10 May 2018

Why should baby boomers be the model for future generations?

By Chris Bullivant

The Resolution Foundation published a report this week, “The New Generational Contract”, aimed at redressing the breakdown of a contract between baby boomers and millennials: namely that pensioners’ social care is being paid for by today’s taxpayers (millennials) who cannot afford baby boomer-priced houses.

The report is debilitated by two crippling misunderstandings.

First, that millennials should expect the same experience as baby boomers.

Second, the notion that Britain’s post-War welfare state is a permanent, fixed reality, a form of society that will remain in perpetuity.

Baby boomers have found themselves, through no fault of their own, the winners of the cheap credit that ran rampant in the latter half of the 20th century, pushing up house prices beyond wage inflation. They also find themselves with a public purse and nationalised health service that cannot cope with their social care needs as populations live longer. The cradle to the grave part of the contract promised them is not being met.

The report recommends taxing pensioners on their house wealth twice: for their continued use of the NHS and to contribute toward a £10,000 inheritance for young people.

Leaving to one side the practical and principled objections to that specific proposal, the deeper problem is the assumption that fairness means two generations should have a shared equality of experience.

To consider how nonsensical this is, we should for a moment consider that – at its widest extreme – this report compares a current day 18 year old with the life experience of someone now aged 72.

Had the Resolution Foundation conducted a similar report in 1964 when the youngest baby boomer was 18, they would be comparing that baby boomer with someone born in 1911. Their experiences were gulfs apart: two world wars, the beginnings of the collapse of Empire, and the creation of the Welfare State.

It is odd to assume that millennials could and should have a late-20th-century experience of the welfare state both now and well into the future.

As with so much of Westminster politics, the commission fails to recognise that no country on earth can maintain a static experience of life and nationhood when population, technology and needs change so radically over long periods of time.

To this end, the commission’s report isn’t anywhere near as bold as it claims to be and is a missed opportunity to cast a vision for what a millennial’s experience of Britain could be over the next 50 years.

First, the report should have addressed the reality of a failing health service. There is no reason why the radical change in health provision experienced between the Edwardian generation and that of the Baby Boomers, should not be experienced as a radical overhaul of the NHS during a millennial’s lifetime.

In the same way the current Government is managing expectations of the pension age for those born in 1978, so we should be changing expectations for millennials on health.

For example, millennials should be dissuaded from the myth that the NHS is the best healthcare system in the world. Rather, they should be educated on the alternatives to the NHS available in over twenty five countries providing universal coverage through a combination of state, commercial and charitable organisations; funded by a mixture of insurance, tax and personal top up.

Don’t give millennials a hand-me-down baby boomer NHS, but let them shape a system that will work for them long into the second half of the 21st century.

Similarly, governments need to get real about housing expectations. England is the most densely populated country of its population size in the world after Bangladesh. It is possible to build the millions of new homes needed by 2050, when one quarter of the population will be over 65, but they cannot all be four bedroom “executive” homes.

And so Britain needs to have a deeper conversation about housing. It may be that the alternative is to make renting a cultural norm as it in other European countries. Either way, long-term infrastructure projects cannot be continually kicked down the road by successive governments on rail, road, airport, energy and housing. This failure to address long-term capacity issues in the country, while piling up public debt, is the real break in the intergenerational contract.

The real 70-year-old the Resolution Foundation’s report should be concerned with is our welfare state: the one put in place by the Beveridge Report and then the National Health Service. The longer we continue to peddle the myth that a baby boomer experience can persist for all time, the longer the intergenerational contract will not work.

Generations do not have a shared experience: millennials need freedom to shape their own.

Chris Bullivant has worked for think tanks dealing with health and welfare reform.