Bridging divides?

This spotlight article looks at the 2019 general election from a generational perspective. Age has become increasingly important for party choice over recent decades, with the Brexit vote turbo-charging these differences. At the same time, Britain’s demographic divergence means that the average ages of constituencies are growing apart.

Parties may be able to capitalise on these generational differences in the short term, but a longer-term governing agenda will require the bridging of both generational and Brexit-related divisions. A new generational contract means delivering both cohort-on-cohort living standards improvements for the young, and health and care for older generations that is paid for in a generationally fair way.

The main parties’ manifestos represent a mixed bag. In addressing the challenges young adults face, there is ‘the good’ – increased education spending and a focus on long-term investment and the environment. And there is ‘the bad’ – a more polarised approach to housing, and the continued favouring of pensioners in social security spending. Delivering health and care for older generations in a generationally fair way represents ‘the ugly’. The main parties are ducking social care challenges – with no substantive proposals from the Conservatives, and too little focus on meeting the costs from Labour.

Alongside the obvious focus on Brexit, the presence of manifestos means we can now judge what the 2019 general election is about. Austerity is out of fashion and instead the main parties are wrestling over how much bigger they want the state to be, and which groups should feel the effects of extra spending and taxation. Environmental issues have come to the fore, reflecting concerns about justice for future generations embodied in a protest movement of school children and young people. And psephologists are debating whether modelling that combines polling results with constituency demographics will predict the election outcome as well as it did in 2017.

This spotlight article brings all these issues together, looking at the 2019 election from a generational angle. We look at divides in voting preferences and the demography of different places; the role that the EU referendum has played in amplifying these; the need for parties to bridge these divides; and, finally, whether the main parties have risen to this challenge.

Age is an increasing determinant of party choice, meaning that the age of constituencies is an increasing determinant of which party’s candidate gets elected

In terms of who in society makes up each party’s base, the big-picture backdrop going into the 2019 general election is that age has become very important. Today, older voters are much more likely to vote Conservative, and younger voters more likely to vote Labour, than they were 35 years ago, as we’ve explored in detail before and as shown in Figure 1. In the second 1974 general election, 30 year olds and 70 year olds were as likely to vote Labour as one another. Roll forward to 2017 and the 30 year olds are nearly twice as likely to do so.

Figure 1: Age has become a much stronger predictor of party choice in general elections

Far from a recent sea change in party support, the importance of age in determining which party people vote for has been gradually increasing since the 1990s, as shown in Figure 2 for the Conservative vote share.

Age has, to some extent, replaced the traditionally dominant role of class in party choice. Back in October 1974, 22 per cent of those in the lowest socio-economic groups[i] voted Conservative, while 57 per cent voted Labour. By 2017, that difference had almost entirely disappeared at 41 per cent and 44 per cent, respectively. That’s not to say that class and income are no longer important in determining party choice – they are. Indeed, to some extent what we are seeing is the dynamics of class and affluence becoming realigned according to age.

Figure 2: The gap in party choice by age has been growing for some time

There is a lively debate about what explains these trends. Some argue it’s all to do with rising university attendance. However, our analysis suggests there’s no difference in Labour support between 18-24 year old students and non-students.[ii] Beyond the experience of going to university, it’s likely that both cultural preferences and values, and economic fundamentals, matter in explaining this age divergence. Given big shifts in economic experiences across generations, economic considerations deserve a good hearing at least.

A particular challenge is understanding whether these trends reflect cohort effects – meaning young people today will stick with Labour as they age – or whether the life-cycle phenomenon of ageing into conservatism will continue to apply to younger cohorts, perhaps just over an extended timetable. Our own David Willetts has made the case for the former if the economic fundamentals don’t change, while James Tilley leans towards the latter.

The central point is that economic outcomes may be the deciding factor in whether this turns out to be a cohort or life-stage effect. For example, rising renting among younger cohorts has a large bearing on their lower turnout, and is also linked to their Labour preferences. So maybe a (policy-driven) surge towards higher home ownership could turn a cohort effect into a life-cycle one, and, for example, combat fears among some Conservatives that their voters will eventually die out. A credible answer to these kinds of challenges is how parties will boost their vote share in years to come, which is why we take a generational perspective on each party’s policies, below.

Whatever the drivers, a key implication of our analysis is that age plays an increasing role in party choice at the constituency level, as well as at the individual level. Figure 3 illustrates this, showing that in 2017, younger constituencies were most likely to send a Labour candidate to Westminster, while older constituencies generally returned Conservatives.

Figure 3: The age of constituencies is highly correlated with party choice

The importance of age as a predictor of which candidate gets elected is not a new phenomenon, but it is a growing one. Focusing just on England,[iii] Figure 4 shows that over the course of the past three general elections, the age of constituencies has become more strongly correlated with the vote share of the two main parties. The strength of the relationship increased particularly markedly for the Conservatives between 2015 and 2017. By 2017, the average age of constituencies explained almost half the variation in the two main parties’ vote shares.

Figure 4: Age has become a stronger predictor of party choice over time

It’s not just age that explains changing party preferences. Another huge factor is Brexit. In fact, the strength of the leave vote in constituencies in England and Wales explains nearly two thirds of the change in each constituency’s Conservative vote share between the 2015 and 2017 elections, as Figure 5 shows.

Figure 5: Conservative support has become more aligned with ‘leave’ support

These growing age divides in voting are sharpened by another big trend – growing age differences between places

Crucially, the growing role of age in determining party choice interacts with another big 21^st century British divergence – growing age differences between places. Our demographic divergence entails local authorities that started out older ageing fastest, while many younger places are actually getting younger (especially university towns attracting more students).

Figure 6 shows that the same demographic divergence is evident between constituencies in England and Wales as we see at the local authority level. This is reflected in the fact that in 2002, 35 constituencies in England and Wales had an average age 10 per cent higher than the national average, and 42 had an average age 10 per cent lower than the national average. Roll forward to 2017, and those figures had increased to 81 and 71, respectively.

Figure 6 Constituencies have diverged in terms of age

What does this demographic divergence mean for MPs? It suggests that the oldest and youngest parliamentary constituencies have become safer for their respective parties in recent years, despite an overall trend away from party allegiance.

So, party choice is increasingly correlated with the age of constituencies, and the ages of constituencies are increasingly diverging, thus sharpening generational divides in Britain.

Bridging generational and Brexit-related dividing lines – rather than doubling down on them – is essential for a unifying governing agenda

British electoral maths is increasingly refracted through two very big and related dividing lines, based on generational differences and preferences in the EU referendum. It might be hard to look beyond the near-term electoral or Brexit arithmetic, but finding a way to unify people across these two big divides will be essential for any party wanting to build a governing agenda that will last years rather than months.

Focusing on the generational aspect, winning votes in both old and young constituencies means a national electoral strategy that brings together Britain’s two big generational policy challenges. First, this means delivering cohort-on-cohort living standards improvements for the young, given widespread evidence of deteriorating outcomes across their pay, housing, pensions and what they get from the welfare state. The second big challenge is providing the health and care that older generations need, deserve and expect, paid for in a generationally fair way.

On this basis, the remainder of this spotlight article looks at how Britain’s two main political parties’ manifestos measure up against this challenge. The overall context is that the post-austerity era means both are offering increased spending. However, Labour’s shopping list is extensive while the Conservative manifesto is a much more limited offering. The Conservatives are therefore largely sticking with the status quo, while Labour is attempting to reach out to older voters as well as younger ones, but with some of the big generational challenges side-lined.

Across both parties, some policy areas are ‘good’: the environment is rising up the agenda and education is prioritised. Some are ‘bad’: both parties continue to favour pensioner benefits, with Labour’s abandonment of further increases in the pension age and spending on ‘WASPI’ women particularly expensive. And both manifestos fail to propose generationally fair ways to fund health and social care that harness Britain’s growing wealth. This represents ‘the ugly’.

2019 manifestos – ‘the good’

Against the backdrop of significant cuts in recent years, the attention given to adult education and training in the 2019 manifestos – from Labour’s lifelong Level 3 training entitlement to the Conservatives’ ‘National Skills Fund’ – is good for the young and lower skilled. Beyond that, Labour’s biggest current spending promise is the scrapping of tuition fees, which is clearly very younger-generation focused. However, if combined with a return to numbers controls, this would restrict educational opportunities. The intra-generational impact is also tricky given that it is mainly more affluent graduates who would benefit from this move.

For the school-aged young, 2019 was the year of climate protests. And the protesters were heard: the quality of our natural environment has risen up the political agenda. Both main parties have new initiatives for a new phase of UK sustainability efforts. The Greens and the Liberal Democrats also propose lots of action in this area, opening up the potential for cross-party dialogue.

It is also encouraging to see fiscal sustainability high on the agenda across parties.. New fiscal rules have an admirable degree of focus on boosting long-term investment and improving the country’s net worth – a warranted move from the perspective of younger and as-yet-unborn generations. That is, of course, if these rules aren’t broken before they’ve got off the ground, a risk we’ve recently highlighted.

And finally, given extensive evidence of pay stagnation and labour market insecurity affecting younger generations, the focus on labour market reform in the manifestos is welcome. The Conservatives back a single labour market enforcement agency, both parties want the minimum wage to reach new heights, and Labour offers an ambitious agenda on collective bargaining and shares for workers. While some of these policies will require careful implementation to have the desired effects, both parties appear to recognise at least some of the labour market challenges facing young adults today.

2019 manifestos – ‘the bad’

In the same vein, the greater security for private renters on offer from both parties reflects the fact that housing is perhaps the single biggest area of concern for young adults. Both parties also want to push up housing supply – the Conservatives via planning liberalisation and Labour via a huge increase in social building. However both these supply approaches lack realism. And more broadly, the polarisation of approaches on housing risks undermining the long-term consensus that is needed to shift outcomes in this area that is of significant importance to younger voters.

When it comes to benefits (covered in detail in our review of social security policy), the Conservatives will stick with existing plans. This means that they will oversee a further £3.8 billion of cuts to working-age benefits that will be rolled out in the coming years. Labour’s plan for social security is comparatively far-reaching, with an extra £9 billion of spending in 2023-24 on cash benefits largely for working-age households, mainly as a result of reversing selected previous benefits cuts. In addition, they have proposed further spending on broadband, school meals and childcare.

However, these Labour promises are dwarfed in the longer term by plans to keep the State Pension age at 66, and very substantial payments of around £12 billion per year to the self-styled ‘WASPI’ women affected by previous State Pension age rises. In addition, both parties promise to maintain the ‘triple lock’ on the State Pension. And neither would reverse the effects of the benefits freeze that has reduced working-age social security spending by over £5 billion.

The fact that the Conservatives are maintaining their existing approach on social security, and that the Labour Party is spending more on pensioners than on working-age families, means that the welfare state will continue to be tilted towards older people. And neither party’s approach is likely to result in child poverty reduction, despite the fact that pensioner poverty has fallen by more than a third in this century while child poverty is close to a record high.

2019 manifestos – ‘the ugly’

Plans for ‘health and wealth’ are where it gets ugly in terms of the second big element of a renewed generational contract – health and care for older generations, paid for in a generationally fair way. Perhaps burned by their social care proposals in 2017, the Conservatives have come up with nothing new this time beyond a promise that no one will have to sell their home to pay for care. Labour wants to make personal care free for those aged 65 and over, one of their biggest current spending injections. More cash for social care is certainly needed, and risk-pooling via public funding is desirable. However, Labour’s plan to fund this spending through general taxation fails to acknowledge the challenges of placing this burden mainly on younger taxpayers, and the plan doesn’t address residential care costs. The 2017 Conservative manifesto’s social care proposal was flawed in both its design and how it was announced. But the acknowledgment that better-off older people’s assets ought to be part of the funding solution was correct, and is now lacking from either party.

When it comes to meeting the rising health and care bill as the large baby boomer generation moves into old age, we need to look more at Britain’s wealth. That’s because wealth has been growing much faster than income for decades, is increasingly concentrated within older generations (although very unevenly distributed within them), and is increasingly undertaxed. Labour’s focus on increasing the taxation of capital gains and dividends is a welcome step in this direction although, while the burden will certainly be top-heavy, it’s not correct to say that only the top 5 per cent will pay. The fact that the Conservatives ditched rumoured plans to cut inheritance tax is also good news. But neither of the main parties has grasped the opportunity to widen the tax base beyond the working age through more widespread property taxes. Nor is either main party thinking about the importance of asset building for young adults (beyond home ownership), for example via a return to asset-based welfare.

Conclusion

This last set of policies is ‘the ugly’ category because fixing Britain’s social care crisis and revamping wealth (particularly property) taxation are things that perennially get kicked down the road. Finding a solution is tough given the ballot-box advantage older voters have, due to their greater number and their higher turnout. But a single- or cross-party governing agenda that addresses these challenges at the same time as boosting young adults’ incomes, and their labour market and housing prospects, is essential to a renewal of the generational contract.

Parties may be able to use generational differences to their advantage in the short run, but this is a time-limited strategy. By saying very little, the Conservatives are ducking the question. Labour’s extensive offer attempts to reach out to older voters as well as younger ones, but doesn’t internalise Britain’s big intergenerational challenge. Whoever is tasked with implementing their manifesto should think about how to deliver a policy package that does this: providing the health and care that older generations need and deserve, while also promoting cohort-on-cohort living standards improvements for the young, all funded in a generationally fair way.

[i] People in semi-skilled and unskilled occupations, and the unemployed.

[ii] In May-June 2019, 30 per cent of 18-24 year olds who had ever been enrolled in higher education said that they intended to vote Labour, compared to 31 per cent of 18-24 year olds who had never been enrolled. Source: RF analysis of British Election Study online panel.

[iii] It is in English constituencies that the relationship is strongest, and more importantly we don’t have age data for constituencies in Scotland prior to 2011.