The state pension has just risen by the highest amount in 15 years, and the Tory Party boasts that this is a result of the ‘difficult decisions’ it has taken. This is odd, because no one else is being told about dividends from such decisions. In fact, Osborne’s deficit is still massive so he can’t afford any other giveaways. As I say in my Daily Telegraph column, it’s just the latest clear sign of a kind of generational apartheid in the government’s fiscal policy: the cuts are being focused exclusively on the working age. And this is why Iain Duncan Smith resigned: not due to cuts to disability benefit (which he supported) but because he couldn’t justify writing ever-larger cheques to pensioners, while making ever-deeper cuts to welfare. He felt that he’d already cut to the bone.
Having to write winter fuel payment cheques to millionaires always annoyed IDS, and while researching the piece, I looked up the results from the ONS's Wealth and Assets Survey to see how many such people there are. The answer: 1.7 million pensioners now live in households whose assets are £1 million or more, a figure that has almost trebled since the crash. The data is below….
This will be due to the asset bubble, a wholly negative development which has left pensioners amazed at the sky-high price of often modest houses – while making the young resentful, and despairing of their ability to ever acquire such property. The bank balances of the pensioners has not swollen to £1 million plus. But their assets have become worth more than £1 million. If you had to ask where to draw the line at winter fuel payments, I’d draw it there. Now, I’m not a generational jihadist – I loathe the way pensioners are spoken of as being a burden that must somehow be carried by the working-aged. But I do think that Cameron’s triple-lock pension policy (which means pensions have risen four times faster than earnings, since 2010) is creating unfairness in the other direction. It’s no mystery what the government is doing: trying to buy credit from the demographic most likely to vote. But look at the below graph: the income of pensioner households after paying for housing is now almost the same as worker households. And this is before you factor in the far-greater costs that families will have.
There is a danger that the pursuit of voters distorts the Tory Party’s priorities – and it becomes seen as the party that helps the old at the expense of the young, alienating both in the process. Anyway, more in my Daily Telegraph column here.