John Rentoul: Willetts banks on the silver vote

Many older people will gain under the coalition, and be unaffected by its most draconian measures

David Willetts is an unusual Conservative politician. The Minister for Universities and Science is a public intellectual, an egalitarian and one of the most interesting members of the new Government. He was nearly destroyed in opposition when he fought David Cameron's battle to commit the Conservative Party to the principle of non-selective state schools against the grammar-school lobby before he was replaced by Michael Gove.

In government, he survived the principal political event of late 2010 unscathed, while his Liberal Democrat boss, Vince Cable, the Secretary of State, nearly crashed his shiny new ministerial car. The new system of student loans is dangerous to politicians of all parties. It is well known to most of us as a Lib Dem Credibility-Shredding Machine. What is less obvious is that it is also the Great Elephant Trap for Ed Miliband.

Nick Clegg, the Deputy Prime Minister, gives the game away in the current edition of Prospect magazine, in which he describes the new policy as, "in effect", a "time-limited graduate tax".

What he means is that it is a 9 per cent charge on income over £21,000 a year, for 30 years, at the end of which most graduates will not have paid off their so-called loan in full, and will have the remainder written off.

Almost the only distinctive policy with which Miliband is identified is a graduate tax. So, by the time of the next election, the choice will be between the coalition graduate tax and the Labour graduate tax.

And the main difference between the two? Labour will, presumably, be offering to put billions more public money into universities to reduce the amount that graduates will be asked to pay back. If anyone can see how that is a story that ends well for the Labour Party, answers on a postcard, please, to John Denham, shadow business secretary.

No wonder, then, that it was Willetts who emerged from last year's student riots looking pleased with himself. Yet what a paradox: for he is the same David Willetts who, in his capacity as an egalitarian intellectual, wrote a book, published only in February of last year, called The Pinch: How the Baby Boomers Took Their Children's Future – And Why They Should Give It Back. It is an engagingly well-written survey in which he narrates British social history with a fine turn of phrase.

For example, he dismisses the imagined past in which we lived in extended families by declaring that England was "the first nuclear power". He writes: "Think of England as being like this for at least 750 years. We live in small families. We buy and sell houses. We go out to work for a wage."

With this kind of long view, he sees how the spread of home ownership among small nuclear families and the rise of house prices has helped to drive a huge transfer of wealth from young to old. In addition, he suggests that his generation has borrowed from its children's future to pay for its current spending; that it has taken more out of the welfare state than it has put in; and that it has despoiled the environment and left it to future generations to clean up the mess.

It does not take much to see a contradiction between the thesis of his book and the policies of the Government in which Willetts now serves, and indeed the specific policy for which he is responsible. The higher tuition fees are a way of saving money in the short term – cutting the teaching grant to universities by 80 per cent – and asking the next generation of students to pay for it.

Willetts is entitled to point out that, by raising taxes and cutting public spending over the next few years, the coalition is trying to avoid passing on an even greater burden of debt to the next generation.

Yet I doubt whether the other David Willetts, the one who wrote The Pinch, would be taken in by this. The argument between Government and Opposition over how quickly to cut the deficit is mostly a dispute over figures that fall within the margin of error in measuring the economy.

If we take the longer view adopted by the author of The Pinch, things such as house prices, tuition fees and pensions are more important in shifting the burden between generations. The coalition's policy of re-linking the state pension to earnings is one of the more important, and least reported, intergenerational transfers. It is like the Private Finance Initiative: a commitment to future payments that do not show up on today's balance sheet.

Goodness knows what the independent Office for Budget Responsibility will make of it when it completes its review of hidden future liabilities. It is easier to know what a psephologist would make of it, however, which is that the Government's policies seem designed to ensure maximum support among the over-55s – an electoral strategy to secure a bigger share of a growing market.

People in this age group are much more likely to vote, and much more likely to vote Tory. They have also suffered least from the "hard but necessary steps" of which the Prime Minister spoke in his New Year's message on Friday.

They are not affected by the cut in child benefit; their children have mostly left university and so are not directly affected by higher fees; pensioners do not even pay National Insurance contributions, which go up in April. On the contrary, their state pension will now rise in real terms. And who knows? By the time of the next election, interest rates may even have risen and started to pay something on their savings. Even the promise to protect NHS spending is a hidden subsidy for older people, who tend to use it more.

It looks almost as if David Willetts was setting out in his book not a criticism of intergenerational unfairness but a strategy for using it to win Tory votes in 2015.;