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Opinion

The UK is no country for the young

07 Sep 2024 5 minute read
The Intergenerational Foundation has called on the UK Government to take specific steps to address the imbalances between the ages.

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.


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Hywel
Hywel
3 months ago

I think, Jonathan, that Labour have hit the better off pensioners, who didn’t need a winter fuel filip, to soften up the middle and upper classes ready for a big hit in the forthcoming Budget.
“Don’t complain about losing pension higher rate tax credit, aligning CGT with Income tax, and stopping Potentially Exempt Transfers”, the pensioners have taken a hit, you have to take some pain too….

Ernie The Smallholder
Ernie The Smallholder
3 months ago
Reply to  Hywel

State pension in the UK are already below the average for pensioners in most of mainland Europe.

Last edited 3 months ago by Ernie The Smallholder
Padi Phillips
Padi Phillips
3 months ago

There is absolutely no reason to pitch the generations against each other, as this article suggests should happen. The removal of the Winter Fuel Allowance is a despicable step that will see many state pensioners suffer. The idea that all pensioners but those claiming Pension Credit are wealthy needs to be challenged, as many who live on the new state pension receive just £221.20 a week, amounting to £11,502.40 a year – hardly a king’s ransom, and it makes them poor by any measure. To add emphasis, those claiming just the state pension, or maybe a little more it they… Read more »

Last edited 3 months ago by Padi Phillips
Mawkernewek
3 months ago
Reply to  Padi Phillips

I fully expect that by the time I get to state pension age it will be subject to a Work Capability Assessment.

Valerie Matthews
Valerie Matthews
3 months ago
Reply to  Padi Phillips

I am a Pensioner and receive nothing like £221,20 per week it is around £165.00 Because I am older than most, apparently I need £50 per week less to live on and will not receive proposed uprating either, Can someone explain to me how this is fair?Or are they simply suggesting we are ‘past our use by date’ and need bumping off?

Padi Phillips
Padi Phillips
3 months ago

Seriously Valerie, I think you should be entitled to Pension Credit if your income is really that low. I did a benefit entitlement calculation on the Age UK website based on the premise that it was someone on a full old state pension rate of £169.50 and no other money coming in, who owned their own home, lived alone and was in Council Tax Group C. Based on those figures the calculator suggested that someone in that situation might be entitled to an extra £75.55 a week, consisting of £48.65 Pension Credit and £26.90 Council Tax Reduction. Maybe you are… Read more »

Last edited 3 months ago by Padi Phillips
Valerie Matthews
Valerie Matthews
3 months ago

It is no Country for the very old either. Many sit shivering and live on a diet of toast and tea. Not daring to put an oven on because of cost of both good food and Fuel. I believe many will not survive the coming Winter, Hospitals overwhelmed, food substandard, malnutrition common, Why has this Country become so uncaring about both young and old? Common denominator is Poverty,

Hywel
Hywel
3 months ago

The common denominator is a corrupt Establishment that have lined their pockets with the taxes of the working and working middle classes whilst underfunding the public services we rely on to the point of very near collapse.
If you think Labour’s the answer, think again as it appears that over half a million pounds has been channelled into the new Cabinet since 2023 from firms with contacts with private healthcare firms.
https://www.thecanary.co/uk/analysis/2024/09/05/labour-private-healthcare-donations-nhs/

Padi Phillips
Padi Phillips
3 months ago

Valerie, if anything, those of us on the state pension are living in something of a ‘golden age’ compared with people living on the state pension in the past. I completely agree that no matter which way we look at it, those of us living on the state pension are poor. I remember when I was young realising just how poor those living on the state pension really were. Even up until quite recent times, and the Winter Fuel Payment is evidence of that, state pensions were abysmally low. We have to thank the Tories, (and it gives me no… Read more »

Last edited 3 months ago by Padi Phillips
Jack
Jack
3 months ago

The intergenerational issue has been massively overstated. It starts with erroneous statistics confusing correlated facts with causally related facts. To explain – yes, baby boomers were into houses at an earlier age than the current generation. Why? Baby boomers bascially didnt go to tertiary education, they entered the workforce at 16 or 18, so they were working for 3 or 5 years sooner than the current genration. Obviously by 30 more Boomers than the current generation will have bought houses. And what houses – no double glazeed windows, no central heating, barely a kitchen and so on. So, the Boomer… Read more »

Padi Phillips
Padi Phillips
3 months ago
Reply to  Jack

This is utter b******s! I might agree to an extent that pitching the old and the young is something despicable, but the truth of the matter is that young people have it terribly hard nowadays. Not every young person has access to the bank of mum and dad and for many the future is grim indeed. It’s not for no reason that the fastest growth of trade union membership is among young workers. There is also the inconvenient fact that up until 1979 the UK was becoming a far less unequal society, and something like two thirds of the population… Read more »

Linda Jones
Linda Jones
3 months ago

No recognition here that the UK state pension is one of the lowest in the developed world, hence the high level of poverty among them. This is despite the fact that the UK is the fifth richest country in the world. The big problem is not intergenerational its inequality, greed and the meanness of the UK elites. A country where the few own more wealth than the majority of ordinary people put together. A country where the smallest of much needed pay rises for working people like rail workers or NHS staff is complained about while elites running off with… Read more »

Ernie The Smallholder
Ernie The Smallholder
3 months ago

There is no such thing as a ‘Welsh Labour Party’ just UK Labour.
Nor is there a ‘Welsh Conservative party’ just a UK one.

UK Labour party and UK Conservative party policies are decided in England where the majority of their organisations are based.

In the UK there are red Tories and there are blue Tories.
Either of them are not for you.

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