The coming battle between old and young

Twentysomethings face living standard squeezes, while those in their 60s have never had it so good.

In the First Thoughts column of the magazine this week, I wrote about an idea which is currently gaining ground: that the young are being squeezed at the expense of the old.

Of all the arguments I have with my parents - both retired and in their sixties - the most intractable is whether they are the luckiest generation who ever lived. Having raised four children, they don't feel rich. Yet they live in a mortgage-free house and receive pensions from their former employers. They both grew up in houses with no TV or indoor loo, yet are currently in New Zealand, visiting their grandchildren.

I can't imagine my retirement will be anything like that. For a start, I remain stubbornly off the housing ladder and it will stay that way while London prices average £406,424 and lenders ask for a 25 per cent deposit. Lord knows what state the NHS will be in by the time I really need it. In the next few decades, the bill for Labour's assorted PFI follies will land on my generation's doormat. Pension? Ha!

This divide has been highlighted before - notably in Shiv Malik's and Ed Howker's book Jilted Generation - but it's becoming more stark as the coalition's economic policies hit the young hard. While graduates get saddled with thousands of pounds of debt and turfed out into a contracted jobs market, pensioners have winter fuel allowances and bus passes doled out to them without means-testing. As Daniel Knowles wrote in the Telegraph on 12 March: "It is a painful irony that the youngest government in history seems to be engineering such a spectacular flow of money towards the oldest."

All this is my way of saying that the mansion tax sounds like a sensible idea, even if it will affect the older generation disproportionately. When I read about Joan Bakewell, who bought a house for £12,000 that is now worth up to £4m, I struggle to empathise with her pain at the thought of being forced to downsize. I wish I knew what it's like to be sentimentally attached to a home but I've just moved into my fourth flat in five years.

Don't cry any tears for me - my twenties involve more skinny lattes and foreign holidays than my parents' ever did - but don't cry for the "asset-rich, cash-poor" baby boomers, either.

The piece I referred to, by Daniel Knowles, is worth reading in full. It explains how housing and childcare costs skew the appealingly simple picture of higher-rate taxpayers in middle-age as "rich" and pensioners as poor:

Most of those at the bottom of the income scale are actually pensioners, with lots of assets and relatively few outgoings - £25,000 a year is a lot if you have no mortgage to pay. They are getting off free, laughing as they swipe their free bus passes on the way to the bank.

Which brings me to my point: the Chancellor thinks that he is spreading the pain evenly, according to income. But he is actually spreading it unevenly, according to age. The people bearing the brunt of this Government's spending cuts and tax rises are young families. If they are poorer, their tax credits are frozen, their teenagers have lost the Educational Maintenance Allowance, VAT has gone up and the services they depend on - the school system, the nurseries and so on - are being starved of funds (even as the NHS, which old people use, gets more). If they are slightly richer, it's the child-benefit cut, the public-sector pay freeze, petrol taxes and the devaluation of the pound that hurt most.

It is a long-established principle that, as Adam Smith wrote in The Wealth of Nations, "the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion". But what Mr Osborne's policies prove is that we struggle to properly define who "the rich" are. Because we ignore age and wealth, "progressive" policies such as the child-benefit cut often aren't; they don't genuinely reflect ability to pay.

By coincidence, Saturday's Financial Times picked up the theme, splashing on an analysis of living standards which showed that the "disposable household incomes of people in their 20s have stagnated over the past 10 years just as older households are capturing a much greater share of the nation's income and wealth".

The result is that "the median living standards of people in their 20s have now slipped below those of people in their 70s and 80s". And as Alistair Darling told the paper: "You can't honestly say to younger people any longer, you'll do better than your father or mother's generation." The word "alienation" increasingly crops up, and you can see in the student protests and movements such as UK Uncut that some youngsters are beginning to vocalise their feelings of being dealt an unfair hand.

While this idea is not new -- see Shiv Malik and Ed Howker's Jilted Generation or David Willett's The Pinch -- it is likely to become increasingly bitterly fought terrain as austerity measures bite. The conventional political wisdom is that because older people are more likely to vote than younger ones, it is safer to target the latter with potentially unpopular measures. (There's also something to the fact that most heavyweight political commentators are of a certain age... ) George Osborne has taken his axe to a raft of benefits aimed at the working population - such as child tax credits - the goodies handed out to pensioners, such as free bus passes and winter fuel allowances, have been left untouched.

The FT pointed to Britain moving to a "family welfare" model, with the younger generations relying on the elder more, as happens in some Mediterranean countries. But, as John Hills of the LSE points out, this hurts those who can't, for example, rely on the Bank of Mum and Dad for a housing deposit, or help with university costs:

"The thing to focus on isn't so much the generational conflict itself, because a lot of the wealth of the previous generation will be passed down, or is being passed down... it's the people who are locked out of that in both generations. It's clearly harder as a young person if you don't have that kind of family support."

These are complicated issues, but a clear picture emerges: that 20, 30 and 40-somethings are bearing the brunt of the coalition's economic policies. But which politician is brave enough to make that argument?

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.

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Keir Starmer: “I don’t think anybody should underestimate the risks of getting Brexit wrong”

The former director of public prosecutions is now heading up Labour’s response to Brexit. But can he succeed in holding the Tories’ feet to the fire?

Early in his new role as shadow Brexit secretary, Keir Starmer was accused of being a “second-rate lawyer”. The gibe, in a Commons debate, came from none other than Iain Duncan Smith. Starmer was director of public prosecutions for five years and later stood for parliament in 2015. No novice, then. Within a few days, Duncan Smith stood again in the House, this time to offer his apologies.

A fortnight later, I met Starmer at his quiet office in Westminster. He was sitting at a table piled with papers, in an office that, a discreet family photo aside, was unadorned. He had just got back from a whirlwind trip to Brussels, with many more such visits planned in the weeks ahead.

Starmer returned to the shadow cabinet after Jeremy Corbyn’s second leadership election victory last month. “The series of agreements we will have to reach in the next few years is probably the most important and complex we’ve had to reach since the Second World War,” he told me.

Starmer, who is 54, took his time entering politics. Born in 1962, he grew up in a Labour-supporting household in Surrey – his father was a toolmaker and his mother a nurse – and was named after Keir Hardie. After studying law at Leeds University, he practised as a human rights barrister and became a QC in 2002. In 2008, after varied legal work that included defending environmental campaigners in the McLibel case, he became the head of the Crown Prosecution Service for England and Wales as well as director of public prosecutions, positions he held until 2013.

When in 2015 Starmer ran for a seat in parliament to represent Holborn and St Pancras in London, it was assumed he would soon be putting his expertise to use in government. Instead, after Labour’s election defeat under Ed Miliband, he served as one of Corbyn’s junior shadow ministers, but resigned after the EU referendum in June.

Now, he is back on the opposition front bench and his forensic scrutiny of government policy is already unsettling the Conservatives. Philippe Sands, the law professor who worked with him on Croatia’s genocide lawsuit against Serbia, says he couldn’t think of anyone better to take on the Brexiteers in parliament. “It’s apparent that the government is rather scared of him,” Sands said. This is because Starmer is much more capable of teasing out the legal consequences of Brexit than the average Brexit-supporting Tory MP. Sands added: “It would be fun to watch if the stakes weren’t so very high.”

Starmer is a serious man and refused to be drawn on the character of his opponents. Instead, speaking slowly, as if weighing every word, he spelled out to me the damage they could cause. “The worst scenario is the government being unable to reach any meaningful agreement with the EU and [the UK] crashing out in March 2019 on no terms, with no transitional arrangement.” The result could be an economic downturn and job losses: “I don’t think anybody should underestimate the risks of getting this wrong.”

If Starmer seems pessimistic, it is because he believes time is short and progress has been slow. Since the referendum, disgruntled MPs have focused their attention on the final Brexit settlement. Yet if, as he argues, the starting position for our negotiations with the EU is wrong, the damage will have been done. MPs faced with a bad deal must either approve it or “risk the UK exiting the EU without a deal at all”.

It is this conviction that is driving his frantic schedule now. Starmer’s first month in the job is packed with meetings - with the representatives of the devolved nations, business leaders and his European counterparts.

He has also become a familiar face at the dispatch box. Having secured a commitment from David Davis, the minister for Brexit, that there will be transparent debate – “the words matter” – he is now demanding that plans to be published in January 2017 at the earliest, and that MPs will have a vote at this stage.

In his eyes, it will be hard for the Prime Minister, Theresa May, to resist, because devolved parliaments and the European parliament will almost certainly be having a say: “The idea there will be a vote in the devolved administrations but not in Westminster only needs to be stated to see it’s unacceptable.”

In Europe, Starmer said, the view is already that Britain is heading for the cliff edge. It was May’s pledge, that after Brexit the UK would not “return to the jurisdiction of the European Court of Justice”, which raised alarm. And among voters, there is “increasing anxiety” about the direction in which the UK is moving, he said. Even Tory voters are writing to him.

In the Labour Party, which is putting itself back together again after the summer’s failed coup, immigration remains the most vexed issue. Starmer told me that Labour had “earned a reputation for not listening” on the issue. Speaking on The Andrew Marr Show shortly after becoming shadow Brexit secretary, he said immigration was too high and ought to be reduced. But later that same day, Diane Abbott, a shadow cabinet colleague, contradicted him, publicly criticising immigration targets.

Starmer believes there is a bigger picture to consider when it comes to Britain’s Brexit negotiations. Take national security, where he warns that there are “significant risks” if communications break down between the UK and the EU. “Part of the negotiations must be ensuring we have the same level of co-operation on criminal justice, counterterrorism, data-sharing,” he said.

Crucially, in a Labour Party where many experienced politicians are backbench dissenters, he wants to reach out to MPs outside the shadow cabinet. “We have to work as Team Labour,” he stressed.

It’s a convincing rallying cry. But for some MPs, he represents more than that: a lone moderate in what can be seen as a far-left leadership cabal. Does he have any ambitions to lead Labour? “Having had two leadership elections in the space of 12 months, the last thing we need at the moment is discussion of the leadership of the Labour Party.” He has agreed to serve in the shadow cabinet, and is determined to stay there.

Starmer has found his purpose in opposition. “If we think things aren’t going right, we’ve got to call it out early and loudly. The worst situation is that we arrive at March 2019 with the wrong outcome. By then, it will be too late.”

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

This article first appeared in the 27 October 2016 issue of the New Statesman, American Rage