The woman in the video is perhaps in her 60s, in a white and pink jacket with a whitish-blonde bob; she is a former and, potentially, future Conservative councillor from Somerset, well-spoken but not strikingly posh.
“Now that I don’t have a mortgage, it’s quite nice that the interest rates are going back up slightly, because we’ve been getting absolutely zip… on our savings for a long time,” Felicity Baker tells the interviewer from Times Radio. “Sometimes we feel that we only ever hear about the people who need stuff, not about the… what do they call it, the squeezed middle?” Whether those who don’t need but merely want things are really the squeezed middle is a question perhaps best left for Ed Miliband.
There’s then a slight break in the recording, so it’s hard to be sure of whom Baker is saying, “…being thoroughly selfish about it”. But she does note that, “When I was a youngster, newly married, we were paying 15, 16 plus per cent. So much of our money every month went on the mortgage.”
By contrast, “youngsters expect an awful lot more these days… If you look at places like Italy, in particular, or Germany, they don’t actually aspire to own their own home. They’re quite happy to rent, and to use the rest of the money to enjoy themselves.” And so it goes on.
Baker is not an MP, let alone a minister. And there’s nothing in her words or her demeanour to suggest malice, as opposed to simply ignorance. The reason her interview made such a splash – the reason I am writing this now, days after Conservative Party conference where it was filmed ended – is that her words felt like a perfect summation of a worldview we normally catch only glimpses of. The older generation’s luck was down to hard work; the next cohort’s struggles reflect a character flaw. Certain, already-comfortable voters deserve more goodies; another, poorer group should lower their sights.
Since it was more comfortable older generations which provided the Tories with most of their votes these last few years, this worldview has proved annoyingly influential. With its un-reflective and un-self-conscious selfishness, that video is like a three-minute interview with the Conservative Party’s unrestrained id.
A few points are worth noting. Italy actually has higher home ownership rates than the UK, and has had for some time. Renters cannot, in fact, save all their money for other things. Renting a home has recently been more expensive than paying a mortgage, even if your landlord is a local authority. (Higher interest rates may change this, but not if they are passed down from landlords in the form of higher rents.)
UK interest rates did top 14 per cent on a few occasions in the 1970s and 1980s, yes. But house prices and mortgage sizes were vastly lower, relative to incomes, so although spikes hurt – how could they not – they were not necessarily crippling. They were also relieved, in part, by the fact that mortgage interest was tax deductible. Today, no such tax relief exists; the average mortgage debt held by those who have managed to claw their way onto the ladder is much higher; and where wages once rose steadily, eroding debt through inflation, they have now been essentially flat for 15 years. Put all these things together, argues the housing analyst Neal Hudson, and household finances are on course to be as squeezed by this crisis as they were by those nominally larger spikes.
This is without even getting into the fact that many under-30s today are tens of thousands of pounds in debt, thanks to tuition fees. Or that, while many more people now go to university, that partly reflects the reality that many more jobs now demand degrees. Or that the welfare system is vastly less generous than it once was (except, that is, towards pensioners). Or that the government has repeatedly raised taxes on the young while protecting the old.
Nor does it consider the fact that those who have overstretched themselves to buy homes have often had little choice in the matter, since renting is overpriced and under-regulated. If you were starting a family in the last few years, borrowing too much to buy a home was not a sign of financial incontinence: it may well have been the only way of attaining security in a market in which housing was far, far too expensive.
Throughout this article about intergenerational prejudice, incidentally, I’ve been trying very hard to keep a lid on my own. This is why I have got this far without using the word “Boomers”.
One of the reasons people believe in things like conspiracy theories is what Michael Shermer, of the Skeptics Society, has termed “agenticity”: the need to put a face on structural forces. Sometimes massive, life-changing things happen because a virus mutates, or there’s a war overseas, or the world’s banking system falls over and vast quantities of capital seek sanctuary in the housing market where you happen to live. Such phenomena are difficult to comprehend, though, and it’s often not clear who to blame. Much easier instead to credit your good luck to your judgement, but another’s bad luck to their flaws.
At the end of the interview, the Times Radio reporter asks Baker if the Tories will win the next election. “At the moment, no, obviously not,” she replies. Then she seems to address her party: “So I say thank you, once again, for stuffing it all up.”
But it isn’t just the Tory leadership that’s stuffed it up: it’s the people who pushed the party to adopt positions that would further enrich some voters, at the expense of many others; who conceive of interest rate rises as a boon for their savings, not a thing that’ll ruin other people’s lives. Sometimes, there really are people to blame for our problems. But they’re not always the people we think.