The game-changing EU referendum has highlighted the important issue of intergenerational fairness, says Colin Wilson
The summer of 2016 will certainly go down in the annals of British political history as a period of significant change. The political commentators and media were not understating things when they said that the EU referendum was a once-in-a-generation decision. We are already starting to experience the fallout from the 23 June vote, but I sense what we have seen is potentially just the tip of the iceberg as politicians, civil servants, businesses and professions grapple with the issues that now need to be addressed to move us forward.
The aftershock of the vote has led to political turmoil in Westminster. We have seen the prime minister resign, mass resignations from the Opposition front bench challenging the leadership of their party, and the leader of UKIP standing aside declaring his job is done now that the UK population has decided to leave the EU. At this point, I would like to reassure you that I, as your new president, have no intention of following this trend!
I am here for the duration and looking forward to my term as president.
I mentioned that the EU referendum was a once-in-a-generation decision, and it was, but what fascinated me was the analysis of how the different generations voted.
In the days leading up to the vote, the market research company YouGov undertook a poll of 1,652 individuals spanning the generations. The results were stark. Of those aged between 18 and 24, 64% said that they were going to vote to remain in the EU.
Of those aged 65+, 58% said that they would vote to leave. While no exit polls were conducted on the day of the referendum, all the indications are that the trend highlighted in the YouGov poll played out on the day.
What I found particularly interesting was when the YouGov results were mapped against the Office for National Statistics' 'Pension Planner Life Expectancy Estimator'. This showed that the average number of years that the younger generation (18-24) would have to live with the decision to leave the EU was 69 years. Whereas those from the older generation (65+) would, on average, have only 16 years to live with the consequences of the decision to leave.
Now, I have absolutely no intention of getting into a debate here on whether the outcome of the referendum vote was the right or wrong answer for the UK; I don't think that is the place of the IFoA, or its president. But what the vote has highlighted to me is the very important issue of intergenerational fairness, and the potential long-term impact of decisions of one generation on those of the future.
I don't think anyone is yet in position to predict the long-term consequences of the referendum vote on future generations.
But even before June's vote, intergenerational fairness was a subject that was attracting widespread political attention within the UK's Parliament. In fact, the Work and Pensions Committee launched an enquiry into the issue, with a focus on the long-term sustainability of the UK welfare system. It was pleasing to see the IFoA respond to that enquiry, a response which led to the IFoA being approached by the Intergenerational Foundation for a briefing ahead of it giving evidence to the Work and Pensions Committee.
But what does intergenerational fairness mean? What are politicians and policymakers trying to achieve? And how can we as a profession help inform this important public interest policy debate? What is clear is that issues of intergenerational fairness extend well beyond debates about social welfare. Decisions taken by today's generation on important issues such as infrastructure investment and mitigating the impacts of climate change will affect the generations to come.
As I set out in my presidential address, it is important that we leave a good inheritance - via sustainable development - for future generations; or in the words of the UN Brundtland Report, "development that meets the needs of the present, without compromising the ability of future generations to meet their own needs".
I believe that we should consider these future generations in all that we do.
I am confident that embracing this challenge will not only make a valuable contribution to the development of long-term sustainable public policy but will also contribute to the sustainability of our own profession. As actuaries, we not only have the skills to help address some of these long-term global challenges, we also have the moral responsibility to do so.
Watch the presidential address online: bit.ly/29ndrTS
Colin Wilson is the president of the Institute and Faculty of Actuaries