World Economy

UK Widening Gulf Between Generations

UK Widening Gulf Between GenerationsUK Widening Gulf Between Generations

The prospects for young Britons have deteriorated sharply since the Tories entered government in 2010 as money and resources have been targeted at the older generation, according to a devastating new report by economists.

The latest findings of the Intergenerational Foundation, to be published this week, highlight a sharply widening gap on its “fairness index” between people under 30 and those over 60.

The report illustrates how the younger generation is increasingly paying the price for supporting those already in, or approaching, older age as the cost of funding their pensions and healthcare rises, NewsNow reported.

Since 2010, the report shows, there has been a 10% decline in young people’s prospects across a range of measures,  including housing, education, health, income and debt. It comes amid a growing backlash from young people against George Osborne’s budget last week in which he announced welfare cuts that will hit many young families, ended automatic entitlement to housing benefit for those of ages 18 to 21, and replaced maintenance grants for students with a loan system.

Osborne also unveiled plans for a new “national living wage” that will rise to £9 ($14) an hour by 2020, giving millions of people a pay rise. But it will not apply to those under 25.

The bishop of Manchester, the Rt Rev David Walker, raises deep concerns over the effect of the budget on poorer families, particularly those with children. While he welcomed the national living wage, he described as a “huge leap backwards” the cuts in tax credits for those trying to make ends meet, often taking several jobs at once.

 Adverse Effects

The bishop, writing for the Observer online, says: “It asks those already struggling to keep their heads above water to take on an extra burden. Bad enough we were thinking about those of working age, but that is to forget the real losers from the tax credit cutbacks. The number of children who will be adversely impacted by the budget change is almost certainly above the number of adults.”

Young people who tried to climb the ladder out of poverty found there was no route to do so. “In Britain in 2015, for far too many households, work has ceased to be the escape route from poverty.”

The report will show a worrying picture of a society that is piling debt on young people while denying them educational opportunities and the prospect of buying their own homes. It will show that levels of spending on education as a proportion of GDP have fallen steadily since 2010, from 5.95% to 5.28%, while levels of participation in higher education have also declined.

The number of houses built fell to 140,000 in 2014, a level that the foundation says is “pitifully low” and a main reason, along with stagnating wages between 2010 and 2014, for rising prices which make buying a home unaffordable for many young families.

Despite the rosy picture painted by the chancellor, the report says that the number of young people out of work is three times higher in the UK than in Germany. By contrast the cost of healthcare and pensions for the elderly rises exponentially.