Wellbeing of Future Generations Bill [HL]

Baroness Greengross Excerpts

2nd reading
Friday 25th June 2021 Lords Chamber

[Baroness Greengross (CB) [V]]

My Lords, for many years, especially since Beveridge and the advent of the welfare state, we have had an implied social contract between the generations. At some stages in life, you pay into the system through taxes and national insurance contributions, and at other stages in life, society supports you. In recent years, as the idea that the baby boomer generation has benefited disproportionately from public policy through their lifetime has become widespread, this social contract has been increasingly questioned. Many people feel that the present generations of younger people are not receiving the same degree of support from the state or enjoying equivalent living standards as their parents and grandparents at a similar age.

As we consider the increasingly urgent need to develop and implement a sustainable system for funding social care, we must bear the issue of intergenerational fairness clearly in mind if we are to arrive at a system that commands enduring support from the whole of society. To achieve this, it must impact on all generations in a way that the majority of people considers to be fair, and it must give young people confidence that it will be there to support them in future. We need more than a short-term fix to deal with the population bulge represented by the baby-boomer generation.

Sir Andrew Dilnot told the Intergenerational Fairness Forum, which I am delighted to chair, that to date each generation has taken more out of the welfare state than it has contributed. This has been sustainable only because of the growth of GDP over the period since World War II. It raises the question of how much each generation can spend above its lifetime contribution —in truth, probably not more than the trend rate of economic growth, if we are to avoid passing on to future generations an ever-increasing public debt and the interest burden associated with it.

To achieve sustainable and fair funding for social care, the Intergenerational Fairness Forum recommended that a hypothecated, mandatory system of social care insurance should be established. We felt that this would be more equitable and more effective than funding social care through general taxation as we have to date —inadequately, I am afraid. Such a system would protect social care funding during periods of public expenditure constraint and against competing priorities for public expenditure. As contributions would be set at a percentage of income, it would also be a progressive system.

I believe that a social care funding system based on these principles would also adhere to the principles underlying this Bill, which I am pleased to support. I commend it to the House.