A report into inter-generational fairness suggests that a £10,000 payment should be given to the young and pensioners taxed more in order to pay for it. The research and policy organisation, the Resolution Foundation, claims these radical moves are needed to better fund the NHS and maintain social cohesion.
Its chairman, Lord Willetts, the former universities minister under David Cameron, said the contract between young and old had “broken down”. Without action, young people would become “increasingly angry”, he said.
This is somewhat similar to the often-mooted idea of a universal basic income, except that it would be a one-off payment and would only be available to 25 year olds. It would be funded by a new “lifetime receipts tax” that would replace inheritance tax.
This is divide and conquer. It would be very expensive and also cause a lot of tension between the older and younger generations. Many elderly people would resent paying higher taxes to fund handouts for millennials, many of whom they perceive as spoilt snowflakes.
The proposals as stated would also lead to many anomalies – for example, a wealthy 25 year old investment banker would receive a £10,000 payment, whereas a homeless person in their 40s would not. It would also cause resentment amongst those who are just slightly older than the cut-off point.
One of the reasons given in support of the £10k payment is that house prices have risen so much that many millennials cannot afford to buy their own home. This is true – house prices now stand at an average 7.6 times the average annual salary, whereas in 1997, house prices were on average about 3.6 times workers’ annual gross full-time earnings. This means that the median price paid for a home leapt by 259% over this 20 year period, while median individual annual earnings could only manage a 68% rise.
So supposedly the issue of unaffordable homes is the fault of pensioners and not the government for allowing millions of extra people into the country and not building the infrastructure for them! Also, too many old people using the NHS even though they have paid their taxes, is not the government’s fault for mismanagement of the NHS! Pensioners do pay taxes if they earn enough, unlike rich tax avoiders like Richard Branson.
Also, if you give all 25 year olds £10k for a housing deposit, what do you expect will happen to property prices? Surely it will just inflate them even further. So the proposal won’t actually achieve anything for the people it’s supposed to benefit, whilst making things financially harder for everyone else.
Is this a case of the Remoaner Lords seeking to hammer the ‘Oldies’ they stereotypically blame for Brexit?
Disclaimer: The content of this post reflects the views of the author, and not necessarily those of MBGA News.
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