Beyond facing down expected economic downgrades and clarifying the direction on Brexit, resetting the agenda on intergenerational fairness has emerged as a top priority for the Chancellor in this month’s Budget. This focus reflects a growing body of evidence showing that generation-on-generation living standards progress is under threat for today’s young adults – as analysis for the Resolution Foundation’s Intergenerational Commission has demonstrated over the past year.
Restarting this progress will require far-reaching and long-term solutions in a range of areas including housing, labour market security, reforms across the tax system and the funding of social care. This briefing note does not seek to cover all of this ground. Rather, we focus on the levers that Chancellors most frequently turn to at Budget time – the taxation of income, and working-age benefits.
Our objective is not to offer recommendations nor an internally-funded package. Instead, we demonstrate the intergenerational parameters by which policies should more frequently be judged, by assessing the impact both across and within generations of options that have been offered to the Chancellor or are readily available to him. These include tax cuts focused on the young; un-freezing working age benefits; reversing cuts to Universal Credit; and applying all National Insurance contributions to pensioners’ employment income.