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| Older people vote – that's why George Osborne's budget is for them | Older people vote – that's why George Osborne's budget is for them |
| (about 2 hours later) | |
| Off we go in an open-top Ferrari with a gigolo on board, away to Monaco to blow our pension pots. Stepping over the threshold of pensionable age does not turn us magically sensible. Nor is the crafty chancellor prudent, as he snatches a fat advance on future taxes by freeing up pensions, leaving some sucker in his seat in 2030 with lost revenues and the extra cost of all the pensions and care of those who blew it all having fun, fun, fun at 65. | Off we go in an open-top Ferrari with a gigolo on board, away to Monaco to blow our pension pots. Stepping over the threshold of pensionable age does not turn us magically sensible. Nor is the crafty chancellor prudent, as he snatches a fat advance on future taxes by freeing up pensions, leaving some sucker in his seat in 2030 with lost revenues and the extra cost of all the pensions and care of those who blew it all having fun, fun, fun at 65. |
| Another bonanza for better-off pensioners was the last thing we needed, with yet harsher austerity to come for ordinary earners. Why gift older people state-backed saving bonds no one else is allowed, plus more tax-free Isas, when the over-55s already own two-thirds of Isa wealth? | Another bonanza for better-off pensioners was the last thing we needed, with yet harsher austerity to come for ordinary earners. Why gift older people state-backed saving bonds no one else is allowed, plus more tax-free Isas, when the over-55s already own two-thirds of Isa wealth? |
| Let's start by saying it's not personal: the old are not to blame, nor are they selfish or grasping. Ipsos Mori finds those folk with memories of pre-1945 more imbued with the ethos of the welfare state than Thatcher's individualistic children. Some 70% of pre-war and baby boomer generations are "proud of the welfare state", but that sentiment is shared by only 25% of Generation Y who have grown up under a barrage of benefit denigration. However, this isn't generational warfare: the young aren't callous, they're putting the needs of the old at a higher political priority than their own plight – which is just as well, as that's where their earnings will go. The old do worry about the young: they never meant to purloin their future, but that is what's happening. | Let's start by saying it's not personal: the old are not to blame, nor are they selfish or grasping. Ipsos Mori finds those folk with memories of pre-1945 more imbued with the ethos of the welfare state than Thatcher's individualistic children. Some 70% of pre-war and baby boomer generations are "proud of the welfare state", but that sentiment is shared by only 25% of Generation Y who have grown up under a barrage of benefit denigration. However, this isn't generational warfare: the young aren't callous, they're putting the needs of the old at a higher political priority than their own plight – which is just as well, as that's where their earnings will go. The old do worry about the young: they never meant to purloin their future, but that is what's happening. |
| Ballooning grey wealth is part accident and part political deviousness by successive governments wooing their votes. The Intergenerational Foundation shows how grey privilege is worsening the struggles of the young. This budget, they say, just made it worse. Even the cut in long-haul passenger duty goes mostly to the old who fly more; while cutting what David Cameron called "the green crap" adds to the climate change burden of future generations. | Ballooning grey wealth is part accident and part political deviousness by successive governments wooing their votes. The Intergenerational Foundation shows how grey privilege is worsening the struggles of the young. This budget, they say, just made it worse. Even the cut in long-haul passenger duty goes mostly to the old who fly more; while cutting what David Cameron called "the green crap" adds to the climate change burden of future generations. |
| One plus point: what a joy to see the finance industry get their come-uppance after decades of skimming and scamming huge hidden fees off compulsory annuities. But the greatest unfairness of all was, of course, untouched: pension tax relief worth £48.4bn does virtually nothing for small savers, with half the money going to the top 8% and a third to the top 1%. | One plus point: what a joy to see the finance industry get their come-uppance after decades of skimming and scamming huge hidden fees off compulsory annuities. But the greatest unfairness of all was, of course, untouched: pension tax relief worth £48.4bn does virtually nothing for small savers, with half the money going to the top 8% and a third to the top 1%. |
| Back in William Beveridge's day, to be old was almost certainly to be poor. Now just 17% of pensioners fall below the poverty line – still too many – but 2 million over-65s own assets in excess of £1m and still get universal winter fuel allowances and bus passes. The theory is that all this tax relief gets paid back in the end, but in practice only one in seven high earners ever pays it back. Even fewer will now. | Back in William Beveridge's day, to be old was almost certainly to be poor. Now just 17% of pensioners fall below the poverty line – still too many – but 2 million over-65s own assets in excess of £1m and still get universal winter fuel allowances and bus passes. The theory is that all this tax relief gets paid back in the end, but in practice only one in seven high earners ever pays it back. Even fewer will now. |
| Roger Daltrey and Pete Townsend didn't die before they got old; instead their generation is living long and living it up. The young used to buy most theatre and cinema tickets, but now the 50- to 74-year-olds spend twice as much as the under-30s. The retired spend more than a billion more on foreign travel than a decade ago, while the under-34s spend a billion less than they did. The young are spending less on restaurants, while older people spend a third more. | Roger Daltrey and Pete Townsend didn't die before they got old; instead their generation is living long and living it up. The young used to buy most theatre and cinema tickets, but now the 50- to 74-year-olds spend twice as much as the under-30s. The retired spend more than a billion more on foreign travel than a decade ago, while the under-34s spend a billion less than they did. The young are spending less on restaurants, while older people spend a third more. |
| But everyone knows housing is the real shocker, where pensioners have lived through four bubbles bringing most of us unprecedented, unplanned riches. Now Margaret Thatcher's property-owning democracy is in retreat, down to 64% and falling, with first-time buyers having an average age of 37, and eight out of 10 only able to buy with family help. For the first time since the post-1945 building boom, more people now rent privately than live in social housing – the latter having shrunk by more than 2 million through right to buy. Yesterday, the High Pay Centre showed the unaffordability of rents: a nurse spends 78% of net income to rent a one-bedroom flat in London and 50% in Manchester – young workers priced out almost everywhere. | But everyone knows housing is the real shocker, where pensioners have lived through four bubbles bringing most of us unprecedented, unplanned riches. Now Margaret Thatcher's property-owning democracy is in retreat, down to 64% and falling, with first-time buyers having an average age of 37, and eight out of 10 only able to buy with family help. For the first time since the post-1945 building boom, more people now rent privately than live in social housing – the latter having shrunk by more than 2 million through right to buy. Yesterday, the High Pay Centre showed the unaffordability of rents: a nurse spends 78% of net income to rent a one-bedroom flat in London and 50% in Manchester – young workers priced out almost everywhere. |
| Why is that relevant to this week's budget? Some pensioners may give their children deposits from a pension draw-down – but without more building that will fuel demand and send prices rising, like Help to Buy. Pensions experts expect great slabs of newly freed-up pension pots to be invested in buy-to-lets. Those who do that are not wicked, but following government incentives. Looking for somewhere safe for their money, property looks the best investment – a one-way bet when precious savings dwindle under rock-bottom interest rates. The average age of buy-to-let landlords is 53, which is 20 years older than the average age of their tenants. Most are not Rachmans with property empires, but own just one property trying to safeguard their savings. The fault is not theirs, but successive governments have driven up house prices, and for reasons beyond comprehension have given every tax advantage to buying bricks and mortar instead of useful investment in productive industry. | Why is that relevant to this week's budget? Some pensioners may give their children deposits from a pension draw-down – but without more building that will fuel demand and send prices rising, like Help to Buy. Pensions experts expect great slabs of newly freed-up pension pots to be invested in buy-to-lets. Those who do that are not wicked, but following government incentives. Looking for somewhere safe for their money, property looks the best investment – a one-way bet when precious savings dwindle under rock-bottom interest rates. The average age of buy-to-let landlords is 53, which is 20 years older than the average age of their tenants. Most are not Rachmans with property empires, but own just one property trying to safeguard their savings. The fault is not theirs, but successive governments have driven up house prices, and for reasons beyond comprehension have given every tax advantage to buying bricks and mortar instead of useful investment in productive industry. |
| The Intergenerational Foundation says the taxpayer funds £13bn a year in buy-to-let tax subsidies: landlords can offset mortgages against rental income, which owner-occupiers can't. Landlords can deduct 10% "wear and tear" from profits, even if they do no repairs – 35% of rented properties fall below "decent homes" standard. Tenants get no security and/or rent controls. Several loopholes let landlords avoid capital gains tax when they sell, which they can't do with shares. Now Osborne floods cash into pensioner pockets – seeing this tilted investment playing-field many will reckon buy-to-let the best bet. | The Intergenerational Foundation says the taxpayer funds £13bn a year in buy-to-let tax subsidies: landlords can offset mortgages against rental income, which owner-occupiers can't. Landlords can deduct 10% "wear and tear" from profits, even if they do no repairs – 35% of rented properties fall below "decent homes" standard. Tenants get no security and/or rent controls. Several loopholes let landlords avoid capital gains tax when they sell, which they can't do with shares. Now Osborne floods cash into pensioner pockets – seeing this tilted investment playing-field many will reckon buy-to-let the best bet. |
| Why would Osborne do that? Because older people vote – 76% last time – and more vote Tory. What is the point of easing the housing, jobs and debt crises of the young when only 44% bothered to vote, and more did so for Labour? The age gap in voting is new, with only a 4% difference in 1987. Low earners don't vote much either, so the young/poor vote least of all. In a vicious cycle, politicians woo actual voters and sod the rest. The IPPR shows how, since 2010, average voters lost 12% in service cuts, but those who didn't vote lost 20%, or £2,135 a year. So, Russell Brand, young people are badly treated if they don't vote. | Why would Osborne do that? Because older people vote – 76% last time – and more vote Tory. What is the point of easing the housing, jobs and debt crises of the young when only 44% bothered to vote, and more did so for Labour? The age gap in voting is new, with only a 4% difference in 1987. Low earners don't vote much either, so the young/poor vote least of all. In a vicious cycle, politicians woo actual voters and sod the rest. The IPPR shows how, since 2010, average voters lost 12% in service cuts, but those who didn't vote lost 20%, or £2,135 a year. So, Russell Brand, young people are badly treated if they don't vote. |
| Sententious politicians mouth the platitude that children are the nation's future. But children are not Osborne's priority. For this captain it is older people first to the lifeboats, women and children last. A smell of decadence and corruption hangs in the air of a society when tomorrow is sacrificed for today, like the Easter Islanders who cut down all their trees and so exterminated themselves. | Sententious politicians mouth the platitude that children are the nation's future. But children are not Osborne's priority. For this captain it is older people first to the lifeboats, women and children last. A smell of decadence and corruption hangs in the air of a society when tomorrow is sacrificed for today, like the Easter Islanders who cut down all their trees and so exterminated themselves. |
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