Intergenerational Commission Report

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2019 National Delegate Conference
25 February 2019
Carried as Amended

Conference rejects the proposals contained in the Resolution Foundation think tank’s report of the intergenerational Commission, chaired by Lord David Willetts (nicknamed Two Brains), titled “A New Generational Contract”.

Conference further rejects the myth of generational unfairness on which the report is founded, and which masks the fact that the real unfairness is based on wealth and class. Wealthy pensioners compared to poor pensioners; privileged young people compared to those young people struggling on minimum wage.

The Intergenerational Commission is a group set up by the Resolution Foundation which claims to be an independent think tank working to improve the living standards of those in Britain on a low to middle income. It does not define the upper limit of that range. Both the Foundation and the Commission are chaired by Lord David Willetts. The Commission published a report in April 2018 giving its views on maintaining what it calls the intergenerational contract which it claims has been eroded in recent years because “Millennials” (those born between 1981 and 2000) have not seen their disposable income increase over that of the previous generation (generation X born 1966 to 1980) at a similar age.

The report claims that the UK’s ageing population means that public spending on health, care and social security will reach £24bn by 2030 and £63bn by 2040. It focuses heavily on measures to protect younger workers from funding these costs mainly by taking measures to transfer wealth from those who are retired or nearing retirement and also by taking wealth from retired and older people to fund health and social care.

The report’s ten key policy recommendations are as follows:

1)Increase public funding for social care by more than £2 billion from reformed taxation of property. There should also be an increase in property-based contributions towards care costs, but with strict limits so that no-one pays more than a quarter of their wealth towards their own care;

2)Introduce a £2.3 billion “NHS levy” via national insurance on the earnings of those above state pension age and limited national insurance on occupational pension income;

3)Boost employment security via: the right to a regular contract for those doing regular hours on a zero-hours contract; extended statutory rights for the self-employed; and minimum notice periods for shifts;

4)Introduce a £1 billion “Better Jobs Deal” that offers practical support and funding for younger workers most affected by the financial crisis to take up opportunities to move jobs or train to progress; and £1.5 billion to tackle persistent underfunding of technical education routes.. Both should be funded by 1p of the forthcoming corporation tax cut;

5)Make indeterminate tenancies the sole form of private rental contract, with light-touch rent stabilisation limiting rent increases to inflation for three-year periods and disputes settled by a new housing tribunal;

6)Replace council tax with a progressive property tax with surcharges on second and empty properties; halve stamp duty rates to encourage moving; and offer a time-limited capital gains tax cut to incentivise owners of additional properties to sell to first-time buyers;

7)Pilot community land auctions so local authorities can bring more land forward for house building, underpinned by stronger compulsory purchase powers; and introduce a £1.7 billion building precept allowing local authorities to raise funds for house building in their area;

8)Require firms contracting for self-employed labour to make pension contributions; lower the earnings threshold above which employees get auto-enrolled; and provide greater incentives to save among low-and-middle-earners by flattening the rate of pensions tax relief and exempting employee pension contributions from national insurance;

9)Develop a legislative framework for new “collective defined contribution” pensions that better share risk; and reform pension freedoms to include the default option of a guaranteed income product purchased at the age of 80;

10)Abolish inheritance tax and replace it with a life-time receipts tax that is levied on recipients with fewer exemptions; a lower tax-free allowance and lower tax-rates. Use the extra revenues to introduce a £10,000 “citizen’s inheritance” – a restricted-use asset endowment to all young adults to support skills, entrepreneurship, housing and pension saving.

There are also proposals to scrap the triple lock and to bring forward by seven years the proposal to raise the qualifying age for state retirement pension to 68.

These proposals if implemented would immediately result in a drop in living standards for those retired or nearing retirement which they would be unable to counter. As the Commission is not a government sponsored body it is not clear what the political response might be. Nevertheless it is concerning that the Commission is targeting the “easy” options rather than the “fat cats” in the private and public sectors being given over-excessive rewards in terms of salaries, bonuses, share options and the like which are out of line with the earnings of the rank and file.

None of these proposals does anything to improve the situation for poorer younger people, but are simply an excuse to squeeze more money out of the older generation. Older people have more than paid over many years for anything they get via national insurance contributions, taxes and their own contributions to occupational pensions, as well as the value of the work that they have performed for the benefit of the economy and the community.

Conference notes these proposals with concern and calls on the National Executive Council to:

a)Liaise with UNISON’s National Retired Members’ Committee;

b)Work with UNISON’s Young Members’ Organisation and relevant service groups to develop alternative proposals with which to approach UNISON Labour Link, the National Pensioners Convention, Age UK, Age UK Scotland, the Scottish Pensioners Forum and any other relevant bodies and to use any opportunity and all means possible to reject the narrative that old people are robbing their grand-childrens’ future;

c)Oppose any government action to implement the proposals in the Commission’s report outlined above;

d)Resist any attempt to extract any more money from the older generation.