To understand the Conservative party’s approach to government, it’s useful to think of there being two Britains. This is something British people love to do; we divide the country into North and South, rich and poor, London and not. The division that matters for the Conservatives, however, is a little different. It’s not a matter of economics or geography, but age. It’s the divide between Old Britain and Young Britain.
Old Britain, with the aid of the Conservative party, is very slowly throttling Young Britain
The Conservative electoral strategy is simple and straightforward: it will do whatever it needs to win the votes of Old Britain, and it will do so at the cost of Young Britain. You can see this in every economic decision taken over the last decade of Conservative rule; working-age benefits have been cut even as the triple lock boosts pensions. Planning reforms which would have cut rents for young people have been shelved to preserve the prices of assets held by the old. Taxes on working age people have risen to the highest level since the second world war while the services they use have been cut; only the NHS and social care – the parts of the state most valued by the elderly – have been spared the knife.
Understanding why the party does this is straightforward. Old Britain is increasingly dominant as an electoral force. Once you account for turnout and eligibility, voters over the age of 55 make up an outright majority of the voting public. This is, historically, extremely unusual. We are used to seeing populations grow, with the young by simple mathematics outnumbering the old, and governance as a consequence tending to cater to their interests.
The aging of the British population has reversed this trend, and in doing so has revealed a hidden failure mode in our democracy: Old Britain, if given free rein, will attempt to kill off Young Britain. This is not the result of malign intent, but of simple economic incentives; the two parts of the country are economically distinct, with interests that are often directly opposed.
Old Britain is landed; pensioners are overwhelmingly likely to own their own home, with 75 per cent mortgage-free. Old Britain does not work; pensioners are, by definition, retired. In short, Old Britain is insulated from the real economy. Homeownership means that changes in rents from a housing shortage are directly beneficial: Old Britain claims more money from property it rents out, and the value of those homes increases. Higher interest rates mean higher returns on its savings, which are often held in cash and annuities.
What matters for its welfare is not whether wages are increasing or the economy is growing, but whether it can extract more or less money from Young Britain through taxes and rents. And even as the economy is set to enter its longest recession on record, Old Britain is finding that it can still squeeze more from less. This is because it is growing; even as individual members age and pass, the ageing population means the number of pensioners is set to increase 28 per cent by 2045.
Young Britain looks and feels very different. It is not starting families; even as the working age population grows, the number of children is set to fall. It spends vast shares of its income on rent; it is vastly less likely to own a home at the age when its grandparents did; it works in an economy where wages have been stagnant since 2008. And its interests are often directly opposed to those of Old Britain; high interest rates for the young mean higher mortgage repayments and fewer jobs, higher pensions mean higher taxes, higher house prices mean higher rents.
And Old Britain, with the aid of the Conservative party, is very slowly throttling Young Britain. An ageing population should mean the government invests in growth, and in a larger tax base to support its needs. But Britain is trapped with an already aged population of such size that this is politically impossible; investment and growth for the old means disruption for benefits they will never see. Older societies accordingly tend to eschew capital spending in favour of current consumption.
The economist Mancur Olson is famous in part for his concept of government evolving from a ‘stationary bandit’ – a tyrant who wishes to extract as much as possible from a population over a long period of time and who has some incentive to see prosperity grow. Old Britain differs from this in a key respect; its incentive is to take as much as possible now, before it passes on.
The Conservative party is their willing accomplice in this; from naked pledges to take from the young to give to the old in the form of the triple lock, to attempts to gerrymander the voting population to lock in the current gerontocracy through biased Voter ID requirements, it has found a way to ensure electoral victory after electoral victory. And all it will cost is the future of the young.
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