Making Baby Boomers scapegoats and taxing us more is not the answer
Like it or not, younger people will have to be less reliant on the state than my generation has been
My name is Philip and I am a Baby Boomer. There: I’ve owned up. I am a member of the most pampered, indulged and fortunate generation in the history of mankind, responsible for all the ills of today, from soaring house prices to Brexit. I have stolen my children’s future. Am I not ashamed? Should I not pay the penalty for my good fortune?
David Willetts – himself a luminous example of this gilded generation – thinks I should. The executive chairman of the Resolution Foundation (RF) think tank has said that Baby Boomers will have to “reach into our own pockets” to fund the spiralling bill for public services. He added: “The age of tax cuts is over” – though I confess I had not noticed that it had even begun. Moreover, I am already funding the cost of services as one of the minority who takes less from the system than he puts in.
But I am still working, whereas many older Baby Boomers have retired, draw pensions and enjoy benefits that never used to exist, such as free TV licences and winter fuel allowances. I read recently that the Conservatives were hypocrites because they favoured capitalist self-reliance for the young but socialist paternalism for the old. But this extension of free stuff to the elderly mostly happened under a Labour government, not a Tory one. That it was maintained after the financial crash pushed national debt through the roof and slashed growth is further evidence that such handouts are politically hard to take away.
In fact, the Tories have been more generous to the young, with free nursery and childcare help. Unless it is being suggested that the old age pension should be withdrawn, then the Baby Boomers are guilty only of living far longer than expected when the welfare state was established.
The Resolution Foundation’s research is the basis for most of the reports on this subject. It has been widely asserted, for instance, that the Millennial generation is the first to earn less than its parents at the same age. But this is not true. The impression arose because the comparison is made with Generation X, whereas the parents of most Millennials are actually Baby Boomers. And, to be fair, the RF did not say parents but “previous generation”. It’s all about definitions.
These arbitrarily selected age cohorts go back 100 years or more. There is the Forgotten Generation (born 1896-1910); Greatest Generation (1911-25); Silent Generation (1926-45); Baby Boomers (1946-65); Generation X (1966-80) and the Millennials (1981-2000). The group of young people currently under 18 is Generation Z, which sounds somewhat terminal. If a generation is assumed to be about 30 years, then these time frames are too narrow.
But however questionable the methodology, we should avoid this blame game. Trawling through historical data to find a scapegoat for the difficulties facing today’s youngsters is positively toxic. Nor does it compare like with like. If consumerist trappings are a measure of wellbeing, then today’s youngsters have far more than we had.
They can buy an air ticket around the world for the same amount that I spent on my first hi-fi system. The communications revolution, free apps, free news, free films, free music; we had none of these. I am told we had free love, but that was before my time, sadly. Yes, we had free university, but only for about one in 20 schoolleavers, which was why the country could afford it. With the proportion in higher education approaching 50 per cent as a deliberate ambition of (Labour) government policy, this is no longer feasible. Jeremy Corbyn’s promise to keep the same levels of access but make it free while writing off existing student debt is madness.
The big difference between then and now, of course, is the affordability of housing. The ratio of earnings to house prices is currently around 7.6 times the average annual salary, compared with around 3.2 times in 1987, though the figure is skewed by London. In parts of the country, houses remain cheap relative to incomes. The gap between the least and most affordable parts has increased principally because so many people want to live and work in London and the South East. High prices are a function of supply and demand, not of the unbridled rapacity of Baby Boomers.
None the less, we have benefited mightily since the Eighties and have a good deal of equity wrapped up in our homes (though it will be needed to offset the damage to our pensions caused by Gordon Brown). Moreover, it is not a constitutional right to own a home by the age of 25. My father was 37 when he bought his first house.
I did not buy until I was 30 and the mortgage was horrendous, taking up 60 per cent of my income, because interest rates were in double figures.
This does not mean that I feel no concern for the Millennials. How could I not, since my two children are of that generation? But taxing the Baby Boomers more in order to hand the money over to the Exchequer to be squandered by the profligates of Whitehall and town hall is not the answer. Poor older Boomers will suffer; and if the well-off are free to pass their wealth to their children, they will in turn be less of a burden on younger taxpayers in their old age.
Baby Boomers did not design the welfare state that benefited them; and the prescription for closing intergenerational differences cannot be to devise more of the policies that got us to where we are now. Instead of provoking conflict, politicians should be focusing on how to ensure that today’s 20-year-olds can access decent health and care when they are 80.
Like it or not, that will require greater self-reliance, because unlimited state provision financed by massive borrowing and everincreasing revenues taken from a dwindling band of taxpayers is simply unsustainable. The future is never like the past; nor is it necessarily always a progression. The 40-year careers that the Baby Boomers enjoyed, which underpinned a comfortable middle-class existence, are disappearing. The rapid advance of automation and artificial intelligence will make life very different for today’s young people in ways that are impossible to predict. And if it all goes wrong, they can always blame me.