- The gap between young and old has become the defining political and economic issue of our time, argues a new essay collection from the Centre for Policy Studies
- ‘Justice for the Young’ sets out the staggering extent of the challenge facing the country in paying for an ageing population while delivering a better life for today’s young people
- By the end of 2026, the UK will have more people aged 65+ than under 18 for the first time in its history
- On current trends, the workforce is set to start shrinking in absolute terms as soon as 2043, potentially ushering in an era of negative growth. By 2072, the UK will have 1.9 potential workers per pensioner, down from around 3.3 today
- To keep pace with the cost of the welfare state, the UK will need annual growth of 2.9% per cent over the next 50 years – a rate it has hit just twice in the last two decades, excluding the post-pandemic rebound
- The economic power of the elderly is entrenched by their political power. CPS research shows that the next election will be the first in which over-55s are a majority of voters by turnout in a majority of constituencies
- The essays in the collection set out policies to help young people prosper across a wide range of policy areas, including housing, education, taxation and childcare
Demographic trends are dragging the UK towards a future of lower growth and higher taxation, according to a major new collection of essays from the Centre for Policy Studies.
‘Justice for the Young’ sets out the daunting scale of the challenge posed by an ageing population, falling birth rates, and government policies which actively make things worse for young workers and better for older retirees. It argues that without urgent reform, it is hard to see how younger generations will ever achieve the same levels of financial stability and life satisfaction as their parents and grandparents.
The essays set out a variety of policy changes which could improve young people’s lives – covering everything from tuition fee reform and fixing childcare to removing planning constraints and making home ownership easier.
In his opening essay, CPS Director Robert Colvile points out that since 1997, the number of people who own their homes outright has climbed from 5.2 million to 8.2 million – but the proportion of young people who own their homes has plummeted. Meanwhile, public spending on the elderly is expected to rise from 10% of GDP to 21% of GDP over the next half-century, necessitating either huge tax rises or a fundamental rethinking of the services the state provides.
Karl Williams, CPS Deputy Research Director, then highlights the scale of the resulting demographic challenge, pointing out that annual growth of 2.9 per cent a year will be needed over the next 50 years just to maintain the equivalent of today’s welfare state. Williams also reveals the political power which demographic trends give to older people, with increased life expectancy and higher voter turnout meaning that over-55s will be the majority of voters in the majority of constituencies come 2024.
The subsequent chapters, by a range of leading policy writers from within the CPS and beyond, focus on reforms which could improve the lives of younger generations or help deliver the economic growth the country needs to avoid increasing the tax burden on the young.
- Delivering cheaper childcare by lifting the burden on providers to meet school-level learning goals and revitalising the supply of informal childcare and childminders
- Reforming the student loan system to make universities more accountable for the quality of courses they provide
- Putting home-ownership back within the reach of millions by reforming the planning system and supporting long-term, fixed-rate mortgages and gradual home ownership
- Supporting the next generation of entrepreneurs to develop their ideas, grow businesses, and invest in the UK
- Reforming education – driving up attendance, attainment, and improving behaviour by tackling phone use in schools and increasing access to mental health support
- Reshaping the state – reforming pensions, social care, and the NHS with an emphasis on personal responsibility and saving
Robert Colvile, CPS Director and Co-Editor of ‘Justice for the Young’, said:
‘The divide between young and old is becoming Britain’s defining characteristic, not just politically but economically too.
‘For young people, home ownership is increasingly out of reach, and the tax and benefit changes introduced by the government always seem to punish younger workers while protecting the privileges of older retirees.
‘We do not want a lose-lose struggle between generations, but a win-win in which higher growth and a smarter state enable the young to build up the wealth to match the old. This essay collection sets out the daunting scale of the challenge, but also a range of policies which could start to turn the tide.’
Matthew Feeney, CPS Head of Tech and Innovation and Co-Editor of ‘Justice for the Young’ said:
‘The current generation of young people may well be the first in many years to not see significant economic growth or seismic technological revolution. Stagnation is not inevitable but if young people cannot see or experience innovation and growth, homegrown talent is inevitably going to go to waste.
‘This collection of essays takes an expansive look at the barriers facing Britain’s young people and offers a range of solutions to unlock their potential.’
Karl Williams, Deputy Research Director and author of ‘The Age Trap’ chapter, said:
‘While the UK is far from an international outlier in terms of the demographic currents against which we are swimming, the acute growth and productivity slowdown since 2008 means that we are worse placed than many to cope with the coming economic and fiscal challenges.
‘Only with radical policy reforms to unleash the potential of the young will we get Britain growing again and escape the age trap.’
NOTES TO EDITORS
- The Centre for Policy Studies is one of the oldest and most influential think tanks in Westminster. With a focus on taxation, economic growth, business, welfare, education, housing and green growth, its goal is to develop policies that widen enterprise, ownership and opportunity.
- ‘Justice for the Young’ is available to download here.
- Authors include:
- Robert Colvile, Director of the Centre for Policy Studies and Editor-in-Chief of CapX
- Karl Williams, Deputy Research Director at the Centre for Policy Studies
- Tom Clougherty, Research Director & Head of Tax at the Centre for Policy Studies
- Matthew Feeney, Head of Tech & Innovation at the Centre for Policy Studies
- Eamonn Ives, Head of Research at The Entrepreneurs Network
- Anya Martin, Co-Director of PricedOut
- Elizabeth Dunkley, former researcher at the Centre for Policy Studies
- Mark Lehain, former Head of Education at the Centre for Policy Studies
- Emma Revell, Head of Communications and Public Affairs at the Centre for Policy Studies
- Alys Denby, Editor of CapX
- Dillon Smith, Energy and Environment Researcher at the Centre for Policy Studies
- For further information and media requests, please contact Emma Revell on 07931 698246 and [email protected] or Josh Coupland on [email protected] and 07912 485655.
Date Added: Monday 13th November 2023