For a moment, leave aside conservatism or socialism or liberalism – or whatever form of ism you favour – and imagine yourself instead drafting a manifesto for older people. You might well start by recognising that since they consume a big slice of public spending on healthcare, and all of it that goes on pensions, spending on both must at least be protected against inflation, if not increased in real terms. That’s respectively 18 per cent of state spending (£146 billion) and 20 per cent (£159 billion) – well over a third of public spending as a whole. And were you not to integrate social care completely into the NHS, you would at least find a new tranche of taxpayers’ money for it, too.
Since well over 70 per cent of older people own their own home, and bricks and mortar are now the most reliable means of saving, you would want to ensure that house prices continue to rise above wages. You would also seek ways of ensuring that they aren’t the only such means, and try to wean the economy off artificially low interest rates. Because older people tend to dislike mass immigration more than younger ones – not only here in Britain, but throughout the rest of Europe – it would be kept very low indeed. And since older people would be resistant to receiving the state pension later in life, so you would avoid hiking the age at which it is received.
ConservativeHome readers will already have spotted a flaw in this programme: it is financially unsustainable. As Liam Fox put it on this site before returning to government: “we currently have three workers contributing to national insurance for every one person receiving a pension. In the next 40 years, this will change to two workers for every pensioner”. But it is not simply the figures that don’t add up. If house prices are to continue to rise faster than wages, even more younger people won’t be able to afford them. The average age at which one can buy a home is now about 30.
And if – given the British aspiration to own one’s home – people can’t settle down until later in life, they will postpone having children. This will be against a long-term background of falling birthrates in western Europe and America: in 1960, the average family in Britain had 2.6 children; by 2011, that was 1.8. We cannot at once have rising retirement ages and falling birthrates and low immigration – at least, if we want to preserve the living standards and public services that we do today. It is socially as well as financially unsustainable – a contradiction in terms (unless one believes that robots will fill the gap, which would bring its own problems).
Labour’s draft manifesto yesterday is being billed in some quarters as one for younger people. This misses the point. Jeremy Corbyn isn’t proposing to lavish lorryloads of manufactured money on younger voters alone, but on all voters, including older ones. So it is that Labour’s draft commits itself to preserving the state pension triple lock, and finding an extra £8 billion for social care. Whether you put your faith in either pledge will be a sub-set of whether you think that Corbyn’s sums add up. As we go to press, it looks as though most voters are unlikely to believe this – though, admittedly, a large chunk of those that do will be younger ones.
But what is needed in the next Parliament is not a programme for younger voters or for older ones, but one which will address the big-scale, western world-wide issues that we sketch out above: the problems of an ageing population, mass immigration, pressured families, job insecurity – and, here in Britain, grotesquely expensive housing. Labour had their own leaked go at the challenge yesterday. The Conservatives are expected to have theirs on Monday, when their own manifesto launch is due. Some in the centre-right media, as usual, are listing their own favourite tax cuts for it to include: inheritance tax, the higher rate bands, capital gains, and so on.
We want a programme that is a great deal more ambitious – and a lot less inclined simply to tell readers what they want to hear. First, it would start by recognising that tax and spending support for families now concentrates on older people rather than younger ones. We hope that the Conservative manifesto abandons the triple lock and ring-fencing, and has a good long look at the chaotic condition of family allowances. If one is earning up to £100,00, one can receive tax-free childcare. Meanwhile, even basic rate taxpayers could lose child benefit. The incentives for caring for one’s own children, rather than getting someone else to do so, are wildly out of kilter. We need a childcare system that is choice-based, and fair to one-earner families. It might help birthrates to tick up a bit further.
Second comes perhaps the biggest challenge of all: housing. Sajid Javid’s White Paper was a good start but, as Alex Morton, formerly the housing specialist in the Downing Street policy unit, wrote on this site: “There is no point in increasing numbers in local plans if there are no new sanctions for councils that don’t have a local plan, or to introduce a system to intervene to put a local plan in place”. The manifesto should propose putting these in place. Elsewhere, Theresa May should pinch a leaf out of Corbyn’s book, since he has pinched a leaf out of ConservativeHome’s. He wants the state to build homes itself. So do we – but for sale, not for rent.
If the effect of more housebuilding is to slow the rise in prices, older people will justifiably want other vehicles for investment (and most didn’t want houses as a main store of value in the first place). That implies higher interest rates – subject, as all policy must be, to the requirements of Brexit. Meanwhile, the third big fairness challenge comes within education spending itself. The Right tends to focus on grammar schools; the left on more university places. Both thus miss a big challenge: that of providing better technical education – one that we have failed to rise to since Butler introduced the tripartite system.
If it is be concentrated post-16, as Michael Gove and others want, this implies a shift of resources from the University sector. As Graeme Archer has argued on this site, young people are victims of the Great University Mis-selling Scandal. “We we know that modern students are debt-ridden in a fashion that would have stopped me in my 1980s, working-class tracks,” he wrote recently. “We know that half graduate to jobs of below degree level. Also unwelcome is the grade inflation and pseudo-academicisation that expansionism has delivered.” Here is a “burning injustice” for the Conservative Manifesto to get its teeth into.