Addressing the Generational Gap
Every generation believes the one coming along behind it has gone soft, or gone strange. Grumbling about the young is as old as Aristotle, who complained that the youth of his day had no self-control and thought they knew everything. What makes the current gap different is not the complaining. It is that the gap can now be measured, and the numbers are stark.
A generation that bought houses in the 1980s and 1990s has watched those houses multiply in value many times over, largely without effort, while the generation that followed faces a deposit that takes a decade to save and a mortgage that eats a third of take-home pay. This is not a difference in character. It is a difference in timing, and timing was set by policy.
It helps to separate the economic gap from the cultural one, because they have different causes and need different remedies.
The economic gap is about housing, pensions, and the ownership of assets. It is measurable in pounds and percentages, and it has a clear cause: decades of restricted housing supply that turned property from a place to live into a lottery ticket won by whoever got there first.
The cultural gap is about attitudes, media, and trust. It is harder to measure and has no single cause. Smartphones, the collapse of shared broadcasting, declining religious observance, and the postponement of marriage and family have all pulled generations apart in ways no government designed and no government can easily undo.
Both gaps compound each other. A generation that cannot afford to leave home, marry, or start a family on the old schedule will inevitably see the world differently from one that did all three by twenty-five. But the underlying causes are not the same, and treating them as one problem leads to the wrong solutions.
Planning restriction is the single largest driver of the wealth gap between old and young. Britain has built too few homes for too long, and the effect has been to convert existing homeowners into an accidental rentier class while locking new entrants out of the market entirely. This was not intended as an act of policy against the young. It happened as the unplanned consequence of a planning system designed for a different era, defended since by those who benefit from scarcity whether they intend to or not.
It follows that the most powerful remedy is not new taxation or new subsidy but supply. Liberalizing planning, releasing more land for building, and speeding up approval are unglamorous reforms next to headline-grabbing interventions, but they attack the actual cause. A government serious about closing the generational gap would treat planning reform as its first and largest priority, because nothing else moves the numbers as far.
Some of the generation now retiring enjoyed final-salary pension schemes, guaranteed and inflation-protected. Those schemes have closed to new entrants almost everywhere except in the public sector, replaced by defined-contribution arrangements that shift investment risk onto the individual. On top of this, the state pension triple lock guarantees annual increases regardless of earnings growth, funded by National Insurance contributions from a working population that will never receive the same guarantee itself.
This is not a case for abolishing support for pensioners, many of whom rely on it and planned around it in good faith. It is a case for indexing the state pension sustainably, so that its cost does not grow faster than the incomes of those paying for it. A formula tied to earnings growth, rather than whichever of earnings, prices, or a fixed percentage happens to be highest in a given year, would remove the ratchet effect without cutting a single existing payment.
The expansion of higher education was sold as an investment in the young. In practice it transferred much of the cost of that expansion onto the graduates who gained least from it, as a degree stopped being a scarce credential and became close to a baseline expectation. Tuition fees and loan repayment structures should be reviewed with an eye to sharing the risk of expansion more fairly between the state, the universities that expanded to meet demand, and the graduates who took on debt to attend them. Universities that oversold courses with poor earnings outcomes bear some responsibility for the mismatch between promise and result, and reform should reflect that.
A certain humility is required. Government can liberalize planning and reform pension indexation because these are matters of law and formula. It cannot legislate shared culture back into existence. Attempts to mandate civic content, restrict platforms, or engineer trust in institutions from the top down tend to fail, and often make the underlying suspicion worse.
The decline of a shared media diet and the fragmentation of attention across algorithmic feeds are technological and social changes that no act of Parliament will reverse. Recognizing the limits of government here is not defeatism. It is the same argument that applies to economic reform generally: incentives and structures can be changed by policy, but attitudes and culture change by other means, or not at all.
Much of the real work of closing the gap will happen away from government. Families that transfer wealth during their lifetime rather than at death, whether through funding a first deposit or simply spending time together, do more to close the gap than any single Budget measure.
Employers who rebuild career structures around merit rather than seniority give younger workers a fairer shot at advancement, instead of trapping them behind a queue built for careers that no longer exist. Apprenticeship and mentoring schemes that deliberately pair younger and older workers rebuild the intergenerational contact that used to happen naturally through extended families, in workplaces, and in shared institutions.
The temptation in any discussion of generational difference is to reach for a verdict on character: the young are entitled, the old are selfish, and so on. This is unpersuasive because it explains nothing. Each generation is behaving rationally in response to the incentives it inherited. Those who bought houses when they were cheap did nothing wrong in seeing their value rise. Those now locked out are not workshy for failing to match a savings rate their parents never faced.
The lesson, as so often, is that structures shape outcomes more reliably than exhortation does. Fix the incentives, chiefly by building more homes and indexing pension promises sustainably, and much of what looks like a generational values gap will turn out to have been an incentives gap all along.
Madsen Pirie