Andy Silvester is the Campaign Manager at the TaxPayers’ Alliance.
It would be fair to say that David Cameron’s appearance at this week’s AgeUK conference was not his most comfortable. He was heckled throughout – one would be forgiven for thinking that his Coalition Government has given those in the audience a raw deal. But that is not the case. While there are legitimate grievances around the lack of returns on savings, the ‘fault’ for that – if there is any – lies a few miles east from Downing Street, in the Bank of England.
In truth, though, older people have had a fairly easy ride. The same cannot be said for the young. Though the effects may not be immediate, Britain’s runaway debt is a train wreck waiting to happen, and those in their twenties, their teens – even the unborn – will be in the front carriage.
For all the bluster about deficit reduction, it is worth repeating the sheer facts of the matter. Britain is adding £91 billion a year – about £250 million a day, the equivalent of more than Manchester City’s annual wage bill – to a national debt that is already well over £1.4 trillion.
To pay for that, we will either need to massively increase taxes (with fairly obvious implications for economic growth – and therefore an almost certainly counter-productive move) or reduce benefits by an equally significant amount.
The Coalition has made welcome strides in reducing the welfare bill; of that there is no doubt. Some estimates suggest they’ve saved as much as £21 billion from what the bill would have been otherwise – not just a fiscal good news story, but crucial for those taken out of the cycle of dependency that a comfort blanket welfare system necessarily creates.
But they show little appetite to go further. Despite the barracking that Cameron received at the hands of those older voters this week, it is an unavoidable fact that austerity has ground to a halt at age 65 throughout this Parliament. The winter fuel allowance of £200, known in the wealthiest households as “the wine fund,” has been kept for all pensioners rather than means-tested.
Then there’s universal TV Licences and bus passes, too. The pensions Triple Lock – which uprates the state pension by inflation, wage growth or 2.5 per cent, whichever is higher – guarantees that pension incomes will never go down in real terms, and in most years will go up. So we keep borrowing – but of course, borrowing is just deferred taxation.
Balancing the books isn’t just, then, just sound fiscal policy but a moral imperative too. An old boss of mine once told me that nobody over the age of eight should use the word ‘fair’, and he may have a point on that front. But in truth there’s no better word for it: it’s simply not fair for today’s politicians to pile debt upon debt onto the next generation, safe in the knowledge that it might win them a few votes in elections and that they won’t have to deal with the consequences.
These will be severe. Young graduates on average salaries are already paying tax rates of around 48 per cent when compulsory Employers’ and Employees’ National Insurance Contribution are throw in alongside student loans. That’ll look like a low-tax nirvana compared to what future generations might have to deal with. And, inevitably, many of those higher taxes will fall on those running businesses, making it harder to hire, harder to expand, harder to give a pay rise.
Of course, that’s before we discuss the scandalously high cost of housing in Britain, inflated by politicians at national and local level who have put the interests of NIMBYs, BANANAs (Build Absolutely Nothing Anywhere Near Anything) and those with residential equity ahead of young people who have seen the bottom rungs of the housing ladder disappear into a haze of restrictive planning laws.
A new report issued by Shelter last week suggested that it would cost £59,376 to buy enough space to swing a cat – literally – in Kennington, a popular spot for young professionals. House prices are equally astronomical in other cities in the UK. That is the sign of a profoundly broken planning system, and a housing market that has left many young people only able to buy a house when an elderly relative passes on. What a depressing state of affairs.
Speaking of depressing, a report last year from the Centre for Policy Studies suggested that the fund the Government uses to pay for the state pension will run out 20 years earlier than we expected. The upshot? Respected experts don’t expect a graduate today to receive a single penny in the form of their state pension.
But for all the reasons there are for young people in Britain to wonder about their future, there are plenty of sound political reasons for those in Westminster to ignore them. We know that the elderly are more inclined to vote and, indeed, are more likely to tell other people how to vote. The accepted narrative is that young people aren’t interested in politics – so they stay home. So goes the conventional wisdom, anyway.
That narrative is only half-true. Young people are interested in politics, but they seem less interested in getting on board with a political party and sticking with it through thick and thin – the days of swallowing a party menu whole might be coming to an end.
Rather, as can be seen through the success of grassroots groups like 38 Degrees and the TPA, people as a whole are more interested in individual issues. Whether the one in question is same-sex marriage, fracking, even Hillsborough, it’s clear that campaigns can still garner widespread support across party lines and across the age range.
This evening, more than a hundred students will gather to protest against the size of the national debt. They see themselves as part of Generation Screwed, and are standing up to protest that unless there’s radical action on the debt now, they’ll have to pick up the pieces. They’ll be asking why David Cameron and Ed Miliband are seemingly so happy to talk tough on deficit reduction, but less keen to actually spell out what an effective deficit reduction programme would look like.
They might not all vote – but they care. And if politicians really care about engaging young people in politics, and restoring their trust in Westminster, perhaps it’s time they started listening.