Charlotte Street Partners



Time for a new generational pact

Written by Adam Shaw, associate partner
Edited by David Gaffney, partner
16 November 2020

Good morning,

It was known long before Covid-19 struck that the simple linear progression whereby each generation will be economically better off than the previous one will not apply to millennials or Generation Z. Yet, little has been done to tackle the root causes of increasing levels of generational inequality that were years in the making.
The Covid-19 pandemic ­– the second ‘once in a generation crisis’ to have hit in a little over a decade – has only exacerbated the issue.­ We have all made huge sacrifices in order to stem the virus. However, young people are bearing the brunt of the economic and societal cost, and will do so long into the future as they miss out on crucial months of education, unemployment bites further, and debt levels spiral.
The irony here, of course, is that this damage is being wrought in the fight against a virus that disproportionately affects the elderly. Before I’m accused of callousness, I don’t believe that young people would see the health of their parents and grandparents put at risk so that they can live a normal life. Quite the opposite, in fact, hence the efficacy of the “don’t kill granny” slogan that was deployed to convince young people of the need for lockdown measures.
However, I do think there is a strong case for a new pact between the generations – one that is sustainable and restores equity. How this is done will require proper consultation, but I have some suggestions.
Downgrading the pensions triple lock to a double lock would be a good first step. The current system guarantees that the state pension rises by the higher of average earnings, inflation or 2.5%. Political interest has kept it in place, however, it doesn’t seem fair that pensions will continue to outstrip earnings. According to the Social Market Foundation, a double lock – the current system without the 2.5% guarantee – could contribute £20 billion to deficit reduction over the next five years while ensuring that pensioners are no worse off.
Secondly, and you’ve heard me bleat on about this before, but we need more houses – and of all stripes; social, affordable, rent-to-buy etc. The argument in favour of capitalism is competitive markets and efficiency but housing affordability in the UK has plummeted.
Thirdly, we need a long-term plan on social care. Unpopular opinion alert: the reforms proposed by Theresa May in the 2017 Conservative manifesto, which partly led to the party losing its majority, were not unreasonable. The notion that proper social care needs to be paid for shouldn’t come as a surprise to anyone. All plausible outcomes involve people having to pay more, whether that’s paying directly, through increased taxes, or via some kind of insurance system.
I understand that five-year parliamentary terms do little to encourage the grasping of long-term structural nettles. However, for too long political expediency has trumped the need to make difficult decisions and develop long-term solutions to long-term problems. That needs to change if we truly are to build back better.


Boris Johnson is to spend the next 10 days in self-isolation on the advice of NHS Test and Trace, after meeting with fellow Conservative MP Lee Anderson, who later tested positive for Covid-19. A Number 10 spokesperson said that the prime minister does not have any symptoms of Covid-19 and would continue to work from Downing Street.
Four astronauts have launched from Florida on a mission to resupply the International Space Station (ISS). The crew – Americans Michael Hopkins, Victoria Glover and Shannon Walker, and Soichi Noguchi from Japan – entered orbit in a rocket and capsule provided by Elon Musk’s SpaceX. US space agency Nasa has said it is now entering a new era in which routine astronaut journeys to low-earth orbit are being conducted by commercial providers.
Johnson & Johnson is launching a UK trial of its experimental Covid-19 vaccine. The US pharmaceutical group will administer its experimental vaccine – which uses an adenovirus vector to transport the immunising protein into the body  to 6,000 UK volunteers in two doses in a phase three trial. This is typically the last step before drug makers approach regulators for approval. (£)

Business and economy

A legal battle over business interruption policies that did not pay out to small firms during the pandemic will be heard by the Supreme Court today. Thousands of businesses made claims on their policies during the pandemic. However, many insurers rejected claims, arguing that policies were not designed to cover such unprecedented restrictions. The issue will have implications for 370,000 businesses and involves potential payouts of £1.2bn. (£)
Widespread working from home could lead to an increase in racism and prejudice, a new report has warned. Research from the Woolf Institute, which researches interfaith relations, found that workplace friendships are key to breaking down misconceptions and there is a risk of people who work from home going “back into isolated silos”. Ed Kessler, founder of the Woolf Institute, has called on the government to focus on offices and workplaces as a vital area for improving community relations.
Fifteen Asia-Pacific countries have signed the Regional Comprehensive Economic Partnership (RCEP), one of the biggest trade deals in history which will seek to reduce barriers in an area covering a third of the world’s population and economic output. The signing of RCEP follows almost a decade of negotiations and economists have estimated that it could add almost £200bn annually to the global economy by 2030. (£)

Columns of note

Writing for The Atlantic, Helen Lewis highlights the campaign against male primogeniture, which sees hereditary titles passed only to male heirs in the UK. The need to explain this archaic system for The Atlantic’s primarily US audience only reinforces its eccentric nature, and the depressing notion that a child can still become nominally more or less important on the basis of their gender in 21st century Britain.
In The Times, Clare Foges analyses the impact of Dominic Cummings’ departure from Downing Street. She argues that although Cummings was a controversial figure, he at least had a vision and plans to reinvigorate the country. Boris Johnson, Foges asserts, is a “weak politician led by stronger-willed characters” and the risk is that the government’s ambitions will slide without Cummings or similarly driven characters at the heart of number 10. (£)

Cartoon source: The Times


The week ahead

Europe will be the focus this week as the window for an agreement on the post-Brexit trading relationship between the UK and EU tightens ever further.
While differences remain, something both sides agree on is that we are at a crunch point, with one UK official quoted as saying: “We’ve got 10 more days, max.”
David Frost, the UK’s chief negotiator, arrived in Brussels yesterday as talks continue ahead of Thursday’s EU leaders video conference, which is viewed by some as the final deadline for a deal to be reached. Other reports suggest that early in the week commencing 23 November is more realistic.
However, it’s not just Brexit on the agenda for Boris Johnson, who was set to make a speech setting out his vision for switching to a low-carbon economy this week. It’s not yet clear what impact his period of self-isolation will have on his schedule.
Johnson is known to be keen to burnish the UK’s green credentials ahead of COP26, the international climate change summit, which is due to be held in Glasgow next year. The green agenda also represents a shared policy interest with US president-elect Joe Biden.
The speech is expected to include commitments on hydrogen, carbon capture and storage, offshore wind and household insulation, and the go-ahead for new nuclear power stations.
Across the Atlantic, the US Senate could vote as early as this week on whether to confirm Judy Shelton, President Trump’s nominee to the Federal Reserve board.
As a fierce critic of the US central bank and a Trump loyalist, Shelton is a controversial choice and would leave a Trump imprint on the Fed ahead of his departure from the White House in January.
In corporate news, Walmart, Home Depot, Macy’s, Vodafone, Imperial Brands, Royal Mail, Easyjet, Asda, British Land, Kingfisher and Halfords are among the companies due to report to the market this week.

What’s happening today?


Kainos Group

Jupiter European Opportunities Trust, Smiths Group

Annual report

Source: Financial Times

did you know

As Antarctica sits on every line of longitude, the continent has no set time zone. Stations tend to use the time of the country they are owned by or that of their main supply base.

Parliamentary highlights

House of Commons

Oral questions: Housing, Communities and Local Government (including topical questions)
Legislation: Pensions Schemes Bill [Lords]: remaining stages

House of Lords 

Oral questions
Impact on the spread of COVID-19 of students returning to their universities – Lord Storey
Process for child victims of trafficking seeking leave to remain in the UK – Lord Roberts of Llandudno
Plans to remove visa requirements for visitors to the UK from Peru – Baroness Coussins
Incorporating the United Nations Convention on the Rights of the Child into legislation – Baroness Massey of Darwen
Statement: Her Majesty the Queen’s platinum jubilee – Baroness Barran

Scottish Parliament 

No business scheduled

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