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Spreading the Budget pain (2)

Stephanie Flanders | 10:16 UK time, Wednesday, 4 August 2010

In the national argument over Budget cuts, some voices are louder than others. This week there have been warning voices coming from the public sector unions - you can guarantee that they will turn up the volume in the months to come.

Ministers may not respond, but their voices will certainly be heard. It's usually a lot harder for politicians to hear the voices of people who don't vote. And of course, people who are aren't born yet can't say anything at all.

If you care about fairness between generations - that is a big problem. It suggests that the demands of older people will always attract more money and attention than the demands of the young.

It also means that future generations are likely to get squeezed. The wrangling over spending cuts this summer will greatly affect them too. But so far I haven't heard many people fighting their corner.

David WillettsIn his book The Pinch, the Conservative David Willetts describes in forensic detail how the baby boom generation has prospered from the core trends in Britain's economy and society over the last few decades, usually at future generations' expense.

To take just a few examples: high inflation helped them pay off their mortgages quickly in the 70s and early 80s - then price stability helped them preserve their wealth, just as rocketing house prices gave them another massive windfall.

They also prospered from an influx of cheap foreign labour from the mid 1990s onwards, just when Generations X and Y were coming on to the labour market, and a shrinking labour force might have helped push wages up.

Now David Willetts is in government - presumably defending the rights of tomorrow's workers as minister for universities. We've also got the youngest chancellor sitting at No 11 since 1986. You'd think it was a pretty good time to even the score between the generations.

But when it comes to generational equity, so far his plans for the public finances and the economy get maybe a low B plus.

For the purposes of this discussion I want you to forget about the distribution of Budget cuts by income, or region, or gender (see yesterday's post). Just focus on what it means for different generations.

Then look at the "tough choices" that chancellor made in his Budget - and the ones he ducked. It's not a black and white picture, but more often than not, the tough choices involve cutting services or benefits for young and youngish people, whereas the red lines tend to protect areas that are especially important for older groups.

Mother and childConsider those benefit cuts: tax credits for families with dependent children are being withdrawn, with supplements for the youngest children removed and child benefit frozen for three years. A number of grants for pregnant women have also been abolished, and so has the Child Trust Fund. Lone parent benefits are also being cut.

By my reckoning, around £3bn of the £11bn in welfare cuts by 2014-15 that Mr Osborne announced in June will directly hit households with young children.

The rest of the benefit cuts come from changing the indexation of benefits from RPI to CPI (to save £5.8bn) and cutting the housing benefit bill by £1.8bn. Those cuts will affect people of all ages, but they are likely to affect older people rather less.

Why? Because the basic state pension was the only benefit to be increased in future years (alone among benefits, from 2012 it will go up in line with earnings, prices, or 2.5%, whichever is highest.)

Also, more than two thirds of people who claim housing benefit are of working age. Indeed, one of the arguments the government uses to justify using the CPI to uprate public sector pensions is that CPI doesn't include housing costs, which account for a much smaller share of pensioners' expenses.

Even more telling is the list of universal benefits that weren't cut. In line with the Conservatives' manifesto commitments, the winter fuel payment, free bus passes and free TV licenses for older people have all been protected, even though most of the £4.2bn a year spent on them goes to people who aren't poor.

George OsborneThe chancellor has said he's in the market for further benefit cuts which could make things easier for departmental spending. As one senior Conservatives said to me shortly after the Budget: "It's almost as if he's daring the cabinet to push to abolish the winter fuel payment."

So yes, this is a work in progress. But on the spending side, too, you'd have to say that older generations were being protected. The school building programme is being axed, and public investment generally is set to fall by half (a decision by the old government which Mr Osborne has not reversed).

By releasing local councils of their obligation to meet housebuilding targets, many experts say the government will help to prop up the value of the baby boomers' houses as well.

Times will be tough for the NHS, but it is the only major department whose Budget will continue to go up in real terms over this Parliament of pain. The figures on this are patchy and out of date, but in 2003/4 nearly 45% of total health spending in England and Wales went to the 16% of the population over 65.

At this point you may think I've completely lost the plot. Of course, you'll say, we protect the elderly, and the NHS. And of course most of its Budget gets spent on people at the very end of their lives. But that's what the welfare state is all about - not one generation stealing from another, but one generation doing for their elders what they hope their children will do for them.

All that is true. But, as Mr Willetts describes, the baby boomers have done rather more than that. They've fixed the system so that they get more money out than they are ever going to put in. He reckons the average member of this lucky generation will get 118% more in public benefits and services over the course of their lives than they have paid in taxes.

The key point is that a lot of the goodies that have been promised to the baby boomers (and the smaller postwar generation before them) will not be around for the generations that come after. So those young people are going to be paying more into the system than they take out. The longer that politicians wait to even the score, the greater the relative burden on the young.

The rise in house prices has tipped the balance even further the baby boomers' way - letting them consume more than other generations during their working lives and after they retire as well. To cap it all, they've presided over many years of government borrowing as well.

As Ray Barrell and Martin Weale from the NIESR point out in a fascinating article for the Oxford Review of Economic Policy [subscription required], this imposes a double burden on future generations: not only do they have to repay all that debt from their own income (future) income, but that income may itself be lower because by borrowing for current spending, the government used up national savings that could otherwise have been invested.

This isn't about the rights and wrongs or running a deficit in a recession - or when and how quickly to bring it down. It's a much longer term question: whether this government, or any future government, is going to begin to take up the cause of younger generations, many of whom could face a much bleaker future than the generation now starting to retire.

Future generations don't care if we have a bad few years. As long as the Mr Osborne isn't derailed by a weak economy and actually follows through on those deficit plans, they'll give him a B plus for borrowing less than Labour planned.

But for today's under-40s and those to come, you'd have to say the coalition government could do better. You can think about how while I'm on holiday.


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  • Comment number 1.

    Your logic on the current cutbacks is good, but your conclusions are flawed, I'm afraid.
    First, the debt crisis is a short(ish)-term thing, brought about by the last government's over-lavish spending.
    The current government promises that the economy will bounce back and that prosperity will return. If the working-age population carry the bulk of the short-term burden, you will also enjoy the bulk of the prosperity increases in future decades.
    We baby-boomers won't be around for too long, drawing our benefits but contributing little apart from income tax on our personal pensions, VAT on our spending and council tax on our homes. The current working population will soon be rid of us.
    When you retire you'll do so from much higher levels of income than we enjoyed, and will benefit from all the progress to be made in health care over next few years. You'll also inherit the assets we leave behind.
    So don't worry, Stephanie, and enjoy your hols knowing you'll be fine in the long term.

  • Comment number 2.

    What about the bank of mum and dad which is being well used by many of the rising generation. It was not open when I, and most of my peers, were their age. A more fundamental question is why has not the enormous leap in technology and productivity not generated enough wealth to sustain a good living across the generations? Perhaps it is the level of non productive citizens (7 - 8 million) might be a clue. Shaking staff out of the public sector is not going to help the younger generation accumulate capital. Perhaps our iniquitous tax systems and the massive concentration of wealth in few hands may be a factor. What plans have this government (and what the last did) that clearly helps the rising generation but not at the expense of the boomers - the cutting the deficit is top priority?

    It is an excellent thought provoking blog but it does pose the resentment/envy culture and does not challenge the dominating race to the bottom ideology.

  • Comment number 3.

    You are spot on Stephanie.

    Generalising, many of the 50 plus generation have enjoyed massive uplifts in property prices from the 1970s to the mid Noughties, many will have either been in overly generous final salary private or public sector pensions, and stockmarkets broadly have boomed from the seventies to the late nineties.

    Contrast that with the under 40s - House prices for many are unaffordable, they will not grow the way they did 30 years ago and the previous benign mortgage and loan to value market has gone for the forseeable future. Pension schemes, private and public, will generate far less over the next generation because only now are their true costs being appreciated. The direction of stock markets cannot ever be safely predicted but the UK stockmarket is still 20% down from levels of the late nineties.

    A difficult one to solve.

  • Comment number 4.

    My perspective is as a baby boomer.

    Yes, I expect to leave a valuable house at least to my children (Mrs Thatcher's cascade down the generations), so they'll be OK. But, I go against type as a middle class Tory and think that inheritance tax at present rates will go some way to rebalancing the situation. Indeed, perhaps the threshholds should be lower.

    Different times, but today's generation need to recognise where they are better off than us baby boomers - those of us who in our youth drank in halves, spent 6/11 (c35p) thoughtfully and occasionally on a 45rpm record, had modest, brief holidays in UK, eating out a rare treat etc. Not to mention today's immeasurably better health and welfare services, with the beneficial outcomes and life expectancies that follow.

    So, I know we've benefited from all you report, but social aspects to one side, things should only get better.

  • Comment number 5.

    I remember complaining a few years ago to my father, who was then 75, about lack of money, and I'll always remember his reply:

    "It's OK for you, you can always go and earn some more, I can't."

    Yes, it's tough if you are young and you haven't got a job, or perhaps only a poorly paid one, but (assuming you are able bodied) you do have the physical ability to do something about it whereas, more likely than not, an elderly person does not.

  • Comment number 6.

    The nationalised banks are making a profit.

    If we all bank there, UK PLC's debts will be paid off in no time.

    Crisis over

  • Comment number 7.

    Whoa now.

    What about the stupenously large borrowings that paid for the first and second world wars.

    And dont forget these borrowings were paid for in lives lost and blighted by war.

  • Comment number 8.

    In developing countries it is the opposite, the equivalent of the lucky baby boomer generation is being created. So in the future one might see a "convergence" of unfotunate current generation people in the west and fortunate generation in the developing world

  • Comment number 9.

    There will always be winners and losers. What you have omitted from this discussion is the massive transfer of wealth which takes place as younger generations either live at home for much longer, subsidized by their parents, or when they inherit assets, such as houses. The state may pay out more to the elderly, but private individuals generally pass their assets on to their children. This is also at the heart of the long term care funding debate. It is the children who have most to lose if houses have to be sold to pay for care.

  • Comment number 10.

    “It is incumbent on every generation to pay its own debts as it goes. A principle which if acted on would save one-half the wars of the world.” Thomas Jefferson.

  • Comment number 11.

    Thanks Stephanie for your very informative article. The current welfare and pensions arrangements are skewed towards older generations and politicians have not made the tough decisions over the years to balance that. When the state pension was introduced, the average life expectancy was in the 50s, retirement ages of 60 to 65 were affordable. Now life expectancy is in the 80s, retirement ages of 60 to 65 are not affordable. Since 2000, the Government has increased the national debt as a % of GDP, this will have to be paid for by the young. However, the national debt reached a peak of 250% as a % of GDP in late 1940s and has steadily reduced until 1990. Consequently, the baby boomers did help reeduce the debt, it's just unfortunate that it is now rising.

    At least interest rates are low. Older generations tend to have more savings and younger generations more debt so the low level of interest rates is rebalancing the effects you outline above.

  • Comment number 12.

    In so many ways this is just so depressing - a tale of greed and short-sightedness played out on a national scale.

    For some reason (no doubt because it suited everyone who was alive at the time) we misinterpreted a one off demographic fluke as the future norm.

    During the '90s it was starting to be considered the norm that you would start work some time in your 20s and retire in your 50s - giving you 30-35 years of working life. Scaled up nationally this meant that each 70-80 year lifetime was supported by 30-35 years of work. Or put it another way every month you worked had to support you for 2 - 2.5 months.

    How people out there save over half your take home pay every month? Not many, I bet.

    The only way to square this circle as to engineer 'growth' that would mean our present day money would have more spending power in the future so we didn't have to put so much aside. As has been discussed on this and Robert Peston's blog we are now realising that a lot of this growth was really inflation, and our spending power hasn't increased in real terms nearly as much as we thought. And nor can we expect it to in the future.

    We are not facing up to this yet - the excesses of the boom have not yet all wound their way out of the system, due to zero interest rates, quantative easing etc keeping the money supply inflated. The only viable solution seems to be that the gerneration coming to power now - thats Osbourne and Cameron's generation, and also mine - are going to have to take a huge hit for the sake of our children. Otherwise we are just going to build on the mistakes of our parents.

    Are you ready?

  • Comment number 13.

    It would be foolish to think of arguing that there is no problem looming for coming generations; what I would argue is that somehow the baby - boomers (of which I am one) are somehow at fault. The vast majority of us lived and worked in the world as it was, neither having nor seeking any influence about the rules by which we had to live beyond putting a cross on a bit of paper every now and then. Although it cannot have been universally true we spent our time (and money) based on the hands we had been dealt; the dealing was always done by somebody else.

    Now a politician comes along and tries to tell us it was "our" fault; while we all have to accept full responsibility for our actions (for good or ill as the case may be) the real blame lies with those we elected to govern us, and I would submit most of *that* blame lies with the recently deposed one.

    It wasn't the baby - boomers as a group who decided to rack up unsustainable levels of borrowing. It wasn't baby - boomers as a group who decided to hand over large quantities of taxpayers' money to a financially insatiable and incontinent organisation such as the EU. It wasn't the baby - boomers as a group who decided that there had to be free movement of all EU citizens. It wasn't the baby - boomers as a group who threw open the UK's borders to more or less anyone who wanted to turn up, coupled with making asylum all too easy to claim.

    Our worst mistake - and I have to admit that it was a pretty big one - was to trust that our elected politicians had the faintest notion of the consequences of what they were doing; given that politicians cannot see beyond the next election we ought to have realised what might happen. But even then, had we recognised that, what could we have done about it?

  • Comment number 14.

    Steph, this seems like a self motivated rant, written in haste, with many flaws in your argument. For example, the post 65's have no way of boosting their incomes in these inflationary times (have you seen the rate savers get!) so if the govt takes away (or rather reduces) the benefits/healthcare for this vulnerable group they have no way of compensating. At least (most ie 80%+) of those aged 18-65 are healthy and capable of boosting their incomes. Also, the wealth tied up in property (of the baby boom'ers and older generations) will virtually all get passed on (in the not too distant future) to their younger heirs who will then also benefit from any 'luck' they have have enjoyed in the last 30 years. I do feel sorry for today's graduates who are leaving with average student loan debts of £20K+ who will struggle to get jobs in this harsh economic climate and who will also really struggle to pay off their debts whilst trying to save their 20% deposits for the overpriced properties. Instead of extending or loaning more money to the banks, who clearly do not deserve it, why does the govt not invest in building affordable 'green' housing on the brownfield sites owned by the govt anyway which will create jobs in construction and management, give the govt an asset base which can later be sold and provide homes in the right areas which will hopefully bring down property prices to a level in line with historic trends.

  • Comment number 15.

    The young will have a tough time of it for sure and I hope they are given the information they need to save for a reasonably comfortable later life (I was going to say retirement but I realise that is becoming a non-attainable ambition). What people forget when talking about the baby boom generation is that whilst some people may have been lucky in keeping their careers, benfiting from house price inflation and stock markets, many others have had to deal with several recessions, completely new landscapes brought about by changing technology and also having to change careers several times. I have never been out of work since graduating in the mid 1970s but only for the last 8 years have I been in a position to save consistently for retirement. Now the grandchildren are coming along, the Government wants to change the pension scheme, with some justification, but this bland assumption that to be in your 50s means you are one of the lucky few is very misleading.

    Young people must realise the consequences of not saving and not contributing to a pension scheme, however far off retirement may seem.

  • Comment number 16.

    Without being too cynical, who votes in greatest numbers? Is it (a) under 30's (b) 30's to 50' or (c) over 50's? I bet you all get that one right! Turkeys don't vote for Christmas. Wonder the demographic of Tory voters? Is it (a) over 50's or (b) over 50's or (c) over 50's? Or to put it another way how many young people bother to vote and if they do then who do they vote for? Shocking the Tories should be looking after their own.
    To make a change or two: lower the voting age to 16 and make voting compulsory. Policies could then change a little to reflect all of our scoiety.

  • Comment number 17.

    Us older generation may not have suffered the cuts as much as the young, but what the 65 and over will lose out on is the extra personal allowance of £1,000. Before the election the Lib Dems promised that everyone would benefit from these tax allowances and since nobody seems to have commented on the 65 and overs not getting it. My husband has a small company pension, which takes him into the taxation bracket and this will remain just as it is now from next April. We do have to pay the increase in VAT and the no doubt increase in our council tax. I don't think that relating the pension increase to earnings will come into effect as people will be getting low pay rises. 2.5% will not cover the increases that we have to pay without the benefit of an increase in personal allowance.

  • Comment number 18.

    Willets is known as two brains so when he wrote this book he had obviously found he had left the spare one at the cleaners when the first one broke down.

    The argument is just tendentious rubbish.

    Having been born in 1948 I can remember rationing, a society without consumer goods and a time when most people did not have a car.

    I can also remember the Cold War and the threat of imminent nuclear annihilation.

    I was one of the fortunate ones who went to university on a grant which was a continuation of the pre-war system of scholarships which lifted my parents from out of the slums their parents knew all too well. However, my wife left school at fifteen and you should get her on the subject of the young today. Talk about an ear-bending! I think I will send her to talk to Willets: he will need a third brain to recover!

    As for paying off a mortgage in the Seventies: get real! I lost a good job following the recession in 1973 and did not recover financially for another ten years. Yes, I remember the Pay Policy of the Heath, Wilson & Callaghan governments. Yes, I can remember the recession of 1981 and seeing nothing on the main-road at midday. Yes, I can remember interest rates on my mortgage at 15%. Sure we did get MIRAS but then this was only because there was so much sub-standard property that needed repair and restoration on which we paid VAT. Yes, I can remember my first ever central heating system and my first fitted carpet!

    So much for memory lane.

    We paid off the Second World War in 2001 I beleive. My Dad who fought it died in 1992. Before he died he said he was pleased that my generation did not have to fight a war as his had to and his father's had to. He felt this showed it was all worth it. I honour that thought but I doubt if Willets even understands it. What a generation having a better life: how dare they!

    I would agree that our affairs have been terribly badly run since 1945 largely because the benefit of the entire nation has been placed secondary to the interests of certain groups. These are the people who have run our country into the ground; people who have never got up at six in the morning to meet a pay-day. What do they know? Just who do they think they are?

    What we need is to define our common needs, see how we can afford them and then set about working to earn them. Adding value through my own labour is all I really know and is all what the country should expect from anyone and they should be facilitated to that end.

    To my mind there has been far too much government in this country, most of it inefficient and some parts downright corrupt. The cuts the middle classes are getting upset about are needed because the money has all gone. Gordon Brown and his friends ate all the pies!

    We have only one thing to do and that is work for our living. The economy should be focussed on getting unemployed people into gainful, value adding work. It should not be focussed on polishing the superstructure. It is a time for small but effective government. It is the time to get the country back to work, that way in small increments we can build a better society, more equal, more free and unbowed before the manipulators and exploiters who have put us where we are now.

  • Comment number 19.

    I have not been you biggest fan, but this article is superb. You are of course correct. The baby boomers will be remembered as the most selfish generation who ever lived. Their parents funded larger families, allowing them to enjoy comparatively lighter tax bills than would otherwise have been the case. They then have small families, increasing the tax burden on their children. Your points about inflation, the advent of Thatcher, and then as they get older vote in Blair and Brown are well made. They made house building difficult, and then have the temerity to complain about the immigration of people who do the jobs that the children they should have had could have done.

    Your point about the under 40s having to pay for their parents selfishness, at the cost to their own services and growth prospects. If I hear one more old person whining about how much more I should be doing for them then I may scream. 50% tax is apparently not enough. "You can do more", to paraphrase our former PM.

    There is however an answer. I am emmigrating at the end of the month. I, and my wife, are well paid professionals, but believe that the demographics of this country, and the selfishness of the old, make raising a family here a thankless prospect. These people really are attempting to eat their young. To all the young I say, pack your bags, leave tonight.

  • Comment number 20.

    It's important to note that this is not a problem introduced by the Conservatives, or the previous Labour government. There are a number of generational imbalances in the economy that will need to be addressed sooner or later. These include the unfunded public pensions, currently not normally treated as part of the deficit, and our current pension system which was designed for a much smaller number of pensioners, but as a pay-as-you-go system is currently unfunded.

    If nothing changes by the time most of us retire the system will be unsustainable: we will need much lower benefits, much higher taxes, or much more borrowing. Raising the retirement age is part of the solution (as people living longer is part of the problem) but it's not all that needs to be done. The recent crisis has shown the limits of borrowing, and it's not clear how much more we can raise tax.

  • Comment number 21.

    "the economy will bounce back" ???

    Leaked Treasury paper reveals expected 1.2M Public sctor jobs will go.
    Darling's plan to bring forward capital works plus end of Olympic construction = 500,000+ building jobs going in next 128 months, as projects are completed and no new work starts.

    So tax take will go down and welfare bill will go up - rebound???

    The important factor about the generations and storing up trouble for the future that I see is based on projecting the CASHFLOW the current generation.

    1. They can't get a job, so go into education - that racks up big debts, which Boy George wants to commercialise - it seems a racing certainty that fees will be allowed to rise considerably.

    2. They can't get on the property ladder due to lack of affordable mortgages and shortage of property, so they rent - so long term equity is built up.

    3. Student loan debt plus rent plus depressed wages in recession means they don't pay into a pension - no money left to do so.

    4. The current generation reach retirement - no housing asset sale to fall back on plus no pension - equals HUGE long term welfare liability is being stored up for the next generation to pay for.

    Conclusion - all student fees do is to shift the public spending liability from being a modest amount now for 3 years spent on education to a huge amount in 50 years on pensioner poverty welfare that will last much longer as life expectancy rises. If you're looking for a totally irresponsible approach to public finances in the long term, this is it. It consigns the current school leavers/students to a much lower standard of living with the prospect of penury in old age.

    Actions - accept that education benefits the whole of society and therefore pay for it out of general taxation - then implement a system of compulsory pension contributions with defined benefits on the basis of a pay-as-you-go scheme which doesn't take the risks existing pensions do by gambling in equities.

    Take those 500,000 building workers looking for jobs and get them to build affordable housing - this increases the supply of housing and reduces the cost of welfare for rented housing.

    Finally why should the baby boomers reap the benefit of massive rises in house prices? There's a pressing case to tax excessive gains on higher value properties when they are sold, which could help pay for the education costs - this would transfer the cost of our kids' futures to the generation taking the excess profits out of the rigged housing market that has fuelled the affluence of the baby boomer generation.

  • Comment number 22.

    To start I declare my position as a baby boomer, born on the first day of the NHS, and having benefited from all the benefits aforementioned. But to say, as Mr Willetts claims, that us baby boomers rigged the social system is, typically, to take the Thatcherite view on society, that everybody is in it for themselves. No, it was my parents' generation that energetically put in place the welfare state, because they could remember the aweful conditions that their parents went through. I realise being an economics commentator tends to blinker your view of society, pound signs before people, but let the realities be based on historical fact. Bevan was not a baby boomer, but his vision of health care for all, provided free at point of contact, was to negate the previous history of little or no health care for the majority. Likewise the Butler Education Bill of 1944 was to enable all to benefit from state education rather than the few, resulting from the levels of illiteracy found in conscripts during the Second World War. Pension schemes were in place long before the baby boomers arrived, and their intended benefit for the limited middle-classes who initially were the only ones who could afford such luxuries, were through expanding economies spread across an increasingly aware "educated" public.

    In terms of the pensions fiasco, let us not forget the Thatcher introduced the now increasingly defunct annuity pensions, encouraging vast numbers of baby boomers in the 1980s to take money out of their secure company pensions and join ponzi-endowment-annuity private schemes. It was on Thatcher's watch that Maxwell set in trend the employer's abuse of pension funds; the introduction of "pension holidays" for supposedly over-funded pension schemes that now have "black holes". Finally, as the well known phrase indicates "you cannot take it with you", so unless the Willetts of this Tory regime take it from us, we baby boomers will be redistributing vast amounts of earnt wealth to our future generations. We, the baby boomers have paid considerable sums to ensure our offspring came out of university with no debt; will support our offspring, as our parents did, through the early years of establishing a stable family situation.

    The real cause of our financial problems, not the Tory fanfared Labour investment into better schools (and subsequent improved results) providing ever increasing numbers able to proceed to higher education, but the financial systems without restraint introduced by the non-baby-boomers Thatcher and Reagan and their fanatical belief in "market forces". Well, reap the benefits of the policies introduced in the 1980s and early 1990s, here is the true cause of your ills. Yes, the Blair/Brown years carried on the laisse faire attitude to the banking greed inspired by the earlier evil pairing, but they did put in place various checks and balances to protect the weaker/poorer members of our society, and the disenfranchised young. My parents were forced, through financial considerations to leave school at 14, through their own efforts they progressed to well paid secure employment, a thing that their parents did not have. In the progress they personally made, they ensured that I did not suffer the difficulties they endured, and likewise I am doing the same for my offspring. A "caring society" is not concerned overduly with money, but with people, a society where those who have the good fortune to succeed in life help those without the privileges and advantages not given to all. My wife and I spent our working lives in education, providing secure starts for the many children and young people placed in our tutorlage, we paid into a compulsory scheme, that, if we had left after 5 years service, would have been held until our official retirement age, paying out very little as a result. We both chose to stay in what was for very many years a poorly paid careers, not for the benefits to be accrued in retirement, but because we felt bound to a system that helped others over and above ourselves.

    The Tories, the Cameron/Osborne boys club, have produced out of the hat a vision of the world far more pernicious than any Thatcherite horror movie. Where privilege will extend to taking anything they want from anybody, excepting their chummies in the banks, property and doing rather well already. It used to be a case of blaming the previous government, the real change being when New Labour turned out to be the same as the previous government, only in later years making serious attempts to redress the extreme inbalances in UK society. It is the children of "the flower power, peace and love" that have turned out to be the true villians, turning care for all into care for self. Making money the be all of all things, turning the world into a "restricted practice" where few own most, while many provide the means. As with all things "coalition" the blame will lie elsewhere, we are turning into a "blaming society", increasingly locked behide our doors, brain washed by the Simon Cowells of this world, ever fearing the intrusion of others. For all the hardships my parents', and grandparents', generations had to face economically they did have one thing, that McMillan and his "you have never had it so good" materialistic policies destroyed, which was strong community and suppiort by others. Devious Dave says he wants to introduce a "self help" society, but demonstrates he as little understanding of what social structures are required, and in fact meaning "help your self to our society" as he and his chummies privatise all and sundry in social welfare.

  • Comment number 23.

    Wrinklies like me do benefit in lots of ways. Superannuation is tilted in our favour. So are house prices because of the way 'planning' rations supplies more tightly than any other cartel. In 2012 our pensions will be further upgraded and paid for with the NIC's paid-in by younger workers. Moreover, all our other pension pots represent transfers from younger workers to ourselves in disproportionate amounts.
    How has this exploitation happened?
    For a start, older folks are much more likely to join political parties and to vote. We lobby Councillors more aggressively to restrict housing developments, (which forces up the value of our properties) and we defend superannuation schemes and the NHS that cream off your contributions in our favour. We do all these by lobbying harder than youngsters do.
    That’s also why a hung parliament is even more likely to tilt policy in the interests of older voters. Look around at the people who attend the Party Conferences – especially Conservative ones. Ask yourself: if these are the people politicians are having to listen to, is it any surprise that they favour older voters’ interests over yours?
    So the young only have themselves to blame for this covert robbery: they are much less likely to take interest in public policy that really matters to themselves. They leave voting to older electors who seek politicians that favour wrinklies’ interests in higher pensions, expanded NHS, rationed housing developments and so on. Politicians need our (wrinkly) votes and will pay for them with your money!
    If anyone under 30's reading this - for you this is a clear warning to get involved - don't say you weren't warned!!

  • Comment number 24.

    I keep hearing it about these baby boomers but don't let's forget two facts: 1) baby boomers paid about 50% more income tax than young people today. I remember 30p in the £ (or 6/- as it was known until 1972);
    2) Pensioners don't get a particularly good deal. ALL public utilities have increased way over inflation for years - in fact, Water companies take it as a right to raise their rates by so-many % above inflation. Council Tax is has been above inflation for about 15 years, energy prices have shot up over the past 5 years.

    In spite of the Tories this is unlikely to change.

    Very few pensioners indeed are comfortably off. A fraction of a percent are rich and the likes of Fred the Shred and Tony Hayward are an even tinier percentage.

  • Comment number 25.

    thank you for yet another well-written controversial blog.

    Lets be clear here. The main suffferers are young people who have not got a job. Many (but by no means all) of whom have got zero relevant qualifications - so that's their fault then, isn't it? I don't entirely think so. I think that schools have deteriorated by being target obsessed and suffering from micor-management of a restrictive curriculum, and attenmptiong to over-academisize education ( a form of introverted intellectual snobbery). It seems that you need a university degree to do anything these days, whether it is needed or not. As a result, many pupils fall by the wayside and become unemployable. Surely schools should teach the basics, and find out what pupils are good at, then use that enthuiasm to motivate learning of relevant skills (e.g arithmetic for bricklayers). If we are not careful, we will end up in about 10 to 20 years with a society full of crap philosophers and crap plumbers. Then we will need to encourage more workers from overseas who have come from cultures where education has more relevence to employment.

  • Comment number 26.

    "They also prospered from an influx of cheap foreign labour from the mid 1990s onwards, just when Generations X and Y were coming on to the labour market, and a shrinking labour force might have helped push wages up."

    Might have?


    Is the law of supply and demand operating in the labour market or not,and if not,why not?

    Either the baby boomers prospered by the influx or they did`nt.

    An "influx of cheap foreign labour" btw,that nobody voted for and many consider to be a de facto invading army minus the uniforms and ordinance.

    "Future generations don't care if we have a bad few years."

    What,you`ve said before that Air Strip One is in "recovery mode"!

    I would`nt like to put any money on there even being a future generation here in Air Strip One if a certain hypocritical non NNPT-signatory nuclear-armed rogue nation and it`s western establishment supporters get their war-mongering way with their plans for mideast war version 3.0 and it all goes pear-shaped for "them".

    "As long as the Mr Osborne isn't derailed by a weak economy"

    Again,why the equivocation?

    We`re in "recovery mode" don`t ya know.

    A few more "influxes" of "cheap foreign labour" "might" do the trick.

  • Comment number 27.

    Darn it! Your inter-generational challenge was here all along. I should have guessed today's title might (like yesterday's) be a little deceptive!

    So here we go...

    "that's what the welfare state is all about - not one generation stealing from another, but one generation doing for their elders what they hope their children will do for them."

    My A-Level History teacher taught me about a chap called the Duke of Westminster. She taught me his family had a principle: that the estate passed on to the next generation should be no smaller than that inherited from the generation that went before (presumably that assessment was made in what Economists, such as yourself, would call "real terms"): the gift to previous generations was the ongoing strength of the Westminster name.

    Her Majesty Queen Elizabeth I appears to feel the same:

    So, somewhere along the line, have other people in Britain started losing sight of the future?

    Mr Willets is a brainy chap (allegedly, like the chap played by Steve Martin, he has the brain-equivalent of Doctor Who and Phil Collin's two hearts; incidentally, where is the drama about the men with two souls/spirits?).

    "The Pinch" sounds like it is "on the money" (as well as being a beautiful double-entendre); and, you are right, there is something to be thought about over the holidays: how an asset manager would manage a portfolio containing the children that the UK educates.

    People are, perhaps, our Nation's greatest asset. Can (should) that asset manager acquire or divest? What would Hermes or another fund do? And (given its frequent attraction to the short-term) is Economics the right discipline to be making the assessment?

  • Comment number 28.

    I'm just under 30 have a good job and deposit, but can't afford to buy. That leaves me renting, which reduces my ability to save for the future; effectively i'm paying off the mortgages of those older than myself (or lining foreign investors pockets). It may take decades for wages to rise to a level matching house prices. Interest and hence mortgage rates won't be going anywhere for a long time. So i expect to be renting for a long time to come. As for reaping the baby boomers wealth through inheritance, that's hopefully another 20 years away, and highly liable to be taxed.
    I don't blame anyone for this situation, life & generations go through cycles. It's nature. However, that doesn't stop me feeling a little bitter.

  • Comment number 29.

    P.S. Isn't Willetts the minister in charge of universities who is proposing to close the 7 nanotechnology centres established under the previous government? How is this preparing for the future, when a major research and devlopment area that will provide jobs and income for generations is to be nipped in the bud. "Pinch" seems an appropriate title for a book by an individual, who for the sake of fiscal ideology, will pass a growth technology to the Amercians and Japanese who hold these very same centres in high esteeem.

  • Comment number 30.

    Speaking as a baby boomer due to pay 50% income tax this year, ,and not forgetting top rate council tax, VAT and taxes on pension earnings .....I'd say that my offspring will each get a million quid when I pop my clogs and won't be doing too badly, not forgetting years of school fees and university tuition and living costs, probably free cars and deposits for their houses .... the state too will get its pound of flesh with its 28% capital gains tax and 40% inheritance tax ......and a heck of a lot more than I got handed out to me as a youngster when I got nowt on a plate.So do I feel sorry for today's minimum-wage-guaranteed and EWTD- pampered poodles?
    No! ............Not one little bitty bit.

  • Comment number 31.

    It's interesting isn't it, that nobody likes to think that they've lived in an inconsiderate way.

    The simple truth is that 99% plus of us live concerned about the effects in our lifetime, rather than the longer view. It's natural that as humans we do this. However to stop this continual bust and boom we've got to look at a much longer period than a 5 year government or two. Think 25 to 50 years minimum.

    We've tried this with various laws, but it seems that power and the pursuit of money will always repeal any law or principle to suit their immediate will ( Glass-Segal, selling gold, relaxing trade rules etc, etc). I really don't know how you can have a fixed set of principles that can be policed and not altered at will by the powerful.

    So ultimately we are all to blame: every generation has let those who seek money and power run the shop for short term gain, rather than focus on what is best for the UK over the long term.

    I guess it's just Human nature to think small.

  • Comment number 32.


    What do you expect from a Government comprised of middle aged white men? - diversity?

    Come on Stephanie - it's the same question as yesterday - why would you think the answer has changed?

    What will it be tomorrow "Have dogs been unfairly impacted by the auserity measures?"

    Basically anyone who isn't white, middle aged, male and works in banking, high up the corporate ladder or politics - IS GOING TO BE IMPACTED UNFAIRLY.


    The growth never came, but the money had been paid out.

    It's not difficult to understand - or even explain - and yet the BBC does love to dance around the issue waving it's arms but not actually pointing to the ROOT CAUSE.

    It's like spending your winnings from the bookies before the end of the race - and then having to ask your wife to 'sub' you so you can eat.

    It's no more complicated than that.

  • Comment number 33.

    As a 26 year-old generation Y-er, I agree quite firmly with a lot of this article, and it's something that a lot of the young unemployed are starting to pick up on themselves.
    Instead of thinking of the bank of mum and dad as some sort of boon, it should be regarded as a problem; we wouldn't be looking to borrow from our parents if we didn't need to. The labour market has reached a point where a single person can barely afford to live alone; council tax, rent, food and the rest rapidly consume the pitiful salaries that are now offered. With credit from actual banks now unavailable, housing prices inflated totally out of reach and the majority of the cash in the country becoming increasingly concentrated into a few (mostly baby boomer) hands, we're then told that WE have been living 'beyond our means' and that all the benefits and advantages that the older generation have been enjoying and profiting from (housing benefit allowed YOU to employ US below living wages) shall now be cut. From us.
    We'll be paying your pensions. We'll be paying for your winter fuel allowance. We'll pay for your bus passes, which many of you don't bother to use since you already have a car...
    Meanwhile, we're forced to borrow in student loans what you received in grants; with no unions worthy of the name to look after us, we'll be victimised by the companies that you own.
    And as for attempting to escape from responsibility for this because your elected representatives did it... You elected them. I was 1 year old when Margaret Thatcher began her privatisation binge and sold off thousands of council houses at a fraction of their value. I neither voted for her, nor was in a position to benefit from it. You were not only voting, your generation was the vast majority of the population at voting age. You accepted promises aimed at your greed for the past thirty years, and now you're hoping to slope off and retire quietly with the profits, leaving us to spend our entire lives paying your lunch bill.
    So don't try and tell us that we're the lucky ones, or that we're getting the benefit from this situation, or that this isn't your fault. We're going to be paying for your profligacy long after you've died, and we're going to do so while the benefits you enjoyed are stripped away from us - even as benefits are carefully kept for the elderly. The name for this sort of behaviour is Generational Tyranny, and it's a topic which will be rearing it's head over and over again in the coming years.

  • Comment number 34.

    Great to see coverage of this issue.

    Your B plus for the coalition is pretty generous but at least they're trying. A very considerable step forward from their predecessors

  • Comment number 35.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 36.

    The younger generations do have gap years, iPods, Starbucks and other such peripheral lifestyle advantages compared to the Baby Boomers.

    However, I am already resigned to the fact that I will never own my own home thanks to the runaway house price inflation of the last 15 years. Boomers are up in arms at a rise in petrol costs or if their free travel is threatened, but a rise in the cost of housing is celebrated as they pull up the housing ladder behind them.

    It's a social scandal and for many young people purchasing a modest one bedroom flat is completely out of reach, never mind a home where you might raise a family.

  • Comment number 37.

    The idea that the young have an easier life than the baby boomers is not the point that is being made but that we, the young, are paying more than we are getting out of the system. I feel that tax is a small slice of this.

    Many of the older generation will have earned a great deal from property. The young are having to pay over the odds to get any property at all. Or seen in another way, at the peak of you earning powers you may not have been able to afford at today's prices the house you live in now. You are asset rich and we are paying for it. The £200k house you live in now is equivalent to a quarter of the gross median-earnings of a 30 year career. On a 25 year mortgage at 4% this would be 2/3 of median net earnings. Did you pay 2/3 of your salary out in mortgage payments? Probably not. All the while you are asset rich we have to pay through taxation for your healthcare. It is nice for people to stay in their own homes as long as possible but why should the young bear an unreasonable tax burden to allow someone to stay in a home we could not realistically afford so that they can leave it to their dependents.

    I work hard and earn a good wage and am taxed handsomely on this. But I am not rich, I have no asset wealth, though hope to achieve this by putting a large proportion of my salary towards my mortgage. You on the other hand are extremely asset rich. Why should you not pay for your own healthcare with your own assets?

    On top of this as a country we ran at a deficit. So not only are we right now funding you comfortable lifestyle and allowing those earning money to pay those who accrued wealth by little more than holding an asset to retain their wealth but you didn't even pay your way in your lifetime. You ran up a lot of debt and left it for us.

    I'll reiterate it is not that we have had a tougher life than the baby boomers, in the majority of instances we haven't, but that you are comparatively rich compared with us (high property prices, gold plated pensions and so forth) yet we shoulder much more of the tax burden than you ever have.

  • Comment number 38.

    "It suggests that the demands of older people will always attract more money and attention than the demands of the young."

    Older people vote.
    Future generations have yet to (if the polling stations let them in that is)

  • Comment number 39.

    What a brilliant article. It's nice to see that - after a massive housing and debt boom - the media finally start to address the huge inter-generational wealth transfer that has occurred over the past decade.

    Mr Willets is aware of this wealth transfer, but I am less sure that he will do anything about it. Witness his contention that higher education is an intolerable burden on the taxpayer: i.e. the baby boomers that benefited from free education can't possibly be expected to pay for the generation after them. This must instead be met through the younger generation taking on even greater debt.

  • Comment number 40.

    People who say only the older vote have to remember the younger have to work, though it is fair to say, amongst the younger people, the students have time on their hands and are more politically active.

  • Comment number 41.

    18. At 12:55pm on 04 Aug 2010, stanilic wrote:

    "What we need is to define our common needs, see how we can afford them and then set about working to earn them. Adding value through my own labour is all I really know and is all what the country should expect from anyone and they should be facilitated to that end."

    I couldn't agree more.

    19. At 12:56pm on 04 Aug 2010, MBfool wrote:

    "You are of course correct. The baby boomers will be remembered as the most selfish generation who ever lived."
    "There is however an answer. I am emmigrating at the end of the month."

    Well, I wouldn't exactly call that a selfless approach from yourself either ...

    21. At 1:10pm on 04 Aug 2010, richard bunning wrote:

    "If you're looking for a totally irresponsible approach to public finances in the long term, this is it."

    That is probably as there has been a little too much thinking within the constraints of the current system, for whatever reason, rather than looking forward at how things could be changed for the better.

    22. At 1:13pm on 04 Aug 2010, honestgeraldinho wrote:

    "... turning care for all into care for self. Making money the be all of all things, turning the world into a 'restricted practice' where few own most, while many provide the means."

    Seems like there is one reason right there ...

    23. At 1:13pm on 04 Aug 2010, leftie wrote:

    "If anyone under 30's reading this - for you this is a clear warning to get involved - don't say you weren't warned!!"

    And another ...

    28. At 1:32pm on 04 Aug 2010, oodangerous wrote:

    "I don't blame anyone for this situation, life & generations go through cycles. It's nature. However, that doesn't stop me feeling a little bitter."

    Exactly. Blame and bitterness isn't the answer - that sort of feeling should be channelled into something positive, constructive, worthwhile and beneficial to all.

  • Comment number 42.

    33 Russ Odoni

    It is not called Generational Tyranny it is called divide and rule!

    The difficulties you outline remind me much like when I was 26 years old in the Seventies. It was not easy but it teaches you that it is not about having a lovely time but it is about surviving and getting by.

    The lesson is to endeavour to achieve political, economic and social change through cooperation across society. It does not have to be like this, so why accept it?

  • Comment number 43.

    Mr. Willett did not address the great loss of personal wealth caused by the great banking theft of 2008. That surely took away any accumulation of wealth by the middle class. Always remarkable to me that the loss of personal wealth by the middle class is never discussed in these matters. This is the same battle that has been fought many times. The wealthy beat down the middle class, because the poor have no money to take, so the wealthy can continue to be wealthy. Now many can question exactly what have the wealthy done to be wealthy but I am sure that discussion will not take place. The conservatives think that the middle class has done very well, but the middle class doesn't think so. There are views on this different than those being put forth by the ruling parties. If he thinks the middle class will feel guilty and request higher taxes to off-set those supposed advantages, I think he will be surprised. Detachment from reality can produce these kind of positions. He is simply a victim of his class.

  • Comment number 44.

    So much utter bilge in both the Willets book and the anylisis of its content, both by folk who are writing from a biased viewpoint that of the must have generation who live on debt and created much of the present problem, just think about the massive amount of must have consumer items available today compared with those of 40 years ago and the billions of debt run up to pay for the latest toys.
    Spend what you dont have is very much a modern concept virtually impossible for the working man in the 50's and 60's who incidentally also paid a much higher rate of income tax to help pay off the cost of the last two major wars and debt is a concept alien to many of us who hold savings instead of debt.
    This article really projects the modern "Its somebody elses fault" thinking...get over it... we did in the 50's :-))

  • Comment number 45.

    #33 Russ Odoni,

    If you have not read the majority of the comments above from the supposedly greedy baby-boomers then I urge you to do so and then re-read your post. If you have and still stand by your comments then I can only say "TOUGH - GET ON WITH IT!".

    Life was no easier for us when we started out. Money was tight when we started having families and the majority of us have funded our off-spring to the best of our ability.

    We made our decisions based upon the economic considerations that were presented to us. There was no deliberately selfish decision to pass on the costs to future generations. As you mature, you will be faced with the same type of decisions and I guarantee that your genertion will make them in terms of the circumstances that face you.

    So don't be so short sighted. You weren't there and you don't know. Neither does Stephanie. She never has a ration card. She never lived in 1950's UK without central heating (in fact no heating at all upstairs in the majority of UK houses!). Neither of you had to support a family during the 3 Day Week or try and find a job in the early 80s. So don't preach about what you do not know and understand even less about.

  • Comment number 46.

    Watching a BBC documentary the other day "Britain from the air" it really struck me that changes that have happened through the baby boomer generation.

    Farms that had 80 employees are now farmed with 1 full time staff, as a result of mechanisation. Vast areas of previously sparsely populated land are now crammed with housing... of course meaning that massive capital wealth is now in the hands of the generation that built the UK since WWII.

    The tail end of this generation has also benefited from the "once off" cost benefit of outsourcing manufacture to the far east.

    I cannot see how the following generations can achieve the same again. With the rising wealth of the East and their demands for water, power and other natural resources, it is inevitable that the coming generations will be relatively poorer in the West.

    Although in future even the poor will have fancy technology gadgets that their grand-parent's couldn't have dreamed of, I think the days of easy accumulation of capital (e.g. moving up the housing ladder) will just be read about in history books.

  • Comment number 47.

    A most disgraceful article, Ms Flannders.

    Provactive yes ! Harmonising no !

    My grandparents lived through the Battle for Berlin. Their own parents had been disinherited of twenty thousand acres because of the creation of the Polish Corridor 'stealing land' through the auspices of the then League of Nations.

    They had children and grandchildren, of which I am one.

    Ms Flanders, we need to recognise that Life Chances and Life Standards have increased for us at the behest of the Baby Boomers. And that our liberty was secured by their parents.

    We only hear an echo of what previous generations went through. But let us hear it well.

    Enjoy your holiday....but please remind yourself that you are fortunate in your birth and in your education. You are much better off than many 'baby boomers'.

    History happens haphazardly Ms Flanders....AND WE ALL TURN TO ASHES in the end.

    Do not deride the generation of Baby Boomers....thay have done much more for us than they have taken away from our future.

  • Comment number 48.

    Steph, do you get paid by the word. Your blog could use an executive summary as it is just becomes a ramble or is it a rant. What point are you trying to make?? Have you forgotten how the so called rich baby boomers continue to suuport their children, pay for their education, fund their housing costs at home or elswhere, and yes so they should.

  • Comment number 49.

    #37 as someone whose parents are now reaching the age where care homes and similar loom very large I totally agree. My parents have a nice house, it is not mine, I did nothing to pay for it, it should be used to pay for as long as possible for my parents healthcare.

    But then again I have long told my parents that rather than hoarding their savings to pass to me on death I would be much happier if they spent it on having a good retirement

  • Comment number 50.

    I'm 29 and a teacher in the south-east. I'm currently living in the family home as I look to buy my own home. I have a deposit of £24,000 and despite this being well above the 10% required desposit that most banks advertise I have been offered a mortgage of £95,000 (although one lender offered £132,000 I can't afford the monthly payments). Taking this out and adding my deposit still won't buy me one of the flats that are falling apart on the ex-council estate.

    I've worked hard to get where I am. I've saved hard too and never borrowed from a bank or "the bank of Mum and Dad". A small proportion of my deposit will have been built up from my savings as a teenager doing a paper round.

    To make matters worse the local NIMBY baby-boomers are set against the building of new houses in the area (no-doubt worried about the price of their homes, but openly citing "congestion" as their reason in the local press).

    It seems to me that I have a difficult choice to make. I've just taken a new job, with additional money for responsibility at work, but this won't make much of a difference to my mortgage situation. So it looks like I won't be staying at this school for very long. I'll be looking for a new job in the north, where house prices are cheaper, or overseas where I regularly see jobs advertised as "tax-free, rent-free".

    Now I'm probably not the only person facing this choice. I know other teachers facing this problem. Nurses, skilled engineers and doctors too. So what will happen in the next few years when people no longer have a choice but actually do move overseas or where the housing is affordable? Who will be looking after the baby-boomers or educating their Grandchildren?

  • Comment number 51.

    Are we talking about the Baby Boomers:

    Whose private pensions have been devalued to the point of disinterest?
    Who have worked through at least three recessions?
    Who have been taxed to oblivion, whilst trying to bring up the next generation?

    Surely not these Baby Boomers, it must be some others musn't it?

  • Comment number 52.

    As a young person of 24 I can appreciate that my parents of the baby boomer generation have done a lot to support me over the years, particuarly through my university education. I can also appreciate that we young people benefit from better healthcare, more gadgets etc.

    However, the real problem lies that me and the majority of people my age are becoming increasingly in debt and will continue through most of our lives to pay it off. To those older people posting here saying that you had no hand out from your parents to help you along, perhaps not, but neither were you entering enourmous amounts of personal debt at an early age. On one average proffesional wage my family of four were able to live comfortably, and my parents were easily able to pay the mortgage off early.

    In contrast, I will be leaving university with close to £20k of debt and even though I expect to get a good wage (if I can get a job) I will have the choice of paying a cripling high mortage rate which will leave me with little else to live on, or continuing to rent and thus further delay my entry onto the property ladder. Renting I might add, off baby boomers who have bought 2, 3 or 4th houses thus further inflating house prices, whilst lining their pockets very hansomely.

    The fact is that I will probably be able to get by. Although there will be many people of my age who will be out of work and will be in ever increasing debt. Whether I will ever be able to be completely debt free is certainly another cause for concern, although as time progresses the inheritance passed down to my generation will likely pay off a lot of debt that young people have aquired.

    What I have not seen anyone comment about here is the unborn generation. These will likely be hit much harder. Young people like myself will struggle to buy a house and raise a family, but we will probably stuggle through, helped in some part to inheritance. Though what are the unborn generation going to inherit? More than likely an ever increasing mountain of debt. This arguement shouldn't be about which generation paid the most and got the least etc. it should be about how we are going to secure any sort of future at all for future generations.

    I don't blame the baby boomers for the situation we are in, it's just how it worked out. Though I think we can blame the government if they don't do something about it. This country desperately needs cheaper housing, more efficient public services, and more jobs. It seems that they are making a start on public services but little in the way of housing or jobs.

  • Comment number 53.

    45 stanilic

    I think politics and economics are both stacked in favour of the intergenerational distribution of wealth, which is probably why its such a good innings over the past 40 years or so. ;)

    Lets say everyone in the UK aged over 18 today was given two choices -

    1) A 20% tax rise to eliminate the defecit
    2) No tax rise, use borrowing and economic growth to transfer costs to future generations

    I'd be surprised if many opted for 1). Its politically easier to defer issues into the future (especially if that means someone else pays) and politically difficult and economically painful to make people pay now for something they thought they'd already paid for. ;)

  • Comment number 54.

    Interesting to see a whole generation given a single label. I see that because I was born in 1951 I am a baby-boomer and have been responsible for most of the country's economic problems. Certainly that seems to be Stephanie's view - and David Willett's.

    Strangely, though, neither of these people, who presumably feeled robbed by me, seem to have grown up in a council house, worn hand-me-down clothes, and gone without pocket money, as I did. I have a slight suspicion that they both went to public schools and Oxbridge.

    I gladly acknowledge that I benefited from the welfare state. We were poor enough for me to appreciate free school milk, free dental and medical care and a grant when I went to Polytechnic. I have tried to pay back society by putting my education to good use; remaining in employment and paying taxes without a break since I left college.

    Nevertheless, I resent the accusation that I have robbed the next generations by buying my own house. For most of my working life I did not own my house - the mortgage company owned a lot of it, and I had to keep working to pay them every month. Each time I have owned a house I have improved it - working most evenings and weekends as "unpaid labourer" to make things better. How much wiring, plastering, plumbing, carpentry, glazing, tiling, grouting, etc. have David and Stephanie done? I guess almost none. And at the end of this how many houses do I currently own? No: I'm renting while I try to find somewhere to retire, but when I buy, it will be my only house and I will live in it. And I'm fairly sure it will be smaller and more modest than that occupied by Stephanie and/or David.

    My wife and I have worked most days of our married lives, either in our jobs or on the house or garden. We have had relatively few holidays, because we couldn't afford them most years. That was our choice. But please, don't tell me that the current younger generation is so hard up. Many of them drink, party, holiday and club like crazy. I came through the 70s. That was hard.

  • Comment number 55.

    Sure, its an unfair life and uncertain times lie ahead.
    Huge fires in Russia destroying wheat crops, Terrible wheat production in Canada due to rain, floods in Pakistan, China, etc, etc.
    Last year's floods and anguish in the UK, the final demolition of politicians standing due to theft of public money for extreme expences are making it difficult to accept politiians judgement.
    In the UK 13 years of huge overspend by Labour, spending borrowed money on crowd pleasing projects, allowing huge house price bubbles and endemic borrowing everywhere, coupled with vaunting political ambition and the result is that our country is in deep trouble.
    Just like the Roman Empire in it's dying days where huge extravagant public entertainment was enacted to please the citizens who had voting power, nothing changes in democracies.
    Whilst it is true that the outlook is particularly poor for the young generation, it should not be forgotten that the older generation who have profited will for the most part play their part in helping out with loans to children to outright gifts in some cases to avoid inheritance tax.
    So, youngsters, just grin and bear it, after all you voted for labour!
    You probably have, after all the responsibility to choose our nursing home(s)

  • Comment number 56.

    The pensioners are in a strong position as they actually bother to vote.
    There are also rather a lot of us now and we are living longer.
    Politicians know this.
    To expect our leaders to ignore these facts is like expecting a mouse to ignore the menacing cat about to pounce.
    Wake up and smell the coffee........

  • Comment number 57.

    In this country economic policy is made by the government not by "a generation" We haven,t had a Baby Boomer party in power but we have had a government that transfered state housing and state owned companies into private hands rather than retaining them for future generations. This government also decided not to establish a sovereign wealth fund for future generations but distributed the profits from North Sea oil to its supporters. David Willetts now seeks to avoid the blame for these selfish decisions by blaming "the baby boomers" rather than the government that took these decisions. I wonder why.

  • Comment number 58.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 59.

    I do not recognize the world David Willetts talks about. My friends and I are baby boomers, and we are all working hard, as none of us can afford to retire. Most of us did not benefit from the university education that both my sons had, and many of us have elderly parents to look after too.

  • Comment number 60.

    Life is not fair so get used to it.

    Those under 25 have added almost nothing at all to the national cake yet they now bemoan the fact loudly that those of us who built it are eating it! Tough.

    Even the older post baby boomers in general have contributed less to our national infrastructure simply due to their shorter period paying taxes.

    This article forgets that we baby boomers were born right into post war austerity and rationing. We were then poorly educated in over populated schools, went to work early to pay for the wartime national debt, our parent’s pensions and health care, the cold war and massive upgrades to British infrastructure. It is a wonder we made any spare cash at all.

    In short, we baby boomers built post war Britain quite literally from ashes in many areas and if we now choose to enjoy that hard work and expect the next generation to grow up and take the slack it is hardly surprising.

    We are selfish and we compete hard, we had to as they were so many of us, but I do not remember us whinging about hardships let alone blaming our parents’ generation for whatever problems we had.

    I suggest the post-baby boomers shut up and grow some backbone. What wimps!

  • Comment number 61.

    Some of the comments here are amazingly ignorant.

    The tone of some seems to suggest that we baby boomers sat around while the world improved by magic around us. The world in fact did not improve unless we worked and paid for it to improve.

    The stock market did not ‘go up’ between 1970 and 1990 but was pushed up by people risking money to buy shares. If post baby-boomers want the markets to rise then they must commit to buying the shares and making them rise too. It does not happen by magic tha knows!

    Likewise the housing market did not ‘go up’ by itself but was pushed up by people competing for houses, which they then had to pay for with money they had earned, most of which they paid tax on.

    What people see now as almost automatic progress benefiting luxury minded baby boomers was in fact only what we had made for ourselves piece-by-piece, year-by-year and over-taxed pound by over-taxed pound.

    Go thou and do likewise!

  • Comment number 62.

    Whilst I don't think it's fair to blame the current situation on Baby Boomers, I think they should try to be more grateful for what they have.

    I know a lot of over 60's who constantly whinge about the level of state pension, winter fuel allowance, etc without a thought about who is paying for it, and will continue paying for it until the money runs out - which it will before most people under 50 now get to retire. These people have also benefitted from final salary pensions, a luxury the rest of us will never have.

    I was lucky to get onto the housing ladder in the mid 80's before the boom but today's 20 and 30 somethings will not get that opportunity without substantial financial assistance from their parents and grandparents.

    Also wages have gone down in real terms in the last 10 years or so, interestingly following the introduction of the Minimum Wage, which is now the standard rate of pay for many jobs, instead of a proper wage for hard work.

    For those that have retired, you have earned it, but please spare a thought for younger ones who are probably going to have a tougher life than you did getting there.

  • Comment number 63.

    53 wozearly

    Message 45 is foredeckdave not me, not that I mind being confused with someone better.

    Your point is very pertinent. Following my experiences in the Seventies I gradually converted all my affairs to cash. It took me over twenty years to eliminate all debt but it was worth it until interest rates dropped to half a percent.

    49 Justin150

    I have just sold my mother's house to pay her nursing home fees. I do not resent it as it was her house. It might be my inheritance but it is her money not mine. At 94 she was born whilst the Battle of the Somme was in full bloom but no doubt some twit will blame her for the German Inflation, the General Strike and the Wall Street Crash. When she was in senile decline and was not prepared to pay for the necessary support provided by the local authority - I will brook no criticism of the social workers as they were brilliant - it was because her savings were for a rainy day. Mum: it is pouring outside with thunder and lightning! Heartbreak: but that is how it is sometimes. You have to adjust.

  • Comment number 64.

    Agree with your sentiments about not penalising the young, but not convinced that all baby boomers have benefitted. Many baby boomers were natural savers, but not all are in receipt of the benefits you describe.If you live outside of London and SouthEast house prices have not been a big boost to wealth. Many outside this area are unable to downsize as either no capital release to offset costs or unable to sell. Not all have good pensions. However, those that do have these benefits are probably the ones who are keen to pass onto their children, but only their children. Why not use IHT, or similar death tax to equalise the situation. Those who have ended up with greater wealth will pass on the next generation, not just to their own children but for all. Reduces taxes on future generations, and smooths out the fortunes of those who just happened to benefit from where they lived (house prices) or had good incomes (final salary pensions helped). After all, most baby boomers are not in a position to release their wealth, until after they die. But if we have benfitted, why not share it.

  • Comment number 65.

    I would agree that our affairs have been terribly badly run since 1945 largely because the benefit of the entire nation has been placed secondary to the interests of certain groups. These are the people who have run our country into the ground; people who have never got up at six in the morning to meet a pay-day. What do they know? Just who do they think they are?

    To my mind there has been far too much government in this country, most of it inefficient and some parts downright corrupt. ...........

    We have only one thing to do and that is work for our living. The economy should be focussed on getting unemployed people into gainful, value adding work.

    Very well put.

    Who do they think they are???

    Our young folk have been disenfranchised by successive Governments for far too long. What they need is the opportunity to work, real investment in real jobs. I also agree with others views on Education, how dare they saddle our brightest young things with debt, student debt is the most appalling concept given our youth by any Government. Education needs to be viewed as an investment in our youth, not a way of enslaving them into a debt trap they will take years to get out of.

    I also agree, we have far too much Government, as well too many elite taking far too much out of society, top employees of banks are a case in point. Note I said employees, not entrapreneurs who actually do something useful, but employees.

    But nothing appears to be changing except the rhetoric, dictated by political dogma, God help us!

    Oh and as a baby boomer (born 1952), I don't think I'm to blame, I don't think I have taken too much out, but feel like I've put a lot in and continue to do so.

  • Comment number 66.

    A couple of points, Stephanie. I agree with much of what you say here, but you need to remember that Labour treated the elderly with shocking disregard.

    Quite apart from the infamous 75p pension increase, there was:

    - Gordon Brown's notorious 1997 tax raid on private pensions, which (allowing for reinvestment returns) may have pinched as much as £225bn in total.
    - Cutting interest rates in the financial crisis, which hit savers (amongst them many savings-dependent elderly people) and also hit annuity rates.
    - The way in which the state pension underperformed per capita GDP throughout Labour's turn in office.

    Often during Labour's term it seemed that the govt was not interested in helping you unless you had children (and would help you even more if you were a single parent, of course).

    Whilst I agree with you (and with David Willetts), I have to say that what we have seen so far from this govt is nothing more than a little rebalancing after a Labour govt which, it seemed, couldn't care less about the elderly (and perhaps I should stress that I am not elderly myself).

  • Comment number 67.

    Paul J Weighell

    You seem to be saying 'we created a stock market and housing bubble - if you want to be rich like us boomers, you should do the same'

    Nice idea.

  • Comment number 68.

    The system will never be fair. There will always be some who are disadvantaged no matter the direction taken. Moreover, while generalisations can clarify issues, individual circumstances matter. The best thing as our leaders struggle to get it right is to go right back to basics. Hard though it is the worst thing is to leave our young people with onerous levels of debt growing at current levels. It is appalling that for every 4 units of expenditure we have to go to the market to fund one unit of it. Yes, the young should get a better deal, and hearing, but lets not leave them the legacy of higher and higher borrowings. Borrowings which will have harsh consequences for them, and their children. I may have missed the point. If so forgive me but the fundamental problem cannot be boiled down to a 'young' and 'old' debate. The view, and action must address the whole picture and the longer term. Frankly, the need to get back to good husbandry is overwhelming.

  • Comment number 69.

    Oh, I forgot to say (being a bit carried away) that my main point was that there was no uniform crowd of "baby-boomers." Just as not ALL young people these days spend all saturday night lying drunk in a gutter. Some got very rich on propery and others didn't. I, for example, went without a car for years because my mortgage repayments were too high. And I could not afford cinema, eating out or drinking either. Holidays were a dream. But I still earned slightly above average at the time.

    I did not steal someone's legacy, and I paid lots into tax, ni and pensions to cover both my future and that of others.

  • Comment number 70.

    A quick comment before I take the dog out for an evening walk:

    Stephanie; I hope you get the chance to read all the comments on this blog before you go on holiday. If you get the opportunity please pass the sentiments expressed back to David Willetts just so that he is fully aware that the baby - boomers are none too happy. Perhaps, as rather hinted at by stanilic @ 18, it might be better if he had engaged one or other of his brains before embarking on his commentary. I wish you had also been a little more cautious in regurgitating some or all of it without a more critical appreciation first.

    I look forward to reading some more comments from (fellow) baby - boomers later.

  • Comment number 71.

    I was not a baby boomer,but I was brought up to respect the older generation.I was dissapointed to read the many comments of put down on retired folk. Not all of us enjoyed the silver spoon treatment but actually had to work darn hard to achieve the living standards that the writers believe we now have, I wish to remind you all that in 1947 the then goverment entered into a contract with the working folk of the day that If we subscribed to the National insurance stamp we would be looked after from the cradle to the grave, most OAP's kept their contract. so perhaps you can tell me where our investment went,having subscribed for forty-five years?. p/s being a young boy during the war years was not all fun and games.

  • Comment number 72.

    Viewed and edited if considered necessary

  • Comment number 73.

    52. At 4:42pm on 04 Aug 2010, jizzlingtons wrote: ....

    Young Jizzlington: If you soon take out a mortgage, it will not be at a cripplingly high mortgage rate. Cripplingly high is what we paid in the late 70s and early 80s. I have seen grown men crying at the repayments that they faced in those times. Your 20k debt from university: is that at a cripplingly high rate? I doubt it. Your mortgage will have a reasonably high rate, but not 12-15% (I hope).

    You will do fine, I am sure. The later generation will too, as our boomer generation will have died out in 30 years, leaving our assets for our children and grandchildren.

    My grandparents didn't own a house; neither did my parents. I and my siblings own houses, but we live in them - we are not property speculators. You might be wisest NOT to own a house for now. Find the cheapest place to rent in the nicest area and then save for a house.

  • Comment number 74.

    Just dawned on me why SF might be a tad upset, loss of family tax credit and that £250.00 when the nipper reaches 7 years old perhaps. lol
    A whip round?..........anybody .....

  • Comment number 75.

    Hi Steph
    the baby boomers may have done well but people over seventy well remeber the old liverpool saying he has'nt got two bob, at that time owning a car before you were thirty was a dream the current crop think it's a right to have one. and no matter what class they are the motto appears to be eat drink and be merry for tomorrow we will be broke saving foe anything appears to be taboo

  • Comment number 76.

    Leaving university with a 20k debt to jump a gravy train long since departed hardly demontrates the sort of intelligence once needed to gain entrance to any further education establishment.

  • Comment number 77.

    Dear stefi,
    I am 45 years old family with 2 growing up children. Iam 55 hours working per week. I am earning 1500 ponds per month. No holiday at all. I am no taking my day off. I have to work. keep my family. I got mony to pay my tax. But I have not got money to change my boiler. Boiler 26 years old. This winter I do not know how to cope. End of the month my bank account nearly empty. Can not save any money. No benifit for me.
    (tax credit, working tax ).

    I every month paying more than 500 pounds. (NI,PAYE)
    Can you help us resolve this problme

  • Comment number 78.

    There’s no such thing as Baby Boomers if the truth be told.
    Just people living out their lives trying to make it all fit.

    And the question you may ask yourself is why is it so difficult to try and give the younger generation a future?

    And having asked yourself that question and received no understandable answer, one has to try and answer the same for oneself.

    So here’s a potential answer, but not necessarily correct response to all those currently trying to give the next generation a future:

    Future generations should be able to rely on the state to control the creation of money as debt. Because unless such is so, future generations will be forever at the mercy of those private corporations that do control it.

    The creation of debt is not wrong, it is the uncontrolled creation of debt that has been our undoing. And ultimately the future generation is being asked to pay for it.

  • Comment number 79.

    magicblackfrog @ 76 has brought up what amounts to one of the cruellest deceptions perpetrated by the Blair government - radically increasing the number of university places and encouraging people to apply for them. This was done in complete disregard of the fact that the courses thus offered would not be and are not equally meritorious to the point that some seem actively meretricious.

    The universities care not that the supply of graduates would be (and is) significantly in excess of the demand; they got their money even if it was at the expense of students who took the courses - I assume in good faith - only to discover when the debt had been incurred that the demand for the knowledge acquired was rather less than might have been hoped. I don't think that that outcome was unforeseeable.

    I feel genuinely sorry for the "younger generation(s)", but as someone who has had to go through a redundancy in the early 90s and took some time to find worthwhile pensionable employment, my (pension) income now is rather less than it would have been had I not had to "change horses in midstream". Other baby - boomers have seen their retirement income drastically reduced by either mismanagement of financial organisations (e.g. Equitable Life) or by employers going out of business with their employees' pension assets in disarray. How convenient that Mr Willetts should overlook episodes like that; it does him no credit at all.

    I would hope that anyone facing what appears to be a very uncertain future will have the ability to take a wider view; scapegoating a generation for things it did not do will solve nothing. How typical of a politician to misdiagnose a problem so that any policy formulated as a "solution" will almost inevitably fail.

  • Comment number 80.

    I would be very interested to find out how much taxpayers money is spent on say, the over 70s, compared to taxes paid on wealth currently generated by the over 70s.

    From a pure economic point of view does it not make sense to invest this money in childrens education, universities / further education and priority healthcare for the young and those of working age instead of helping those who ordinarily do not and will never again make a net current contribution to the treasury's coffers?

    One thing that concerns me somewhat is that some people could argue a logical extension of the above economic argument is that we as a country would be financially better off if we were to kill off people once they get to a certain age or to a certain level of ill health! I now vaguely recall reading Huxley's Brave New World in which I think such a policy was enforced.

    Perhaps I have just proved to myself that you cannot make decisions based purely on economic grounds.

    Thank you Stephanie. Your article is thought provoking and has made me think if younger people in society are indeed getting a raw deal.

  • Comment number 81.

    'It's usually a lot harder for politicians to hear the voices of people who don't vote.'

    This point is irrelevant due to the flaws in our current lack of democracy. There was no choice at the ballot box in 2010 and has not been one for over a decade now as the three main parties offer very similar policies. Therefore any alternative voice will be ignored. A political party only needs one in 5 eligible voters to put a tick against their party at the ballot box in order to form government. All three parties are going for the same group of people who make up that one in five as they know what they need to do to get their vote.

    'The wrangling over spending cuts this summer will greatly affect them too. But so far I haven't heard many people fighting their corner. '

    You haven't been reading the posts on your own blog. I have been trying to fight my corner for years but keep being ignored by the baby boomer generation who own all of the news media and most of the wealth therefore have the money and power to silence my voice in favour of theirs.

    It annoys me that it had been planned for yeats to raise the retirement age yet whilst it only affected those under 30 it was largely ignored in the press and in general debate yet now it affects older generations, this is suddenly big news. What is happening here is that a generation who voted for tax cuts in exchange for the abolition of the link between pensions and earnings are now complaining that their pension isn't enough so the government instead of turning around to these people and saying 'you made your choice, you live with it', they are going to give those pensioners something which they did not pay for and are asking my generation to subsidise it by retiring later. That is an absolute disgrace.

    The older generations have more money, houses with inflated values, many have buy to let income too, final salary pension schemes and if they went to university, did not have to pay and may have even received grants.

    Now is the time to get tough with the baby boomers. Now is the time to tax.

  • Comment number 82.

    The problem with this article is that it doesnt recognise the interconectedness of the generations. I am a baby boomer baby but insofar as my children are left short by current policies the main effect will be that my wife and I will subsidise them to make a start in life. Since we have to pay 40% tax on whatever income we generate to give our children whatever they need, whereas our children would probably pay an average rate of lower than this to generate the same savings, paradoxically the effect is actually more onerous on the older generation.

  • Comment number 83.

    Bob @ 81: "The older generations have more money, houses with inflated values, many have buy to let income too, final salary pension schemes and if they went to university, did not have to pay and may have even received grants.

    Now is the time to get tough with the baby boomers. Now is the time to tax."

    I take you come from the "world owes me a living" school". No house - however inflated its asset value might be - can be used to buy anything while you are living in it. Why penalise those who have paid off their mortgages and then gazed in wonderment as the "value" of their property escalated? They did nothing to cause it. And we don't all own buy to lets either. And just how big do you think pensions actually are, whether indexed for inflation or not? I suppose you also believe that those of an earlier generation who received university grants received enough for all their living expenses as well.

    It's time someone got tough with you, never mind "time to tax".

    I was born the year after the war ended; go and find some photographs of the 40s and 50s; go and read about rationing. Whatever you might wish to believe my life and those of many other baby - boomers (most, even?) was not a bed of roses in a land flowing with milk and honey, and it is presumptive of you to think that it was. What we have now we worked for. We did not set the rules; we worked within a framework set by other. Yes we elected them, usually on the basis of "jam tomorrow". Tomorrow, of course, never comes.

  • Comment number 84.

    While there may be a reasonable discussion to be had concerning the spread of the effects of the budget across ages and sexes, to discuss it in terms of baby boomers and others is a rather spurious argument. How do we form those divisive camps of us and them? Are the baby boomers those who had retired by June 22, the date of the budget? Or those who were 65, or 60 by that date. Or should we take the 1st of January or today’s date when you have raised the question. Does it mean that the ones born before that date had a wonderful life irrespective of when or whether they bought a house and those born after that date have had a miserable life and still cannot afford to buy a house. I don’t think so. Time and ageing are continua and people will have gained and lost in various amounts irrespective of date of birth. Even considering the argument that governments are largely composed of middle aged men who support older people, that has always been the case. so when the baby boomers were young, they would have lost out.

    I do believe that it is immoral the way in which house prices have been allowed to rise and this should be corrected by building more houses. One of the problems is that as soon as someone buys a house, they prevent other houses being built nearby and I think that the need for planning permission for standard design houses should be abolished. Accommodation and employment are essential to each citizen and these should be the priority of any government over and above tax cuts.

    In terms of the present debt, those who benefitted the most during the time of plenty should pay the most and that is all the companies and shareholders who made big gains.

  • Comment number 85.

    I always thought the bbc was dumbing down but Stephanie you did not need to prove it!

    Yesterday women were hit hardest, today it is the younger generations, it follows then that men in their fifties today are all to blame, but wait a minute perhaps you could make a point of those who have been on benefit for a while they get the most, so it comes down to a few hundred thousand men on benefit in their fifties, you could then narrow it down even further to region and town, you could get the whole fault down to halfa dozen white male hetrosexuals somewhere in Glasgow, if you tried hard enough!

    Could you tell us about the top ten percent of earners how have they faired over the last thirty odd years, what age group sex are they have the government taken a fair progressive taxation policy

  • Comment number 86.

    Stephanie wrote:

    "Future generations don't care if we have a bad few years. As long as the Mr Osborne isn't derailed by a weak economy and actually follows through on those deficit plans, they'll give him a B plus for borrowing less than Labour planned."

    The problem with the strategy of both Labour and Conservative is that it is highly probable not to lead to a few bad years - but to driving the country into a decade of more of bad year after bad year as was don in the 1870s!

    George Osborne talks a good talk but the permanent government has always in the past managed to avoid real cuts! We suffer the expectation of cuts and prepare fro austerity and thereby causing it in the private sector when in fact the out-turn in the public sector is quite the reverse - the only things actually cut are payment for brought-in services and external contracts - such as building schools. (Already apparent!)

    #11. Sam_From_Hendon wrote:

    "At least interest rates are low."

    No they are not low for the majority of borrowers (just the poorest savers) as I have shown earlier. All this does is permit gigantic banking margins. Your view is totally orientated to supporting the Bank of England - the exact agent that caused and multiplied the economic disaster.

    Do you have any ability to examine the actions and inactions of those responsible for the regulation and management of the economy over the last decade - I guess you don't as this would not be in the interests of your paymasters! Please think rationally about the way that Bank refused to acknowledge that property price inflation mattered during the nineties and noughties. This gave rise to the conditions that created the property bubble and the crash that broke many banks. How on earth in any from of common-sense can you support them without a thorough purge of personnel!

  • Comment number 87.

    This article is rather misleading and misses the following points.
    A persons home is only worth anything to them when it is bought or sold, as everyone must have somewhere to live, so while people who bought their houses in the 70s may no longer have a mortgage they don't benefit from the value of the house.
    This article also fails to recognise that a lot of older people still rent their houses as buying a house was difficult before Margaret Thatcher deregulated the banks in the 1980s.
    The value of state pensions has reduced by 60% since the 1980s when the Government of the time cut the link to earnings.
    The debts of the second world war were only paid off in 2000, so the working people of previous generations had to pay for this plus the costs of the cold war, which those working since the 1990s have not had to pay.
    House prices along with stock markets rise and fall with the economy, so the writer of this article should not be sucked in by political dogma of divide and conquer.
    It would not be helpfull to the economy to make all the old people homeless to give the houses to the younger generations.

  • Comment number 88.

    My suggestion would be for anyone with a pension higher than the national average to pay income tax on the same basis as workers. If they need health care and they have assets (excluding their home) that can pay for it, these should be used to recompense the rest of society.

    Many baby boomers will instantly object to this in favour of safeguarding their nest egg, but look at my generation - I'm 32 and take home £28k (more than my parents combined did until they retired last month).

    The average salary is £26.5k. The average house is £169k. The salary to house price ratio currently = 6.3 therefore. Multiplying it by 2 for a couple is unfair, because often the wife undertakes part time (or no work at all) in favour of bring up the children. Multiply it by 1.5 instead, and you'll still wince. If you want to save up for a deposit, you're not likely to get an inflation equalling rate. If you want a mortgage, a 2 year fixed rate is around 6.7% for those with 10% deposit, regardless of the 0.5% BoE rate. I ignore what the BoE says now, it's irrelevant for almost anyone under 40. I know, mortgage rates were far higher in the early 80's, but then salaries were going up to compensate a bit, not down as they currently are.

    Added to the cost of buying or continuing to pay for a house, there's pensions. I read you should be putting away £300 a month in your early 30's to have an acceptable pension. That's almost impossible if you're on an average salary and want a starter home (at £100k, never mind £170k). On top of this we have to pay taxes to support the elderly, many of whom enjoyed under taxation. They're also part of the generation that have caused the GFC, which we, our children and our children's children will have to pay for.

    My suggestion: if you've got £100k or more that's not your primary home (tough if you have multiple homes), you should contribute to any medical care you need. The population has gone top heavy (as we knew it would) and it's unfair to expect the next generation to pay for looking after a generation that's more numerous than their own, plus paying for the global financial crisis + saving for our own pensions + trying to yank down the property ladder that the baby boomers have raised so far out of our reach.

  • Comment number 89.

    What Russ Odoni wrote sums up my views perfectly. I don't see how I'll every afford a home or even a family. And yet I'm hearing baby boomers whine and complain about their reduced pension when I won't even have one when I 'maybe' retire (which is presuming I can get a full time job.)

    Baby boomers should feel ashamed with how they've been exploiting the younger generations. Not only do they reap all the benefits from society but when it comes to giving something back as jobs, they go overseas. You want us to pay for your NHS and services by paying tax, yet you take jobs away from us... only to call us lazy for not working.

    News flash. Can't work without jobs to fill. Starting up a business needs money, which we don't have and you do. I used to have a lot of respect for the elderly and seeing them as wise individuals. The more I read, the more I'm feeling that if they could, the young would be taxed 100% to fund fund pensions, NHS health care, etc.

    I don't want much. I just want a job and the ability to afford rent. Not afford a house, afford RENT. Guess I was born at the wrong time and now will pay for it with the rest of my life.

  • Comment number 90.

    What on earth is this? If you haven't anything sensible to write Stephanie, just don't write.

    Its a hard cruel world, and the world owes no one a living, that includes you and me - get used to it.

  • Comment number 91.

    Am I the only one who is still feeling the effects of negative equity from the 1990s?

    I am 40. My husband is 44. During the 1960s and 70s, my father was able to bring up his family on one teacher's salary. In the 2000s, my husband and I both work full time to do the same. Negative equity on my husband's first home (a two-bedroomed maisonette originally bought with his brother) has affected us deeply, both financially and emotionally.

    In philanthropic innocence, we released the brother from the joint ownership so that he could get married, and started our own married life in the maisonette, thinking we would move on in a year's time. For four years my husband could not apply for the promotion he wanted, because we could not transfer the debt. We moved in with my mother so he could finally take a new job in another part of the country, and in 1996 our flat was sold for less than half what he'd originally paid in 1989. We had saved the shortfall from my teacher's salary. To put this into perspective, this sum was a third of the value of the house we eventually bought in 1998.

    We now both work full time to support our family and pay a ridiculous mortgage for a nice, but small, 3-bed, ex-council semi. I am not discontented with my lot, but I do feel bitter when I compare our standard of living with colleagues at work who are ten years older.

  • Comment number 92.

    I am the next generation. 19 years old, in university, studying for a degree in law.

    My generation is ruined financially.

    I hope you're all proud of yourselves!

    Quick question. What happens when the developing countries develop? Who does the bottom rung of industry? Not really related to the blog, just want to know if that will be the end of financial systems. Where will things be made when all the people in china/india/indonesia work in offices?

  • Comment number 93.

    The whole point of David Willetts book is to pit one part of society against another, in this case the young against the old. This is how the politicians hope to control the population when the cuts lead to public anger over the coming be it rich against poor, 'hard working family' against 'lazy scrounger', nurse against teacher, or the young against the old expect more of this gentle nudging by the politicians and the media. All done under the banner of 'having an honest debate' the purpose is to steer public opinion as much as possible, first one way then the other, but always where they want it to go. These are uncertain times for our politicians and it is 'divide and rule' all the way. Its not our fault you see, its theirs...It doesn't matter how old you are or how many elections you've voted in, you haven't had any real say in the events that got us all where we are now, for example how much was spelled out for us clearly in the run up to this election?

  • Comment number 94.

    Future generations will be receiving the flip side hit from Redioactive Gordon Brown and the Heroshammer Enolala gay bommer sickos whos blast from the past may at some point produce a political movement amongst younger voters towards compulsory canibalism for the retired in order to prevent their pension savings [the youngs] from being eaten and cunningly substituted with worthless financial instruments purrchased by governments to ensure the onward march of their loonytunes employment o portuneitties in the City.

    I am not a cynic .

  • Comment number 95.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 96.


    From Writings

    The growth never came, but the money had been paid out.

    It's not difficult to understand - or even explain - and yet the BBC does love to dance around the issue waving it's arms but not actually pointing to the ROOT CAUSE.

    It's like spending your winnings from the bookies before the end of the race - and then having to ask your wife to 'sub' you so you can eat.

    It's no more complicated than that.


    The bigfoot politcko/bankster allieance insured that their inphalationairy forces were nipped in the budt and they now wonder why there is no patter of little feet

  • Comment number 97.

    I have very little sympathy for the younger generation. The vast majority are so over indulged and are totally self obsessed.

    People of older generations did not have foreign holidays, endless supply of smart clothes, shoes, Ipods, mobile phones - oh and a car bought for them the day they are 17. Many of these over indulged youth that I meet have very little drive and ambition, because they have had everything handed to them on a plate.

    I started work at 16, my husband started when he was 13 and is still working at over 65, the things we have - house etc - WE EARNED

  • Comment number 98.

    Alex Elliott (#92) asks:

    "Quick question. What happens when the developing countries develop? Who does the bottom rung of industry? Not really related to the blog, just want to know if that will be the end of financial systems. Where will things be made when all the people in china/india/indonesia work in offices?"


    This is already happening. Back in 1990, whilst still working for GEC/Marconi, I taught a two week MSc module in Bangalore India. Great students and a great time; I'm sure I'd not recognize the place now!

    However, note that the subsequent explosion in the Indian computing presence hasn't destroyed Britain's computing industry. Far from it. What has happened is that one needs to dig a bit deeper than most people usually do.

    The world's most ubiquitous chip (ARM: 20 billion and counting) was designed by my group in Manchester under Steve Furber's direction. The group is really about three or four full time academics, plus slightly more fixed-term contract researchers and a dozen PhD students. The development of these chips is then undertaken by ARM in Cambridge (UK). They don't actually make the chips, instead they licence the design to interested parties who probably send their orders to Korea for fabrication. Interestingly, all of the contract negotiation is undertaken under Californian Law, so I assume ARM must have a Silicon Valley office. This is typical of recent UoM computing spin-offs: the research (and sometimes development) takes place in Manchester, but sales and marketing requires that instead of a big "Made in Manchester: Home of Computing" sticker, there's a Silicon Valley address somewhere, even though the Californian office constitutes just one secretary and a salesman.

    Anyway, back to the topic in hand (inter-generational theft): operationally, the university appears to be planning on a 25% cut to it's funds. Reading between the lines, it seems that the Treasury desire something larger than that. What will probably happen is that continued funding for our (important and forty-something) fixed contract staff is removed as it runs its course. Next, as the university does not have to ring-fence its income, any money ear-marked for STEM subjects is likely to be diverted to filling in the university's funding gap generally. Still, we're lucky: when the going gets tough in the UK we can (with family approval) up sticks and move somewhere that is prepared to continue paying us; academics in STEM subjects already work in a very competitive and highly globalized market.

    So, one could reasonably predict that as funding for universities in the UK falls, so there will be some hit to degree quality for the next generation of students. How much of a hit depends on what happens with the spending review; a small squeeze can probably be absorbed without too much damage to quality; a 40% hit will certainly cause a major change in what we can do for our undergraduates.

    In the mean time, after a pre-emptive polishing of my CV, should I be looking at the offers from France, Switzerland or the US?

  • Comment number 99.

    The young and pretty will find it a lot easier to get seasonal jobs than us old and gnarled folk, and are more mobile.
    But most older folk have long term irons in the fire for getting through rough patches.

    The swings and roundabouts of life.

  • Comment number 100.

    --My generation is ruined financially.
    I hope you're all proud of yourselves!--

    There was nothing when I was young.
    Piles of bricks on wasteground.A dying country.25%inflation.Mass strikes.
    No car.No central heating.Banana sandwiches for lunch for three years at school.Welly boots at secondary school(donk donk donk all day long).

    A McDonalds was something the wealthy ate. wimpey actually! :)

    There was bog-all to "steal" from anyone.

    The world is your oyster.

    You don't even have to stay here at your age, you can leave the debt ridden UK and go where you like at your age.
    Those of us who choose to stay have got the debt to deal with.


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