The politics of intergenerational wealth inequality | Letters

A proposal to give every young person a state-funded capital grant, echoing an idea from the 1790s, has resurfaced in the debate over how to tackle widening intergenerational wealth inequality in Britain [1]. Writing in the Guardian on 9 June, columnist Polly Toynbee argued that “young people need money because our system is rigged” and advanced the case for a universal capital endowment [1]. The concept traces back to Thomas Paine’s 1790s pamphlet Agrarian Justice, which proposed a payment of £15 to all 21-year-olds [1]. The latest contribution to this policy tradition is a report from the Social Market Foundation, which its authors say will have tangible policy impacts [1]. Dr Rajiv Prabhakar of The Open University, the UK’s largest academic institution by student number, noted that the age at which grants are accessed is critical for both policy design and political viability [1][8]. Economic inequality is measured across income, wealth, and consumption, and research has linked high levels of inequality to political instability and slower economic growth [2]. The relationship between inequality and social mobility is captured by the Great Gatsby Curve, which shows that countries with higher income inequality tend to have lower intergenerational mobility [4]. Stanford sociologist David Grusky, founding director of the Stanford Center on Poverty and Inequality, has focused his career on the systemic causes of such stratification [5]. Prabhakar pointed to the child trust fund (CTF) as a cautionary example. Introduced by New Labour and later scrapped by the coalition government, the CTF became viewed more as a savings product than a capital endowment and was absorbed into other policy agendas [1]. More than 750,000 CTF accounts remain unclaimed, a figure that underscores the difficulty of sustaining such programmes across political cycles [1]. Not all readers welcomed Toynbee’s argument. Jeremy Galtress of Nottingham wrote that “the boomer generation should not, across the board, have to subsidise those who are looking to get a foot on the housing ladder” [1]. He said the value of his home had been built through personal sacrifice: “No fancy holidays, no £50,000 weddings, no ridiculous £90,000 cars. Priorities” [1]. Galtress added that “borrowing against a future state pension has its merits, as long as there is a state pension in existence down the line” [1]. The debate arrives as Generation Alpha, the first cohort born entirely in the 21st century, grows up amid falling fertility rates and an economy in which portable digital technology and the legacy of the COVID-19 pandemic shape early life [6]. The Labour Party, which has governed the UK since the 2024 general election, has historically been the vehicle for welfare-state expansion, including the creation of the modern welfare state under Clement Attlee’s 1945 government [9]. Whether a universal capital grant for young adults can move from Paine’s pamphlet to statute remains an open question.