They confirm that the intergenerational contract in Europe is under strain. Europeans are worried that they and their children are likely to end up worse off than their parents and grandparents. If this comes about, then we will have undermined the key premise that motivates society – that each successive generation should be in a better position than the previous ones.
The survey revealed that, across the 10 countries, fewer than one in four Europeans think that their generation is being treated fairly by their government when taking policy decisions. Interestingly, this sense of unfairness and distrust is not felt just among the young. It is broadly shared across genders and age groups. Similarly, Europeans of all ages don’t believe their government thinks beyond the short term. A majority don’t trust them to take into account the potential financial impact of their policy decisions on future generations.
Europeans also share remarkably similar views when it comes to which policies with a strong direct or indirect intergenerational dimension are the most important. More than half (54%) put addressing poverty and unemployment as a top priority, along with securing pensions and social care (47%). Education and a fair tax system are seen as of middling importance (35% and 29% respectively) while ensuring environmental sustainability and the reduction of government debt are, perhaps unexpectedly, regarded as low priorities (18% and 17% respectively).
Different generations placed greater emphasis on issues that more immediately concerned them. So, not surprisingly, the oldest people in the survey (55 to 64) place more importance on tackling pensions and social care, while the youngest (16 to 24) are slightly more worried about environmental and public finance issues.
What is clear from the survey results is that this broad consensus in policy issues across Europe and lack of trust in policymaking requires governments to take urgent action. Given the demographic trends, structural economic changes, rapid technological developments and the strained public finances that many countries are currently facing, the challenges are likely to increase.
Why, you might ask at this juncture, should ICAEW chartered accountants be getting involved in an issue such as intergenerational fairness? The answer is that ICAEW – and indeed any professional body with a public interest mandate – should be talking about issues that it can either shine a spotlight on or that give some help to policymakers in terms of reaching better policy decisions. And intergenerational fairness, I believe, goes to the heart of the kind of society that we want to build in the 21st century.
The way in which many governments, particularly in Europe and North America, responded to the global financial crisis in the last decade was to support the financial system. This avoided a systemic collapse but at what price? Years of sluggish growth, poor productivity and an ever widening gap between rich and poor. We have to find some way of rebalancing this asymmetric relationship across the generations.
Improving understanding and management of public finances would go a long way to help but I do believe we also need to make a step change in the way we tackle issues of intergenerational fairness, particularly when taking those policy decisions that will have a significant knock-on effect down the generations. As we look towards 2018, we are calling for a profoundly different approach – one which all stakeholders in society can understand, contribute to and scrutinise, and one which is based on a greater appreciation of different perspectives, timeframes, financial flows and trade-offs.
The report, Intergenerational Fairness: A Survey of Citizens in 10 European Countries, can be accessed at icaew.com/intergenerational.
ICAEW chief executive