Generational strife

The cost of living squeeze has revived the debate about intergenerational unfairness, including in the pages of this newspaper. Older people on fixed incomes are particularly vulnerable to higher inflation. Often no longer working, they are dependent on the state pension rising alongside living costs. They are more likely to gain from higher interest rates, especially if they own their home, but inflation is still eroding the real value of their savings.

For the younger generation, the current storm threatens to extend an already lengthy period of disappointment. Real wages have not risen for 20 years, while house prices have soared. Many feel aggrieved at a system that, they believe, serves only the interests of the already established, and look askance at demands for larger pensions. Higher interest rates may not be of immediate benefit to the young, if the cost of taking out a mortgage becomes prohibitive.

This is, to some extent, a phoney conflict. Parents and grandparents are not ignorant of the plight of their children and grandchildren, with many going to great lengths to help them onto the housing ladder. The young also endured hardships during lockdown to protect older relatives from a virus that posed little threat to themselves.

But it is the sort of bitter dispute that arises in an economy that is no longer growing, when politics becomes a toxic battle to secure a slice of a fixedsized pie. Yes there are structural issues in, for example, the housing market and there will always be arguments over who is most deserving of the limited support that taxpayers can provide. But they are arguments that are easier to resolve if politicians are focused on economic growth.