According to Jonathan Portes, means-testing the winter fuel payment (WFP) is defensible given the progress made with the much-maligned ‘triple lock’ for state pensions.
This formula links pension increases to 2.5%, inflation, or earnings – whichever is highest. The former Cabinet Office economist notes this has increased the basic pension by 11% since 2011.
The triple lock has gained an almost exculpatory reputation for insulating older Tory voters and disinheriting the young for being woke.
Conservative callousness in the 2019-24 term was typified by battles over universal free school meals and the two-child benefit cap.
Uprating pensions while younger workers are saddled with student loans – a 9% marginal tax rate for nurses and teachers – signposted security for older people while magnifying insecurity for young people.
In reality, uplifting payments protects older people now and younger people in the future given how UK pensions have lost value relative to European pensions.
OECD figures in 2023 found the UK had an overall net replacement rate of 54.4% from mandatory pensions compared to earnings, versus an OECD average of 61.4%.
TUC research in 2021 found that abandoning the triple lock for an earnings link would punish 700,000 people.
However, concern with uplifting pensions is now coded as the preserve of Daily Mail op-eds rather than a longstanding goal of the left.
This sits somewhat uneasily with a narrative popular across the spectrum following Brexit and the 2019 election: pensioners are a class unto themselves, increasingly cleaved off from the wider economy, relying on corpulent asset growth – primarily housing.
It explains YouGov polling just after the vote to cut the WFP, which suggested a plurality supported it – 46%, with the highest backing coming from 25-49s (56%) and 18-24s (49%).
61% of Labour voters also backed it compared to 32% of Tories – proportions that surely would have been reversed if implemented by any Tory leader.
The bastardised conception of pensioners as a privileged class has primed younger voters to support curtailing universal benefits for the old.
Former Scottish Labour leader Kezia Dugdale explicitly defended the cut on these contorted grounds: “A huge chunk of those 10 million people have had a very good decade when it comes to increases in pensions, for example.”
Peter Kyle, Science Secretary, said pensioners are the only group to have seen increased incomes in the last fifteen years. He deliberately ignored billionaires, who saw a £150bn increase in their wealth between 2020-22 alone.
Former Tory leader and Foreign Secretary, Lord Hague, has similarly framed the triple lock as something denying younger people a fair stake in the economy.
There is something undignified about politicians and commentators on six-figure incomes complaining about Baby Boomers and pretending their interests are the same as everyone born between 1981 and 1996.
Many are rather too promiscuous in their denunciation of Boomers, granting them the nomenclature of neoliberal custodians of capitalism, as if surplus value is no longer extracted from ownership of the means of production but via free bus passes for pensioners.
Age is a substitute for class but is just that: a substitute without any nutrients. Hague doesn’t identify the lower rates paid on national insurance or the 40-45% tax relief on private pensions for high earners, which may cost up to £12.5bn and £14.5bn, respectively.
Nor does he point to the £72.2bn withdrawn from liberalised private pension funds in the last 10 years. Instead, his pitch is for redistributed austerity, so there is an opportunity for the cold shower to be turned on all demographics.
Labour has attempted to appeal to this generational split, though the Labour right always ruins the bargain by going out of its way to attack everyone else as well.
Still, Reeves’ coarse, fatuous insistence that “If we can’t afford it, we can’t do it” and the ‘tough decisions’ echolalia of cabinet ministers in every interview do not entirely rob the generational argument of its power.
According to the Intergenerational Foundation, over-65s’ share of wealth increased from 32.5 to 45% between 2007 and 2016 A more lurid, viral statistic is that a fifth of Boomers were millionaires as of 2019.
As Keir Milburn argued in 2020, this is the primary reason for diverging voting patterns in the UK as homeowning pensioners became aligned with a booming asset economy dependent on quantitative easing, stock market growth, low inflation and interest rates, and under-40s with the sclerotic parts of the economy where people earn wages.
The split is not just on material lines but over what is seen as politically possible.
Labour’s 2019 ‘Red Wall’ woes in predominantly working-class Northern and Midlands towns were also characterised as problems with the ‘Grey Wall’, i.e. ageing, homeowning populations.
Towns like Bolsover that saw stable industry replaced by Sports Direct factories were likelier to see their fortunes in fluctuating housing wealth.
Even in 2019, Labour was winning over non-retired workers earning under £35,000, and older renters were more likely to vote Tory than younger homeowners (though turnout was far lower among older renters).
But a complicated wrinkle in this Millennial vs Boomer dynamic is the inequality within these generational cohorts.
The average Millennial is more likely to be low-paid or live at home than Boomers were at their age, and housing is less affordable for low-paid Millennials than it was for low-paid Boomers at the same age.
However, the Financial Times found the divide is starker within the Millennial generation: the top decile have an average £300,000 of property wealth, triple what the wealthiest Boomers had amassed at the same age.
Meanwhile, the average renter gets older. Over-35s are now 57% of renters, up from 49% a decade ago. The National Housing Federation has found nearly half of older renters are struggling with bills, essentials, or both.
Independent Age has found on current trends, half of older renters may be left in poverty. Life is easier for the wealthiest 10% of Millennials than the Boomer renter who likely has no capital to withdraw for social care.
According to a study of four advanced economies, 74% of house price increases are due to increased land prices rather than your grandparents trying to spite you.
However, the difference in expected windfalls is precisely where generational solidarity starts to break down. It firstly imagines that even working-class Boomers can dip into the collective Old People’s Wealth Fund and ask Richard Branson for a handout as if he will honour a burden of demographic solidarity.
Secondly, if the older renter is supposedly in solidarity with a Boomer billionaire, it also demands the absurd fiction that the younger homeowner with no student loans is in solidarity with the younger renter.
Closing the wealth gap between the generations might not require social democratic measures i.e. wealth taxes or massive social housing programmes; it could also be done by closing the gap between the top 10% of Millennials and the top 10% of Boomers.
This may be part of the centrist or right-wing pitch in the future: pulling Millennials into the asset-hoarding sections of the economy as landlords while cutting future entitlements for those not so lucky and pretending it’s curtailing the excesses of Boomer homeowners now, while expecting people to work longer before they discover their pensions count as taxable income.
As Molly Broome of the Resolution Foundation has noted, the pension age is not the retirement age, and richer people’s assets mean they can afford to retire earlier than the pension age. Working-class people can neither afford to nor live as long to enjoy their state pension.
There is a distinction between those angry about the developers, lenders, and landlords hoarding housing wealth and those resentful because they want to do the hoarding.
They could be placated if grotesque housing inequality were more equitably distributed across the age groups. With any luck, they no longer need to worry about the political representation of all renters and, instead, get to be the thirty-somethings at the top.
Representation matters, and they are our Burkean emissaries. They can paraphrase Edmund’s forgery in Shakespeare’s King Lear:
“This policy and reverence of age makes the world bitter to the best of our times; keeps our fortunes from us till our oldness cannot relish them.”
Please support The Battleground. Subscribe to our free newsletter and make a donation to ensure our continued growth and independence.
Photograph courtesy of Sam. Published under a Creative Commons license.
