John Major is having a pop at the elite, allegedly!
In September, the New Statesman and the Intergenerational Foundation teamed up to run an essay competition for A level students. The topic was "has Britian robbed its children?" and the winning entry was by Conor Hamilton.
The message is clear: young people are lazily relying on the old. One reason this narrative is so effective is that there is a widespread anxiety today’s children will not value and uphold the efforts of the generations that came before them. It plays on a fear that young people are not fulfilling their part of an intergenerational contract, preferring to live their lives selfishly. However, what if the breach of contract is the other way around? What if older generations have been living an unsustainably extravagant lifestyle, leaving little for those that will come after them?
The immediate evidence for this would be the UK’s national debt, which has increased from 34 per cent of GDP in 1991 to 90 per cent. This debt is so large that the interest we pay on it is roughly the same size as our defence budget. Unfortunately, the interest will only increase as our debt shifts to just short of 100 per cent of GDP, as it is predicted to have done by 2015. It seems the taxpayers of tomorrow will be struggling with the debts of yesterday for a long time to come.
However, it is not only the profligacy of the last generation, commonly deemed synonymous with the previous Labour government, that will harm the young. The austerity measures pursued by today’s coalition are also unfairly weighted against young people. University funding and housing benefits for the young have been slashed, employment schemes have been abandoned and the Education Maintenance Allowance (EMA) has been scrapped in England.
Meanwhile, pensioners are exempted from caps on housing benefit, pensions remain triple-locked and universal benefits such as winter fuel payments, free TV licenses and free bus passes, all remain untouched. None of those benefits existed 16 years ago. Strangely, the current deficit reduction plan shows little concern for those who will have to pay the money back.
As a result, Britain’s homeowners have stopped investing in useful things like businesses, and have instead starting using their homes as an easy source of cash. Every time someone takes out a second mortgage or downsizes to make the most of their house’s increased value, they bring that over-inflated profit along, even though they have done relatively little to earn it. This cost is then paid by the people entering the market for the first time or looking to upscale. Yet again it is the younger generations that must over-pay because of the actions of the old - a cost which has been estimated at £1.3trn pounds in total.
This has dire consequences for the distribution of wealth, which has been shifting in favour of elderly in recent years. A Bank of England study found that in 2005, the average wealth of people aged between 25 and 34 had fallen to a third of its 1995 value, whereas the wealth of those aged 55-64 had tripled.
A lack of affordable housing and heaps of private and public debt won’t just deprive the young people of the chance to accrue material wealth, it will also delay their chances of becoming adults. This latest housing scheme does not address the real issue that WE ARE NOT BUILDING ENOUGH HOUSES!