The UK is no country for the young

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.

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.