there, and they made it.

When we talk about people’s property, particularly people who have gone through that kind of experience to get to where they are, putting their property at risk to pay for their care is quite hard for them to cope with. It undermines the fundamental purpose that they were trying to achieve because it puts their security at risk. In a way, it is worse than that because successive generations since, such as my generation or younger baby boomers, who are better educated and have taken advantage of other opportunities, have dismissed or diminished the things that people such as my parents and their generation relied on to become successful, such as financial prudence, avoiding debt, saving, the importance of skills, a vocational education and their family. For some of them it must feel as though we are asking them to pay the price for our incompetence. We have to find a way of acknowledging how that must feel to them, and at the same time we should be seeking their advice on what we should do in future.

It is rather insulting to suggest that people such as those I have just described are nostalgic or want to turn the clock back. When I talk to my parents and their friends, I do not find them nostalgic at all. They will tell you that there was no such thing as the good old days. They very much recognise that this is all about the future. When they think about the future and the challenges for young people, they will say that their needs are the same as theirs were. Young people want work and housing, they rely on their friends and their family, and they want that sense of belonging and purpose. It is interesting that research shows that young people want things such as honesty, clarity and respect for others. These standards and values are as important to young people as they are to older people.

When we think about all these complex issues that we are trying to address when we look at different policy areas, we must not forget that if we are to rely on each other—which we evidently need to do—we need not just to acknowledge the challenges those who went before us overcame, but to seek their advice more than we have and recognise that some of those standards and behaviours that they relied on to succeed are the same things that young people need now, and that the people who are letting them down are often those of us who are sandwiched in the middle. Like my noble friend Lady Jenkin, when I talk to young people I feel very heartened by their attitude and their aspirations for their future.

14:10

[Lord Wallace of Saltaire (LD)]

My Lords, this has been an excellent debate, and the speech we have just heard is a very good example of the high quality and of different experiences being brought to bear in this House. It was very good to hear the noble Lord, Lord Willetts—The Pinch was the starting point for many of my thoughts on this subject, probably some years ago now. I too was surprised by the absence of Labour speakers. I am told that Labour is a party that cares a great deal about equality, and this is one of the underlying issues to do with equality and inequality in this country. I was glad that the noble Lord, Lord Lamont, sat and listened at least to the opening speeches in view of his article in last week’s Daily Mail, in which he said that,

“the very idea of intergenerational inequality is bunk”;

indeed,

“it is one of the silliest political concepts ever conceived, and yet it has been taken up with manic enthusiasm by ... the Resolution Foundation”.

I worry about the Daily Mail, which has four pages today attacking universities and intellectuals. It is a newspaper which attacks immigrants all the time, attacked judges the other month, attacked a major international organisation, the OECD, last week and now attacks intellectuals this week. I wonder who it will go on to attack next and begin to wonder when the Conservative Government will have the courage to stand up to this hysterically reactionary newspaper and defend the concept of open debate and free speech.

The Social Mobility Commission talks about three overlapping problems of inequality in the United Kingdom: that between rich and poor, that between London and the poorest regions, and that between the old and the young. I was struck last week, on seeing a graph in the Economist on OECD figures for the gaps between the richest and the poorest regions in major countries, by how Britain stands out for the gap between London and the south-east and places such as Yorkshire and Lancashire. That is something we should also worry about, and it is why Members of this House such as me begin to go on more and more about the problems of the north and the imbalance in public spending between London and the south-east and the north.

Returning to the question of intergenerational inequality, I am glad that a number of noble Lords emphasised the extent to which growing longevity alters the nature of the equation. This House is, after all, a perfect example of that. When pensions were introduced in 1911, the average life expectancy was 57, and the pensionable age was 60. A welfare state of that sort was therefore easily affordable. When the National Health Service was introduced after the Second World War, life expectancy was a little higher—although not by too much—and there was not much you could do about people with a range of conditions for which many of us in this House have already been treated by the NHS. The situation has been changing and, as we have a higher and higher number of people in their 60s, 70s, 80s, 90s and over the age of 100, the question of intergenerational inequality is a major one. My son is now a systems biologist working on various micro-organisms which cause serious diseases, and the speed at which work in that area is developing has huge implications for longevity and medical practice and for what can be done for the elderly in the last two or three years of their lives.

We need a sober, cross-party debate. All parties in government have struggled with this in the last 20 or 30 years. I suggest there might be a very strong case for a Lords sessional committee, for example, which would discuss this question in the broadest terms, because that is one of the ways this House can throw light on difficult issues that each party finds it hard to grasp. We need to ask how we promote longer-term perspectives in government and how we deal with issues where we have to address what we are leaving to our children and grandchildren.

The Chancellor of the Exchequer talks a great deal about the need to get our public debt down so that we do not leave the debt to our children, but he does not talk enough about what sort of investments we should make so that our children will have a better life, better infrastructure, better industries and so on to inherit. I find the selling off of capital assets in the public sector to fund current spending, to hold taxes down, amazing—it was one of the things in the coalition that I most disapproved of and tried to argue against—but it has, after all, been going on for the last 30 or 40 years. There is an underlying question here about whether taxes are too low in this country for the challenges we face, for old and young, in the next 15 to 20 years. There are the questions of taxing housing assets, which we do much less than most comparable countries; of the extension of the national insurance age, which the noble Lord, Lord Balfe, mentioned; and of the costs of social care, which the Conservatives themselves raised before the election and then backed out of during it. The cost of paying for the NHS, including end-of-life care, is huge. I think it is correct to say that half of what is spent on each person by the health service is spent in the last two years of any person’s life.

The Social Mobility Commission in particular stresses the importance of early years and education up to the age of 18. My perspective on this comes from having done most of my politics in northern towns and cities. I look at younger people there without much aspiration or much help, in relatively poor schools where the savage cuts in local authority spending have meant children’s social services are no longer provided, most schools do not have nurses, obesity is a problem because of the quality of the food they eat, and they do not understand how to move from school into work and have very little idea of what sort of skills they need for the sort of work they will face. Local further education colleges have had their budgets cut, so the transition to work and training for that half or more of our 18 year-olds who do not go to university is poorly provided for. I find deep cynicism in West Yorkshire about the new apprenticeship scheme and whether it really will focus on providing skills for young people or be used to provide transitional skills for those already in work.

These people—the left-behind as the noble Lord, Lord Bird, said—are also British citizens and we will leave to our children a much more deeply divided and much less peaceful society unless we address some of their problems. This is an intergenerational issue but also a deeply important social issue. We need better apprenticeships and more effort put into local economic and industrial regeneration. The point that the noble Lord, Lord Bird, made about banks that do not spend enough time thinking about investing in local regeneration is strongly felt there. Housing—both housing to buy and a revival of social housing—is crucial, and the prospect that the impact of technological change will make their situation worse, with insecure, unskilled work and zero-hours contracts, as the noble Baroness, Lady Jenkin, said, is also a serious problem. We have to debate this issue.

One of the reasons I have been converted to the idea that we should introduce votes at 16 is that, as the proportion of our voting population who are retired rises, so it would help to redress the balance if we also increased the number of young people.

The welfare state was introduced before the First World War partly because, as government began to recruit the working classes into the Armed Forces for national security purposes, it discovered that many in the working class were underfed, unfit and uneducated, and that they therefore needed to spend state money on people we would treat as our citizens. The welfare state now benefits increasingly the middle-class retired, who live 15 years longer than the working-class retired, who benefit a great deal from the National Health Service; and the poor—

[Baroness Chisholm of Owlpen (Con)]

Time.

[Lord Wallace of Saltaire]

I apologise. This is not a sustainable basis for a peaceful and united national community. It is an issue we must address.

14:20

[Lord Hunt of Kings Heath (Lab)]

My Lords, at times I have felt a little lonely today. None the less it has been an absolutely fascinating debate, and I congratulate the noble Baroness on it and on the way she opened it. I commend noble Lords who have spoken because of the tone of our debate. We have had a forensic analysis of some of the huge challenges facing us if we accept the premise of an intergenerational crisis on fairness, but there is a conclusion among noble Lords that we are not talking about warfare. Every day, we see so much support, caring and co-operation between the generations and that is what we have to build on as we develop policies in the future.

The noble Baroness, Lady Smith, was right to draw attention to what is a real conundrum: the short-term political horizon versus the need sometimes for long-term planning and decision-making. She mentioned climate change, which was a very good example, but clearly noble Lords have mentioned other examples in domestic policy where, for instance, we see proposals that might impact some of the benefits that older people receive but then get short shrift. The Government’s experience in relation to the funding of long-term care in the last election—which mirrored our own experience of when Mr Cameron attacked us for the “death tax” in 2010—does not always encourage politicians in terms of proposing policies which they deem to be in our interest in the long term.

The noble Lord, Lord Wallace, wondered whether we should have a Select Committee on this matter, and I think that is worth suggesting. It did strike me that, on climate change, through thick and thin, there has been a general consistency over many years now. I wonder whether having the Committee on Climate Change—a statutory advisory committee to Government —has been helpful. I wonder whether that is some kind of model we might think about in dealing with some of these very difficult issues.

Clearly, the demographics show us that we will have a growing number of older people in our population. Many of them have benefited from the benefits that noble Lords have mentioned and which they now question. Certainly the last Labour Government presided over a halving of the number of pensioners in poverty, not least through the introduction of pension credit. But our health and social care system is under considerable strain. Every year, the number of patients requiring treatment is going up, and there is clearly a huge problem. Our hospitals are unable to discharge patients because of the lack of care, community and care homes—we debated that this morning. So far there has been precious little idea about how we will meet this ever-growing problem, which we know will be with us for at least 30 years.

On the other hand, in our debate today we have had some very concrete suggestions about a way forward in many of these areas. It would be wrong to be negative by thinking that we are in such a state that there is no way through. I warmed to the suggestion of the noble Lord, Lord Best, that in relation to the imbalance in housing, the concept of rightsizing in accommodation and help-to-move packages—which would then release housing stock—deserves attention. Particularly because of the way he presented it, that could be seen as an incentive to older people, rather than a cutback in their benefits, or putting their home ownership under threat because of care bills. I agree with the noble Baroness, Lady Stowell, that one of the very difficult issues is how, for instance, we could release equity in people’s homes or ensure that the distribution of housing stock was more equitable than it is.

Certainly, the housing situation is bleak: the waiting list for council accommodation is long; housing rental costs for young people are high; and the number of home owners under the age of 25 has halved. Your Lordships’ Economic Affairs Committee said that the root of the crisis in housing is in the restriction of land supply and of the planning system, the failure to replace council houses bought under the right-to-buy scheme and the lack of incentives for private companies to build more affordable homes. None of this is insurmountable; it needs the political will. I hope that we can see housing rise much more to the top of Governments’ priority order in the next few years.

The noble Lord, Lord Willetts, referred to the issue of young people’s expectations. The fact is that the younger workforce will be earning less than their parents’ generation in comparison and younger people are increasingly reliant on their parents and grandparents for support. Alongside that, the world of work has become much more insecure, with fewer full-time and reliable jobs. We have seen an explosion in part-time jobs and, in particular, insecure work, such as the introduction or development of zero-hours contracts. All of these lead to a very insecure position for many young people. The noble Lord, Lord Bird, asked where the new industries are, and that is a very good question, as was his second question: where is the investment coming from to invest in those jobs which provide the kind of stability and satisfaction that we need to see?

Education and skills are very important. I do not want to go into this debate about tuition fees, save to say that the noble Lord, Lord Willetts, has received a gentle push-back from noble Lords. I particularly warmed to the comments of the right reverend Prelate the Bishop of Salisbury that, however you define student loans, to many young people they are a debt—a psychological barrier. I was also interested in what the noble Baroness, Lady Stowell, said about our parents’ attitude to debt. We are in a position where, in a sense, the Government embrace debt and tell young people that it is a good thing—I wonder whether that is wise.

There are so many experts here on pensions, but I agree that the position is precarious. Having a son whose employer is now putting 1% into the pension scheme makes me feel such anguish about what those people will get when they retire in terms of a decent pension package. The noble Lord, Lord Filkin, talked about its precariousness. On the other side, the noble Lord, Lord Bird, talked about unleashing the power of pension funds in order to invest in the kind of infrastructure that we will require. I cannot help feeling that on pensions we have a huge amount of unfinished business.

Clearly, there is no magic wand to wave. But we could adopt a coherent set of policies to help young people in relation to housing, education and greater security at work. This does not need to be at the expense of the chipping away at hard-earned protections for older people. Of course we face hard decisions about public expenditure, the role and level of taxation and the distribution of public finances, and some tension is inevitable, although the noble Lord, Lord Turnbull, indicated that we have some flexibility, which I hope that the Government will listen to, given the distinguished experience that he brings to your Lordships’ House.

The key message from this debate is that we would like the Government to focus more on intergenerational fairness. I agree with the noble Lord, Lord Wallace, that it is a debate for the whole of society. I also agree with the noble Lord, Lord Tugendhat, that, building on the experience of 2017, the more that younger age groups vote, the better. I, too, would go for votes at 16, and I suggest to the noble Lord, Lord Young, that, having encouraged so many more young people to vote, it is a great pity that the electoral register that his Government are so determined to bring in will not reflect that increase in young voters’ interest in elections.

14:30

[Lord Young of Cookham (Con)]

My Lords, it is a pleasure to respond to this debate as the Minister in the Government who happens to have more experience of more generations than any other. I thank the noble Baroness, Lady Smith, for selecting this subject for debate and for moving it so well. We have had an astonishingly good debate—non-partisan, apart from a few jibes from the noble Lord, Lord Hunt.

Any debate that has in its Motion “fairness” and “across all departments” of government gives the Minister replying a rather long frontier to patrol. I will try to address as many points as I can, but I may be defeated by the clock. In response to the point made by the noble Baroness, and underlined by the noble Lord, Lord Hunt, about looking at the long term, it is perhaps better to debate this subject in the upper House, where we are not so focused as individuals on the next election and can afford to take a slightly more detached and long-term view.

I shall first try to put this debate in a broad context by talking about the role of government in addressing fairness. The Government have a responsibility to address inequality between the rich and the poor. Major disparities between households are not only intrinsically unfair, but lead to a fractured and unstable society. Although there is a political debate in this country about how progressive Governments should be, about the extent to which the promotion of equality should erode the freedom of the individual—the noble Lord, Lord Wallace, implied that taxation should be higher than it is—all parties subscribe to progressive taxation on incomes and on capital. That debate has been about what I call horizontal equity—looking at households across the spectrum and reducing disparities between them, levelling up where possible rather than down and using the proceeds of economic growth to do so.

Our debate this afternoon has been about something different: fairness between generations—looking at cohorts up and down, as it were, rather than across, and identifying unfairness. This is a much more complex issue for Governments to address, for reasons that we have heard in the debate, because whereas poorer people do not necessarily become rich, younger people necessarily grow older. Also, older people give money to their younger generation—we heard this from my noble friends Lord Tugendhat, Lady Altmann and Lord True, and from the noble Lord, Lord Filkin, on the Cross Benches—and support is often given in kind the other way round, to an extent that rich people do not give money to poor people. This extent of intergenerational exchange and transfer adds an extra dimension to the traditional debate.

Carried out insensitively, addressing intergenerational equality could have the perverse consequence of a particular generation missing out as policies change, or, as my noble friend Lord Willetts explains in his excellent book, a particular generation benefiting at the expense of those who went before and follow after. A related issue in this context is the extent to which today’s generations can borrow to enhance their own lifestyles at the expense of potentially depressing those of the generation to follow.

The good news about our debate today is that the temptation to portray this as pitting one generation against each other has been resisted. This is not a zero-sum game, because, as I explained, people move from one cohort to another. The role of the Government should be, as my noble friend Lord True suggested, one of clearly targeted intervention to address specific problems and, as the Prime Minister has said, to try to build a country that works for everyone.

We need to approach this with a view to bringing people together rather than prising them apart. Nearly all those who contributed agreed with that premise. We have this debate against a background of a social contract, mentioned by my noble friend Lord Willetts—that the next generation will be better off than the one that preceded it—coming under some tension.

Much of our debate has focused on the issues facing the younger generation, and before I look at this subject by subject, I want to pick up a general point made by several noble Lords. Yes, there are real problems for today’s generation. The right reverend Prelate the Bishop of Salisbury said that hope was being sapped, but my noble friend Lady Jenkin put a slightly different perspective on it, because in some ways, the prospects for young people today are actually quite bright. Theirs is a generation that is healthier, with far greater access to higher education than their parents and grandparents, with record numbers—particularly from disadvantaged backgrounds—going to university, life expectancy up, youth unemployment falling, rates of smoking, alcohol consumption, drug abuse and teenage pregnancies down and with access to affordable travel overseas, which was denied to earlier generations. As my noble friend Lord True said, thanks to technology, there is access to information, music, entertainment and social exchange to an extent unimaginable 25 years ago, so there is something to put on the other side of the balance sheet.

I take on board the suggestion made from two Front Benches that there should be a Select Committee to look at intergenerational issues, and of course I will pass that on to the usual channels. I fear that I do not read the Daily Mail since it launched a fairly serious attack on me back in the 1980s, I think, and it is not a paper that is in the Government Whips’ Office, so many of the recent exchanges have passed over me.

Housing is one of the most pressing issues facing the younger generation, a point well made by the noble Lord, Lord Best. The simple truth is that, as a country, over decades, we have not built enough homes. We had a good debate on housing last week and there was consensus on that point. As a result, the number of homes has not kept pace with our rising population, fuelling soaring house prices and also rents, as many noble Lords have mentioned. The Council of Mortgage Lenders predicts that by 2020 only a quarter of 30 year-olds will own their own home, as my noble friend Lord Willetts said. By contrast, more than half the generation currently approaching retirement were homeowners by their 30th birthday. We are seeing an entire generation effectively locked out of the housing market, with all the implications that this has for opportunities to find work, start families, put down roots and acquire capital and security, as mentioned by my noble friend Lady Stowell.

That is why we have this ambition to deliver 1.5 million homes by the end of 2022. At a time of significant restraint on public expenditure, with difficult decisions being taken right across Whitehall, we committed £25 billion to housing in the previous Parliament and recently announced another £12 billion. That is evidence of our determination to make progress. We need to build more homes, faster and in the right place and, whether the homes are to buy or rent, ensure that they are more affordable.

We have to make more land available, particularly land owned by the public sector, and encourage local authorities to build more homes, including homes for rent. One of my noble friends wanted more incentives to save, but in a way that was not wholly accessible. I think that the recently introduced Help to Buy ISA ticks that box, offering people an opportunity to save for their first home.

On home ownership, as I said in our debate last week, our Help to Buy equity loan helped more than 134,000 households to buy a new-build home, and 81% of those were first-time buyers—39% had a total household income of £40,000 or less and 90% had a total household income of £80,000 or less. Many young people can afford the repayments, when it comes to home ownership, but not the deposit. That is why the Help to Buy equity loan can address that.

My noble friend mentioned renting. We are banning unfair letting fees, capping deposits and providing landlords with incentives to offer longer tenancies, and we are ensuring that all landlords are members of a redress scheme to speed up dispute resolution. We are also making sure that all letting agents are registered. We recently announced another £2 billion for the affordable homes programme, increasing the budget to more than £9 billion. Yesterday, the Prime Minister announced that local housing allowance rates in the social rented sector for general and supported housing tenants will not go ahead. There was quite a lot of comment about making better use of the housing stock. The noble Lord, Lord Best, the noble Baroness, Lady Greengross, and others emphasised the need for that. I was very interested in the proposals put forward the noble Lord, Lord Best.

Local authorities should have clear policies for addressing the housing needs of particular groups, including older people. Given the importance of this issue, the DCLG is consulting, as part of its review on planning the right homes for the right place, and the consultation ends on 9 November. Through the Neighbourhood Planning Act, we are introducing a new statutory duty on the Secretary of State to produce guidance for local planning authorities on how their local development plans meet housing needs for older people. Progress is being made on that front.

On the economy, there were many recommendations for the Chancellor—some for cutting taxes and some for raising them—and I shall pass those on. Some may feature more in thoughts for our manifesto than in immediate plans, given the commitments that we have already given. We want to provide economic security for people at every stage of their life. We have a progressive taxation system: the top 1% of income tax payers are paying more—28% of all income tax, up from £34.5 billion to £46.7 billion in 2014. With the vast majority of taxpayers kept out of capital gains tax, we have raised £8.4 billion from those who have made significant gains. That is why our rules on inheritance tax, mentioned by a number of noble Lords, strike a balance between ensuring that the average family can pass assets on, while at the same time facilitating redistribution, so that wealth is not unfairly concentrated. That is why we are continuing to take action on the deficit.

Our national debt is forecast to peak at around 90% of GDP by the end of the year, which is the highest it will have been in 50 years. Like the noble Lord, Lord Hunt, I was very interested in the intervention from the noble Lord, Lord Turnbull. I was slightly surprised by his remarks, as a former Permanent Secretary to the Treasury, that national debt should go higher. When I was briefly a Minister in the Treasury, the culture was very much the other way. However, we should look at the case that he made, although there is not only his view or my view about an acceptable level of borrowing by the Government; the international money markets may take a slightly more cautious view. I think that it was the Governor of the Bank of England who said that we are to some extent dependent on the generosity of strangers. In the meantime we are trying to get debt falling and to increase economic resilience.

Youth unemployment is at a near record low. There are a record number of people in work, and there are around 750,000 job vacancies, meaning greater opportunities for all. We need to focus on ensuring that, once people are in work, they see their wages rise and take home more of their pay package. I thought that my noble friend Lady Jenkin made a very important point about the changing nature of the job market as we look ahead, and how young people have to be prepared for that. We have increased the national living wage to £9 an hour by 2020, and cut income tax for over 30 million people.

Supporting people in retirement after they have worked hard all their lives continues to be a priority, especially as it can be more difficult to increase your income once you have retired. As the noble Baroness, Lady Greengross, said, we want this country to be the best place to grow old. My noble friend Lord Tugendhat said that it was time to think again about the triple lock, although that is more a matter for the next manifesto than an immediate option.

Under successive Governments, we have seen the percentage of pensioners living in poverty fall dramatically. In the 1970s, 40% were in poverty; today, that figure is 16%, a success of the policies of some 30 years ago to which my noble friend Lord Tugendhat referred. We have seen big rises in the living standards of pensioners. However, as my noble friend Lady Altmann said, it is important not to generalise. More than 1 million current pensioners rely solely on the state for their income. As my noble friend Lady Stowell said, quite often those are people who have had a tough time in life before they retired. That is the background to the triple lock uprating of pensions in 2011 and why we have committed to continuing it over this Parliament. For those with another income, of course, the state retirement pension is taxable.

This is not a case of robbing Peter to pay Paul. Young people will become old themselves, and today’s young workers will become tomorrow’s pensioners. However, mindful of increases in life expectancy, we are committed to regularly reviewing the state pension age each Parliament in the interests of intergenerational fairness. The first review of the state pension age, in July this year, proposed increasing it from 67 to 68 in 2037-39, seven years earlier than the currently legislated date of 2044-46, saving £74 billion by 2045-46. We are also minded, in the long run, to commit to up to 32% as the right proportion of adult life to spend in receipt of state pension. That proportion is consistent with the average spent above state pension age experienced by people reaching state pension age in the last 25 years. The 2017 Labour manifesto proposed maintaining the state pension age at 66. This would have built up a further debt of £250 billion by 2045-46, which would have to be passed to later generations.

Higher education was a major topic in our debate. For young people, one of the biggest advances in recent years has been the explosion in higher education opportunities. Graduates can earn, on average, at least £100,000 extra lifetime earnings after tax. We had various ways of presenting student finance in the debate—on one hand, from my noble friend Lord Willetts, on the other hand from the right reverend Prelate the Bishop of Salisbury. The point was made that what really matters is how it might be perceived by the students. There has been some unfairness in the time; I have only two minutes left, which means that I shall not be able to make all my points. But on student finance, the OECD’s Andreas Schleicher said in 2016 that the UK,

“has been able to meet rising demand for tertiary education with more resources … by finding effective ways to share the costs and benefits”.

On health, there has been real progress. However, on obesity, if we are not careful the next generation may not live as long as this one—and we have plans to address that.

On migration and refugees, an important issue raised by the right reverend Prelate, we transferred more than 900 unaccompanied asylum-seeking children in the UK from other EU countries, including more than 750 from France. Perhaps I could write on some of the other issues, such as those on climate change raised by the noble Baroness, Lady Featherstone. It would take me two minutes to read out my note, so I hope that the House will understand if I do not do so. The noble Lord, Lord Addington, and many other people asked specific questions—and I have the answers, but not the space to read them out.

To conclude, on a raft of issues—housing, taxation, employment, pensions, higher education and health—we are making significant strides to support people across the generations, giving young people the opportunities to get on and giving older people security and dignity in later life. The two are not mutually exclusive. We want to continue to renew the unspoken social contract—one generation helping another and being helped in turn—that has forged and strengthened our society, and renew belief in aspiration and the belief that, across the generations, our country can and will prosper.

14:49

[Baroness Smith of Newnham]

My Lords, I am grateful to all Members who have spoken this afternoon and brought such expertise to the debate. It has been fascinating and incredibly well-informed, and touched on a set of issues for which the national debate is normally too limited.

I was handed a note from the Table to say: “The debate must finish by 1451 and, if it does not, I will have to stand up and shut you down”, or words to that effect. The silent generation has been very vocal this afternoon and left those of us from Generation X with very little time to sum up. So I am not going to go back over the issues, other than to say that I am grateful to all three Front-Benchers for taking the time to think about these things. Across all parts of your Lordships’ House this afternoon there has been an attempt to look at ways of changing the tone; to think of ways that are innovative, and to accept that these are issues which should not bring tension between different generations.

Motion agreed.