Blaming the old

Posted on: 29 June 2011 by Alexander Hay

A think tank has a modest proposal

True menaces to society (c/o Cooljinny @ Flickr)

Patrick Nolan, Chief Economist for think thank Reform, has a great idea - blame old people for the nation's woes!

...The hole is simply too large to be covered by more borrowing or further taxes, especially when old and indebted countries like the UK are struggling to remain competitive. The only way to escape the debt spiral is radical action.

The main problem is that the post-war welfare state was designed for a young and growing population. Like a pyramid scheme, generous entitlements to retired people would be funded by younger workers, whose entitlements would in turn be funded by a new set of workers. This is simply unaffordable, and the problem has been made worse because successive governments have encouraged people to look to the state rather than taking responsibility themselves.

Not only is the number of people over 65 increasing, but the elderly are by far the most likely to vote at elections. This gives the grey lobby immense power, and politicians have been quick to spend large amounts to attract its votes. The result has been programmes such as the Winter Fuel Allowance, free bus passes and free TV licences, which might be popular, but lead to billions of pounds being spent on people who simply do not need it...

This is problematic for many reasons, not least the invocation of the old 'Welfare State As Ponzi Scheme' chestnut. The notion of us being 'competitive' is troubling too. No matter how much we lower our standard of living or lower our costs, we will never be able to compete at the level of the Indians, the Chinese and the rest of the developing world. Also, Nolan provides no proof as to why the 'perfidious old gits' don't need these benefits.

It's alarming for another reason - it demonises an entire swathe of the population, and unfairly too. While older generations had it better in some ways, with free university education, houses that were actually affordable and the sort of job security their children and grandchildren can only dream of, with all the hubris that comes from that good fortune, they were also paying a lot of tax and national insurance in good faith on the assumption that the government that took their money would pay them back in turn.

Nolan, however, sees the problem not as one of competing obligations, and trade-offs, but as a merely financial problem that needs to be solved by reneging on the deal:

...So while the Government must indeed face down the public sector strikes, and control the cost of these pensions, it needs to adopt other, equally controversial measures, not least decoupling the state pension from earnings and rethinking the universal Winter Fuel Allowance. It must also look at ways of citizens paying for some of their health care themselves, as in nearly every other major country...

In other words, old people should get used to being colder, less healthy and poorer. It's for the good of the market, you see. Nolan then unleashes his piece de resistance:

...Long-term care can and should be funded predominantly by its users, not least through the sale of homes: on recent estimates, those over 60 control more than 80 per cent of the nation’s wealth, and retain more than £1 trillion in unmortgaged equity...

This is a roundabout way of saying that older people, having been sensible enough to work and save over the years, should be punished for that and have it all taken away. Who benefits? Well, there are plenty of people who can afford their long-term care but begrudge paying tax or helping other people.

It's also a deeply undemocratic argument, demanding that the views of the old are ignored and they are forced to accept whatever settlement is imposed on them, regardless of their doing what they were told – paying and buying into the system. Meanwhile, it seems tax is unbearable for some, but pensioner poverty is a price worth paying. Reform itself is partly a charity and so avoids paying tax on some of its activities. But that's OK, apparently.

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Alexander Hay

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