David Cameron is warning that every individual will be hit by the coming cuts. But don’t expect the pain to be spread fairly across all groups. If the coalition agreement is anything to go by, the elderly will be given a free ride at the expense of everyone else.
We’re in the midst of a fiscal crisis, but there is hardly a perk left for over 60s — the most wealthy section of society (see IFS chart) — that hasn’t been protected by the coalition.
Older people will feel some indirect pain through withdrawal of some public services. But the over 60s may be the one group in society that does not take a direct hit to income over the next five years.
Ministers privately admit it was little more than a response to genuine “concern on the doorstep” among a group that are the most likely to vote. The result? Old people, regardless of means, were the big winners of the election. Most of them benefited from the great British property bubble and now will ask their children to pay for the fiscal fallout.
Just take this list of spending pledges. I’ve exaggerated the case against them, if only because no one in politics is willing to make it. (They are all terrified of the voting granny.) For those with valid concerns over pensioner poverty, remember that this money could easily be better targeted on the needy, while still making savings. There is nothing progressive about give-aways based on age.
– Free bus passes for the over 60s. How else would Vince Cable and Ken Clarke get around? And this perk costs just £1bn a year, which is an eighth of what we spend on the railways.
– Free TV licences for those over 75. Essential at a time of swingeing budget cuts. Cost: £600m (more than the child trust fund which has been scrapped)
– Restoring the earnings link for the state pension from 2011. Very expensive in the long term. Could have actually meant pensions fell this year because of falling incomes across the economy. But the coalition promised that pensions will always rise by at least 2.5 per cent — even if everyone else’s earnings drop below that.
– Protecting winter fuel payments. A £2.2bn give-away to all 60 year olds, whether they need it or not. Can no one think of a better way to target this to people who really are struggling to heat their homes?
– No changes to the default retirement age for anyone over 60. The retirement age will be increased. But not until 2016 for men and 2020 for women. The move will make all those who paid for perks for the over 60s work even longer. That’s justice for you.
– Real terms increases in NHS spending. The service that old people rely on most will be spared from budget cuts. Oh, and don’t forget the free eye tests and prescriptions.
Jim Pickard
Kiran Stacey