Academics, parliamentarians and leading industry figures have contributed to a new publication, outlining the challenge ageing poses to the UK welfare state and the reforms necessary to ensure its survival.
‘Towards a new age: The future of the UK welfare state’ argues that governments are ‘sowing the seeds of the welfare state’s demise’ by failing to reform a welfare system increasingly distorted towards propping up spending on older people, at the expense of the working age population.
The book, published by the International Longevity Centre – UK (ILC-UK), contains 20 essays outlining the challenges and reforms necessary on housing, health, education, the labour market, and pensions and welfare.
Contributors include (amongst others):
- Former Italian Labour Minster Professor Elsa Fornero
- Former longest serving UK Pensions Minister Steve Webb
- Former UK Minister for Science and Universities Lord Willetts
- Sir Michael Lyons, author of the Lyons Housing Review
- Sir Anthony Seldon, Vice-Chancellor, University of Buckingham
- Nusrat Ghani MP, Chair of the All Party Parliamentary Group on Ageing
Based on new analysis, the ILC-UK argues that population ageing could make democracy and the welfare state incompatible.
It says an increasing share of public expenditure on older people at the expense of investing in younger generations will undermine the affordability of the welfare system and the wellbeing of the population as a whole. But since the UK has a growing and powerful older voting block, the chances of aligning effective social policy reform with broad-based political support is likely to fall over time. The report says that, unless we get to grips now, enforced and painful retrenchment may be needed at a later date to secure affordability.
The ILC-UK point to evidence from their new Welfare State Effectiveness Index which shows that countries with welfare systems geared towards higher spending on older people at the expense of younger generations have the lowest levels of wellbeing. They perform worst in terms of: poverty, access to education, housing quality and intergenerational fairness.
New analysis from chapter authors Professor David Bell and Professor David Blanchflower demonstrates that millennials may be less inclined, and less able to support the continued existence of the welfare state.
Using the ‘welfarism scale’, i.e. attitudes to welfare collected from the British Social Attitudes Survey, they found attitudes to the welfare state are markedly less sympathetic for under-35s. Higher levels of youth unemployment, underemployment, temporary job holding and self-employment have weakened millennials’ ability to contribute to the welfare state.
The authors argue for a major reorientation of policy towards youth employment and skill enhancement to ensure millennials are able and inclined to support older generations
The book concludes by arguing that we need a new Beveridge that takes into account demographic shifts in a way that is fair across generations. But in order to define what a new social contract could look like, we first need a wide-ranging, national debate incorporating the views of different groups. The book finishes by setting out the key principles for kick-starting such a process.
Andrew Rear, chief executive of Munich Re UK, said: “At this pivotal moment in our history, the UK needs to think through what kind of society we want to be, and build positively towards that, instead of drifting on a sea of soundbites towards fracture and uncertainty.”
Ben Franklin, head of economics of ageing at ILC-UK, said: “Reform of the welfare state to ensure its future sustainability is not simply about pulling back the state. A reconfiguration of the state is what’s needed with retrenchment in some areas and expansion in others. Yet if governments make policy based purely to get re-elected, the welfare state could become so distorted that it might sow the seeds of its own demise.
“To move forward, we, as a society, must better understand the long term consequences of ageing. It is quite possible that by having an open and honest national debate about the possible economic and social consequences, public opinions could be reshaped and political preferences challenged. This is not just relevant for the UK. The rest of the world is ageing too and at a significant rate. This is the future, it will shape us all profoundly, and we must adapt in order to make the most of it.”