Generational Theft?

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I spoke at a breakout session at yesterday’s Meeting the Challenge conference called “Generational Theft?” and organised by Liberator (or more precisely Simon Titley). I thought I’d put my own thoughts on how the debate went here, if for nothing else than to help Simon with his official report.

The other speakers were Ed Vickers and Simon Bryceson. Given that they clearly knew far more about what they were talking about than me, I was flattered to have been asked to be on the platform, but I like to think I may have made some contribution in terms of bringing the discussion onto campaign strategy and policy ideas. And since I don’t know the names of all the contributors, and they might object to me quoting them here in what was a frank discussion, I shall adopt Chatham House rules.

Ed expressed his thesis as outlined on his website (linked above), talking about Britain should now be regarded as a gerontocracy. Simon talked about how different countries have coped with a major shift in economic change, varying from the relative ease of Scandinavian countries and Japan to the major upheaval of South American countries. The implication being that if we didn’t respond early enough, Chile would be a better model for what happens next, not Sweden.

I talked about what I have termed here as neofeudalism, how attracting young voters should be a long term strategic goal for the party, the futility in trying to target the “grey vote” with expensive policy pledges which did little to attract them and the need to be seen to be associated with the idea of intergenerational equity.

The early part of the floor debate looked as if we may have misjudged the title of the session. I don’t think any of us believed that what we were looking at was a case of the older generation consciously acting to do down their children, yet the title “generational theft?” (note question mark) seemed to make people think that was what we were saying. In hindsight it may have generated more heat than light which emphasis on equity might have avoided. C’est la vie.

With that said, I think the majority of the participants got what we were going on about. There was also a notable difference in emphasis between the older generation and the young, for whom our message seemed to resonate much more strongly (one woman in the audience articulated our case far more eloquently than the three of us combined).

One contributor lambasted us, accusing us of attempting to demonise old people and claiming that we had blithely ignored the consensus that had formed around the Turner Commission proposals. This single contribution, for me, showed how on the money we were.

Were we demonising old people? I don’t believe we were. In my introductory speech I did talk about the need to sow seeds of dissent on the issue, but I happen to believe that the older generation would respond positively and generously to that rather than simply roll up the drawbridge in outrage.

A good example of this sort of reaction is actually with tuition fees: the policy is a vote winner not just with prospective students, but with parents and, significantly, grandparents as well. They don’t want to see little Jonny having his future mortgaged and will be open to change if they feel it will benefit the next generation. Thus far however, debates over things like council tax have merely been articulated in terms of poor old people, not who would subsequently have to pick up the tab.

His pointe that if you listen to old people you will find that they tend to be much more generous towards younger people than the other way round is accepted, up to a point. A more accurate way of putting it is that older people regard their younger relatives with higher regard than young people view their older relatives (about which more later). However, having just lived through a week in which the entire government and Labour party (can you tell the difference these days?) went nuts over the Respect Agenda, it is clear the extent to which young people are demonised by our society. Intergenerational strife is a reality that we live with every day, not some horrible thing that people like me want to manufacture.

His point about the consensus surrounding the Turner Commission is again right up to a point. But it is clear that Gordon Brown and the Treasury don’t share this consensus and neither do the trade unions. Ed Vickers made an important point about how his own union the AUT had championed opposition to raising the public sector retirement age. Most AUT members in their 50s are indeed relatively well off (it isn’t a union of street cleaners after all) and his point was quite reasonable. Instead his point was caricatured as saying that all old people were wealthy.

But pensions are only one part of the quadruple whammy that young people face these days, the others being property, student fees and tax. The idea that Turner magically answers all of these is farcical. What is worse, the suggestion made at the meeting that the generosity of old people towards their children and grandchildren meant that there wasn’t a problem, is precisely the problem we need to sort out.

Let me make one thing clear: I do not want to be dependent on my parents in order to be able to afford a house. I find that humiliating and so do many people. It isn’t a dilemma that their generation faced (at least, not to the degree that my generation does now), and its root cause is a speculation driven, low supply property market which has become only marginally concerned with true economic value.

What’s worse, this utopian vision of wealth cascading down the generations is to ignore those families who didn’t leap onto the housing market ten years ago and now find the ladder has been kicked away. This is why, with due respect to Ed, I prefer to talk about this as being a kind of feudalism rather than gerontocracy (although with just 36% of under 25s voting, and 70% of over 60s, the idea that the UK is run by the old is an psephological fact), with a mass landed middle class lording over an underclass of serfs with very little social mobility and life chances.

What’s to be done? Far from the gloomy point made at the start of the meeting that it is an unsolveable problem, I don’t believe it is. Land value taxation enjoyed significant support in the room. There are positive signs about where we go post-Turner. Throughout the party’s leadership debate there appears to be an emerging consensus that we need to look at income tax and its effect on the poor. Chris Huhne is calling for personal allowance to be raised to the level of the minimum wage and I applaud him for it.

Finally, we had a slight digression on education. Ed talked about the importance of primary and secondary education in terms of life chances, and I’m sure noone would dissent from that. Tertiary education presents us with a bit of a problem. Grade inflation has lead to huge numbers of people doing meaningless degrees simply in order to get a foot in the door. Do we therefore go backwards, encourage a shrinkage in the education market and thus make degrees meaningful again? Or do we recognise it is a reality and try to stop it from weighing young people down too much?

My personal suggestion at the meeting was to make tuition fee and maintenance loan repayments tax deductable – i.e. we accept the system as it has been introduced but ensure that in effect graduates don’t get weighed down by it. Although there are real questions about whether we drop our outright opposition to tuition fees and to what degree we make the tax exemption (100% or a proportion?), I think it is an idea that is worth considering, especially given that fees have now been a reality for 6 years and there is a danger that people will increasingly say “I had to pay them, so why shouldn’t the next lot?”

The consensus of the meeting, such as it was, seemed to me to be that confrontational measures were rightly not wanted, but that there is a real issue that needs to be addressed. I hope the Meeting the Challenge working group will take notice.

Finally, a few extra links that Simon recommended in the handout he prepared for the meeting:

10 thoughts on “Generational Theft?

  1. This is an important debate – both in terms of the policies themselves and the party’s strategy.

    The one point I don’t agree with is about higher education. I don’t believe that ‘grade inflation’ or massive numbers doing meaningless degrees is inevitable with expansion.

    We should be aiming for steady improvement in pre-school, primary and secondary education and this should lead to a steadily growing proportion who are able to benefit from higher education.

    The economic results of this will mean, in turn, that the investment in education pays for itself, as it has largely done so far.

  2. It may not automatically lead to grade inflation, but it certainly has thus far.

    When I was at school (86-93) I was told that the actual title of your degree didn’t matter; it was the fact of having done a degree that really mattered. By the time I graduated in 1997 that was no longer the case (and I had a degree in… theology!).

    Similarly, my sister became a Vice President of Merril Lynch having crawled her way up after leaving school without doing A-Levels. By the time she left in 2002, they weren’t even looking at people without degrees in business studies.

  3. The notion that we have a gerontocracy in this country is a complete fantasy.

    What we actually have is a system which denies older people the right to earn a living and forces very many of them to live in extreme poverty.

    The Turner Commission tinkered around the edges. That’s because very many people hold to the erroneous belief that they will end up with a pension which will give them a decent lifestyle – and you have tabloid newspapers and trade-union numbskulls who encourage this idiocy.

    Not so. The average private sector pension NOW is £6,000 per annum. What will it be in 20 years time, when life expectancy could have increased by 10 to 15 years?

    If you get those older people who are capable of working into employment (about a half), you solve the problem.

    Why is the government not doing this? Because big business doesn’t want to lose its ability to employ cheap labour.

    Tony Blair doesn’t have to worry. He has a £3 million house. The rest of us can look forward to 20 to 30 years starving and freezing to death, or Beachey Head.

  4. As I said above, gerontocracy is a fact – a high proportion of old people vote and a low proportion of young people vote. But I would agree that it doesn’t adequately describe what is going on. That’s why I prefer to talk about a new form of feudalism, with a mass landed class holding a new serfdom under foot.

    I do think that the cash poor, asset poor old need more support. What I don’t accept is that with so much wealth in the hands of older people, it should be younger people who foot the bill.

  5. Sounds like this was a good event – pity I couldn’t be there. I wonder whether the debate can be taken further for Harrogate, maybe taking on the turner agenda and the Lib Dem response which nobody seems to want to debate – at least in public.

  6. A lot of sense, and an issue I remain interested in.

    I was thinking about tax deductibility of education costs the other day, but aren’t the current generation of student loans already tax dedcuctible in the sense that they are deducted via PAYE before the tax is calculated? If I’m wrong, then it’s scandalous…

  7. It is ordinary folk like you and I who are footing the bill for the “retirement” scrapheap.

    Big business has off-loaded the cost on to the public purse, while politicians and the media are deceiving the people into thinking they are getting the best possible deal.

    It is all about further enriching the already very rich, and pauperising the rest of us.

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