The Work and Pensions Committee launches a major new inquiry on "intergenerational fairness" – the question of whether the current generation of people in or approaching retirement will over the course of their lifetimes have enjoyed and accumulated much more housing and financial wealth, public service usage, and welfare and pension entitlements than more recent generations can hope to receive.
Baby boomers and younger generations
The group born in the middle of the baby boom (between 1956 and 1961) have been forecast to receive from the welfare state 118 per cent of what they contribute; while recent research shows that younger people are on course to have less wealth at each point in their lives than earlier generations had acquired by the same age.
The Committee’s inquiry will investigate the extent to which this disparity is a consequence of government policies, such as the "triple lock" which protects pensioners' incomes, and/or broader economic and demographic trends. It will consider steps which could be taken to address any intergenerational unfairness.
Aim of the inquiry
The Committee intends to:
- Assess trends in, and the sustainability of, the intergenerational distribution of income, wealth and public expenditure
- Assess the impact of recent developments in welfare policy on intergenerational fairness and the interaction of pensions and welfare with other policy areas
- Produce a cross-party assessment of the sustainability of the existing welfare system, in its wider context
- Take a view on the long-term viability of policy measures such as the triple lock in the context of financial pressures on younger groups
Committee's call for written evidence
The Committee invites written submissions addressing the following points:
- What has been the collective impact on different generations of policies in recent years, including welfare reform and deficit reduction with areas of protected spending?
- To what extent is intergenerational fairness a welfare issue?
- What effects are these changes projected to have over time? Are they sustainable? What have the long-term trends been?
- How does the welfare system interact with other areas of public expenditure and income and wealth in the wider economy, including issues of health, education and housing
- Is the triple-lock necessary to prevent future increases in pensioner poverty?
- What would be the effects of reforming the triple lock and how might the worst of these be mitigated?
- How might other benefits such as Winter Fuel Payments be reformed?
- To what extent will existing policies encouraging work and savings ensure a more sustainable system?
- What are the options for reform?
Send a written submission through the Intergenerational fairness inquiry page.
The deadline for written submissions is Friday 19 February 2016.
Rt Hon Frank Field MP, Chair of the Committee, said:
"Voters have two priorities for welfare reform: ‘is it fair’ and ‘is it affordable’. Politicians of successive governments have ducked both of these fundamental questions when it comes to the different levels of income afforded to those above and others below retirement age. Is it fair and affordable to divert a large and growing sum of public expenditure toward pensioners – regardless of their circumstances – while mainly poor families with children face year-on-year restrictions on their income? Can the “triple lock” pension increase pledge be sustainable? Or are these policies necessary to guard against pensioner poverty? The Select Committee hopes to learn from voters of all ages what they believe to be both fair and affordable, so we can propose ways of restoring confidence across all generations in the welfare state."
Richard Graham MP, Committee Member and Chair of the APPG on Pensions, said:
"At a time when there is significant pressure on public spending, people are living longer, pensions are starting later and care costs rising there will also always be issues about relative fairness between generations.
How has public spending between generations altered over the years and what are the implications? The Committee will look at these issues."