(By Alex Proud/Telegraph) If you’re under 30, old people have stolen your future. And what’s worse, you let them do it.
This sounds like a sweeping generalisation. And, of course, we could argue over the details. But, bold and unshaded though this statement is, it’s pretty much true. On one hand there has been a huge intergenerational transfer of wealth upwards. And, on the other, the people who are have been the beneficiaries of this transfer have left unpaid bills all over the shop. So yes, Philip Larkin was right: your parents did f—k you up. As for how you let them, we’ll come to that.
In a nutshell, they’ve shafted you financially. It’s a depressingly familiar list: property, pensions, the NHS, further education, student debt, the national debt and so on. They built a giant, towering pyramid scheme to ensure they had lovely lives and they’re now spending their gold-plated pensions on exotic holidays; the boom in the cruise industry over the last decade is no accident.
Meanwhile, you live in a tiny shared rented flat in Zone 4, working in a job whose wages are so meagre it may as well be in internship. Worries about your own pension don’t really come into it: you’re more concerned about next month’s rent which, of course, is funding some 57-year old’s third buy to-let-investment. In seven years time, when you’ll be finally earning the national average wage, you can start paying off that £40k of student debt you racked up for that useless degree that Tony Blair told you would be your passport to the good life.
It’s hardly surprising that Russell Brand is calling for revolution. Brand is clearly on to something because recently there has been a concerted effort to rebrand him (sorry) as a nincompoop and his followers as naïve. For what it’s worth, I do think he’s a bit of a fool. However, to write him off is also naïve. In his excellent analysis in the FT, Michael Skapinker notes that Brand has more Twitter followers than the FT and Wall Street Journal combined, and concludes “[His] revolution is not going to happen, but many of his criticisms resonate – and not just with his credulous fans.”
However, while I can sort of understand Brand as a muddled messiah for the dispossessed, I disagree emphatically with all his claptrap about not voting. Not voting has got us where we are today. Not voting enabled this great intergenerational heist to take place.
In 1964, over 70% of all age groups voted and the difference in turnout between 18-24 year olds and those over 65 was negligible. By 2005, 75% of the 65 plus age group was still voting but the figure for 18-24 year olds had fallen to 38%. Things picked up a bit in the 2010 election as they tend to in “kick the bums out” elections. But even so, the political calculus is clear. Target your policies at the grannies and you’ll get one and half or two votes for every vote you get from the kids. As our corporate chum the meerkat says: Simples.
So, Brand doesn’t have to tell the kids not to vote. They’re already not voting. And if you don’t vote – and the young have been not voting in greater numbers since the early 90s – then politicians will aim their policies at those who do. As a 20-something man, you might think that Cameron and Osborne are a kind Batman and Robin of entitled incompetence. But your granny probably thinks they’re nice, presentable young men.
The rise of Britain’s gerontocracy correlates pretty well with the decline of the youth vote. Blair may have cruised in on a youth ticket, but thereafter the young vote dwindled sharply. So, as a man who knew which side his ballot paper was buttered, Blair saw no reason to reverse any of the policies which were already allowing the old to steal the family silver. As for the Tories, they have always favoured the older and the wealthier and, increasingly the older are the wealthier.
We’re all becoming depressingly familiar with the results of these policies. The single worst (and most easily grasped) problem is housing. Our housing market has become an in-and-out club. If you’re over 50, in addition to your primary residence, you may well own a couple of buy-to-lets which will augment your already well-upholstered pension. If you’re under 30, you’re screwed.
If you’re under 30 in London, you’re super-screwed. You’ll be in your 40s before you’ve saved enough to buy a dump in Catford. And even then it’s likely that you’ll be outbid by a buy-to-let investor or, increasingly and tragically, refused a mortgage because you’re too old.
A long list of policies across three very different governments has got us here. The “one off” sale of council houses to make us all Tories in the 1980s – over two million homes that went cheap, often criminally cheap. The bottom three rungs cut off the ladder, the proceeds pocketed and the houses never replaced. Even so, property was still cheap back then – and if the housing market was anything like a free market, we might still be alright.
However, for all their devotion to the free market, our leaders have shown no interest in allowing the housing market to function this way. Rather, each year, we build a tiny fraction of what is needed ensuring prices march endlessly upwards. We have no coherent national housing plan. Our planning system is a mess. We have artificially low interest rates. We sell homes off-plan to foreign investors and don’t build enough to house the immigrants who are vital to our economy. The result is an cruelly dysfunctional market – and one which works brilliantly for your parents.
In tandem with this, over the last few years we’ve done a great job of increasing the wage gap between age groups. Guess who low wages hurt? Not people in their 50s and 60s. In fact, they actually help older people as they as more likely to be investors and employers. So, there’s no house for you, but the people who vote can afford a cleaner for their holiday home.
Housing is the most pressing problem. But there’s plenty more in the pipeline. In their book, The Jilted Generation, Shiv Malik and Ed Howker point out that this is the funding shortfall in the UK state pension scheme is £2.2 trillion. That’s 2.2 million million or about £74,000 per head of the UK’s working population. It is largely a result of people living longer – and the problem was known in the late 90s. The obvious solution would have been to adjust NI contributions upwards.
Did it happen? Would your folks have voted for a someone who’d do that? Ha ha ha ha.
You might assume that people pay for their own state pensions. They don’t. The UK operates what’s known as a Pay as You Go Scheme. There is no giant pension pot. Your NI contributions pay directly for the pensions of today’s retirees. Obviously this system worked brilliantly for the boomers (loads of workers, few pensioners who died quickly). Equally obviously it is going to suck beyond belief for today’s 20 somethings. You are going to pay and pay and pay as you go.
As if this wasn’t enough, there are plenty of other black clouds on the horizon. The first is the insane demands that ageing boomers will place on the NHS. The only way for our cherished health service to continue will be for you to pay a lot more tax and work even longer. Congratulations: your retirement age has just been upped from 85 to 90. We can also look forward to the PFI chickens coming home to roost, the continued destruction of social mobility, the last nails in the coffin of job security, and the ever greater concentration of wealth upwards… before we get on to the vast environmental legacies left to us by those who will never experience their effects.
OK, but it’s reasonable to ask, could it have been different? Actually it could. We’ve already seen that the boomers could have funded their own state pensions rather than leaving the tab for their kids. But another example of what could have been lies across the North Sea. Norway has a sovereign wealth fund worth about $900 billion, which comes from state’s cut of its North Sea Oil bonanza. It was founded in the 1990s, with a view to providing things like pensions and healthcare when the oil runs dry. Already the income from the fund (not the capital) makes a substantial contribution to Norwegian government spending.
Perhaps you can think of another country that had a North Sea Oil bonanza… I know that Britain has 13 times the population of Norway. But even so, $900bn would come in very handy. We did talk about setting up a fund as long ago as the 70s, but instead your parents voted for governments who pissed it up the wall on tax breaks – which of course, benefit those who are wealthier and older disproportionately. We did the same with the proceeds of our various privatisations. I dunno, perhaps your folks took two skiing holidays that year.
Our housing crisis was even more avoidable. All we had to do was build the number of houses the market needed. We used to be very good at this. But here, a vipers nest of vested interests, profiteering, NIMBYism and pandering to equity rich voters for whom mortgages payments are a distant memory means nothing is done. Sure, the government talks the talk – no-one wants to appear mean to cute 22 year olds – but there’s no action. Polices to help the young – such regulating the rental sector properly or a national housing plan gather digital dust on think tank hard drives.
For what it’s worth, I don’t think this was intentional. Again Larkin has it right: “They may not mean to [f-ck you up], but they do.” It’s more a case of wilful ignorance.