This unseemly 'generation game' being played out by Labour and the Tories is dangerous

Inside Westminster

Andrew Grice@IndyPolitics
Friday 27 February 2015 17:32
While about £7bn has been cut from working age benefits by the Coalition, spending on pensioners has risen by a similar amount, according to the Institute for Fiscal Studies
While about £7bn has been cut from working age benefits by the Coalition, spending on pensioners has risen by a similar amount, according to the Institute for Fiscal Studies

Four days after David Cameron pitched for the grey vote by promising wealthy pensioners they will keep financial perks they do not need, Ed Miliband made his play for the votes of young people by pledging to cut university tuition fees from £9,000 to £6,000.

On the face of it, the motives of the Conservatives and Labour motives look rather cynical. If the Tories remain in power after the May election, they would cut the welfare budget by another £12bn. Mr Cameron could easily have found the first £1bn of that on Monday by means-testing winter fuel allowances, free TV licences and bus passes for pensioners. His refusal to do so means the next welfare cuts would fall on the working age population, including many relying on in-work benefits. The Tories are already targeting young people, saying they would have to do community work to get Jobseeker’s Allowance could lose their housing benefit.

While about £7bn has been cut from working age benefits by the Coalition, spending on pensioners has risen by a similar amount, according to the Institute for Fiscal Studies. The old will also get a taxpayers’ subsidy of £400m to fund the generous 4 per cent interest rates George Osborne offers in his eve-of-election pensioner bonds giveaway.

This week has brought a daily dose of studies showing how the young generation is losing out. One revealed how twenty-somethings and pensioners had changed places on the living standards scale in the past 35 years, a very dramatic social change. Another disclosed that more people now own their own homes outright than still pay a mortgage, as young adults struggle to get a foot on the property ladder. A third found that the biggest rise in poverty in the past decade has been among 19-25 year-olds, due to housing costs and stagnant wages.

No surprise, then, that the Tories enjoy an opinion poll lead among the over 65s and that Labour is ahead among 18-25 year olds. This gives the Tories a big advantage: at the 2010 election, 76 per cent of the over 65s voted, but only 44 per cent of 18-24 year-olds did. One reason why Mr Miliband stuck so rigidly to his 2011 plan on tuition fees is that he needs to persuade the young to bother to vote.

The Conservatives and Labour deny fomenting inter-generational war. Indeed, that would be pretty stupid, as it would risk alienating a big slice of the electorate when they scrabble for every last vote.

Mr Cameron argued that austerity was right because it would relieve the burden of public debt on today’s young generation. Today Mr Miliband appealed to parents and grandparents to support his tuition fees cut, saying they did not want their children and grandchildren to leave university with an average £44,000 of debt.

I suspect many pensioners do not want to be seen as the “selfish generation” who did very nicely from the rise in house prices and pulled up the ladder behind them, leaving today’s young generation likely to be the first in almost a century not to be better off than their parents. I also suspect many better off pensioners would be happier to give up Mr Cameron’s perks than he imagines. Pensioners worry about the education, job and housing prospects of their younger relatives. Many help out financially, and with vital childcare.

It may be happening by accident rather than design, but the Tory-Labour “generation game” is worrying. After all, we have enough divisions in the UK already. Scotland almost broke away last year and the tide of opinion there still flows towards independence. The north-south divide in our unbalanced economy will not be bridged overnight by Mr Osborne’s welcome but belated “northern powerhouse.” Labour sometimes flirts with the politics of envy, with its proposed mansion tax and yesterday’s clampdown on pensions tax relief for the wealthy. Conversely, the Tories were foolish to cut the 50p top rate of tax, which undermined their “all in it together” mantra.

The new dividing line in politics is causing concern. Ros Altmann, the Government’s adviser on older workers, said Labour’s tuition fees plan could provoke “generational envy,” adding: “Pitching young people against older people undermines the bond that society is usually built on.” Labour insists its pensions tax reforms are progressive because they would hit high earners rather than today’s pensioners. But the Saga group for the over-50s warned that Labour was “playing Russian roulette with peoples’ futures.” While education was crucial, Saga said, so was “a savings culture where people ensure they put enough by for their futures - whether that be for pensions or care.”

However, Angus Hanton, co-founder of the Intergenerational Foundation which promotes fairness between the age groups, said that young people might want to “tear up the social contract” between generations unless benefits were redistributed more fairly.

As one senior Liberal Democrat put it: “There have always been divides in politics – in geography, class and ideology. But we have never had such a divide over age groups. Playing one generation off against another is a very alarming development. Politicians should not breed divisions and mistrust.”

Whatever short term boost they might secure, a conflict between generations will surely not do the Tories or Labour much good in the long run. Wise Tory heads worry that their “it’s the economy, stupid” campaign offers little to the younger voters the party will need to win future elections. It leaves no room for Cameron The Moderniser who hugged hoodies and huskies -- much more appealing to young people.

This unseemly “generation game” is dangerous. Our politicians should stop trying to divide and rule.

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