Leader: We need a progressive contract, not conflict between the generations

The creation of such a generational war is precisely the intention of Conservative policy, but it is a dividing line that progressives should be wary of embracing.

Students protesting against higher tuition fees in 2010. Photo: Getty
Students protesting against higher tuition fees in 2010. Photo: Getty

One does not need to study Conservative policy for long to identify the group the party is most concerned with attracting. The year began with David Cameron promising to maintain the “triple lock” on the state pension, so that it rises in line with whichever is highest – inflation, earnings or 2.5 per cent – for the entirety of the next parliament.

Then, with a Lawsonian flourish, George Osborne used the Budget to announce the end of all restrictions to accessing private pension pots and the introduction of new high-interest state bonds for the retired. Finally, at an event hosted by Saga magazine on 24 March, Mr Cameron suggested that the Tories would repeat their past pledge to raise the inheritance-tax threshold to £1m at the next general election (so far unfulfilled this parliament) and came close to ruling out the means-testing of universal benefits for the wealthy elderly.

Whatever the merits and demerits of these proposals, they all derive from cold electoral logic: pensioners are more inclined to vote. At the 2010 general election, 76 per cent of those over 65 voted, more than any other age group. Conversely, just 44 per cent of 18-to-24-year-olds did, a smaller percentage than any other age group.

In the case of the young, the cap on tuition fees has been tripled to £9,000, the Education Maintenance Allowance has been abolished and the Future Jobs Fund has been scrapped. In the case of the old, the state pension has been increased, universal benefits have been ring-fenced and NHS funding has been protected. Even as they pledged to shield the elderly from austerity in the next parliament, the Tories have vowed to extend it for the young. Mr Osborne has signalled his intention to abolish housing benefit for the under-25s and the universities minister, David Willetts, has hinted at another rise in tuition fees.

Faced with this inequality, many respond by urging not more generous treatment of the young but less generous treatment of the old. Benefits, they argue, should be restricted to all but the most needy and the state pension should no longer be protected. The creation of such a generational war is precisely the intention of Conservative policy. It allows the Tories to frame themselves as the party of responsible pensioners, in contrast to Labour, the party of the feckless young.

It is a dividing line that progressives should be wary of embracing. Contrary to works such as Mr Willetts’s The Pinch: How the Baby Boomers Stole Their Children’s Future and Why They Should Give It Back (a rift ironically encouraged by his higher education policies), the divisions within generations remain more significant than those between them. As a study published in February called Intergenerational and Intragenerational Equity by the economist Jonathan Portes concluded: “The circumstances of your birth and early life (who your parents are, education, gender, ability, effort and just plain luck) still matter far more – indeed, more so than before – than when you were born.”

Rather than a battle between young and old, the age of austerity is defined by a battle between rich and poor. Under the last Labour government, 900,000 pensioners were lifted out of poverty but 17 per cent of over-65s still fall below the line; the UK ranks 23rd out of 27 European countries. Having fallen by 800,000 between 1997 and 2010, child poverty is forecast to rise by 600,000 by 2015. As the Institute for Fiscal Studies has warned, “Despite the impact of universal credit, the overall impact of reforms introduced since April 2010 is to increase the level of income poverty in each and every year from 2010 to 2020.”

To combat these ills, rather than a race to the bottom between the young and the old we need a progressive contract between the generations. This would include the introduction of universal childcare to allow more parents to return to work and to improve early-years outcomes, the integration of health and social care to end the so-called warehousing of the elderly, and the introduction of a mansion tax and land value tax to ensure that all those, young and old, benefiting from rising property prices contribute in return. In addition, the deracinated plutocrats who are buying up swaths of London must be brought into taxation through wealth and asset taxes. As politicians seek to divide them, here is an agenda all generations can unite around.

The NS debate at the Cambridge Literary Festival on 5 April will see Shiv Malik, Laurie Penny, Simon Heffer, Kwasi Kwarteng, Mansoor Hamayun and Allison Pearson discuss the motion "this house believes that baby boomers left society worse than they found it". For more details and tickets visit cambridgeliteraryfestival.com