There is more intergenerational co-operation than battles

I have long disagreed with my old friend David Willetts and those who think the baby boomer generation have done too well at the expense of the generations that follow. I am not pessimistic like them about the upcoming generations, who may well go on to harness new ideas and new technologies to make themselves considerably more comfortable and richer than the baby boomers. Meanwhile, let me explore some of the errors of the present belief that the older generation are having it too good.

There is nothing new about most of the wealth of a country residing in the hands of people over 40 rather than under 40 years old. By definition babies come into the world with no wealth of their own, and no capacity to earn until they have grown up. We do not agree with child labour, so we support our children from our income instead.

In contrast many of the older generations have spent years struggling with a mortgage until they reach the day when they own a home outright. Given usually rising house prices they get gradually richer even with a mortgage. Most save for their retirements, so over their lifetimes their savings in financial assets build up to secure them that pension at 65 or beyond. 20-40 year olds have not normally managed to save much for their retirement, and are still struggling with home buying. So did the baby boomers in their younger days when house prices were a lot cheaper but mortgages were a lot dearer. Current affordability as judged by mortgage payments as a proportion of income are not overextended in the way the house price to income ratio is.

In practice the baby boomer generation is sharing their wealth and income with the younger generations in conventional ways. The Bank of Mum and Dad is flourishing where parents have a surplus. It is paying educational fees and providing deposits for homes. The Bank of Grandma and Granddad is also often working overtime for similar purposes. Many of the younger generation will stand to inherit decent sums, though we hope they will have to wait a good long time for that.

The more active retired who have some wealth are keen to spend on exotic holidays, meals out, leisure breaks, sporting and cultural events and much else which creates income for those setting up businesses to service these markets, and creates jobs for many younger people. The frail and disabled better off spend much of their money on care homes, which again generate work and income for many people. The better off tend to be generous with charities.

The present imbalance in wealth between older and younger people is nothing new. It is inevitable given the way we work, earn and save. The money is recirculated, as it would be unhelpful if the elderly just sat on their wealth and did nothing with it. Many of them make conscious decisions to move it on by buying things and by giving it away to those who have more need of it. To those who do not, they leave it in a bank or savings scheme, so their money gets reused anyway by younger people who borrow it for their own purposes. I do not think there is a great intergenerational war. Most people see the elderly have money which they need to spend, and the younger people have energy to work, to earn that money. In their turn they will expect the same in their old age.

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204 Comments

  1. Sir Joe Soap
    Posted February 5, 2018 at 5:22 am | Permalink

    Much truth in this, however

    1 – it ignores the fact that debt is built up inequitably by English students studying at English universities, which wasn’t previously the case
    2 – it ignores the fact that a first time buyer’s house in 1980 was around 3 x gross new graduate income, compared to around 12 x now
    3 – it ignores the fact that inflation eroded debt rapidly in real terms in the late 70s and early 80s, which it doesn’t do now

    So the net debt picture is radically different, even if interest rates are lower now.

    • Peter
      Posted February 5, 2018 at 7:06 am | Permalink

      This mostly ignores the problems the young now have getting a home and a decent job these days. When I started out there were good jobs aplenty with reasonable wages security of tenure mostly and a good pension to look forward to. Houses were a small multiple of average income.
      That has all changed.
      However the old are blamed for this instead of elites who have watched a shift of assets from the many to the few,buying off the old in the process with early retirement windfalls that remove jobs that would have been avaialableto the next generation. What should be standard terms like a reason able pension are now demonized as “gold plated” pensions.

      • A different Simon
        Posted February 6, 2018 at 1:00 pm | Permalink

        Peter ,

        One thing I criticise the socialists for is wanting to privatise those things which should be nationalised/socialised .

        Pensions is the main one . They want to punish companies by making them liable for investment performance risk between the time they take and employee on and the day they die .

        Most companies will not be around for anything like that length of time so they must not take on such long term liabilities .

        A decent livable state pension is the only sensible option plus discretionary saving by those who can manage it .

        Far better than the current fudge of means tested benefits .

    • eeyore
      Posted February 5, 2018 at 7:15 am | Permalink

      A student loan is the subsidised use of someone else’s money, which more than likely will never be paid back. Is it too much to expect a little gratitude, or is resentment at their hard lot now the default position for the young?

      Nonetheless I take Sir Joe’s points, but he should reflect that today’s elderly struggled with interest rates up to 15%. And inflation which eroded debt also eroded savings.

      Already the young are too posh to do their own rough work, for which we import less fastidious foreigners. When the baby boomers die off young people will inherit on an unprecedented scale. We are a nation of heirs and heiresses. The effect on national character will be profound.

      • jerry
        Posted February 5, 2018 at 9:59 pm | Permalink

        @eeyore; You forget that student loan was most probably the parents money in the first place, paid to HMT via their taxes, the govt. being in part a higher education savings account in effect!

      • Mitchel
        Posted February 6, 2018 at 10:22 am | Permalink

        “We are a nation of heirs and heiresses”

        Yes.Wasn’t that,broadly speaking,one of the reasons Spain went from being Europe(if not the world)’s greatest and wealthiest power to a decayed backwater in a relatively few generations.

        Look what’s coming from the East.

    • stred
      Posted February 5, 2018 at 7:43 am | Permalink

      Friend Willets was actively encouraging students to take student loans, in the expectation that they would become high earners. He must have little knowledge of salaries offered to graduates other than in law and medicine.

      The loss of real savings through interest rates below inflation is also a way for government to ‘tax’ older people while taxing graduates with a 6% interest rate 4% about its own borrowing cost.

      The pushing up of house prices by money creation for mortgages has also benefitted the Treasury at the expense of older and younger people. Older people cannot move because other houses and flats are equally expensive and stamp duty too high, while young people pay high prices and much of the value is eventually taken in IHT.

      • stred
        Posted February 5, 2018 at 7:44 am | Permalink

        4% above

    • zorro
      Posted February 5, 2018 at 7:57 am | Permalink

      Much truth in your too, however,

      1) More students have the ability to go to university than before which makes them more marketable and more potential for better earnings either here or abroad – granted they need to choose wisely, but a lot of jobs crying out for sensible, literate, flexible young people.
      2) The internet – I always tell my children that I would have loved to have studied at university nowadays like them and have the unbridled power of modern communications and the internet to assist me in my research. Som much more convenient and readily accessible books, seminars, tutotorials – brilliant
      3) Agreed – prices are higher – hint nint – we know why that is!! However, we live in a world of ZIRP which makes mortgages highly affordable. An interest rate shock would affect them but prices would drop too. But hey, I never advocated ZIRP, or the reasons why house buying has become more expensive.
      4) A more stable inflation picture is better to plan financial/business affairs. I don’t think any of this would fancy 15% interest rates or wildly fluctuating inflation again. I would never have predicted very low interest rates for such a long time 20 years ago, would you? I know that there are reasons for it, but it has been managed relatively on an international scale in a not too horrendous fashion.

      zorro

    • jerry
      Posted February 5, 2018 at 7:58 am | Permalink

      @SJS; Indeed, and to add to your second point, the inability to save in the ways most baby-boomers and their parents could due to the rise in property rental costs whilst trying to save for a deposit.

      Then of course far to many have allowed, due to the connivance of the banks and credit facilitators, personal debt levels to become crippling, even more so of late with social media & smart-phone driven purchasing trends.

    • Bryan Harris
      Posted February 5, 2018 at 8:57 am | Permalink

      That doesn’t escape the fact that every generation is prone to stupid and vindictive political decisions…and every generation faces different challenges
      .
      Take brown’s raid on pensions that destroyed many people’s dreams of a solvent retirement… and that didn’t help any of the generations…
      .
      Let’s stop this nonsense that people are not responsible for their own destiny – yes, politics will get in the way, as well as financial conditions, but that doesn’t mean these problems cannot be overcome, with a little unbiased intelligence, and less government!

      • Lifelogic
        Posted February 5, 2018 at 4:27 pm | Permalink

        “Take brown’s raid on pensions that destroyed many people’s dreams of a solvent retirement” Yes but this assault has been made even worse by the appalling Osborne and Hammond with pension cap reductions and contribution limits. Plus his assault on Landlords, Tenants, Stamp duty, the IHT ratting and much else.

        The non dom attacks were entirely counter productive too, as we see with lots of wealthy people now leaving.

        • Bryan Harris
          Posted February 6, 2018 at 8:26 am | Permalink

          Yes – vindictive, unnecessary politics at work..

    • John Finn
      Posted February 5, 2018 at 11:03 am | Permalink

      1 – it ignores the fact that debt is built up inequitably by English students studying at English universities, which wasn’t previously the case

      While you ignore the fact that, in the 1960s and early 70s, far more people left school at 15 than went to university. I have friends that had been working 10 years by the age that most of the current generation think about starting work.

      2 – it ignores the fact that a first time buyer’s house in 1980 was around 3 x gross new graduate income, compared to around 12 x now

      Having bought houses in 1977 and 1990 I am somewhat sceptical of the “3 x gross new graduate” figure. As far as the 12 x income figure is concerned. I recently sold my mother’s 3 bedroomed semi-detached house (garage and gardens) in a perfectly reasonable area of our city for £155,000.

      You also forget the key cost of mortgage repayments. Interest rates of 10% – 15% meant servicing a mortgage was relatively much more expensive than it is to-day. My daughter can comfortably afford to buy the sort of house that I could only afford with both mine and my wife’s income in 1977.

    • Richard F
      Posted February 5, 2018 at 11:13 am | Permalink

      Absolutely Sir Joe. Inflation erosion of debt is all too often ignored.

      • Lifelogic
        Posted February 5, 2018 at 5:10 pm | Permalink

        True – Inflation is a great thing if you are the government (or indeed if you arrange your affairs so as to benefit from it as I often do).

        The government even tax you now on Capital Gains (at 28%) on gains that you have not even made in reality!

    • Anonymous
      Posted February 5, 2018 at 11:22 am | Permalink

      Correct.

      I explain later on how I (not a boomer) am far poorer than those slightly ahead of me – mainly because of my children.

    • MikeP
      Posted February 5, 2018 at 12:15 pm | Permalink

      Not sure that completes the picture. Houses bought in 1980 weren’t for baby-boomers (then in their 30s) necessarily whereas I – a baby boomer – had a degree (rare), earned £2500 a year when I bought my house for £12500 in 1975, 5 years after graduating and a first job on £1248 a year. Interest rates rapidly spiralled to 17.5% meaning mortgage repayments ate into our income, preventing us from spending in many other areas. Today’s trend is for single people to want a house of their own which was unthinkable years ago. If we wanted our independence we went into rented accommodation with friends until we’d settled on a partner for life who could then shared in the house purchase.

      • Lifelogic
        Posted February 5, 2018 at 5:31 pm | Permalink

        Exactly. Furthermore a house then was often rather more primitive – perhaps without central heating, insulation, single glazing, simple lighting, one bathroom, primitive security ……

    • lojolondon
      Posted February 5, 2018 at 12:52 pm | Permalink

      Regarding house prices : The only thing that determines price is supply vs demand. Import 6m people every 10 years and you have far more demand than supply. Hopefully BREXIT will give the UK a chance to redress the balance.

      • M.W.Browne
        Posted February 5, 2018 at 4:11 pm | Permalink

        BREXIT is irrelevant. We have full control over non-EU immigration now, but neither Conservative, Labour or Liberal want to stop it. They are cushione from the effects of a foreign takeover of our country, and the so called millenials are too stupid to see this. We could also introduced rules to mitigate EU immogration, as many EU countries already do., as long as these rules applied to our own people as well.

      • Lifelogic
        Posted February 5, 2018 at 4:30 pm | Permalink

        Especially if you restrict planning consent, make getting planning very expensive, make buyers fund others social housing and have stamp duty at up to 15%.

      • A different Simon
        Posted February 6, 2018 at 1:09 pm | Permalink

        No it’s not .

        It’s availability of credit .

        Low interest rates , dual income mortgages and relaxed lending rules drive house prices up .

        Shifting taxation from labour , industry and capital onto land would go a long way to levelling the playing field between aspiring owner occupiers and speculators/landlords .

        Adam Smith , Winston Churchill , Milton Friedman all thought this annual ground rent / land value tax was the least damaging tax . Vested interests and ignorance continue to prevent it’s implementation here .

        Increases in the unimproved value of land in specific locations could then accrue to society as a whole rather than just freeholders,landlords and mortgage lenders .

    • Dee
      Posted February 5, 2018 at 4:44 pm | Permalink

      1)You ignore the fact that 90% of student debts are never paid back.

      2)You ignore the fact that they only pay the debt back when their payscale
      reaches a certain (high) threashold.
      3)You ignore the fact that after so many years their debt is written off..

      4)Since when did high inflation reduce debt? I think you’ll find it actualy
      increases the amount you owe.
      5) You ignore the fact that in those days there was no Gov incentives or help
      to buy schemes, you were on your own and the bank managers rubbed
      their hands. Now even the builders offer to furnish your home for free. Kids today do not know what hardship is.
      6)You quietly paper over the fact that the Bank of Mam & Dad pays much of what the younger generation spend on big purchases. How many Grannies are looking after their childrens children so they can work and not pay child minder fees?
      Oh and their is one other thing my generation gave you, apart from space travel, computers, washing machines and 90% of what you take for granted and that is the ability to air your views, the ability to kick against the establishment in fact, most of the rights you have today.

      • a-tracy
        Posted February 6, 2018 at 9:12 am | Permalink

        1) is the 90% a government figure? English students that had the Labour parties first tuition fees in Sept 1998 were initially £1000 pa I’d be surprised if those sums weren’t paid back because they repaid the loans on income over around £16,000pa and have been paying them for twenty years. I’d like to see which courses leading to careers haven’t paid this small sum back in 20 years. Sept 2006 they put fees up to £3000 pa. Sept 2009 £3225 and the big sting Sept 2012 £9000!

        Dee, do you think that £16,000 pa is “(high)”? That is the level my eldest is paying his loan back at 9% of his income above that level?

        3. It’s 30 years paying 9% extra tax than all those before them before it is written off.

        And as a consequence of the 2012 change, students who graduate in 2017 will pay 6.1% interest, despite the Bank of England base rate being 0.25%! This is just daylight robbery and our ENGLISH MPs should be ashamed of these decision for English students only. This high rate is in order to ensure they never pay it off (because for whatever you say Dee people have been paying it off and if they can’t pay back £3000 in 20 years what chance have people taking on £27,000pa loan. It becomes a high tax resulting in over half of their income being taken in taxes before they have to pay Council tax, VAT.

        The whole point of my generation working from the age of 16 was to give our children a better educated, social ladder climb into a professional occupation that requires a degree, otherwise what? That we plebs just know our place and hold our children back while the wealthy are the only ones that can afford for their children not to take on any loans at all. They had no choice and it is a bigger misselling scam that PPI because they didn’t clearly explain to the 18-year-olds they were accruing interest from day 1 of the loan in 2012 as they hadn’t previously.

    • Peter D Gardner
      Posted February 6, 2018 at 2:19 am | Permalink

      Universities :the eu and devolution and increasing government involvement in universities are significant factors.
      Graduate incomes: probably deflated along with the value of a degree.
      Debt: many reasons for debt but true inflation reduced debt especially for people on indexed salaries.

  2. Prigger
    Posted February 5, 2018 at 5:28 am | Permalink

    “…the present belief that the older generation are having it too good.”
    I have only heard this from literally two young Commentors on this site and a couple of people chosen by Fake News ” in the street” at say a Momentum rally. Chosen because their ideas are out of sync with everyone else and therefore sensationalist and provocative. I see no reason to debate the issue and cannot be accused of posing an ad hominem argument because in this respect as such a term relates to (literally ) adult opinions only.

    • lojolondon
      Posted February 5, 2018 at 12:53 pm | Permalink

      Totally agreed. The MSM keeps repeating their perspective, which is a very ‘momentum’ point of view. No real people believe that the older generation are too well off.

  3. JJE
    Posted February 5, 2018 at 5:53 am | Permalink

    What a complacent view. You don’t even mention the debt burden from student loans or the shortage of housing. Buying a house and starting a family is more difficult than ever.
    I guess you don’t worry much about the young people who don’t have a bank of Mum and Dad to help out.
    You should take Mr. Willett more seriously if the Conservative Party is to survive.

    • Horns of a dilemma
      Posted February 5, 2018 at 7:02 am | Permalink

      JJE
      Why should young people be given sufficient money in buying a house?
      I don’t own my own house. My ability to reproduce myself has never been in the largesse of my local estate agent or bank manager.

      • Peter Parsons
        Posted February 5, 2018 at 4:26 pm | Permalink

        They shouldn’t be given it, but they should have a reasonable opportunity to earn it, something which is no longer possible for many.

        A studio flat in John Redwood’s constituency will go on the market today for about 6x median earnings. 20 years ago just 3x median earnings was enough to get you something somewhat more substantial (a 2 bedroom property).

        There are many reasons for this including an imbalanced economy focussed on London and the South East (which has driven up prices in the bottom corner of the country), increased life expectancies as a result of lifestyle and better health care, changing demographics (more single person households).

        • Narrow Shoulders
          Posted February 6, 2018 at 7:39 pm | Permalink

          6x median earnings repaid at 2-4% or 3x median earnings repaid at 9 – 15% I’ll take the former please.

          The real issue for first time buyers is the deposit but even then they have help to buy if they don’t squander on cars, phones, city breaks and early independence though renting.

          Starting out has always been hard but expectations are higher now than before. The latest generation expect (generalisation but relatively accurate) my generation and the boomers (so x y and boomers) did expect to labour for results.

          • Peter Parsons
            Posted February 7, 2018 at 8:33 am | Permalink

            Mortgage rates were 5%-6% 20 years ago, not the levels you cite, “early independence” as you put it is often a necessity due to a need to leave somewhere near to where the jobs are, and Help to Buy simply props up an overheated demand side rather than addressing the real issue of supply.

            The average age of a first time buyer has gone up noticeably and the number of first time buyers has also dropped noticeably compared to 20 years ago. It is not a level playing field, it is now significantly more difficult than it used to be.

            20 years ago, my just below median earnings salary combined with a deposit of about 6 months wages was enough to get me on the property ladder in the south east. Today, with that level of deposit and income, forget it.

    • Pragmatist
      Posted February 5, 2018 at 7:08 am | Permalink

      They shouldn’t apply for student loans if it is a burden nor granted them. A responsible lender would not give a student a penny to save his life. Most students say the UK is doomed since the Referendum, then why are they stupid enough to borrow money based on the belief?

      • a-tracy
        Posted February 6, 2018 at 9:16 am | Permalink

        Sometimes Pragmatist I can’t believe what I read. If you want a professional career in the UK you need a degree. There is no choice but to take on a loan because parents in the UK unlike in the USA who have been charging tuition fees for decades didn’t know they had to save up for this cost from birth, they didn’t tell us in 1993 that they would be charging tuition fees and living cost loans of £36,000 with 6% interest from day one of the loan.

        • Narrow Shoulders
          Posted February 6, 2018 at 7:40 pm | Permalink

          While everybody buys into the “you need a degree” scam kids will continue to be taken to the cleaners.

          There are other means

          • a-tracy
            Posted February 7, 2018 at 10:11 am | Permalink

            All three of my children required a degree and the education involved in that pursuit in order to advance into their career choice.

            I know well the other means Narrow Shoulders everyone and I mean EVERYONE else in our family didn’t get to have a free degree education when they were around. They have had to drag themselves up and have been excluded from many jobs, secure pensions and low working hours because of it. We are continually insulted for being of ‘low levels of education’ by the likes of the disrespectful Independent and Guardian papers when those journalists have no idea of the courses and skills you’ve picked up in the ‘other means’ you are talking about. My husband did a four-year apprenticeship at what was considered a safe big electrical engineering firm that is now bankrupt after a century of trading.

            Good luck in your offspring going without degrees but I know what I’d choose again even though I STRONGLY disagree with the high levels of interest! and the unfairness in our dis-United Kingdom.

    • Nig l
      Posted February 5, 2018 at 8:09 am | Permalink

      What nonsense. Short term memory, I guess. Mortgages are much easier to get and deposits lower plus other schemes to help,people on the housing ladder as are personal loans to finance furniture. I had to find 10% plus probably a similar percentage for the personal loan.

      Debt and especially default carried a large stigma. University places and the post degree benefits were outside the reach of working class families with little aspiration in their schools.

      Working in a profession that initially paid a loss less than my friends ‘on the tools’ I had to do evening work in a pub and holidays were off the agenda. The culture was that we had to save or else finance would not be available. It was probably 4/5 years before increases in my salary gave me the spare to enjoy life.

      Car ownership was not wide spread making the wide range of areas people can look at now, and commute, out if the question.

      Now finance is ‘instant’ and good for that but it has meant that we are in a ‘have it now’ culture which is excellent but does not mean that some things need more effort.

      My partners daughter within the last three years, with her husband, has bought a terraced house in Surbiton, not a cheap area and other success stories abound, So it can be done., not easy but then it never was.

    • Lifelogic
      Posted February 5, 2018 at 9:00 am | Permalink

      No one forces them to take on huge student debts, often for almost worthless degrees. Too many are encourage to do this I agree.

      But 50% of this debt is never paid back anyway. This especially by women as they take career breaks and are more likely to work part time. Also by EU students who often do not bother.

      • Ed Mahony
        Posted February 5, 2018 at 4:45 pm | Permalink

        ‘No one forces them to take on huge student debts’

        – Oh come on. They’re kids. They’ve being encouraged to do so by adults to do so. And student loans is just the beginning. Far more important are house prices which they can’t afford (with adults, the baby boomers, enjoying the high property prices). Where’s your empathy on this matter, sir?

        • Lifelogic
          Posted February 6, 2018 at 10:06 am | Permalink

          My advice to them is perhaps not to do a degree unless it is either something they really want to do for the love of it or they think it will repay the £50K and loss of three years earnings. Most degrees clearly do not. Perhaps Medicine, Veterinary, Maths, Physics, Law, Accounting, Architecture, Engineering, Chemistry, Computer Science ….. at Russell Group universities might. Most other will not do in general.

          Or perhaps do one if you are fairly sure you will never earn enough to ever have to fully repay.

          I have friend who runs a recruitment agency and says most graduate employers ignore even interviewing anyone with less than a 2:1 at a Russell Group Uni or better.

          You can learn a lot while working (and earning) if you are bright.

          • Ed Mahony
            Posted February 6, 2018 at 1:08 pm | Permalink

            I fully agree with you.

            But you, personally, can’t tell every kid that. Meanwhile members of our government, and other non-government organisations and institutions, are encouraging many of our kids to do many of the stupid degrees on offer.

      • JoolsB
        Posted February 5, 2018 at 5:24 pm | Permalink

        If the politicians had any sense which they clearly haven’t, they would at least scrap fees for degree subjects we need, medicine being one of them, on proviso they work for the NHS for a minimum number of years. After all doctors don’t have a choice about going to university and we desperately need them. It seems unfair that as only 78% of the debt is every repaid that those doing the worthless degrees are the ones who will probably never pay a penny back whilst those professions the country desperately need will be the only ones clobbered by the enormous millstone this Tory Government have unfairly placed around their necks and that’s only if they’re English of course. That’s the most unfairest and discriminatory part of all.

        • Dennis Zoff
          Posted February 6, 2018 at 1:26 am | Permalink

          Excellent point!

        • Lifelogic
          Posted February 6, 2018 at 10:11 am | Permalink

          Medicine places are hugely restricted. Even 3 A* at A levee and 10 A * GCSE does not guarantee a place.

          Also as it is 5 years you come out owing perhaps £150K plus interest with salaries in the NHS still rather low. Over 50% choose other employers, often other jobs or leave the country.

        • Monty
          Posted February 6, 2018 at 10:06 pm | Permalink

          I agree that Government should identify a subset of strategic subjects, and students should be assisted to study those subjects assuming they reach a satisfactory academic threshold. But that would need to be tightly controlled for quality. Rather too many Universities are partaking in a “bubble”, with 25% of students getting a first, and none at all failing.

          • a-tracy
            Posted February 7, 2018 at 10:22 am | Permalink

            The Government doesn’t have a clue about what or who is going to be successful in the next five years let alone a long-term strategy of choosing what degrees and what % of people need to take them.

            The creative industries – and I keep having to say this over and over again to the STEM only advocates – The industry employs millions, just think how dry, boring and predictable your life would be without creativity – without the new inventions, clothing, design, arts, films, dance, new gaming technologies. A creative education is as key as Maths.
            “New analysis reveals the arts and culture industry grew by 10% in 2015 – five times faster than the UK economy as a whole – and now contribute £11.8bn. Nicholas Serota, Chair of Arts Council England, which commissioned both reports, praised the “leading role” arts and culture have played in rejuvenating towns and cities across England. The research also reveals the Government recoups £5 for every £1 of culture funding, and the sector created 363,000 jobs in 2015.”

    • Bryan Harris
      Posted February 5, 2018 at 9:01 am | Permalink

      Why do people always talk about student loans – Yes, they are unfair and a stupidity beyond reason brought in by labour – but every generation has their own burden to face, in living long enough to acquire any wealth…

      • Peter Parsons
        Posted February 5, 2018 at 4:14 pm | Permalink

        Student loans were actually first introduced by the Conservatives in the 1990s when they started to abolish maintenance grants.

        • Bryan Harris
          Posted February 6, 2018 at 8:30 am | Permalink

          “The Labour government under Tony Blair passed the Teaching and Higher Education Act 1998 which introduced tuition fees of £1,000 to start in the 1998/9 academic year.[3] In addition, maintenance grants were replaced with repayable student loans for all but the poorest students.” (Wikipedia)

          • Peter Parsons
            Posted February 6, 2018 at 1:45 pm | Permalink

            Don’t believe everything on the internet. Student loans were first introduced by the Education (Student Loans) Act 1990 under a Conservative government.

      • Ed Mahony
        Posted February 5, 2018 at 4:49 pm | Permalink

        But it’s worse for this generation (don’t forget house prices) and going to be even worse by Brexit.

        Past generations always tried to help their young get on and do well. But this is the first generation of the older generation putting themselves first before the young.

        The baby boomers are going to go down as the selfish generation in history. Perhaps it had something to do with money coming too easily to people in the 1980’s. Not used to it. Went to their heads, voting for something 30 years later that would burden their own children and grand children.

        • Anonymous
          Posted February 5, 2018 at 10:24 pm | Permalink

          Don’t you dare tell me I don’t care about my children.

          • Ed Mahony
            Posted February 6, 2018 at 10:24 am | Permalink

            I never said you don’t. But there are clearly SOME people who are putting themselves before their children on the matter of Brexit. It’s what lots of young people think. If you don’t believe me, get out there and listen to what the young are saying.

          • Ed Mahony
            Posted February 6, 2018 at 10:29 am | Permalink

            Also, are you saying you’re never selfish towards your children or anyone else? If you’re not, then you must be a saint (but even saints are flawed).

            I’m selfish the whole time, unfortunately. I need people to remind me of that. But that doesn’t mean i’m a selfish person all the time or a terrible person. No doubt i’m a lot more selfish than you. And i regret using the word ‘selfish’ in my former comment. Apologies.

            Best wishes.

    • Ed Mahony
      Posted February 5, 2018 at 9:33 am | Permalink

      Hard Brexit can’t survive the long-term unless it gets widespread support in the country.

      But Europe is only 20th on list of most people’s concerns.
      The young feel let down, and even more so when the economy sinks from the impact of Hard Brexit. The Conservative young will leave the Tories for Labour and/or the Lib Democrats and/or emigrate.
      And the working classes, who supported Brexit, will return to voting Labour.

      There will then be a call to return to the EU, for economic reasons, and we will have to return under even worse conditions, and our country’s economy and general welfare, depleted.

      UNINTENDED CONSEQUENCES. History books littered with unintended consequences.

      If people want to leave the EU fine, but first you need a strong economy (like Germany’s – high productivity, high exports to outside the EU) to pay for the change. And you need a strong leader in place. And a proper strategy. That’s just common sense.

      • Ed Mahony
        Posted February 5, 2018 at 9:35 am | Permalink

        ‘And the working classes, who supported Brexit, will return to voting Labour’

        – I mean the working classes who supported Brexit, will quickly turn on Brexit.

        Brexiters love to talk about da will of the people, but forget that da will of the people could easily turn around to bite them in the ass in a few years time, and we end up back in the EU but under worse conditions. Great (not).

        • John C.
          Posted February 6, 2018 at 1:44 pm | Permalink

          Generally, people who thought they were doing quite well voted to remain, whilst those who were unsettled with their situation voted to leave.
          Presumably younger people were on the whole satisfied. Why, when their prospects have been undermined by mass immigration, I can only put down to the barrage of propaganda they have been subjected to.
          Quite simply a country cannot grow so rapidly in population without huge problems in housing, transport etc.
          The older generations on the whole recognised this simple truth, whereas younger people voted to make their situation worse.

          • Ed Mahony
            Posted February 7, 2018 at 7:19 am | Permalink

            I agree about over-population. That was the main reason i nearly vote to leave.

            However,

            – Belgium, in the EU, was doing a lot to stop immigration from within the EU
            – Immigration is a problem for all rich countries, not just the EU
            – Many people from within the EU go back to their countries once they’ve made money (look at the Irish, and in recent years, the Poles).
            – No guarantee the UK government won’t necessarily radically reduce immigration. Offered no solutions. Record on controlling immigration from outside the EU terrible (and immigration to the UK from outside the EU is greater than from within.

            If the government doesn’t successfully reduce immigration from outside the EU then this will be another massive problem (one of many) for Brexiters to face.

            Meanwhile, the government needs more workers to keep our economy competitive. If the government fails to keep our economy competitive then this will be the biggest problem for Brexiters to face.

            Brexiters have to overcome all these problems if Brexit is going to work. If not, we could end up back in the EU under worse conditions than before.

    • Wessexboy
      Posted February 5, 2018 at 10:23 am | Permalink

      As a new pensioner, very few of my (grammar school) peers went to university, the rest went out and earned a living. Going to university is a choice, with costs known in advance. Housing is only in short supply because we have imported too many people, and have greater demands as individuals for personal space.

    • NickC
      Posted February 5, 2018 at 11:32 am | Permalink

      JJE, There are more than 9 million people in the UK who were not born here. Those 9 million have to live somewhere. If half of them go home, there would be 4.5 million new places to live available for the indigenous. It’s supply and demand. You think it’s a shortage of housing. I think it’s a surplus of migrants.

      • Lifelogic
        Posted February 5, 2018 at 4:32 pm | Permalink

        We need fewer people or to more planning consents and builders – it is not rocket science.

      • Andy
        Posted February 5, 2018 at 4:33 pm | Permalink

        Actually the housing crisis is caused mainly be there being too many old people. Life expectancy has dramatically increased – and far more people (both old and young) are living alone. This dramatic demographic shift is the key cause of the housing crisis. But bigots always manage to blame foreigners.

      • Dee
        Posted February 5, 2018 at 5:47 pm | Permalink

        Well said NickC. My sentiments exactly. I remember we told our politicians about migrant putting strain on the housing, NHS etc and they poo-pooed us down blaming it on the older generation living longer and it has taken them awhile to finally admit we were right, but no apology.
        There should be NO student fees outside Academia. We should pay for Science, Maths, Chemistry, Medical and all what I call the Acamic subjects. Those who want to follow the Arts and crafts and minor subjects should pay for it themselves, after all, either you have the talent or you don’t. I also wonder how much of the loans go on booze and partying? Perhaps John could answer that one. I wonder how many students of ballet or music or needlework are now sweeping roads, working in cafes and the like? So much for the £1000s the taxpayer has said goodbye to. We should not be paying loans to overseas students who quite believably take us for fools and either use their Uni place as an easy passport to illegaly live here when they abscond from Uni or they go back from whence they came and we kiss their loan money bye-bye. Now May say’s they are no longer a problem, they no longer do those things, her eyes must be a deep emerald green, the womans a fool or she is taken in with wrong advise, nothing unusual there then.

      • hans chr iversen
        Posted February 5, 2018 at 6:18 pm | Permalink

        this is a geographical distribution problem not a migrant challenge

    • CeeDee
      Posted February 5, 2018 at 11:46 am | Permalink

      It is not a complacent view. Every student makes a conscious decision whether to attend university or not, knowing full well what the costs are before applying. There are actually plenty of jobs in the country that pay quite well, that don’t require degrees. It is possible to start a family without buying a house; decades ago young people rented and often continued to rent for some years after children had arrived. Owning a house is not a “right”, as many seem to think, including the incomers to our country. Developers also sell new houses to make a profit, if you’re not happy with the prices they charge, maybe that’s where you should direct your actions.
      Truth is, in the years ahead, your age-group will actually reap huge benefits from new technology as Mr R says….it’s just that you can’t see it yet.

      • forthurst
        Posted February 5, 2018 at 4:45 pm | Permalink

        There is an acute shortage of homes to buy and rent in many parts of the country. Most private lettings are shorthold tenancies; this gives precious little security to a family when they could not easily find a replacement home.

        Having moved areas and decided to rent whilst looking for a new home which is extremely frustrating because of the dire shortage of suitable properties, I had the full experience of buy-to-let merchants. Many of these people are far too stupid and dishonest to be involved in lettings at all but were encouraged by governments and mortgagees to invest in private property. if you can call taking out a mortgage an investment.

        While the government prioritises mass uncontrolled immigration over the needs of those who wish to live a normal successful life as they themselves have experienced, they will continue to make themselves needlessly unpopular. It is time for the government to shake off their complacency and to start to sort out the mess that they themselves have in part created.

      • rose
        Posted February 5, 2018 at 6:44 pm | Permalink

        I had grown up and left home before my parents bought a house. It was all rented flats before then. I minded about not having a garden but I didn’t hate the grandparents on account of that.

        • rose
          Posted February 5, 2018 at 6:47 pm | Permalink

          In our turn, my husband was 46 when we bought our first house.

    • libertarian
      Posted February 5, 2018 at 12:35 pm | Permalink

      JJE

      Most students never repay their loans . Yes we have a shortage of low cost housing, we also have a shortage of construction workers, maybe if fewer young people went to University ( and ran up debts) and more took apprenticeships and jobs in construction then the problem wouldn’t be as bad?

      • a-tracy
        Posted February 6, 2018 at 9:20 am | Permalink

        I just don’t believe this “Most students never repay their loans” in 1998 the tuition fees for a three-year degree was £3000 in total. Why can’t the government tell us how many of this 1st cohort paid off their debt in full in the last 20 years and how many will pay it off within the following 10 years before the debt is written off? Don’t the government keep any figures?

    • Rien Huizer
      Posted February 5, 2018 at 1:56 pm | Permalink

      There not enough desperate young to do any harm to a party they do not vote for anyway.

      • JoolsB
        Posted February 5, 2018 at 5:26 pm | Permalink

        What about their parents and grandparents?

    • Peter D Gardner
      Posted February 6, 2018 at 2:22 am | Permalink

      Mass immigration.

  4. Yokel
    Posted February 5, 2018 at 6:02 am | Permalink

    “By definition babies come into the world with no wealth of their own…” Born with a silver spoon in the mouth” is more than a figure of speech.
    Since the Upper Class are so fecund and classless in their attentions, it would seem a myth that there is a profound genetic constituent in the educational success of their children. So good schools and good teachers can bring forth. But we need good teachers. I knew one once, more than half a century ago.. Sadly he passed away recently. Not spotted one since

  5. hans chr iversen
    Posted February 5, 2018 at 6:42 am | Permalink

    John,

    Fortunately as you rightly put i there is no intergenerational war, but the concentration of wealth in the generation over 50 and particularly in the top ten percent is significantly more concentrated than it was in the past two generation because of war and re-construction.

    This gives us a very vast concentration of wealth across Europe and in particular in the US , which leads to a growing and squeezed middle-class.

    Unless, some sort of re-distribution over generations and other means takes place over time, the concentration could become a major problem as it was at the turn of the 20th centure.

    • libertarian
      Posted February 5, 2018 at 6:59 pm | Permalink

      hans

      I realise that you are a socialist and therefore dont really understand very basic and simple facts about money ( or indeed statistics). However we DO NOT have a zero sum economy so therefore it doesn’t matter a jot if just one person owned 15 trillion pounds. It has NO EFFECT what so ever on the rest of us and our ability to earn money.

      • hans chr iversen
        Posted February 6, 2018 at 7:47 am | Permalink

        no but it does have something to do with the perception on what ane equalitarian society should look like and function and in Scandinavia and other parts of the World thee are societies where mobility does work better and therefore the is more consensus about where society is heading.

  6. hans chr iversen
    Posted February 5, 2018 at 7:10 am | Permalink

    Latest statistics of five fundamental of true democracies of the top 15 in teh World 9 are in the EU, with the UK coming in as number 14, according to the EIU as number 14, interesting statistics, when we talk about democracy, referendums and wills of the people.

    There seems to be a strong and fulfilling democracy thriving around Europe

    • rose
      Posted February 5, 2018 at 6:41 pm | Permalink

      So why was the deputy leader of the de facto opposition in Germany arrested?

      • hans chr iversen
        Posted February 6, 2018 at 3:06 pm | Permalink

        Rose

        Please kindly read the survey one example does make a rule,.

        thank oyu

    • libertarian
      Posted February 5, 2018 at 7:00 pm | Permalink

      hans

      Got a link to this piece of research?

      • hans chr iversen
        Posted February 6, 2018 at 7:48 am | Permalink

        latest EIU report it was referred on yahoo

    • NickC
      Posted February 6, 2018 at 12:04 pm | Permalink

      Hans, (Some) European nations may be democratic. The EU is not.

      • hans chr iversen
        Posted February 6, 2018 at 3:04 pm | Permalink

        so I am glad to see you are finally coming to a clear distinction between one and the other we are making progress, NickC

        • NickC
          Posted February 6, 2018 at 6:21 pm | Permalink

          Hans, How old are you? I was aware of the distinction between the EEC, never mind the EC and the EU, and individual European nations, probably before you were born.

  7. alan jutson
    Posted February 5, 2018 at 7:11 am | Permalink

    Not quite as simple a picture as you outline John, although I have to agree that many of the younger generation seem to have an attitude of entitlement, some before they have even started work.

    Perhaps our Parents schooled us in life in a different way, if you want to get on, you have to work, if you want to improve upon that, then you have to work harder, longer, or smarter.
    Only ever purchase what you can afford, and live within your means as best you can.

    No I did not have University fees to pay, because they did not exist at the time, and I did not go to University.
    I learn’t whilst I earn’t by completing an apprenticeship and attending technical college, my wife went to night school to improve her skills and qualifications, and we saved up the deposit for our first house by working very much longer than the normal 40 hours a week each, whilst we both lived in our respective parents homes (both privately rented) until we married, and whilst we did pay our Parents a contribution each week, it was minimal.

    Different people have different attitudes, there is no right answer.
    In life most people have a range of choices, few make good judgements all the time, but you should always try and learn something from your mistakes.

    Those who have health problems, Mental or Physical do not have those same range of choices, and so for them life is rather more difficult, hence the reason for a safety net.

    Few people believe they are wealthy, because they will always know someone who is better off, living in larger houses, with better cars, in what appear to be nicer areas.

  8. Lifelogic
    Posted February 5, 2018 at 7:15 am | Permalink

    Exactly I remember struggling hugely when buying my first flat in London and with interest rates that were far, far higher. We even had 17% + interest rates from John Major with his entirely predictable ERM disaster.

    Furthermore the young now get so many things virtual for free – music, entertainment, books, reading materials, videos, maps, sat nav, video games, news, skype, messaging ….. all they need is a tablet, phone or laptop – all of which can cost virtually nothing (unless you insist on the over priced Apple versions).

    Just an LP costs about 4 hours work in my day.

    We should how perhaps stop encouraging a lot of them from acquiring £60K of student debt for what are so often totally worthless degrees. We should stop taxing tenants by mugging landlords with absurd taxes and we should relax planning controls somewhat.

    We should cut low skilled/low paid immigration that undercuts wages and put huge pressure on public services and housing and cut taxes and simplify tax and regulations to grow the economy. We should also go for cheap energy and stop attacking UBER and the gig economy. We need some real competition in banking. The banks currently are a joke. 0.3% when you lent to them unsecured yet 4%- 30% + when you borrow.

  9. Excalibur
    Posted February 5, 2018 at 7:24 am | Permalink

    It has long been the structure of society that you begin with the menial and work your way up. When I joined the British services at the age of fifteen my ‘take home’ pay was ten shillings a fortnight. I remember still the titter through the ranks as I was required on pay parade to march up to the pay desk, and salute for my paltry ten shillings.

    I said to myself “I can do better than this” and ultimately did. My wife and I now live comfortably in retirement on our savings. As H.G. Wells taught us, every one has the opportunity to carve out a better life for themselves, if they are not happy with the life they have. Opportunities abound. Grasp them…….

  10. Mark B
    Posted February 5, 2018 at 7:32 am | Permalink

    Good morning.

    From each according to their ability (wealth), to each according to their needs.

    What our kind host has been explaining is a tactic so beloved by Cultural Marxists like the Frankfurt School and its identity politics theories. ie Set the oppressed against the the oppressor. In this case, the oppressed are the young, and the oppressor are the old. Into this government and other interested parties can claim that they must somehow intervene in order to ‘balance’ what they say is unfair. In truth what is happening is the politicization of the old and the young in order to steal the wealth of the old. Do you really think the young are going to get anything once the State has put its snout in ? 😉

    The way to counter this ploy is to broaden this and explain that, compared to generation even before it is not only wealth but society has a whole that has benefitted.

    The older generations worked, payed taxes and help build motorways, railways, airports and utilities, all so that the younger generations to follow do not have to. The young benefit from better food and choice, all thanks to older generations creating markets in which goods, ideas and services can be bought and sold.

    If government wants to help, they can abolish Inheritance Tax allowing more money to flow to the young from the old. But it will not do it because it will be losing all that lovely cash.

    Reply This was delayed because it is long

    • Mark B
      Posted February 5, 2018 at 5:50 pm | Permalink

      No links. No names mentioned or implied. Not that long compared to most. On topic. etc.

      Yet still stuck in moderation – Why this time ?

      • NickC
        Posted February 6, 2018 at 6:25 pm | Permalink

        Mark B, JR’s blog, JR’s rules. I frequently disagree with JR yet he publishes most of my comments. Probably the same for you. If you whined like this on my blog you would be out.

  11. Lifelogic
    Posted February 5, 2018 at 7:35 am | Permalink

    Listen to “Cabinet Confidential: interviews with cabinet secretaries” available on line if you do not believe me. They do not even realise how misguided and daft they sound.

  12. duncan
    Posted February 5, 2018 at 7:35 am | Permalink

    The left has worked hard over the last 25 years to inculcate within young, impressionable minds a keen sense of entitlement that is now being harvested for political profit

    You only need to know one thing about the left. They see people only as POLITICAL CAPITAL. A person’s humanity is of no significance to them. If they can politicise you and an issue related to you they will. This issue is a classic example of this tactic

    Corbyn’s attack on private property and the idea of forced redistribution incites wild eyed enthusiasm in the young. Corbyn knows what young people are like. They expect something NOW. He’s also conscious of the fact that they a vote and that makes them a target for political grooming.

    Like kids at xmas the young become excited when a grotesque politician like Corbyn tells them they can have something for nothing if only those nasty Tory voters weren’t so rich. It’s classic Marxist provocation. Stoking resentment

    If you want something, go out into the world, work hard, earn the cash and buy it. There’s no such as a free lunch unless of you’re a Marxist seeking to destroy conventional society

    The older are richer because they’ve worked damned hard for it. Get off your backside, get out to work and stop moaning

    Corbyn wants the youth vote and he’ll say anything to get it. This man is a danger, a false prophet. A pied piper who says ‘you can have it all for free but only if you vote Labour’

    Corbyn represents the biggest threat to the UK since Benn

  13. Ian wragg
    Posted February 5, 2018 at 8:30 am | Permalink

    How would the snowflakes manage without electricity or central heating. Rationing until I was 8 years old.
    Icicles on the inside of the windows.
    They complain of student debt but they don’t have to go. We took apprenticships and worked weekends for spending money. They complain of the cost of housing then spend 10k on a wedding.
    I think their priorities are somewhat skewed.

    • John C.
      Posted February 6, 2018 at 2:00 pm | Permalink

      It certainly strikes me that younger people spend much more on entertainment, clothes, outings and general frippery than my generation ever did. The idea that they have a grim life whilst older people live in luxury is bizarre.

  14. Bryan Harris
    Posted February 5, 2018 at 8:58 am | Permalink

    #
    Spot on JR

  15. Bert Young
    Posted February 5, 2018 at 9:02 am | Permalink

    As one of the older generation who re-married and has a young child at school , I do not recognise all this “surplus” business I am supposed to have . I was never left – nor expected anything from my parents ; I was brought up to prepare for life and succeed on my own . Fortunately my efforts succeeded and by the age of 33 I had paid off all my debts and was able to re-train myself to switch careers . I believe that everyone – except for the disabled , has the capacity to do this and should face all the challenges ahead of them . I have no time for those who are looking for a hand-out or use credit cards irresponsibly.

    My advice to those who “want” is to actively save to get it ; by all means borrow but only within the window of their current funding . Mum and Dad face all sorts of higher costs in their old age and need the leeway to absorb them ; this flexibility is their right from the efforts they put into their working lives ; they should not have to look over their shoulders for the benefit of the young ( pardon the pun ).

  16. agricola
    Posted February 5, 2018 at 9:05 am | Permalink

    I am now eighty years of age. My two brothers and sister had no bank of mom and dad in financial terms. Their bank was their parents belief in education as the keystone to life. It worked.

    Generations since have suffered the political degradation of education . Education is the key to social mobility and fulfilment. Politicians have severely degraded this over the past fifty years. It was politicians who killed off the Direct Grant Scheme and the majority of Grammar Schools for which they should be eternally shamed. They topped their malevolence by charging for higher education and burdening subsequent generations with debt to add to housing debt should they ever get to the point of buying one.

    My children’s children are the generation who will not be able to compensate for political grasping ineptitude via tax and banking crises, with their own bank of mom and dad. Politicians have drained the piggy bank. The best advice I can pass to them is do not get involved in conventional pension schemes but buy assets instead. If you have talent take it to countries who respect and appreciate it.

  17. Ed Mahony
    Posted February 5, 2018 at 9:21 am | Permalink

    But at the moment, you have the young struggling to buy houses (and everything else) whilst some of the older generation, who mainly voted leave, insult them (directly and indirectly) with the aggressive and divisive ‘remoaner’ (knowing full well that things are only going to get even more financially hard in the next few years).

    • NickC
      Posted February 6, 2018 at 12:17 pm | Permalink

      Ed, Remain started it all off, directly after the Referendum result, by not accepting our vote, calling us thick, flat-earthers, uneducated, xenophobic, knuckle-draggers, swivel-eyed, even Nazis, etc, etc. We are now 19 months down the line, finally retaliating having initially assumed we would get what we voted for – Leave.

      But you don’t like that. So for you that makes anything you say okay? We didn’t vote for a compromise half in/half out capitulation. When are you Remains going to learn? And stop whinging about what you started, or stood by and accepted. If you can’t take the heat you should have thought about it first before trying to overturn our democratic result.

      • Ed Mahony
        Posted February 7, 2018 at 10:44 pm | Permalink

        @Nick,

        Firstly, I don’t endorse the stupid comments and approach of some remainers. We’re not all the same! Just as all leavers aren’t the same!

        Secondly, the referendum was not clear. ‘Do you want to leave the EU (what does that mean, from a legal POV?) It was an appalling piece of governance (or whatever word is). Moreover, many leading Brexiters said or implied it was not about leaving the single market.

        Thirdly, I’m pragmatic. If the evidence points to Brexit being good. I’m supporting Brexit. But the evidence from most if not all leading financial experts is bad. That our economy isn’t strong enough to sustain the shock of leaving the single market and CU. This isn’t just bad for our country. But it also means Brexit doesn’t have the legs to run the course (people will demand second referendum). And we could end up returning to the EU with even worse conditions than before.

        Do you want that Nick? To return to the EU with even worse conditions than before? Because that could be one of the unintended consequences of Brexit. Not forgetting all the others (i.e. national economic recovery and improving our country in general delayed for quite a few years).

        I might be wrong. But that’s where all the evidence is pointing.
        Regards.

  18. a-tracy
    Posted February 5, 2018 at 9:32 am | Permalink

    “most of the wealth of a country residing in the hands of people over 40 “……. If it is there I’d argue most of it’s not in the hands of people over 40 it’s often in their bricks and mortar which they can’t eat or spend unless they enter risky buy out agreements that I’ve heard several people come-a-cropper and end up homeless and throwing themselves at social services after taking up these offers.

    The increase in house prices in the South and wealthy areas of the North and Midlands is like some crazy pyramid scheme we’re all ignoring. When will the point be reached that the next UK born generation just can’t get mortgages to buy these houses any longer? Then what happens to that nest egg the 40 somethings think they’re got to live off if they downsize.

    I look at the taxes my kids are paying thanks to Labour and Conservative/Lib Dem ENGLISH politicians because we were keen for them to get a further education we couldn’t afford because our parents needed us to stand on our own two feet from the age of 16: 43% (tax, employees NI, NEST and Student loan and this is due to go up as Nest increases) over £17,500pa. Then add in council tax/water rates which out of an average salary of £23,000-£25,000 is around another 10% tax on every pound they earn. (£2500pa on a flat worth £185,000 in 2013). Then VAT at 20%, extortionate insurance charges building/contents, which some people seem not to have to pay? Licence Fee. That’s before they start to pay for transport to get them to a job.

    My parents couldn’t pay any more tax contributions they already struggle to cover their licence fee, council tax, water rates, insurance costs, vehicle running costs, repairs and maintenance on minute pensions because my Mum worked part-time and only gets a tiny state pension because she was told my Dads NI contribution would cover her in old age. So I’m not going to bash the boomers either because the majority of that generation hasn’t had the lush retirement you describe.

  19. Ed Mahony
    Posted February 5, 2018 at 10:00 am | Permalink

    It took until the war against America in 1898 for the penny to finally drop in Spain that it was no longer a leading, imperial power.

    We in the UK are suffering from former-Empire syndrome like Spain before ’98. Not unusual that you have two Old Etonians involved (Johnson and Rees-Mogg who thinks he’s living somewhere between Brideshead Revisited, A Room with a View and 1850), who have brushed the corridors of Eton, Oxford, and Westminster Palace with their close associations of the imperial past.

    I’m a strong supporter of Eton and Oxford (for family and other reasons) but, Eton, Oxford and Westminster and other old institutions have to move on. The Empire days are gone. We’re no longer a leading global power. That mantle has gone to the USA, China and now India. And we live in a global world.

  20. Epikouros
    Posted February 5, 2018 at 10:15 am | Permalink

    The progressives now dominate our public education system and are systematically imposing their dogma on the rest of society. So have managed to create a culture that is very different to that which older generations grew up in. A culture that is not conducive to producing young people with attitudes that will enable them or prepare them for a life that requires them to act responsibly, be self reliant if the need arises or with a capability to think rationally and objectively. They have been conditioned to only believe in the collective and only dogma that is sanctioned by progressives and socialists are acceptable and all other opinions and beliefs should be suppressed.

    This does not augur well for our youth or society as a whole as merit and therefore competence has been eschewed in favour of romantic notions of social justice in the form of diversity and equality which promotes mediocrity and therefore incompetence. Morality is a mixed message as progressives espouse the virtues of complete sexual preference tolerance and at the same time promote Islamic moral codes. The youth of today are for now living off the backs of what youths of yesterday achieved and they are in for a rude awakening. When in the future that which now exists because of the efforts of those gone before ends then they will be ill prepared. I am not optimistic they will build on what they have but instead fritter it away. Especially as they do not recognise the dangers they face even adding to them.

  21. Posted February 5, 2018 at 10:19 am | Permalink

    I think the big difference over the past sixty years is that youngsters today don’t think very far ahead; they are the ‘must have’ generation, and must have it now!
    I started saving immediately I started work, trying to put some money aside each week. We did get a decent interest rate which was an encouragement, but even so, most of us had savings. How many save more than a token amount these days? More likely they are in debt on their credit cards.

    This generation don’t seem to have logical priorities. A couple brought a baby to be baptised at the local church and the vicar asked them why they hadn’t got married. Apparently, they “couldn’t afford” to do so as they expected to have a reception with a couple of hundred guests and all the frills followed by a honeymoon in some exotic location. The amount that they were thinking of would probably be enough to pay the deposit on a small house.

    When we married, we had a couple of dozen friends to a small “do” with the food prepared by our parents and held in our garden. We made the deposit on a house our number one priority, we bought nothing we didn’t absolutely need until we had saved enough. We had quite a bit of second-hand furniture, which turned out to be a great decision, because we didn’t have to nag our children about damaging it and it was replaced in due course.

    Nor did we have an expensive car, a series of “old bangers” got us through until we could afford better when I got a new, more highly paid, job. Contrast this with a youngster that I know who spends a large part of his salary each month on leasing a car which is replaced every few years.

    This is the difference; we saved and got what we wanted, these days the youngsters spend and have today’s “must”, but seem to forget about the future. They live different lives to what we did, spend their money differently, and must expect different results.

    • Ed Mahony
      Posted February 6, 2018 at 11:00 am | Permalink

      ‘I think the big difference over the past sixty years is that youngsters today don’t think very far ahead; they are the ‘must have’ generation, and must have it now!’

      – But this mentality and economy has been bequeathed to them by the previous generation. Kids are just kids. It is adults who makes the world go around (modern advertising for example, was created by advertising moguls such as David Ogilvy, born beginning of 20th century).

      We need to return to previous generations, like the Quakers 150 years ago, who taught work ethic (had word, diligence, patience + honesty). Adults must take the initiative. And not blame kids so much for their behaviour and attitudes today. They are, to an important degree, what their parents and society made them.

  22. formula57
    Posted February 5, 2018 at 10:21 am | Permalink

    Beyond the key points about housing and debt stated by Sir Joe Soap (first above) the world of work has changed adversely such that there is:

    – less expectation of secure employment and less assured pension arrangements;

    – worse career prospects as organizations reduce layers of middle management;

    – greater pace of change as disruptive technologies take effect.

    Whilst I repudiate any notion that generation X and onwards are somehow doomed, the pressures and challenges they face seem more acute typically than those faced by the baby boomers.

    • Monty
      Posted February 6, 2018 at 11:43 pm | Permalink

      Technologies aren’t just disruptive though, they are also constructive. They have opened up new career opportunities that never existed for the boomers.
      The youngsters make the mistake of overlooking the fact that they just can not contemplate the hurdles we were confronted with back in the sixties and seventies. We never wanted them to. Just as our own parents never really wanted us to really comprehend the privations of the War.
      But us oldsters also make the mistake of viewing current challenges through our aging eyes, daunted because our youth and vigour are largely spent. If I could be 21 again, I’d be up for it. But then, I would have another 50 years to exploit to the max.

  23. JoolsB
    Posted February 5, 2018 at 10:41 am | Permalink

    Unless you are a politician, public sector worker or RBS banker who all have the privilege of having their gold plated pensions guaranteed by the hard pressed taxpayer, many private sector pensioners now see themselves working way past their retirement age to supplement their pensions. Added to that is Osborne’s theft of state pensions for women in their early sixties, meaning many of us in the real world cannot afford to help our children or their children no matter how much we would dearly like to.

    It’s heartbreaking and sickening to watch England’s young, thanks to Cameron and your party tripling fees, starting their working lives with eye watering debts of £50K upwards hanging over them for most of their working lives, many of them unable to rely on the Bank of Mum and Dad to help them. They will spend 30 years paying an EXTRA 9p income tax on every pound they earn plus an even more disgraceful 6.1% interest so Governments of every colour including yours can fritter it away on international aid, public sector pensions and the Barnett Formula thus allowing students in the rest of the UK to escape these huge debts you are only too happy to place on England’s young.
    Meanwhile in time, they will want to buy a home, get married and start a family, no easy feat in many parts of England, especially the south without this added debt burden.

    Try telling England’s young they’ve never had it so good John. You and your colleagues, who all benefited from not only free university education but maintenance grants too, have betrayed England’s young. No wonder they are turning their backs on the Conservative party and who can blame them?

    • fedupsoutherner
      Posted February 5, 2018 at 10:17 pm | Permalink

      Jools, Yes, I find it sickening that youngster in Scotland can buy cheap homes, have free university and earn the same as youngsters down south with none of these options. My son has a large debt after getting his degree and is working all hours now trying to get a deposit for a flat which costs a darn sight more than many 3 bed houses in Scotland.

      • John C.
        Posted February 6, 2018 at 2:08 pm | Permalink

        Still the great inequality that never receives much attention : the way the English are treated in comparison to the Scots. I cannot think of any similar situation anywhere in the world.
        We share a government, pay the same taxes and are treated totally differently. Scandalous.

    • a-tracy
      Posted February 6, 2018 at 9:32 am | Permalink

      Students and campaigners should concentrate on getting this interest rate brought right down, and lawyers should check if students were clearly told those eye-watering interest rates were being applied from day one of the course because I seriously don’t believe that change in 2012 was explained properly.

      Students post-2008 would be mad to keep haranguing give future students free tuition when they have a 30-year tax to pay, why would anyone encourage a situation where people coming up behind them were 10% less costly to employ and put them all out of work because they couldn’t afford to live on a reduced net income with the sky-high tax take. This advantage the Scottish and Welsh students have in England makes me livid and the new higher taxes in Scotland don’t take account of the English students who are already paying 9% more graduate tax.

  24. JoolsB
    Posted February 5, 2018 at 10:43 am | Permalink

    Didn’t mean to send this through twice but no doubt censorship will mean it won’t appear for days anyway, if then!

  25. Denis Cooper
    Posted February 5, 2018 at 10:44 am | Permalink

    Off-topic:

    http://www.telegraph.co.uk/politics/2018/02/05/theresa-may-wins-backing-major-tory-donors-enters-defining-week/

    “… a member of Philip Hammond’s Treasury team said Britons could have to pay a 3 per cent tariffs on goods traded with the EU after Brexit.”

    Well, unfortunately there are several different ways to calculate the effective or average tariff that would be applied to goods exported from the UK to the continuing EU if there was no special trade deal, which seems increasingly likely.

    So there is scope for some disagreement and confusion, but in practical terms a mere 3% would not be that different from the mere 1.2% which the EU itself quoted in 2014, while either it would be very much lower than the average tariffs which applied when the EEC Customs Union was first set up:

    http://johnredwoodsdiary.com/2018/02/04/the-last-stage-of-the-eu-negotiations/#comment-916895

    And both are very much lower than the relatively few remaining high tariffs which were selectively and deceitfully quoted by the Remain side in the referendum, eg:

    http://www.telegraph.co.uk/news/newstopics/eureferendum/12184369/David-Cameron-Farmers-face-70pc-tariffs-after-Brexit.html

    “David Cameron has claimed British farmers could face 70 per cent tariffs on their produce sold to the EU after Brexit as he challenged the Leave campaign to come clean with food producers about the cost.”

    “Speaking at the Scottish Tory conference in Edinburgh, he said the UK could have to rely on “the basic rules for global trade”, which he said could mean tariffs of up to 13 per cent on salmon, 40 per cent on lamb and 70 per cent on beef.”

    That’s aside from the reality that we run a massive deficit in our trade in food and drink with the EU, as I recall lamb is a rare exception where we run a surplus:

    http://johnredwoodsdiary.com/2017/04/04/cheaper-food-after-brexit/#comment-863262

    And of course we would have the discretion to reciprocate by applying tariffs to the much greater volume of imports from the continuing EU.

    • Know-Dice
      Posted February 5, 2018 at 5:37 pm | Permalink

      Don’t forget in the future 100% of the tariff on anything we import that has duty on it goes to the UK Government, rather than the current arrangement of giving the EU 80%…

    • Mark B
      Posted February 5, 2018 at 5:52 pm | Permalink

      Denis posts something long, with links and is off topic. It gets posted straight away. Mine, stuck in moderation.

      I don’t mind, it is just the endless excuses, if our kind host can be bothered to give one, that really rather puzzles me ?

      • a-tracy
        Posted February 6, 2018 at 9:34 am | Permalink

        Mark, we all get caught up in moderation just get your own blog if you don’t like it. I get sick of reading people whining about it.

      • Denis Cooper
        Posted February 6, 2018 at 2:47 pm | Permalink

        As a-tracy says, we all get caught in it … apart from the trolls …

  26. PaulW
    Posted February 5, 2018 at 10:45 am | Permalink

    The real test will come when the young people come to fully realize what a disasterous legacy mess that the older ones have left them..viz a viz outside of the largest trading bloc in the world and working to WTO rules..’back to africa’..red double d3cker busses, warm beer and ham sandwiches if you’re lucky..not to mention holidays in Blackpool and Brighton..i don’t think they are going to be too pleased

    • Edward2
      Posted February 5, 2018 at 3:56 pm | Permalink

      Are you predicting no trade between Europe and the UK after Brexit?
      Seems very unlikely to me.
      Especially as the EU (mainly Germany and France ) sell 80 billion more into the UK than we sell to them every year.

    • libertarian
      Posted February 5, 2018 at 7:02 pm | Permalink

      PaulW

      so what you’re saying is that the younger generation are so feckless, untalented , lazy and inept that they won’t be able to make any difference to their own lives in future… hmm interesting point of view

    • mancunius
      Posted February 6, 2018 at 12:05 am | Permalink

      You seriously think the EU is planning to ban British tourists? You think hoteliers from Normandy to Nice, Trent to Tarento, Salonika to Cyprus are all determined to impoverish themselves ‘for the sake of the EU’s political unity’?

      Your other parodic clichés deserve pity, but not of the kind you are seeking.

  27. Anonymous
    Posted February 5, 2018 at 11:14 am | Permalink

    I missed being a boomer by just a few years.

    The difference in wealth between me, my parents and those only slightly older is stark. I have taken on more training and responsibility and work harder for longer than they did.

    All of my aunts/uncles were unqualified but retired with good pensions and were going on cruises in their mid to late fifties.

    There is just no way this is happening for me. Not a chance – and this was so before the Brexit vote.

    I have saved in a good pension but it is not a state one and so is under attack.

    I will also be too busy bailing out my infinitely-better-qualified-than-the-boomers children who will be punished with a graduate tax and the cost of housing in the areas where they can find work.

    Who knows but it’s not near as certain and as simple as it used to be.

    You worked hard, studied and saved and you got rewarded. This is no more. I’m glad I’m not young.

    • Anonymous
      Posted February 5, 2018 at 11:18 am | Permalink

      PS, The family wealth was not wasted on cruises but on moving to retirement districts where the family estate failed to keep up with city values and the old fashioned idea that it was good to keep money in the bank. There is a pitiful amount left.

      Please consider this as well as the distance if you are thinking of retiring away from your children. Also keep in good range of main hospitals.

  28. rose
    Posted February 5, 2018 at 11:26 am | Permalink

    Thank you for setting the record straight. There is far too much sloppy thinking – or rather no thinking at all – on the latest fashionable slogan “inequality”. the PM seems to be a bad case of this. We have always had inequality – in everything, not just money and property. Equality in the true sense of the word would grind things to a halt as there would be no incentive to work hard and get on.

  29. Chris
    Posted February 5, 2018 at 11:34 am | Permalink

    Setting one generation against another is a classic Marxist tactic, along with breaking down identities and units e.g nation state/national identity on the larger scale down to the family unit (their argument being break the bonds that tie people together/give them security, and the people become footloose/rudderless and easier to control.

  30. margaret
    Posted February 5, 2018 at 11:36 am | Permalink

    I agree . There are some though who must have a phone , must have a car , must have a degree , need a computer and new clothes and are not satisfied with the way we worked to accomplish . Walking , phoneless, Saturday jobs , evening paper rounds to buy clothes and food , outdoor activities, reading, saving pennies in a jar .Expectations are a lot higher today.
    I paid for my own degrees as a single parent with 2 children to bring up , and 2 P/T jobs to pay a mortgage.. \My sympathy rests with some only.

  31. Richard1
    Posted February 5, 2018 at 12:01 pm | Permalink

    Yes I’ve always thought David Willets’s argument contrived & his theory leads to very odd and unConservative policy proposals. in reality of course there isn’t this generation and that generation – its a continuum.

    • Lifelogic
      Posted February 5, 2018 at 4:37 pm | Permalink

      Perhaps two brains Willets needs to use just one brain as his two brains often seem to conflict come up with nonsense. Next he will be suggesting 98% income tax like Dennis (double first) Healey!

  32. David
    Posted February 5, 2018 at 12:10 pm | Permalink

    Housing is such much more expensive than before and that is unusual.
    In my road I looked at the cost pcm for a 100% in 1997 and using the bank of england inflation calculator it came to the equivalent of £900 pcm in 2017. The actual cost is £1897 pcm!

    • John
      Posted February 5, 2018 at 8:26 pm | Permalink

      Yes, we need to curtail demand and manage immigration numbers.

  33. Posted February 5, 2018 at 1:31 pm | Permalink

    Generally those Baby Boomers didn’t go to university unless their parents could afford it. And when they couldn’t, the students themselves recognised that they would have to finance themselves. That’s not very apparent these days (though doubtless a few still do). I find little sympathy for young people who carry on their education as an extension of schooldays, putting off the evil moment of having to find work, and who complain because their elders may be enjoying their ”easy life”, having worked and struggled through difficult years.
    No – I’m with you, John. Having worked and saved for my own retirement, I resent the resentment.

    • a-tracy
      Posted February 6, 2018 at 9:36 am | Permalink

      There were grants?

      • Monty
        Posted February 6, 2018 at 11:56 pm | Permalink

        The grant system paid fees and a modest subsistence. It was means tested, and made available to the 5-10% or so of state educated students who achieved the required grades (via the Grammar Schools) to enter the Universities. Parents had to subsidise you, and in most cases that caused hardship for the family.

        • a-tracy
          Posted February 7, 2018 at 10:52 am | Permalink

          Monty, you had nothing like the debts and costs that modern students have, I know what used to be available I left school in 1981 my husband took on an electrical engineering apprenticeship and worked his way through his training. I had friends that went to University, many had to work in the holidays and at weekends to not be a burden on their parents at all. BUT that is nothing like the hardship that mid-earning families have now when both parents earn £30,000 combined their kids can’t get any grants whatsoever, the parents are expected to stump up as the student loan for subsistence doesn’t cover the living costs let alone the other bills and the students work all holiday long and whatever other work they can get.

          • a-tracy
            Posted February 7, 2018 at 10:53 am | Permalink

            To be clear I’m talking about English students here.

          • Monty
            Posted February 7, 2018 at 8:22 pm | Permalink

            It was only possible to provide those grants back in the old days because only 5 % of school leavers went to University, and they were studying disciplines of strategic importance to the country. So the vast majority of my generation had no way of accessing higher ed at all.

            Of the minority who did, some didn’t get a grant because they were sponsored by companies such as GEC and British Steel, and tied to taking up employment with their sponsor on graduation. Most were not poor enough to get a full grant regardless. But unemployment among graduates then was very rare. The intake and course quality was a good match for the recruitment needs of the professions. So the student austerity was ultimately worthwhile.
            Nowadays we have a bean feast for the Universities, who seem interested only in cramming in as many students to as many courses as they can, and heaven help them if they can’t find a job afterwards. Some courses that I know of are getting away with 8 hours a week of contact time, ie tutorials and lectures, and leaving the students to their own devices for the rest. In order to conceal the shoddiness, they have indulged in grade inflation. Now the top 25% get a first. The top 75% get a 2:1 or better, and nobody ever fails.
            That, is a bubble. It is doomed to burst eventually, and the victims will be the youngsters who paid serious folding money for a sham. A cruel hoax, perpetrated against our own kids. By Blair, and the higher ed sector.
            Seeking to blame a generation who mostly had to make a life for themselves without that opportunity at all, is just perverse.

  34. Rien Huizer
    Posted February 5, 2018 at 1:54 pm | Permalink

    The current intergenerational situation is that some youngsters have rich parents and some do not. The ones with poor parents and parents not ready or willing to share their wealth with their descendants are looking at a situation of relative abundance of well educated people (not so 60 years ago), relative scarcity of steady and well paying jobs (60 years ago well paying jobs were scarce as well but union power and closed borders made sure that wage inflation (followed, inevitably by price inflation) that expectations about NOMINAL wages were firmly optimistic, so housing debt was a winning proposition and no one believed that house prices could be lethally volatile for small leveraged investors (in houses).

    The current young do not have a case for, eg taxing the (rich) old but they do have a case for a carefully designed set of policies that will create more positive expectations, especially about being able to live independently. Ideas for such policies abound and few are politically feasible, even if economically so. What the incumbents (older, richer, already settled) should consider is that the old class” distinctions of flawed Marxian political economy may be dead but could be reincarnated via generational conflict. Hopeless people in Amerca do not vote or are gerrymandered away. In Europ, where the rule of law is still alive, that is not so easy. NB: when I use “rich” I mean people with positive wealth (assets minus liabilities) of at least 250K, ie the median elderly home owner. When I use “European” I include all EU countries plus EFTA/Switzerland but not Ukraina and Turkey.

  35. Daniel Chilvers
    Posted February 5, 2018 at 1:55 pm | Permalink

    There is some truth in this theoretical analysis but it is complacent and ignores some significant difference from 20 years ago. As a 30 something I had my child benefit (rightly) means tested by the coalition govt back in 2011 only to see the baby boomer generation continue to receive their winter fuel allowances, free buss passes, have a triple lock pension guarantee and other benefits. They are also in receipt of generous final salary pension schemes. The NIMBY attitude to new housing development has also frozen many of my peers out of the housing market. George Osborne famously told us we were all in it together but the baby boomer generation were untouchable. This resentment is leading us to a socialist government. My generation will therefore pay twice for this inter-generational imbalance much of which has been caused by a Conservative government.

  36. nigel seymour
    Posted February 5, 2018 at 2:29 pm | Permalink

    “The Civil Service reportedly has redone the Treasury’s Brexit long-term forecasts with a new approach, so say numerous leaks via Buzzfeed and elsewhere. ‘Officials believe the methodology for the new assessment is better than that used for similar analyses before the referendum,’ reports Buzzfeed. This new approach has, it seems, dumped the old Treasury calculations and methodology published in the original Treasury Project Fear report during the referendum. Plainly, the criticisms of this old approach – persistently so from us at Economists for Free Trade – have hit home; if so, that is real progress. ”
    Patrick Minford

    • Denis Cooper
      Posted February 5, 2018 at 4:07 pm | Permalink

      But oddly enough their new improved calculations for the long term economic damage which would be caused by Brexit come to much the same doom laden conclusions as their previous methodologically unsound calculations. Of course it is possible that the previous incorrect calculations gave them the correct answers by accident, that has been known to happen, while now they are getting the same correct answers because their revised calculations are correct. On the other hand when they were previously content to swear by implausible numbers based on what would strike many people as little more than unsubstantiated speculation, and politically charged speculation at that, it is very hard to see why much the same numbers in their revised edition should be taken at face value.

  37. James Snell
    Posted February 5, 2018 at 2:33 pm | Permalink

    We read today where DD is tweeting again about how great things are well that would make him the greatest tweet or twit in my book..Barnier will take him apart
    .yes the conservatives are going nowhere..they’ve had their day..what the future looks like5 i have no idea but have lost all faith in british politics…so sorry for the young people and the genetations following

    • a-tracy
      Posted February 6, 2018 at 9:37 am | Permalink

      Why don’t you run for election James?

  38. Mick
    Posted February 5, 2018 at 3:24 pm | Permalink

    Off topic
    I see the bias bbc had mp grieve on spouting his bile that we should have another referendum because he feels that’s what the voter wants bull, I’ll tell you what I want is a mass gathering of leaver voters so the government and Brussels can see for there own eyes what they are up against 17.4 million and growing and not the London bubble snowflakes we keep on getting thrown at us with false made up figures to make it look as though the country would back remain if there was another referendum

    • Blue and Gold
      Posted February 5, 2018 at 3:43 pm | Permalink

      Mmmm…I keep hearing how 17.4 million voted to leave. That’s not many in a country of around 65 million inhabitants.

      The BBC…they are clearly neutral, as they ALWAYS have 2 sides to the discussion that is being featured. You people would not complain if they only reported the pro Brexit view…..hypocrisy comes to mind.

      Don’t forget we have a UKIP Prime Minster.

      Get used to it and get over it, this REMAIN and Leave argument is going to drag on and on for decades.

      • mancunius
        Posted February 6, 2018 at 12:19 am | Permalink

        I doubt it. Once we’ve made a clean, firm exit from the EU and governments and their civil servants have got used to their new serious responsibilities for steering the ship of state, rather than just pretending to, I doubt such backwards-looking introspection will be much of a topic, except in academia and the Guardian. We’ll all be too busy leading our own lives, earning and looking ahead.

    • acorn
      Posted February 5, 2018 at 5:02 pm | Permalink

      The trouble is Mick, your Brexiteer leaders in the Westminster bubble, don’t have the balls to inflict the coup de grâce on Mrs May. JR and his ERG mates, don’t have the courage of their convictions. And; they don’t want to be held responsible for what happens after Brexit. Even the 1922 Committee Chairman is saying ERG’s Rees-Mogg, is not a suitable Prime Minister candidate.

      “What they do want, says [Rafael] Behr, is ‘the freedom to complain that it has been bodged; that the dream has been betrayed by Remoaners and their civil service accomplices.’ In other words, they may huff and puff mightily to persuade us that they are blowing the Euro-house down, but by their cowardice do we know them. They do not even have the courage of their own convictions.”

      Lustig summed it up at Huffpost (Google it): “It’s Time To Call The Brexit Ultras’ Bluff. Why May should stand down as Tory leader, making way for a new leader to call a general election.”

    • fedupsoutherner
      Posted February 5, 2018 at 10:12 pm | Permalink

      Agree Mick. I find it abhorrent to think we might have to have a second referendum. We know what we voted on and the vote was the biggest vote for a long time. More people turned out for it than in a general election. Just walk away and watch the EU crumble. Why is it all about what we are going to lose? The EU will lose a lot of trade too because they are bumptious idiots.

  39. acorn
    Posted February 5, 2018 at 5:22 pm | Permalink

    BTW. JR says, “[…] they leave it in a bank or savings scheme, so their money gets reused anyway by younger people who borrow it for their own purposes.”

    Banks don’t lend retail deposits, they become the cash buffer on the assets side of the Bank’s balance sheet. Which is why the government insures retail deposits for when the Bank goes bust and the cash disappears to the senior debt holders.

    Reply Your comment is simply untrue

    • acorn
      Posted February 6, 2018 at 8:44 am | Permalink

      The concept of a “loanable funds” market, mediated by interest rate variations, was abandoned in the 1930s. Except by neo-liberals. 😉

  40. Denis Cooper
    Posted February 5, 2018 at 5:26 pm | Permalink

    Off-topic again, I wonder why Michel Barnier wants to make it more difficult for his country and other remaining EU member states to export their stuff to the UK.

    As far as I know the UK government has not yet proposed creating any new impediment to the present almost completely free two way trade between the UK and those countries, so why is their joint representative deliberately seeking to put at risk their longstanding and substantial trade surplus with the UK?

    It makes no sense; and to be honest the more stupid and destructive, and vindictive, and self-harming, their approach to the withdrawal negotiations becomes the more convinced I am that we voted the right way in June 2016.

    • Andy
      Posted February 5, 2018 at 9:53 pm | Permalink

      Mr Barnier does not want additional trade barriers. You do. Brexiteers voted for trade barriers. It is what Leave meant.

      I know Mr Farage and the other snake oil salesmen told you Leave meant no foreigners, more cash and yet still retaining all the same trade benefits with none of the costs.

      He lied. It is really rather pathetic that even now you can not figure out that you have been duped.

      The good bit comes next – when the negative consequences of your vote actually start negatively affecting you too. That’ll be fun.

      • Edward2
        Posted February 6, 2018 at 7:35 am | Permalink

        Again you persist with your nonsense Andy.
        What trade barriers are the government proposing?

      • NickC
        Posted February 6, 2018 at 12:28 pm | Permalink

        Andy, The EU has got trade barriers – with the rest of the world. And when we Leave we can begin to dismantle those, leaving the EU whimpering behind its trade barricades.

      • Denis Cooper
        Posted February 6, 2018 at 2:52 pm | Permalink

        It is Michel Barnier who is saying on behalf of the other EU governments that additional trade barriers are “unavoidable”, eg here:

        http://www.bbc.co.uk/news/uk-politics-42945605

        If I was the UK government I would be forceful in publicly asking him to explain why he should think that when it is obviously nonsense.

        Perhaps you could explain it for him, Andy.

    • fedupsoutherner
      Posted February 5, 2018 at 10:09 pm | Permalink

      Denis, Yes, all we hear is how we will lose out. What about all those countries in the EU wanting to continue to sell to us? I am sick of the bias coming out of the BBC already. The thing that worries me is not that we are coming out but how are we going to if parliament votes against it?

    • WalterP
      Posted February 6, 2018 at 12:08 am | Permalink

      What’s the matter Dennis..is the cold light of day starting to seep through?.. you know as we all know how the EU works..it is first of all a trading bloc built on agreements and rules..at this time we are still part of it so we know full well what it means to be inside and what it will mean to be outside..Don’t lay it on Barnier..he is the chief civil servant only charged with negotiating on behalf of the Commission. The EU is not going to compromise its four freedoms ..not even for UK..be ause if they did it might only encourage others and that would be bad very bad for them..so its useless to wish that this might happen..but it won’t..it has been said before by others that when it comes to EU matters politics trumps economics everytime..just like when we had the referendum politics trumped economics..so lets just get real about all of this..a crash out in march 2019 is a real possibility..all that will be left to do in that case is to pick up the pieces..FOX has nothing going either..nothing..zilch..so it doesn’t look too promising for business, for people travelling, for financial services,,but this is what we voted for..as JR says taking back control..

      • NickC
        Posted February 6, 2018 at 12:36 pm | Permalink

        WalterP, The EU has never been “first of all a trading bloc”. It is an artificially generated, corrupt and dysfunctional bureaucracy set up to steal nations’ rights and independence in order to turn itself into the “USE”, a fourth reconstruction of the Roman empire.

      • Denis Cooper
        Posted February 6, 2018 at 2:58 pm | Permalink

        “The EU is not going to compromise its four freedoms” is the heart of the matter, part of the price that it sets for free trade between its member states is uncontrolled and unlimited migration of persons between the states. But there is no economic rationale behind that, its purpose is political.

    • acorn
      Posted February 6, 2018 at 6:49 am | Permalink

      You are forgetting the part 26 million households will play in your tariff war. They will still be wanting then BMW and them bottles of Chablis.

      Pity the Conservative Party, trying to get re-elected, if the price and lack of availability of such imports should significantly increase.

      • Edward2
        Posted February 6, 2018 at 12:08 pm | Permalink

        If that were to happen…and I doubt it will. ..people will switch to alternative cheaper cars and wine from non EU sources.

      • Denis Cooper
        Posted February 6, 2018 at 3:03 pm | Permalink

        It wouldn’t be “our” tariff war. As JR has repeatedly said, despite the fact that we run a chronic and massive trade deficit with the other EU countries our government is perfectly willing to continue with tariff free trade. If there is to be a tariff war then it will be started by the EU, not by us.

  41. Andy
    Posted February 5, 2018 at 5:40 pm | Permalink

    Almost 17.4m people are today trying to figure out what a customs union is. You think they’ll have it sussed before leaving it makes them poorer?

    • NickC
      Posted February 6, 2018 at 6:33 pm | Permalink

      Andy, You’re so fixated on the EU you’ve forgotten about the rest of the world and all the tariffs and barriers the EU erects against it. Which we have to operate. Since the UK government is likely to lower and simplify our tariffs from the chronically labyrinthine barriers the EU has, we will be better off out.

  42. Tulip
    Posted February 5, 2018 at 7:02 pm | Permalink

    He would dissect a rose in search of its beauty.

  43. ChrisS
    Posted February 5, 2018 at 7:11 pm | Permalink

    As a recently retired Independent Financial Adviser, I know that affordability is what really counts in assessing housing costs between any two periods.

    This thread has jusat prompted me to do a calculation based on the price we paid for our first home : a maisonette in Maidenhead in 1973. In 1973 we paid £10,200 which, according to the inflation calculator I used, ( from the Hargreaves Lansdown’s website ) is the equivalent of £122,500 today.

    Today, Right Moves have an identical property in the same road for sale for £325,000
    That is, in real terms, 2.65 times the price we paid.

    Comparing incomes in 1973 and today, average income in 1973 for a couple, both working full time, was £3,005, ( Source : Hansard ) the equivalent of £36,023 today using the inflation calculator.

    In reality, the same couple would actually be earning £55,690 today (source : payscale.com) . An increase of 1.46 times in real terms.

    Finally, the mortgage interest rate we paid in 1973 was 8.4%
    Today there are fixed rate deals readily available at 2%

    Putting these figures together, the mortgage repayments required to buy the same maisonette as we bought in 1973 ( with a 10% deposit in both cases ) would in real terms be cheaper, but not by much :

    The mortgage payments would be 142% of the 1973 figures but average earnings are actually 155% higher. In real terms that means today’s couple would be spending 26.7% of their gross earnings on mortgage repayments but in 1973 that figure would have been 29.8% of gross earnings.

    This is very much in line with what I would expect.

    However, in places away from the London commuter belt, wages have risen somewhat slower but house prices have not risen nearly as much, making properties quite a lot more affordable than my figures suggest.

    The reason why many buyers struggle is because more want to buy on their own when in reality two incomes have been required for most of the last 50 years.

    Then we have the fact that buyers are on average much older : we were 21 and 20. Now the average first time buyer is over 30 and considerably higher up the earnings scale so for a couple, purchase is very much easier as a result. Also, Government support means that the deposit required is often only 5% today compared with 10%-15% in 1973.

    The real position of first time buyers today is not nearly as bad as commentators like to make out. Many of the problems arise from changes in lifestyle. Over the last decade, young people often came to see me with car loans, credit card debts etc, all of which counted against them in calculating the amount of mortgage they could borrow. That was never the case in the 1970s.

    • Chris
      Posted February 5, 2018 at 10:03 pm | Permalink

      Very interesting, Chris S, particularly as our first home was in Maidenhead at that time.

    • Andy
      Posted February 5, 2018 at 10:28 pm | Permalink

      Spoken like a true retired person who has not actually had to try to buy a house in 2018.

      Today you could not be a 21 year old IFA and buy a house in Maidenhead – even with two salaries.

      Indeed, if you are 21 and an IFA then your long-term career prospects are already bleak – because the best paying firms won’t even look at you as you don’t have a degree and their employees now all do.

      Your generation had it all in the 1970s – and you have kept it all for yourselves at the expense of your children and grandchildren.

      • Edward2
        Posted February 6, 2018 at 7:40 am | Permalink

        So are you saying the figures are wrong Andy ?
        Where are your figures?
        Your reply is just a statement.

      • ChrisS
        Posted February 6, 2018 at 11:17 am | Permalink

        Oh dear, Andy, you do seem to be carrying round a big chip on your shoulders.

        I was not an IFA at 21. I worked for a large multinational and was trained properly over a period of ten years. When I was in a position to recruit IFAs myself, I always found the ones who had been trained in the industry had far better knowledge and were better with clients that the graduates that were starting to come onto the job market with degrees in Financial Services. Friends who are in business today often say similar things about graduate/non-graduate candidates for different types of vacancies.

        My point about house buyers is totally valid. I would agree that two 21 year olds would not be able to buy a property in Maidenhead in 2018 without a very large deposit. But then few would wish to do so.

        The lifestyle of today’s 20-40 years olds is very different. If they do enter into stable relationships, it’s rarely before they are 30 and according to the Halifax, first time buyers are now on average 30 years of age rather than 21-25 as in the 1970s and they are earning around £35,000 each. Very much in line with the figures I quoted.

      • NickC
        Posted February 6, 2018 at 12:42 pm | Permalink

        Andy, Your generation has chosen instead to give its money to the EU. No wonder it has insufficient money left to buy a house. Only socialists think you can spend the same money twice. Whose fault is that, Andy?

    • mancunius
      Posted February 6, 2018 at 12:33 am | Permalink

      ChrisS – A very interesting and instructive post – many thanks for illustrating the figures so clearly.
      I quite agree about the large amounts of outstanding loan and debt among mortgage applicants today. But in fairness, it was much more difficult for us to take out loans in the 1970s, and unthinkably damaging to get into arrears. And credit cards (or bank credit overdrafts) were in their infancy, and only granted to a chosen few.

    • Ed Mahony
      Posted February 6, 2018 at 12:47 am | Permalink

      But now women don’t have the choice not to work so much to spend more time with their children. Because they’re stuck to paying the mortgage. In the 1970’s, the household wasn’t so dependent on the woman’s wage.

      The evidence is that lots of women would work less if they could, focusing more on their children. But they can’t. And the evidence also shows how important strong family life to the welfare of the nation in so many ways.

      Ironically, it is those who lived during the 1950’s, 1960’s and 1970’s who know how important family life is. And they’re the ones who voted for Brexit which is just going to put even more stress and strain on family life, in particular, for the young.

      • Monty
        Posted February 7, 2018 at 12:12 am | Permalink

        This woman and her husband both had to work full time back in the seventies to secure a mortgage on a house in the region of £10K. We were both graduates, in engineering jobs. For the first ten years, no holidays, and we were working 60+ hours per week, paying off the outstanding capital. Glad we did, before the mortgage rates went through the roof and the negative equity crisis forced many of our generation into foreclosure.

        • Ed Mahony
          Posted February 7, 2018 at 7:25 am | Permalink

          Hi. But it’s the big picture that matters, not individual cases. And the big picture is that far more women have to work far more, and for longer, to pay the mortgage.

          Not just that. They also have to be take out more loans if our credit-based economy is to remain, and the credit-based economy is a key reason for such inflated house prices.

          So it’s a vicious circle with women being pulled more and more into the demands of the economy and housing market – at the expense of their choice to spend more time and energy on their children and family.

          • Ed Mahony
            Posted February 7, 2018 at 7:27 am | Permalink

            So Brexit will impact even more on the young – on young women and their husbands, children and family. If they’re able to buy a house in the first place at all that is.

          • Ed Mahony
            Posted February 7, 2018 at 7:30 am | Permalink

            And the family is already under attack as it is, let alone from the demands of our modern economy and housing market. Under attack from aggressive feminism and social liberalism in general (for example, gay marriage undermining the traditional meaning and purpose of marriage). Brexit is only going to make life even harder for young families and for the young to get on the housing market to start a family.

          • Monty
            Posted February 10, 2018 at 1:19 am | Permalink

            Brexit or not they will have a hard time getting established.

            First, they are paying far too much in tax and NI, to feather the cosy nests of all the folk in this country who have latched on to the benefits lifestyle. These lotus eaters spend their lives idle, in the comfortable knowledge that even after they have raised their clutch of kids at state expense, they’ll keep their council house and ultimately get a pension. And that’s just crazy.

            Second, we have a perverse treasury who interfere with whatever transfers parents could pass to their children, and apply a ridiculous penalty. With no regard whatsoever how poor the recipients may be.

            Third we have raised a generation whose priorities mitigate against saving their money. They “must have” stupid expensive stuff, because they can’t bear to lose face in front of their friends. They will not make the economies and endure the temporary privations we used to, and that significantly depletes their ability to save for a good deposit.

    • Ed Mahony
      Posted February 6, 2018 at 1:45 am | Permalink

      ‘Over the last decade, young people often came to see me with car loans, credit card debts etc, all of which counted against them in calculating the amount of mortgage they could borrow’

      – but that’s all part of the type of economy we have bequeathed to the younger generation by the baby boomers! If the young stop all those loans and debts our economy goes backwards. Is that what your’re suggesting? If not, then the reality is that house prices are relatively much higher for the young to buy than back in the 1970’s.

      In other words, you’re just looking at this from a spreadsheet POV. That’s fine if you’re trying to make money. But not fine if you’re looking at is from a more political level. If you’re going to do that, then you’re going to have to analyse the figures a lot more. You’re simply not doing that.

      • ChrisS
        Posted February 6, 2018 at 10:58 am | Permalink

        In the 1970s we saved up and bought things we wanted with cash. We did not take out credit to buy everything immediately.

        That’s one major difference.

        • Ed Mahony
          Posted February 6, 2018 at 1:05 pm | Permalink

          ‘We did not take out credit to buy everything immediately’

          – but the economy of credit was created by adults not children. Children are born into the world we create (Boris Johnson telling Tory Conference, a few years ago, ‘greed is good’). Adults have to take responsibility, to an important degree, to how our children turn out.

          • Ed Mahony
            Posted February 6, 2018 at 1:42 pm | Permalink

            I like Boris, but he should be a man of letters like Samuel Johnson. Not in politics. Bit sad.

            And I like Lord Lawson. But he should be enjoying his twilight years with his family and friends. Enjoying wine, fishing, reading great books, and the amazing French weather. Instead, he’s banging on about Brexit, all detached in his big, French Chateaux. Reminds me a bit of mad, old Mrs Havisham in Great Expectations.

            All just confirms, we live in a mad, mad world. And i included myself being a bit mad and flawed as well like everyone else. But i really think there’s something mad about Hard Brexit. Not in principle but in practise (our economy’s too weak, not enough people really want it, not a strong enough leader, not a thorough enough strategy – meanwhile, there is so much we could be doing to build up our country, but are not, because we’re all fixed on Brexit like an animal in highlights).

          • ChrisS
            Posted February 7, 2018 at 9:01 am | Permalink

            All those young people who take out PCP deals on brand new cars are being foolish in the extreme. They don’t really need a new car at all.

            When I recently went to change one of our cars, the discount on buying a 5 month old/ 7,800 mile demonstrator from the same garage was 42% off of the RRP and that price was before any negotiation. The demonstrator could easily have been purchased with a bank loan.

            By contrast, the PCP contract most people would sign up for these days would, over three years, cost more than the RRP !

            Which would you do ?

        • Ed Mahony
          Posted February 7, 2018 at 11:05 am | Permalink

          @Chris,

          Totally agree with you about the car.

          Why not holiday to Morocco and buy cheap, 2nd hand Renault 4. Lovely holiday, adventure and car for few hundred quid ..

          I TOTALLY get getting back our laws and Parliament (e.g. Hard Brexit) I totally do (and would totally support). BUT first

          1) Our economy has to be strong enough to take the inevitable economic shock
          2) We need to persuade enough people of it
          3) We need a strong leader
          4) We need a proper strategy

          That’s just common practical sense. Without which one can’t really achieve anything in life unless it’s a fluke!

          Saying that, I think we should also be contributing to the EU, to a degree (and getting something back in return e.g. more favourable trade relations) for global political reasons (a strong, prosperous Europe is good for our economy and for our peace and security).

          If Hard Brexit met these conditions, I would TOTALLY, 100%, be behind Brexit, and would be calling for Mr John Redwood to be made Duke of Wokingham!

    • acorn
      Posted February 6, 2018 at 8:28 am | Permalink

      ChrisS. You have to add in some macro ingredients. Real wages have flat-lined for the last two decades. Neo-liberal austerity has been shifting public sector debt into private sector debt and still is. Hence, lenders had to adopt higher risk to keep the commercial credit creating machine going; and, look for ways to lay off that risk (securitisation of mortgages etc).

      Like all financial bubbles, a house price bubble is preceded by a credit bubble caused by the phenomenon of “irrational exuberance”.

      • ChrisS
        Posted February 7, 2018 at 9:04 am | Permalink

        The risk is not higher. As I demonstrated, the buyer would have been paying a lower percentage of income than in 1973 and although the buyers would only need to put down 5%, the property would actually be being bought with a larger government-backed deposit of up to 15%

        The lender’s risk is actually lower today.

        • acorn
          Posted February 7, 2018 at 5:10 pm | Permalink

          But the mortgagees risk is systemically higher if interest rates rise. If the rate of NPL (non-performing loans) increases, then the lenders who borrowed short to lend long go bust; just like Northern Rock.

    • David
      Posted February 6, 2018 at 4:01 pm | Permalink

      Did you add the cost of stamp duty? (Quite a big amount). Also have you considered what percentage of your salary you were paying in 1976 compared to what people who bought 3 years ago did?
      Also those fixed rates deals have fees – did you compare the fees you paid with them?

      • ChrisS
        Posted February 7, 2018 at 8:55 am | Permalink

        First time buyers don’t pay stamp duty on purchase up to £300,000

        That will obviously have a depressing effect on prices in those areas like Maidenhead where a first property will cost around that figure. In the example I used, the property identical to the one we used to own is up for £325,000.

        Clearly no FTB is going to offer more than £299,999 for it.
        The old stamp duty jump at £250,000 had a similar effect for years.

        • David
          Posted February 7, 2018 at 10:55 am | Permalink

          I am not entirely sure that is correct. Also FTBs sometimes have to move, now days the cost of doing so can be crippling (because of stamp duty), not so in the past.

          Also did you compare the cost of fees in your calculation and the effect of inflation? In the 70s debt was often inflated away, not so today.
          Certainly compared to the 90s affordability in London is so much worse than today.

  44. John
    Posted February 5, 2018 at 8:11 pm | Permalink

    I don’t see any significant intergenerational war.

    I do disagree with the policies of Gordon Brown loading impossible debt for immediate gratification.

    I do levy a similar but much much smaller charge on George Osborne with the Triple Lock but tempered very much by the need to decrease the increase in public borrowing.

    There are reasons to believe too many assets were sold off for immediate gratification as well as loading too much debt on future generations. Most of that is Labour policy though.

    What is far more interesting and fascinating is the interchange between the generations and immigration. Less focus on society and collective responsibility but personal. The need for a state to cover social benefits of a ‘nuclear family’ being replaced by a very different outlook by both the Millennials and immigrants.

    I think the above argument (if true) of intergenerational war is to be overtaken by ‘progress’.

  45. Alison
    Posted February 5, 2018 at 9:27 pm | Permalink

    O/T, re BBC bias: steeled myself to watch 6pm BBC News tonight (5 Feb). Predictably the Beeb coverage of the Downing Street lunch – Mrs May, David Davis, Barnier (et al presumably) – was 200% biased to Project Fear about Custom Unions. Not one iota about the reasons against EU Customs Union membership (or lookalikes, compromises). Again and again, “EU =UK’s biggest export market” etc etc. I then watched the ITV coverage at 6.30 pm (not sure if Scotland ITV main news times are same as rest of UK). Anyway, though my ITV (STV) watching was interrupted, the ITV presented options – customs union, similar, no customs union. I shall watch again via the Internet, to itemize the total lack of balance in the BBC coverage, and I shall complain to the BBC and, if appropriate, to the Ombudsman. Wicked.

    • Andy
      Posted February 5, 2018 at 10:29 pm | Permalink

      Diddums.

  46. Mick
    Posted February 5, 2018 at 10:22 pm | Permalink

    The main stream media bbc / sky / national rags keep spewing out that 43% of our trade is with the eu, is it because we have to trade through Rotterdam by the unelected in Brussels then onto the rest of the world, but to the average man on the street it makes us look as though we trade mainly with the dreaded eu, it’s about time Mr Redwood went just that extra mile and put the U.K. up front and expose all this fake news

    • ChrisS
      Posted February 7, 2018 at 10:10 am | Permalink

      The figure has gone down from 44%.

      When Bernard Jenkin challenged UK Statistics Authority chairman, Sir Andrew Dilnot over the figures, he was told that because the then-44% included services as well as goods, the Rotterdam/Antwerp/Hamburg/Bremen effect was about 2%. Significant, but not a major topic of debate.

      We still do the majority of our trade with the rest of the world which is growing while the EU market is shrinking.

  47. LukeM
    Posted February 6, 2018 at 12:25 am | Permalink

    Even after all that has been said DD still thinks we can have our cake and eat it..he thinks the EU can be persuaded to allow us cherry pick? Then we have D Hannan MEP breaking cover to say we can have a swiss type of agreement..ignoring the fact that that would mean allowing free movement and that we would also have to pay in and accept ECJ rulings..we seem to be all over the place

    • NickC
      Posted February 6, 2018 at 12:46 pm | Permalink

      LukeM, That’s because our government is trying to deliver Remain policies – still in the single market etc, as Remains petulantly demand.

  48. mancunius
    Posted February 6, 2018 at 12:48 am | Permalink

    David Willetts has a bee in his bonnet about our having ‘stolen our children’s future’, but as I have noticed in debates on other topics, he devalues his credibility by using emotional arguments based on an exaggerated personal viewpoint. (And he’s yet another ex-grammar school boy who, having benefited from that educational model, now wants to suppress grammar schools.)
    The problem is that if we do as he says, and the older hand over all their wealth to the younger, who either pi$$ it up the wall or are later proved never to have actually needed it in the first place (much as JR plausibly surmises) – then that wealth, currently invested in Britain’s assets, bricks-and-mortar, its companies and infrastructure, and paying tax for the public good, will have been destroyed, and all for nothing.

  49. stred
    Posted February 6, 2018 at 5:52 am | Permalink

    In current yoof language, ‘Wicked’=’Very good’.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

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