What to do about “generation rent”? The 20-and-30-something victims of generational injustice, stuck at home with mum and dad, toiling in low-paid jobs because previous generations ate all the pies.
The Resolution Foundation and the Labour Party think they know the answers. Resolution proposes a £10,000 social dividend for everyone on their 25th birthday , funded by swingeing tax rises for pensioners. Labour suggests raiding the National Fund, a charity set up to pay off the national debt, for cash to spend on good causes.
But neither deals with the real problem: defusing the demographic timebomb of more elderly people, with bigger medical bills, social care costs and state pensions, funded by fewer working-age folk. If we do nothing, millennials face a cold, mean future of much higher taxes and poorer public services throughout their lives.
Giving 25-year-olds a £10,000 bung won’t solve the problem. They’ll lose it all and more in higher taxes and lower pensions as they get older. And raiding the National Fund is a one-off sticking-plaster fix to win short-term votes. It doesn’t address demography at all.
And that’s the flaw with Jeremy Corbyn’s supposedly-magical appeal to millennials; ever-bigger promises of more cash and free stuff are short-term electoral bribes.
If ministers get suckered into copying him, they’ll be a pale, electorally unconvincing “me too” imitation. And they will let down an entire generation of twenty- and thirty-somethings.
This is morally wrong. We cannot allow demography to become destiny. We can’t burden future generations with enormous bills unless we also give them something to pay the IOUs when they’re due.
That means saving our way out of trouble. A Sovereign Wealth Fund for the UK, like Norway’s long established, highly-successful version.
If Labour wants to raid the National Fund, it should use it as seed capital to start the fund rather than splurging the cash.
If Resolution wants to tax pensioners harder (good luck with that) it should invest the money for the long term.
Better still, we could use publicly owned assets such as the British Business Bank, unused public land and buildings, and perhaps taxes from fracking to get the Fund under way.
Or, now that the Government’s day-to-day budget is balanced after 10 years of austerity, we could invest the surpluses from good years so we’ve got something to fall back on in bad ones.
However we do it, we’d create an attractive, hope-filled Conservative vision for what Britain ought to offer its millennials. A morally responsible alternative to short-term promises of free stuff, paid for by someone else.
Demography shouldn’t be destiny. And an entire generation is watching.
John Penrose is the Conservative MP for Weston-super-Mare