Tackling Intergenerational Unfairness (Select Committee Report)

Lord Liddle Excerpts

Monday 25th January 2021 Grand Committee

[Lord Liddle (Lab) [V]]

My Lords, I will start with a general admonishment of the way that this House runs its affairs. It really is scandalous that this debate is taking place 21 months after the report was published. The excuses of Covid and Brexit are frankly not good enough. If we have agreed to set up special committees to investigate cross-cutting issues that we think are of public importance, the Government and the usual channels have got to show greater willingness to take them seriously. I would like the Minister to respond specifically to that point in her conclusion.

I welcome the noble Lord, Lord Price, to this role as stand-in chair. I got to know the noble Lord well when I chaired the Lancaster University council, of which he, an alumnus of the university, was a very wise member. I hope he will be able to play a big role in public policy in future because he combines the originality of the brilliant businessman that he is with an acute social conscience.

The report represents progress in illuminating the question of intergenerational fairness. It is very encouraging that the Office for National Statistics, run by another former member of the Lancaster University council, Sir Ian Diamond, is responding positively to its conclusions and, hopefully, is helpfully going to give us more information on whether this is a real problem, as I think it is, or not, as some other noble Lords believe.

I think it is a real problem when it comes to the question, “Where do Governments make their choices when they face harsh decisions on public spending?” In the 2010s the coalition and then the Conservative Government got that badly wrong. They prioritised preserving benefits for the over-60s while cutting them for families, which is one reason why child poverty is rising in such an alarming way. They showed that we were not all this together through the necessary austerity of these years. We chose to back one generation over another, and that was a great mistake.

We also face a grim financial position for the future—the noble Lord, Lord Price, painted the financial backcloth very well—and choices are going to become more acute. We have to face the fact that the welfare state that we have is unsustainable on the present tax base because of demographic pressures. That means the pressures of the rising demands of health and pensions and addressing the crisis in social care will increase public spending and, unless we are prepared to make our tax base more generous, we will not be able to afford to fund our services as they should be funded. The Covid crisis has made those choices worse. It has shown how threadbare our welfare safety net is and how deep the problem is of low pay in many sectors of the economy, particularly in essential public services. So we are going to face tough choices soon and my big fear is that crucial investments, such as in education, will be squeezed in the face of a Government who once again decide to prioritise the older age groups.

Of course, some of this can be addressed by some increase in taxation, which I favour, and I hope the Chancellor addresses that in his Budgets this year. We need a reform of council tax into a much fairer property tax. We need to equalise capital gains tax with income. We need to tackle tax expenditures, which are far too generous towards the wealthy on saving for their pensions. All those things are right. but our society is still going to be faced with very tough choices. The question is whether the political power of the elderly once again win out or we can actually find the will not to ignore the needs and opportunities of the young—because this must not be allowed to happen.