Our country favours the old over the young and the problem has been getting worse. George Osborne took some welcome steps yesterday to reverse that trend. The apprenticeship levy, the extension of student loans, and enabling sixth form colleges to escape their unfair VAT burden by converting to academies are important moves in the right direction.
Today’s generation gap is between generous access to pensions for the old and restricted access to housing for the young — and it is widening all the time. The time it takes a typical middle-income household to save enough for a deposit has increased from 3 years in 1983 to 24 years today. That is scandalous. I don’t believe older generations are deliberately damaging the prospects of their children but they have not recognised the damage done by policies they support. Nimbyism is the most egregious example of that. Now opinion is changing. In 2010, 28 per cent of people said they would support more homes being built: in four years that has doubled to 56 per cent.
The most powerful symbol of the pressures on the younger generation was the chancellor’s proposal to make big cuts in tax credits for working families. I am very pleased that he is not pursuing this. He sensibly concluded that there was no “tweak” that enabled big savings to be made without hitting the incomes of hard working families — the very people whose side politicians always claim to be on.
However he now envisages that much of these savings will in future come from the streamlined Universal Credit. Even if a family’s circumstances do not change they might still face cash losses under UC. I doubt that people will be comfortable with such a contrast between the treatment of pensioners and younger people.
The chancellor understandably does not want to repeat Gordon Brown’s notoriously meagre 75p pension increase. But that does not mean we have to carry on indefinitely with the triple lock ensuring pensioners’ incomes rise by at least 2.5 per cent a year which could be a lot more than either prices or earnings. The chancellor identified savings in pension credit this week. I hope he’ll also ensure that future reforms to benefits strike a better balance between the generations.
This post originally appeared in The Times.