Generation Y: The silent victims of an over-bloated and unfair welfare system

Cllr Jonathan Glanz, the Cabinet Member for Housing on Westminster City Council, says Generation Y are right to demand welfare spending be brought under control

Toby Young blogged last week on the surprise expressed by a Guardian columnist following research from Ipsos MORI that showed only around one in five 16-34 year olds (AKA Generation Y) consider the welfare state to be one of the country’s proudest achievements.

The research results are wholly unsurprising and bear out precisely what I have been experiencing in Westminster for some time now. Personally, I do believe that the creation of the welfare state is something we should all be proud of though I do admit to being slightly older than the Generation Y cohort! I can also see, however, that mistakes in the application of benefits and the shift from a principle of ‘a hand up’ to ‘a hand out’ has undermined the achievements of the past. This is illustrated most clearly by the housing benefit system that is currently being reformed by the Government.

The Ipsos MORI survey was actually part of an excellent, much wider generational analysis that shows young people are also less likely than other generations to support higher taxes in order to increase benefit payments.

Again, this is no great surprise to anyone with any experience of housing in London and other high cost areas. While the desire to buy a home is the one consistently high and universal aspiration across the generations from pre-war and Baby Boomers to Generations X and Y, for twenty- and thirty-somethings today the dream is rapidly evaporating. To put it bluntly, they are the victims of decades of complacency and the unsustainable expansion of the welfare state.

For example, take a Westminster couple in their late twenties earning a joint salary of forty or fifty thousand pounds per year. They might be among the 45% of households in the capital who are worried about meeting their monthly housing costs To qualify for a typical mortgage on a lower quartile property in Westminster they would need savings of £200,000 to £300,000. The private rented sector is not much more affordable with average rents of around £550 per week exceeding the common benchmark of 40% of post-tax income.

Realistically our couple is not going to qualify for social housing either which means that they probably need to look elsewhere for somewhere to live. That is a massive loss to our community and by moving away from their jobs, their friends and potentially taking their children out of local schools, their commute is lengthened and their costs are increased.

In this situation, hardworking young people on average incomes have every right to feel more than a little irked when they realise that their taxes are subsidising the private rents of families living in central London homes the like of which they would need a decent lottery win to be able to afford. Indeed, not only were their taxes subsidising rents of up to £2,000 per week for others to live in the most desirable areas but they are also keeping prices in the area artificially high to such an extent that they have no chance of accessing the market.

This is the true picture of the welfare state in 2013 for Generation Y and these are the people I keep in mind when I am being attacked by political opponents for my support of the government’s welfare reforms. That is because I do not believe for one second that this generation of young people is any more heartless or lacking in sympathy for those genuinely in need of help from the state than any of their forebears. They have become the silent victims of an over-bloated and unfair welfare system full of perverse incentives.

The Housing Benefit bill in England is now pushing £23 billion, including £270 million in Westminster alone. Living in central London is not for everyone but I would wager that a large number of those for whom housing costs are a growing concern look at these numbers and wonder, not only why they should be proud of this system, but also question how on earth their parents’ generation got it so wrong. I am confident that this Government’s efforts might give Generation Y at least some assurance that we were not all bad.