Stop blaming old folk for the mess we're in

Columnist

Sunday 15 July 2012

IT used to be the younger generation who were criticised for not paying their way.

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Iain Macwhirter

"The world doesn't owe you a living, you know," said parents stuck with late-sleeping children of working age who somehow couldn't find their role in life. Now things have changed. Increasingly, it is the elderly who are being accused of living off the state, sponging even, by their sanctimonious offspring.

Younger people resent older people sitting on tax-free equity in expensive homes while they struggle to get a mortgage. Benefits for people of working age are being withdrawn or means-tested, while older people in Scotland still enjoy benefits such as free personal care, winter fuel allowance or free bus passes, regardless of their income – though perhaps for not much longer. Older people are even being blamed for prolonging the sovereign debt crisis. Apparently, the rising cost of the ageing population is undermining the national finances. Last week, the Office of Budget Responsibility (OBR) predicted that by 2050, the rising ratio of older people to workers, the "dependency ratio", will have punched an £80 billion hole in the national accounts. How will we cope?Really, you have to ask: why don't these older people just do the decent thing and pop their clogs like they used to? Perhaps someone could open sustainable euthanasia centres in eventide towns like Bournemouth and Helensburgh, where the old could be helped into the next world in a painless and humane manner. A final solution to the problem of elderly social care ... What a bizarre sense of priorities we have acquired when the blessing of longevity is presented as a "time bomb", an "economic crisis". That we are all living longer is a tremendous achievement of modern civilisation and medical science. It is something to celebrate, not turn into another phoney crisis. It is wrong to talk of older people as if they were some alien force coming to eat our lunch. No-one says children are a burden on society because they consume wealth and get tax breaks such as child benefits. Older people just happen to be at the other end of the life cycle. They aren't a burden on society, they are society – they made the world we live in.Anyway, older people pay taxes just like the rest of us, and at the same rates as the rest of us, whether they are living off their pension savings or still working. They've paid for their state pensions through their national insurance contributions. Most older people depend on savings which right now are being shredded by inflation and near-zero interest rates. Low interest rates constitute a wealth transfer from older people with savings to younger people with large mortgages – though strangely they don't see it that way. Many older people want to work but can't because of lingering age discrimination. In areas where retirement rules don't apply, more and more older people are remaining economically active well into their 70s. Look at the Rolling Stones – Jagger and Richards will both be 70 next year – generating more revenue than they did 50 years ago. OK, as tax exiles the gerontocrats of rock managed to spirit away a lot of their earnings over the years, but that's a fiscal problem, not an age-related one. As the retirement age increases – as it should – more older people will remain in work.Blaming older people for economic austerity is economically illiterate as well as callous. Turn the argument right side up and you see that longevity is a source of future economic growth. An ageing population is, like climate change, an inconvenient truth but also a sunrise industry. Elderly care is set to become one of the key growth areas of our moribund economy, providing large numbers of jobs, not just for carers, but for the leisure and medical sectors. The fact that there are "not enough workers" to support them can be resolved – as the OBR itself notes – by immigration. Though curiously this solution to the "dependency ratio" doesn't appeal to Tory MPs who complain about the costs of pensioner benefits. In Scotland, free personal care is invariably wheeled out by local authority officials and newspaper editorials as a luxury the country cannot afford. Providing medical and nursing care to older people has helped tens of thousands to remain independent, living with dignity in their own homes instead of lingering in hospital beds at the cost to the taxpayer of £1500 a week. As the economist Professor David Bell has pointed out, since the policy was introduced in 2002, bed-blocking in the NHS has become virtually non-existent, saving a large chunk of the £400 million or so that the policy costs. And free personal care (FPC) isn't just a way of allowing older people to avoid having to sell their homes. It is a myth that FPC covers care-home costs. It doesn't, and care home residents still have to pay the net £22,000 annual cost, unless they own less than £23,000. That's a means test in anyone's language. Councillors and local-authority bureaucrats like to focus on free personal care because it diverts public attention from officials earning six-figure salaries and getting extravagant final-salary pensions. The cost of local authority pensions is equivalent to a quarter of council tax revenue. As for axeing or means-testing free bus passes, as urged by the Tory MP Nick Boles, the savings here are likely to be nugatory for the simple reason that well-off pensioners don't go on buses in the first place. Pensioners fill empty seats on buses that have to run anyway, so the savings in Scotland after administration costs is unlikely to amount to more than a few years of Bob Diamond's salary at Barclays. It is convenient for politicians of the right, like the Universities Minister David Willetts, author of The Pinch, to suggest that the dividing line between the haves and the have-nots should be redrawn on a generational basis. But this is a diversion from the true unfairness of a society in which wealth inequality, irrespective of age, is returning to levels last seen in the Edwardian age. There may be a problem of older "empty-nesters" sitting in large houses they don't really need in order to lock in the capital gains they have made over preceding decades. But that is a consequence of exempting residential property from capital gains tax. You can't blame older people for living. Longevity, as someone once said, is here to stay – so grow up. Older people are not a burden on society: they are you and me a few years on. And it's later than you think.

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Stop blaming old folk for the mess we're in

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