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Opinion

The UK is no country for the young

By Mark Mansfield
The Intergenerational Foundation has called on the UK Government to take specific steps to address the imbalances between the ages.

Jonathan Edwards

As an MP I probably wasted many months of my life in voting lobbies.

Voting in the Commons lobbies resembled the famous Sudanese Omdurman prison scene in the film The Four Feathers. I much preferred the rapid electronic voting system deployed during the pandemic with the deed completed in seconds.

The one benefit was the opportunity to speak to other MPs who you might otherwise not see during the working day. I remember one such discussion I had with a Labour MP from Wales, early in my career. I was ranting to him about the unfairness of the media using the term “Welsh Labour”; when no such legal entity existed.

His answer to me was “Jonathan, what you’ve got to remember is that politics is about perception not reality”.

I recalled that conversation when thinking about the increasing pickle the new Labour UK Government has got itself into over its decision to scrap winter fuel allowance as a universal benefit.

The Labour Party is endeavouring to create the perception that it has inherited the fiscal equivalent of an Eton Mess.

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Project Miserable

Project Miserable, as some commentators have labelled it, aims to destroy the traditional strength of the Tories in that they are perceived (wrongly) as the party of economic competence.

The warnings by the Commons Leader, Lucy Powell, over the weekend that Labour had to cut the benefit to stop a run on the pound and subsequent economic collapse is a part of this strategy.

I have no idea what the Central Bank and senior Treasury officials have offered in the way of advice to Ministers, I will only say that the savings of the policy only amount to £1.4bn. This is peanuts when total UK Government expenditure according to the Institute for Fiscal Studies was £1,200bn.

If we are to believe the run on the pound warnings, then the savings from the new winter fuel allowance policy aren’t going to make much of a difference and we had all better fasten our seatbelts.

I don’t want to spend too much time discussing the comments of Ms Powell; however, considering the volatility of international investors, even mentioning the words “run on the currency” is rather unwise unless the said cataclysm is in full flow.

Leaving aside the questionable morality of cutting support for the elderly with winter around the corner and fuel prices set to increase, the key point I want to consider in the remainder of the article is that Labour is increasingly digging a political hole for itself which could prove electorally problematic.

Labour strategists when considering the challenges before them must at all costs avoid policy decisions which create narratives that enable it to be attacked from the left and from the right.

Exposed

Announcing cutting winter fuel allowance as part of a fiscal consolidation package exposes Labour on all fronts.

The Tories will attack, as they made the decision during their time in office to preserve the benefit despite 14 years of cutbacks. The far right will couple cuts in support for the elderly with immigration to further their cause.

The parties to the left of Labour will attack the policy as an example of Red Toryism: it is an open goal for them. In Scotland the SNP must be basing its counterattack on Labour fiscal conservatism.

Looking forward to the next general election, what if Labour faced a reunited right or a Tory-Reform pact on the one hand and the Liberal Democrats, Greens, Independent Alliance attracting progressive voters on the other?. 2028/9 could look radically different to the conditions Labour faced in 2024.

Labour’s rebuttal against the Tories is to emphasise its wider strategic objective of highlighting the mismanagement of the precious 14 years. However, this does nothing to prevent the attacks on the left.

An alternative strategy would be for Labour to highlight the policy as part of its drive to address inter-generational inequality.

Successive Governments have understood that older people are more likely to vote and have pandered to this cohort. It has created a huge imbalance in fiscal terms, with future generations being lumbered with liabilities way beyond annual economic output. A report by the Work and Pensions Select Committee in 2015 basing its conclusions on 2011 figures estimated the inter-generational imbalance to be at £7.5 trillion in aggregate terms. The figures today will inevitably be worse.

Age imbalance

The UK is no country for the young: the inter-generational contract which has been the basis of the modern welfare state is teetering on the edge of the precipice.

The Intergenerational Foundation has called on the UK Government to take specific steps to address the imbalances between the ages. Highlights include implementing a large housebuilding programme to increase supply in order to reduce prices and rents; reviewing the state pension system; aligning Income Tax and Capital Gains Tax on unearned income; reviewing student fees to reduce the lifetime debt burden facing current students; and introducing a wealth tax on the super-rich.

Labour is committed to some of these policies and could well look at others. If it were to frame the winter allowance policy around a mission to rebalance the life opportunities amongst the generations, it would be able to continue its onslaught against the Tories’ mismanagement but critically protect its left flank.

If I were a Labour strategist, I would consider mobilising the rage of the young as mission critical. Doing so would also stymie the increasing support for the right that is increasingly evident in Europe.

Jonathan Edwards was the MP for Carmarthen East & Dinefwr from 2010 to 2024.

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13 comments

Hywel

I think, Jonathan, that Labour have hit the better off pensioners, who didn’t need a winter fuel filip, to soften up the middle and upper classes ready for a big hit in the forthcoming Budget. “Don’t complain about losing pension higher rate tax credit, aligning CGT with Income tax, and stopping Potentially Exempt Transfers”, the pensioners have taken a hit, you have to take some pain too….

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Ernie The Smallholder

State pension in the UK are already below the average for pensioners in most of mainland Europe.

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Padi Phillips

There is absolutely no reason to pitch the generations against each other, as this article suggests should happen. The removal of the Winter Fuel Allowance is a despicable step that will see many state pensioners suffer. The idea that all pensioners but those claiming Pension Credit are wealthy needs to be challenged, as many who live on the new state pension receive just £221.20 a week, amounting to £11,502.40 a year - hardly a king's ransom, and it makes them poor by any measure. To add emphasis, those claiming just the state pension, or maybe a little more it they also receive a small occupational pension will be eligible for both Housing Benefit/LHA and Council Tax Reduction. This means, again, that by any measure, people on such incomes are poor. Yet they are ineligible for the Winter Fuel Payment. Young people do have it hard, very hard and I do not envy them one bit, and would support measures that make life easier for them and help them get the best start in life possible. But let's not kid ourselves that it is the old who are responsible for the plight of the young, that responsibility lies with a government that is too cravenly coward to do what is required and tax the obscenely rich sufficiently so that the terrible inequality that exists in the UK today is reduced massively. If there are pensioners who have massive incomes, then decent tax policies will deliver what is required without removing the universal benefits that any sensible social security system must be based on. Thus, the removal of Winter Fuel Payments remains a despicable act by a government continuing with ideological austerity and in denial of just how economically illiterate it is. While pensioners freeze this winter, the energy companies will once again makes obscene levels of largely untaxed profit, all with the blessing of people like Jonathan Edwards.

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Mawkernewek

I fully expect that by the time I get to state pension age it will be subject to a Work Capability Assessment.

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Valerie Matthews

I am a Pensioner and receive nothing like £221,20 per week it is around £165.00 Because I am older than most, apparently I need £50 per week less to live on and will not receive proposed uprating either, Can someone explain to me how this is fair?Or are they simply suggesting we are 'past our use by date' and need bumping off?

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Padi Phillips

Seriously Valerie, I think you should be entitled to Pension Credit if your income is really that low. I did a benefit entitlement calculation on the Age UK website based on the premise that it was someone on a full old state pension rate of £169.50 and no other money coming in, who owned their own home, lived alone and was in Council Tax Group C. Based on those figures the calculator suggested that someone in that situation might be entitled to an extra £75.55 a week, consisting of £48.65 Pension Credit and £26.90 Council Tax Reduction. Maybe you are among the more than 800,000 pensioners entitled to Pension Credit but who are not claiming it? Only you will know your specific circumstances, so only you can find out whether you're entitled to more money than you're currently receiving. You can find the Age UK Benefit Calculator here: https://benefitscheck.ageuk.org.uk/Home/Start/

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Valerie Matthews

It is no Country for the very old either. Many sit shivering and live on a diet of toast and tea. Not daring to put an oven on because of cost of both good food and Fuel. I believe many will not survive the coming Winter, Hospitals overwhelmed, food substandard, malnutrition common, Why has this Country become so uncaring about both young and old? Common denominator is Poverty,

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Hywel

The common denominator is a corrupt Establishment that have lined their pockets with the taxes of the working and working middle classes whilst underfunding the public services we rely on to the point of very near collapse. If you think Labour’s the answer, think again as it appears that over half a million pounds has been channelled into the new Cabinet since 2023 from firms with contacts with private healthcare firms. https://www.thecanary.co/uk/analysis/2024/09/05/labour-private-healthcare-donations-nhs/

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Padi Phillips

Valerie, if anything, those of us on the state pension are living in something of a 'golden age' compared with people living on the state pension in the past. I completely agree that no matter which way we look at it, those of us living on the state pension are poor. I remember when I was young realising just how poor those living on the state pension really were. Even up until quite recent times, and the Winter Fuel Payment is evidence of that, state pensions were abysmally low. We have to thank the Tories, (and it gives me no pleasure whatsoever to give them credit, but there we go) for the introduction of the Triple Lock. We are a very powerful and influential demographic which has this new government, if not trembling in their boots, somewhat concerned and beginning to doubt the wisdom of their actions, such has been the popular backlash to the move to stop paying the Winter Fuel Allowance to most state pensioners. While the state pension won't deliver us into the lap of luxury, it is, if we are claiming all we are entitled to, more than enough to maintain body and soul and keep us warm, fed and clothed and maybe even allow a few of the nice things in life. That doesn't mean that it shouldn't be more. My own situation I think is a pretty common scenario. I receive the a full new state pension of £221.20 a week, plus around £13 a week from an occupational pension. I also claim Housing Benefit, which covers all bu £12.50 of the weekly rent. I also claim Council Tax Reduction, which completely pays my liability. I'm frugal with my electricity and gas consumption, and am fortunate that my housing association flat is at least moderately well insulated, (to 1983 standards, so not wonderful) and the heating system is run off a modern gas condenser boiler, which is reasonably affordable to run. So, with my state pension, and the small occupational pension, plus the benefits, I reckon I have an income equivalent to around £17,500 a year. It's not a massive amount, but I can't say that I have any real complaints either. More would be nice, but it is what it is. I do feel for those who are truly struggling, and there are always those who love to moan. I suspect that many who are pleading abject poverty are those too stubborn, proud or stupid to claim Pension Credit or the other benefits they could well be entitled to.

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Jack

The intergenerational issue has been massively overstated. It starts with erroneous statistics confusing correlated facts with causally related facts. To explain - yes, baby boomers were into houses at an earlier age than the current generation. Why? Baby boomers bascially didnt go to tertiary education, they entered the workforce at 16 or 18, so they were working for 3 or 5 years sooner than the current genration. Obviously by 30 more Boomers than the current generation will have bought houses. And what houses - no double glazeed windows, no central heating, barely a kitchen and so on. So, the Boomer home owning charts shwoing how many were in houses by 30 pays no attention the fact that the starter homes of baby boomers would be -in effeect nearly condemned now. But we just get charts showing the 'poor' now genration not having as many homes as boomers did when 30. But that's comparing apples with oranges and so proves nothing. Next, boomers are obviously more wealthy than those starting out in life - they have worked for longer and saved more. (See the current fact showing the avearge person now spends £30,000 on takeaway coffe in their lifetime - but boomers pend least and the youngest spend most.) Intergenerational unfairness? The bank of Mum and dad has been taking asolid beating for some decades and the Boomer wealth is now starting to flow to thir children and grandchildren... Intergenerational unfairness? A woke term with the subtext of I don't want to work just give me something for nothing..

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Padi Phillips

This is utter bollocks! I might agree to an extent that pitching the old and the young is something despicable, but the truth of the matter is that young people have it terribly hard nowadays. Not every young person has access to the bank of mum and dad and for many the future is grim indeed. It's not for no reason that the fastest growth of trade union membership is among young workers. There is also the inconvenient fact that up until 1979 the UK was becoming a far less unequal society, and something like two thirds of the population lived in social housing, which undermined the housing market so much that it kept house prices relatively sane. There was also a limit on the size of mortgages, of, roughly three times annual income, which also served to restrain house prices and keep them affordable to ordinary workers. So what if there is some statistic that says young people spend X amount on coffee. Back in the day when I was young there was certainly no shortage of young people who spent a considerable amount on alcohol on their nights out in pub and club, and on cigarettes. I don't know where you get your ludicrous ideas about double glazing and central heating from. By the mid 70s it was common to have both, either retro-fitted or fitted to new builds. Most houses also had kitchens, even those houses built previous to the widespread adoption of central heating and double glazing. Most, if not many young people now struggle to be able to afford somwhere to rent, and can only dream of buying a home, what with even the cheapest houses being 6, 7 or 8 times their annual income, if indeed they have a full-time job. Many struggle as part of the precariat, even those very highly qualified. Intergenerational unfairness is a thing, though it's not something planned by the older generation however they have benefitted massively from changed government policies that have seen house prices rise and a rise in general in inequality in this country over the past 45 years. There is no wokeness in the sense you misuse the term, but the young are very 'woke' to the fact that they are being denied a future. Many of then work phenomenally hard for little reward or recognition and no real prospect of their position changing. You might believe the myth that all someone has to do is work hard and eventually it will pay off, but most young people aren't so gullible.

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Linda Jones

No recognition here that the UK state pension is one of the lowest in the developed world, hence the high level of poverty among them. This is despite the fact that the UK is the fifth richest country in the world. The big problem is not intergenerational its inequality, greed and the meanness of the UK elites. A country where the few own more wealth than the majority of ordinary people put together. A country where the smallest of much needed pay rises for working people like rail workers or NHS staff is complained about while elites running off with £millions is taken as justified, often rewarded for failure. Where people in modest homes on modest incomes pay more council tax than those living in comparable mansions. The UK problem is centred around the unfairness and corruption built into our whole economic model.

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Ernie The Smallholder

There is no such thing as a 'Welsh Labour Party' just UK Labour. Nor is there a 'Welsh Conservative party' just a UK one. UK Labour party and UK Conservative party policies are decided in England where the majority of their organisations are based. In the UK there are red Tories and there are blue Tories. Either of them are not for you. Support only parties based in CYMRU, with independent policy making decisions from within CYMRU.

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