What would you do if the government gave you a £10,000 birthday present?
Yesterday, The Guardian’s front page led with the conclusion of a report from the Resolution Foundation suggesting that every Brit should receive £10,000 when they turn 25 years old as a kind of “citizens inheritance” or “universal minimum inheritance” to bridge the wealth gap between baby boomers and millennials. This is ridiculous idea and they know it.
Pretending a person in their mid 20s is going to spend that money on housing deposits, starting a business, or further education (i.e. “sensible” purchases) is naïve. There will be far more instances of the money being blown on all-inclusive, binge-drinking, package holidays to Bangkok with the lads for a drug and prostitute-fuelled club crawl pausing only to burn a 1000 baht note in the face of native street urchins just for the bantz. And the only thing they have to show for the experience a few weeks after being a lot of bruising around the knees and a scribbly face tattoo of a Chinese proverb they think says ‘hope equals love’ but actually translates as ‘bathtub banana’ – or something similar.
Alternatively, if a holiday isn’t their scene, just think of all the avocados they’ll be able to buy.
More serious problems with this short-term bribe include the regressive nature of giving £10,000 to every 25 year old, regardless of individual situations. Giving a millennial who is unemployed and living in a council house the same amount as a millennial who has landed a secure job in the City and who lives in a 3-bed maisonette seems unfair. Plus, the obvious facts that £10,000 gets you a hell of a lot more in the north than it does the south – don’t even get me started on London prices.
Want to tackle the intergenerational wealth gap? Here are some ideas to get you started:
- Create more affordable and accessible housing for first-time buyers. Deregulate planning permission laws so houses in London are allowed to add more floors and small developers can build homes more easily. Also, add a hefty tax to buyers who are purchasing property in London but not living there. This could disincentivise millionaires from purchasing property in the capital simply as an investment opportunity. In 2016, The Guardian reported that 22,000 homes in London had been left vacant for longer than six months. This number is probably higher but homeowners are now hesitant to declare properties empty due to a punitive “empty homes premium” council tax of an additional 50%. Property Partner predicts that there are over 200,000 uninhabited homes across the UK. So why not find a way to reduce this number and house people?
- Regulate the car insurance market. OAPs are much more likely to be in car accidents than teenagers yet are charged far less for insurance. Maybe a system where the most expensive insurance policy can only be 1.5x that of the cheapest could make the system fairer.
- Ensure that the millennial railcard makes it past the current trial period so it can be rolled-out to all young adults rather than just the current 10,000 people.
- Bring back maintenance grants for university students from the poorest backgrounds. Maybe this is more of a generation Generation Z issue? But why not start posing solutions to their future economic issues – which will inevitably be worse than that of millennials.
There are many flaws with this proposal from the Resolution Foundation and it has clearly sparked a lot of controversy – but maybe that was the point? Suggesting an outlandish idea like this might just get the conversation rolling on how the generational income divide can be bridged.
In the meantime, with the government opting to shy away from ambitious economic policies, slightly discounted rail fairs might be all the concessions millennials will receive for the time being.