The Resolution Foundation has come up with a cruel blockbuster this time in its efforts to create an intergenerational war in the UK. They argue that older people have too much of the country’s wealth, and recommend taxing pensions and homes much more to pass the money on to younger people.
They ignore the obvious point that in all past generations older people have more of the wealth than younger people. Most of us start out with no assets. You work up to buying a home of your own on a mortgage, and start to put savings away for rainy days, and gradually build up a pension pot. As people now live longer they may spend many years in retirement, so they need a substantial level of savings to see them through their remaining years.
Most bizarre is the Foundation’s idea that many older people have done well out of house price rises. Most people just own the home they live in. As most wish to carry on living in it, they cannot use the gains they have made for some other purpose. The people who ultimately gain are the younger people or the charities who inherit the money on death.
Worse still is the Foundation’s prescription to deal with this misinterpreted problem. They want to charge people more for living in their own home if it has gone up in value – £2.3bn more for the country as a whole. They want to charge people extra tax on their pensions in payment, placing an NI charge on top of their Income tax on the pension receipt! They want to impose more NI on any earnings people add to their pension.
You do not make the young rich by making the older poor. Tackling some poverty in old age has been a success story, so why now go back on it and try to impoverish the prudent? I agree with them that we can and should do more to help young people with home purchase and with university fees.
Trying to pit one generation against another is unpleasant politics. In many families there is a spirit of mutual help between the generations. Where parents and grandparents have surplus savings they do often help young people to pay their way through education or to acquire their first home.
May 11, 2018
What about old people who rented most of their life, and bought recently at the top of the market?
What about old people with young children they are struggling to bring up.
This stuff is simplitic nonsense.
If there is any unfairness in society it is mainly in favour of those winning the social housing lottery who are lucky enough to get a nice house in a good area with good schools
And indeed there is probably at least a few hundred grand difference in earning ability just on whether you happened to be allocated a good school or not. State rationing and allocation drives biggest unfairness.
Lack of self awareness from the political class of problems they themselves create.
May 11, 2018
Agree totally plus people’s lifestyles, the prudent versus the profligate. Let’s also not forget the inflation linked pensions in the public sector, often more generous than in the private, the vast cost of scandals like Winrush, Breast screening etc and the umpteen billions wasted over the years.
It’s prudence paying for incompetence.
May 11, 2018
This is the same Willetts as university minister content for EU students to have free tuition in the U.K. While English students given lifetime of debt. He is full from f whacky ideas to punish English hard paying taxpayers. What is disgusting he was made a Lord and effectively given another pension! The same person who is now voting against the Govt to stop Brexit. A traitor to democratic elections. Scrap the Lords to oust people like him.
Another of Cameron’s outright Europhile fanatics in cabinet.
May 11, 2018
Willetts should have worked out that instead of giving English students a lifetime of debts he could have scrapped tuition fees to put them on the same par as freeloading EU students in our own country. This would be worth more than the hand out he is talking about including those not going to uni.
Willetts knows all EU youngsters would be entitled to the free hand out as well under EU rules. Would this extend to those EU youngsters not born yet who are to get welfare payments from the U.K. under May’s capitulation? I think his latest idea makes him look of of touch and his head in the clouds of la la land. I am sick of my taxes being spread around the world while govt falsely claims it cannot look after its own. Willetts being a front runner in this regard.
Your current and former ministers come across as horrible towards young people in this country while prepared to give away hand over fist to foreign nationals. When will have any govt minister being patriotic to citizens of this country? Totally Idiotic idea again.
May 11, 2018
JR talking about stupid ideas I note Guido points out how the U.K. Will be disadvantaged if we remain in the defence and security pact, let alone May pledging giving it away for nothing! Procurement, building of ships being hampered. Again, has May lost the plot? We want industry and ship building here, we want skilled jobs and skills to be kept here, we do not want unelected foreign people to decide our defense or security policies. May want to follow we want a PM to lead our independent country and decided policies which can be ultimately decided by the public voting in those who make the policies.
Is the The Sun correct about Robbins? If so he and other KitKat civil servants need sacking.
May 12, 2018
Putting English students on a par with the rest of the UK as well as the EU would be good Hope. English taxes provide free tuition fees for the Scots and capped fees at a third of English rates for the Welsh & NI. Welsh students only pay £3,465 even when studying alongside English students at English universities. This Tory Government along with the rotten Labour one before it doesn’t give a stuff about the rotten deal English kids and English kids alone are getting.
May 11, 2018
It’s not just no brains Willets Hope., it seems the whole Conservative party, there by the grace of England, who are happy to see English kids, and English kids alone in the UK and EU pay the second highest tuition fees in the world. They deserve England’s contempt instead of our votes.
May 11, 2018
Average state sector pension “pot value” is, I understand, about £500K. All paid for by people in the private sector who have an average pots of about £50K. It is an outrage. Especially when most of the public services they deliver are often appalling value.
Plus they work shorter hours, take far more sick pay, retire earlier and spend much of their time inconveniencing the public and the far more productive private sector.
May 11, 2018
It appears that everyone sees assets, wages , consumables as their mark for success, but they don’t see a life times effort to get to the point where these things are owned.
How do you compare 50 – 60 years of hard work, sensible living , providing a pathway to ensure the offspring are helped on their way, with those who have done little or nothing.
As I was working nights often 100 hours a week at the age of 18yrs , taking responsibility at the age of 20 for hundreds of ill patients, doing academic work in breaks and end of shifts ,paying my parents a small amount of my £10 / month wage , I did not think that yes that’s OK because now my parents have worked all their life I can take their money as well as the value of the property they will leave
to me.
The younger people now will also be penalised in this way should they get to old age! How can David Willets think he can motivate a society into performing well, not only for security of self but for the UK, with his strange thinking ? Now that is Marxist.
May 11, 2018
Many older people would be glad to pass on assets down a generation but are deterred by an intrusive and malignant tax, CGT, that penalises generosity.
The Resolution Foundation now proposes that people not only may but must pass on assets, whether they wish or not, but only to non-family members. Passing assets to family members will be penalised as heretofore.
Government has got itself in a similar pickle by ignorant tinkering with marriage laws. Now, thanks to same-sex marriage, estates can pass free of IHT to any person of the same sex except a family member, whom one is not permitted to marry.
May 11, 2018
We work for our families and self improvement for them. Others just want to take, a few deserve support of the state i.e. Disabled and elderly. Willetts and others content to tax us until we squeak to pay for socialist utopia, no I do not want to fund Eastern European countries through my taxes, no I do not want to fund overseas aid to the tune of £14 billion while elderly are forced to sell their homes for adult care, or unable to get hospital appointments, or cut police by 20,000 (contrary to May’s false claim if you cut spending by this amount it is bound to correlate with performance and crime), military unable to function through cuts with ships in harbours unable to put to sea etc.
Socialism seems to have infected a large proportion of the Tory party, it needs to be cut out if the party wants to survive. Willetts would be content for us to work and be a cash cow including to give away the family silver for his EU dream. No. We voted out.
May 11, 2018
“no I do not want to fund Eastern European countries through my taxes, no I do not want to fund overseas aid to the tune of £14 billion while elderly are forced to sell their homes for adult care, or unable to get hospital appointments, or cut police by 20,000 (contrary to May’s false claim if you cut spending by this amount it is bound to correlate with performance and crime), military unable to function through cuts with ships in harbours unable to put to sea etc.”
I agree with you as do many others however it would seem the powers to be are not listening.
May 11, 2018
As one of the older posters here (probably, I am in my mid 80s) perhaps I can add my perspective. I was born into the 1930s depresssion, grew up during WW2 with all its hazards and shortages, had a much more limited choice of universities (c4-5%? could get places) and lived with rationing up to the age of about 20 years old. We could finally afford to buy a house at age 33. Taxes were very high during my wotking life (up to 60% for at relatively low incomes). Inflation was insidious and, during the late 70s reached extremely high levels. Exchange controls (which limited travel abroad) ended early 1980s IIRC. We were comprehensively lied to about the Single market. So what, I ask myself, is this Foundation bellyaching about? This is just another excuse to promote a harebrained scheme to confiscate more of my hard earned income and accumulated wealth. It should be rejected out of hand.
May 11, 2018
And the biggest victims in British society are not generic 25 year olds. It is people who have been forced inter generationally to live on sink social housing estates. Who dont have the funds to move location. And who have been forced to go to sink schools, and send their own kids to sink schools. Sink social housing estates which were originally built to support old dominant employers like shipyards, steelworks, mines, etc which are long since shut, with nothing emerging to replace that volume of local jobs. The state chooses to keep subsidsing these houses far away from any realistic jobs market, forcing the people there into joblessness. If any section of society needs help it is this, not 25 year olds (a proportion of which will have richer parents etc anyways). If the state simply allowed them to take their housing subsidy and school subsidy where they wanted, they would self optimise their jobs chances, their location relative to schools etc, by moving over time themselves. One of the biggest problems with the political elite in this country is the way they have forced these people into their current position.
May 11, 2018
Exactly it is idiotic.
I too agree with JR that we can and should do more to help young people with home purchase and with university fees. The best way to do this is to relax planning, cut the greencrap and OTT building regulations. (Some idiot on TV today wanting all houses to have loads of excessive disabled provisions) What on earth is the point of that when most houses do not need it and never will? Then cut taxes, stamp duty, IHT, lifetime transfer tax, NI and the likes. Then get off the back of employers so wages can rise. There is some new idiotic bereavement Tax on employers on the way is seems. That will cheer you up when you lose a child won’t it? Just two weeks paid leave £800 perhaps less Tax and NI I. Paid for by lower wages for the rest!
For university fees fine but only the 50% at best courses that actually have any value. Teach the rest useful skills, building, sales, programming, engineering, farming and the likes.
May 11, 2018
Most employers are indeed very understanding and generous in these sad circumstances. But many other small employers often simply cannot afford to take say £800 of their salary to give it to someone who has lost a child or is off sick. It not the government’s role to enforce generosity. They are endlessly trying attacking businesses in this way. Businesses have to survive are not magic money tree charities for government to endless rob. Will some one explain competitive economics to Mr Will Quince MP please.
In many cases this money will have to come from the managers salary or by laying others off or paying them less. Perhaps even being the straw that breaks the business’s back and makes everyone redundant.
What happens when you own has some tragedy or illness virtually no help at all probably just a fine for then for filing late or something.
May 11, 2018
Blaire encouraged all to go to uni to cut unemployment while he implemented his mass immigration plan. The first rung of the ladder jobs going to immigrants rather than school leavers, education, education education not built up but dumbed down to give higher inflated grades to meet his plans. The Tories have followed for eight years! When are the Tories going to change this?
May 11, 2018
You do not make the young rich by making the older poor.
Indeed so why have Brown, Hammond and Osborne attack private pensions, robbed people of personal allowances and child allowances,in crease NI, insurance taxes and ratted on the £1M IHT threshold promise. Plus all the rest of the attacks on nearly every one. Tax borrow and piss down the drain and over regulate everything. This is current the Tories agenda. It has been since Major and still is.
May 11, 2018
Houses in the EU are already subject to excessive disablement regs. In the UK the requirements, on top of high land and building costs, lead to oversized ground floor toilets and small living spaces. why not allocate a smaller proportion of disabled houses in proportion to the number of disabled needs, then subsidise moving.
In France we found a superb flat with a huge terrace( allowed by the planners) and a flat behind with a tiny living room and kitchenette, but a bathroom big enough for a small car. They were not selling fast. The hotel room next door of the same area had a good living room and kitchen but adequate bathroom. French architects are obviously as hamstrung as British.
May 11, 2018
Good morning
I wonder if Her Majesty will sign off any such law bearing in mind that she has the most to lose 😉
So here we have a so called charity using its position to influence government policy. When you go to their sites and especially their key funder, The Resolution Trust it amazes me to read words that sound to me very Socialist in tone. All about rebuilding society and such.
It would not surprise me if this is government policy in tears to come.
One thing that is not mentioned. Why have house prices risen ? They have risen because of low interest rates, government raiding pension funds and MASS IMMIGRATION of most young people, some with families.
This is nothing but a tax grab. And grubby one to boot. You want to help the young ? Get rid of inheritance tax.
May 11, 2018
Mark B – Agreed.
Can you also add Student Loan interest to your list which raises to over 6% this autumn compared to the Bank of England rate of 0.5% and a typical personal loan rate of 3.3% (HSBC).
The Student Loan Company is just Government Wonga by the back door.
May 11, 2018
Not quite Wonga rates (also it is paid back out of income that has already been taxed and NIed.
One of the main high street banks are charging about 68% on overdrafts even to the best clients! But they pay you perhaps 0.2% on deposits! A compete joke where is some real competition?
May 11, 2018
Why no mention of fundamental market behaviour in regards to house prices – that of supply and demand? The UK built 300,000+ houses per year in the 1970s, but less than half that in recent times. Why is that? Has demand halved with increasing lifespans and changing demographics causing a rise in the number of smaller households?
Expecting the private housebuilders to keep supply up with demand is simple folly as they benefit from keeping a supply shortfall – it drives up the prices of the houses they do build and drives down their costs since raw material suppliers and labour are both competing for work on fewer properties, and so it is in their interest to maintain the current shortage status quo.
If house price supply had been kept up with demand, prices would not be where they are.
May 11, 2018
Indeed it is all about supply and demand plus the availability and costs of mortgages. House priced fall rapidly in an area where there is over supply or the population or jobs are in decline. Often to well below the cost of building one!
Try John Major’s 17%+ ERM interest rates! Still no apology from the pathetic man & EUphile remoaner.
May 11, 2018
Socialism through the back door-remember when G Brown changed the law to allow charities to become politically engaged-and the subsequent proliferation of charities,NGOs,etc, their generous public funding and their incestuous Blairesque hierarchies.
May 11, 2018
Sociology has a lot to answer for with its simplistic categorisation of individuals into specific social groups which in themselves are meaningless tosh
The individual’s become an irrelevance and yet the person is real while the social group is little more than a narrative, a concept of no worth
This type of social analysis exemplified by the Res-Foundation is designed to simplify the absolute complexity of the real world
Of course the real world is far too complex to describe and so those with political objectives use narrative to extract political capital and advantage
A person’s individual financial circumstances cannot be described according to age, ethnicity or gender so why do politicians and social activist groups do what they do.
Why do we make reference to ‘the old’, the ‘young’. There’s no such entity in the real world but such social groups (which are little more than an invention or academic contrivance) are conjured up to create a political tension when one group is played off against another. This is classic Labour politics – rich versus poor, black v white. male v female – all meaningless in the real world but very useful for political gain
Of course this policy idea is another tax grab using the idea of youth poverty to stoke sympathy and an emotional response
In the 80’s the issue was simple. You got off your backside and grafted until you succeeded, simple. Today it’s all about political parties looking to buy the youth vote using other people’s money
Moral values have been discarded and replaced with politics. Political parties are now shameless in their tax and power grab – instead of espousing the values of hard work, saving and lower taxes they try and buy the votes of certain contrived social groups by using our money and stoking resentment
This country and its politics has reached its nadir
May 11, 2018
So, as a society we should give money to young people who cannot afford to save up a deposit to encourage a money lender to place them in massive debt? What about society then giving money to young people who are separating and divorcing ten years afterwards so they can have a deposit to encourage a money lender to place them in massive debt? Sounds like good sound Tory boom and bust.
May 11, 2018
The government needs to intervene here and start a huge building programme..we need thousands more cheap, well designed affordable homes for the young so they can get a start – the present day housing market has them priced out of it.
Back in the 1970’s with an ordinary middle of the road steady job I had no problem in getting a mortgage for a three bedroom starter, with front and back garden, this is no longer the case now for young people therefore it needs some sort of government intervention to thwart the market.
May 11, 2018
@WalterM
The govt has already thwarted the market by making it an obligation of the authorities to provide taxpayer funded housing for thousands of immigrants who come here with their families without the financial means to support themselves. Remove this burden and the market will correct itself as markets always do.
May 11, 2018
Immigrants plus the generous benefits system which actively encourages couples to live apart and thus require two houses instead of one.
May 11, 2018
Bob, yes, and at the same time not renew a visa for a cancer specialist from New Zealand but have to let in all and sundry from Europe whether or not they can afford to fully support themselves.
May 13, 2018
Yes I feel especially sorry New Zealand, they are a true friend and we treat them badly.
May 11, 2018
The government needs to intervene first to have a radical real significant reduction of inward immigration. We cannot keep expanding our population like this without massive problems. And it needs to accompany that with real incentives to hire, train and promote locals, and to stop giving massive tax perks to work visa holders etc.
Other than that it needs to stop manipulating society as much as possible, and have a big push to hand more power to individual citizens and away from different arms of the state, be they education authorities, health trusts, social housing providers, and so on. State should confine itself to high quality regulation, monitoring, and enforcement, so for instance on house building a quantum leap in the quality of new build inspection for building regs is needed and is directly the states problem to get in order.
May 11, 2018
Yes , there needs to be a place for housing built to a price .
Given that the average family income is say £25,000 they need to be able to buy a house at around £100,000 .
I am on the edge of an AONB – a lovely patchwork of woods , fields and farms with villages every 5 miles or so .
Many houses could be built in small clusters of say 4-8 in field corners near farms and close to roads . So utility connection costs would be minimal .
Well-designed wood frame houses could be built for around £60,000 and a final selling price of £100k achieved .
The local authority would be responsible for planning permission and there could be an opportunity for local people to stay in the area .
Much better than new estates or even new villages which are favoured at present .
May 11, 2018
WalterM ,
People will always want to live in the most convenient locations rather than at the margins so there will , and always has been , an imbalance between supply and demand .
The main factor governing house prices and responsible for inflation busting increases is availability of credit – and compliant government serving the finance lobby .
Factors like moving from 3X (net of employers significant pension contribution) single wage mortgages to 4.5X gross dual wage mortgages made a big difference as did ZIRP .
When you bought we had things called building societies which acted as a conduit between savers and borrowers .
Since 1982 , banks have been given unrestricted access to the mortgage market and can create credit out of thin air which has enabled them to puff up house prices .
May 11, 2018
And the roads and the water and the utilities and the schools and the hospitals and the jobs…
Is this the time to be having mass immigration ?
May 11, 2018
The problem is unfettered immigration!
May 14, 2018
Walter M
I think you will find it was government intervention which caused the problem
Some things to ponder
In the 70’s there were things called Building Societies
In the 70″s there was a thing called interest on savings
In the 70″s there was a thing called MIRAS
It is still perfectly possible to buy a reasonably priced house in the UK, just not in London or parts of the south east
Building a million houses won’t change that and here’s why
1) Supply and demand. Demand is global, supply is local. If you build a million cheap houses in London, then people will queue to buy them from all over the world and drive the prices up
2) There isn’t really much of a shortage of houses , there is actually a shortage of the finance to buy them
We have basically zero interest rates( ZIRP) so, no one can save a deposit effectively. This was neatly got around up until 2007 by offering 100-120% mortgages. The government intervened and stopped this too.
I do agree that our archaic planning laws and totally stupid so called “greenbelt” laws need to change, but until we find a way of financing house purchase no amount of building will help
May 11, 2018
It is very odd what has happened to David Willetts. With proposals like £10k for every 25 year old (why not £100k or £1m?) I wonder why he is thought to be so clever? There is no such thing as the older and younger generation to be defined against each other. Where’s the cut off? This is not intelligent politics and it certainly isn’t Conservative. If we want to make it easier for young people to buy houses, which is a good idea, then we need radical changes in the planning laws.
May 11, 2018
Richard 1. Yes, where’s the cut off? Can you imagine the envy of a lad who’s just turned 26 watch his sibling being handed £1000 on a plate? I think it will do more harm than good. Politicians should remember that we haven’t all got great big pensions. We may have private pensions but mines only £152 a month. Many ifvus still had to work hard up to retirement age and are only just beginning to enjoy ourselves. How many times do you see students eating out and staggering out of bars drunk? My son was a student and his friends thought he was a killjoy because he didn’t think getting drunk every night was good entertainment. Many youngsters have to grow up and realise they can’t have it all. Just like us, when we had a mortgage we knew we were going to have to go without for many years.
May 11, 2018
Sorry, that should be £10000.
May 11, 2018
And many of us are working past retirement age. My working husband is 72 and saw his private pension halved thanks to Brown and the banks and as someone in her early sixties, I too am working thanks to rich kid Osborne robbing me of my state pension until I am 66 by which time my husband will be 75 so we will not have much of a retirement together. Meanwhile while as we carry on working, at least we know our taxes are providing pensions the rest of us can only dream of for the public sector and those politicians and bankers who destroyed pensions for the rest of us.
May 11, 2018
er radical changes in the immigration system first and foremost…
May 11, 2018
No I don’t think that’s right. There is no aggregate shortage of housing, but it’s far too difficult to build where people want houses. Just cutting immigration won’t help much.
May 12, 2018
Yes cutting immigration will help.
And houses without a jobs market within travelling distance are worthless if the state didn’t subsidise them and condem the residents to joblessness.
May 12, 2018
Cutting net immigration each year to zero from its current 250K/300K would clearly help enormously to overcome our housing shortage.
May 11, 2018
”….we need radical changes in planning laws” – what about radical changes in the number of people coming to this country that require housing?
Housing crisis + traffic crisis + NHS crisis + other crises = population crisis
May 11, 2018
Spot on again JR. Afraid its the usual worst kind of politics, that of envy.
Firstly a Government £10,000 gift without conditions is just stupid.
Do you give it to anyone here who is 25, if so look out for some super immigration into the Country of people who are 24 and younger.
How about people already in prison, do they get it it, do known drug takers/pushers, sons and daughters of millionaires, etc etc.
How about those who miss the cut off date by a day, a week, those who were born here who left a few day’s, months, a year before due to work placement, or family movement.
No wonder politicians and ex politicians are getting in a muddle with Brexit, expanding airports, and playing with train sets, if this is the level of priority and thought.
Of all the problems we have in this Country which need to be resolved, you would of thought some of those would have taken priority.
The politics of the mad house.
May 11, 2018
Possibly, it’s because of guilt ridden regrets about advising the young to get heavily into debt in order to take a dumb degree which pays less than a plumber. He ought to get a brain scan to check whether one of them had fallen out and the other is softening.
May 11, 2018
Well articulated. I am surprised at Lord Willets, knowing where he was educated that he could come up with such nonsense. I think he would find a more congenial home among the Lib/Dems. There is much that government could do to help the young overcome the barriers put in place by government by design or ineptitude. My parents supported me with their thinking and finance when I was a teenager, I did the same for my two sons. There comes a point when they are better making their own lives, and that of their children.
If one wishes to change the minefield that all youth has to traverse, lets discuss the abolition of university fees, the reintroduction of the Direct Grant Scheme, the building of affordable accommodation, and the introduction of a more visionary mortgage facility. The existence or none existence of such items that affect the first thirty years of most peoples lives are where you should start, not by further robbing the elderly to pay for other peoples grandchildren.
May 11, 2018
I am surprised at Lord Willets, knowing where he was educated that he could come up with such nonsense. I think he would find a more congenial home among the Lib/Dems.
Such are most PPE graduates it seems. Lacking any common sense,largely irrational and innumerate, emotion first and little or no real thought at all. I am sure there are some exceptions but not many it seems. Not much quality in this list below that I can see.
Widdecombe, Lawson, Alan Duncan, George Gardener and Mark Reckless perhaps.
https://en.wikipedia.org/wiki/List_of_University_of_Oxford_people_with_PPE_degrees
May 11, 2018
Regrettably the idea that the old are stealing from the young is very current. It will almost certainly be picked up by government, very likely this Conservative one, which is effectively Blairism continued.
May 11, 2018
yes virtue signalling group think in the political class is very much in fashion
made worst by the political candidate selection process in all the main parties which tends to select from a small section of society which all think alike
May 11, 2018
Indeed May is worse than Blairism, not quite as bad a Corbyn/SNP I suppose but paving the way for him it seems.
May 12, 2018
That is why I will never vote Conservative again. I havent heard anyone in Government speak out against this crackpot idea. I suspect that they would be quite pleased if it came to pass, as it would get them off the hook for the many ways they have squandered taxpayers money.
I would point out that it is impossible to know when you are young, how you will be financially when you reach older age. It is a question of luck, hard work, health etc. When I was in my 20s, I had very little money, despite starting full time work at the
age of 15. Husband and I are comfortably off now, but its taken a lifetime to get here. Life is always uncertain, nothing changes. If one starts off healthy and able to get work, there is always hope.
May 12, 2018
They never make another sweeping intergenerational generalisation: that a huge capital transfer has been made from old people’s life savings to young people who have thereby made huge capital gains – because of low interest rates.
May 11, 2018
Is it true that Mr Willetts has the nickname “two brains” because of his intellectual ability?
This report suggests that somewhere down the line whoever came up with it is out by a factor of four.
May 11, 2018
I recall the days when the present Lord Willetts of the Resolution Foundation was a Tory MP, nick-named Two Brains.
It was unfortunate then, as now, that he was so busy being ‘clever’ that he forgot to employ any common sense.
May 11, 2018
Strangely, the much thought-out analyses of such economic research institutes here and in America are remarkably similar to economic policies of the former communist Eastern Bloc countries.
For example, who would believe that American Republican economics on taxes are identical to those of former Albanian Communist Leader Enver Hoxha? But they are! OR that this present analysis is more of less the same as “The Young Couples Loan” of Czecholslovakia in the 1970s? But it is.
You see, no one here in the West got an accurate picture in detail of Communist country policies except “They are Communist”.
Any more analysis required then write to former Eastern bloc embassies in the UK and ask how to get hold of back issues of their magazines on such topics which were printed for the very few here, in English around 1970
May 11, 2018
I can only agree with your comments JR – it is astonishing that a conservative think tank could come out with so much socialist thinking …
I drew this to the attention of my own MP, who told me that this was not government policy – I hope it never will be…. It’s irrational at best, and just the fact that it has been considered will get people worked up on by sides of the alleged divide.
What we are seeing though, is the slow death of a once great party as it descends ever more into socialism…. into areas that they think will appeal to the masses. The tories have an identity problem, but it’s self generated – WE know what the tories should stand for – It’s time the Tory party realised its potential by being true to its principles.
May 11, 2018
The solution to every problem always seems to be more taxes.
I don’t suppose politicians ever try a reduction of taxation as an alternative.
May 11, 2018
Edward2 – yes, its part of the socialist carrot and stick approach, as defined by harold Wilson in 1963 – only there is never a single carrot….
We are moving into an era where even conservatives are boasting about their socialist credentials…. no wonder fewer people understand what the tories stand for…
May 11, 2018
You do not recall the budgets of Nigel “My brilliant Chancellor” Lawson?
May 11, 2018
Long time ago now the rather good Chancellor Nigel Lawson.
In recent years it seems to just be more and more taxes.
May 12, 2018
He mad a mistake in giving double mortgage tax relief with notice though.
May 11, 2018
John. maybe I am just being soft in my thinking but the rent most people pay is in some cases higher than the mortgage repayments. Would it not be a good idea that the government could either make 100% mortgages available or take a 10% stake in the house so that people could get on the housing ladder. Most renters can afford to pay their rent, it is getting the deposit together that stops them. This would benefit every age not just the young.
May 11, 2018
There are a host of things that government could do to make homes available – What about the old German system, whereby people were encouraged to buy their own land and built the home themselves, engaging architects and skills they didn’t have…. they would have saved with the same bank for 10 years and received a better rate mortgage to pay for the build and required tradespeople – but the best things is that they’d have the mortgage paid off in ten years.
Why can’t we achieve something like this…. instead of building council houses for people to buy or rent, with most becoming slums within a few years.
May 11, 2018
If someone puts their own money into buying a property to let; that is investment and they are likely to maintain the property well, look after their tenants and provide a service that most require at some time in their lives. However, there was a case in the garden of England of a couple building up an enormous property portfolio by buying new builds off plan; when the market took a nosedive as a result of the massive bankster mortgage fraud, the portfolio nearly went under with presumably the banks (shareholders) to take a major hit. However, it all ended happily with the large property portfolio of starter homes being sold off to foreign speculators as hundreds of young people were forced to live as shorthold tenants, having been denied the ability to buy a home and start a family as a result of a conspiracy between the government, the banks and some greedy people.
Here are a few prescriptions for starting to resolve the problem; first stop all uncontrolled mass immigration completely. We do not need foreign doctors etc, we need more university places. Stop banks lending to buy-to-letters; stop foreigners owning residential property other than for their own habitation; put a surcharge on properties left in wills if they are not sold during the administration. Make Stamp duty cumulative on the total portfolio.
The Tory party should be about private wealth creation (added value) not shifting money from young people to old and then trying to arbitrarily reverse the process.
May 11, 2018
It will just drive house prices further.
The reason there is a fetish for landlording is that successive governments have a fetish for cramming the country full of people.
May 11, 2018
PS These economic institutes should not line up against me on TV in a debate on the issue if they wish to stay in a job and in business. I’m smarter than the average Russian bear. ( though I’m as British as fake economic think tanks )
May 11, 2018
PPPS Well, we bought a washing machine, fridge, a lovely bedroom suite and other items with it. Prague used to host wonderful economic conferences. Has Mr Willets been there or a member of his staff perhaps?.Do wish Mr Willets “Honour to Your Work” as was the official communist party slogan on its paper Rudé právo at the time
Sorry JR for all these messages. I am very upset. Bad memories. But I despise people who by their actions attack and belittle and shame my glorious UK
May 11, 2018
Dear John–There are far too many of these Foundations, Think Tanks, Reearch Groups, Select Committees, Research Departments and so on and so forth–I get fed up listening to so-called News items spouting what their latest pronouncements happen to be–Having been set up, unasked, they seem to feel obliged to pontificate, so they invent something (usually of the camel instead of horse type) and thereby muddy the water at best–I’d rather they just shut up–or here’s an idea, maybe any monies they have been endowed with or whatever should be stolen as per usual and used to mitigate taxation.
May 11, 2018
Willetts has always been and overated, over promoted sycophantic member of the liberal ‘elite’ – never a Conservative. Classic example of someone who has never had a real job where you have to make money just to live. Please let the bonfire begin and remove the public money teat from all of these entitled middle class peer pleasers.
May 11, 2018
So after 50 years of work, and of making a choice of building up a home, of building up some level of savings or pension, and all out of tax paid earnings, the old generation are going to be singled out to pay more, even though they may already be paying care home fees or for careers for themselves or their parents..
The fact that when they die, Inheritance tax, probate fees (remember THE planned increase), are not enough.
The very people who usually do UNPAID (as opposed to paid) real voluntary charity, community work, that often bring up grandchildren, may also do the grandchildren school run, who may still be even looking after their own very elderly parents, are deemed rich enough to pay more, even though they are still liable for the same tax on income and spending as everyone else.
Worse still it is even suggested that they should be taxed on their so called wealth, when they simply could be (so called) property rich, but cash/income poor.
The real joke is that if you do give a cash gift to your children (or anyone else) it has to be out of excess income (standard expenditure), you have to live more than 7 years, give less than £3,000 or ITS TAXED.
Perhaps if the Government raised the limits (been the same for more than 30 years) some parents/grandparents may, just maybe tempered to give a little more.
No wonder people are now looking at voluntary euthanasia !
May 11, 2018
Oops, tempted not tempered.
May 12, 2018
Alan:
Well said! Thats the situation in a nutshell !!
May 12, 2018
Couldn’t agree more about that three thousand pound limit, it’s not the older generation fleecing the young, it’s the treasury.
May 12, 2018
He probably thinks old people are all like the ones in the House of Lords.
May 11, 2018
President Donald Trump’s rally in Elkhart, Indiana – May 10, 2018 he announced a change in his main slogan for 2020 from “Make America Great Again” to “Keep America Great”
Our Laughing Chancellor should try as is his wont “The UK Gets Worse Doesn’t It!”
May 11, 2018
It is a daft idea and will probably not come to pass.
Younger generations are now in a less favourable situation than previous ones. Good jobs have disappeared overseas to suit business, cheap foreign labour keeps wages down and house prices are now beyond most youngsters. Blame faulty policies for allowing this to be the case. It is not the fault of previous generations.
Assets are already stripped away from the elderly with punitive IHT rates which now affect ordinary families, the rich escape inheritance tax via trusts and good lawyers.
May 11, 2018
IHT is not so easy to escape as many think, even for the rich. Trusts attract tax in different ways but HMRC goes to much trouble to ensure the burden is equal and unavoidable.
However, marrying one’s great-grandchild is perfectly legal and permits family assets to pass untaxed so long as two generations are skipped.
As heterosexual marriages must be consummated to be valid – a requirement possibly distasteful to the young person and problematic for the old – a same-sex union, which imposes no consummation requirement, is best.
May 11, 2018
Somewhat off topic, here we see another example of well informed people (in this case Continuity Remain) able to hold two completely contradictory beliefs at the same time. In this case it’s the Remain argument that it would be terrible to have any tariffs on trade with the EU but at the same time terrible if we don’t have tariffs with the rest of the world.
Food will be cheaper after Brexit – if we ignore special interests
May 11, 2018
Unfortunately the link I included with the article I referred to got cut. It can be found on the website CapX and is worth reading.
May 11, 2018
I think the intergenerational argument is not subtle enough, also associating home owners with saving is insufficiently subtle. I think there is an issue that some (of various ages) have got lucky (born/first job in London, inheritance, prop have unearned wealth, whilst others have delayed consumption (saved) until old age and been hammered by a decade of mistargetted monetary policy. Moreover mobility through life (from nothing in youth to assets in old age) is decreasing. It will become more difficult to defend individualism and a free market, without mobility, reduction of rewards to luck and removal of market distortions.
May 11, 2018
The people who ultimately gain -from house price inflation. Young people get 60% or a part if shared, if they are lucky, then have to find the 40% or more to buy themselves a starter home which costs much more than their parents house did. It is the taxman that gains and that is why the treasury prints money and favour mass immigration to boost house prices to ridiculous levels. Owner occupiers do not benefit, unless they sell to go somewhere cheap, and BTL ‘pension’ investors can’t get at their gain without paying so much CGT that they could not buy a one room cupboard in their expensive area.
Sometimes people with 2 brains cancel each brain’s intelligence out. Common sense is missing. They need to resolve themselves.
May 11, 2018
Both Winston Churchill and Adam Smith (with his “annual ground rent” proposal) were in favour of taxing away the economic rental value of a residential location (developed with building or not) .
Given that economic rental value of a location (not the house on it) is created by society as a whole , should not non-crony capitalists maintain that society as a whole collect the economic rent of a location ?
If this does not happen then it is collected by private parties . Increases in rental value caused by public spending get translated into higher rents and capitalised into higher house prices .
An accountant calculated that Crossrail increased the overall economic rental value of residential and retail locations serviced by it by 6X the overall cost (a discounted cashflow analysis of increases in annual rental charges into the future ) .
The problem is that this 6X uplift is paid for by general taxation and passengers , and not by those who the most benefit accrues too ;local landlords and mortgage lenders .
Willets is right – it is necessary at some stage to reduce employment taxes and shift the burden of taxation onto land (which is after all a gift from God / nature) .
May 11, 2018
Churchill was not talking about BTLs bought for the purpose of a pension, improving properties and then managing and repairing them at expense as a business, providing vital accommodation for those unable or not wishing to buy. He was talking about the owners of estates who had the benefit of increased population and industry. Today, landlords pay CGT on unreal gains and income tax on unreal profits. There seems to be no limit on the state’s schemes to confiscate any private enterprise. Even social democrat countries do not tax like the UK and it’s supposedly conservative politicians.
May 12, 2018
Stred ,
You are not entirely right on several points .
1) Churchill was talking more about urban and suburban locations than big rural estates .
The big rural landowners were not the ones who benefited when their workforce migrated to the cities – existing freeholders of locations in the city were .
The obvious example is those who were at the margins of the city which became relatively more central when the perimeter of the city extended .
2) Churchill and Smith were talking about taxing the location , not the improvements made to the location .
Thus your point about BTL’s is not the issue . I agree that measures which increase the housing stock are good and that options for building a decent pension are currently inadequate .
Fees to society for exclusive use of a piece of land would be paid by every freeholder , whether owner occupiers or landlords , young or old , rich or poor .
To illustrate the difference between the location and improvements . If the owner of an undeveloped plot of land choses not to develop it , Smith would have them pay the same fee to society for exclusive use of that plot of land .
Churchill put this sort of machievellian land banking as “inconveniencing society” .
3) By attaching a cost to having exclusive use of a piece of land , absentee foreign owners of mansions in London would have to pay annual charges .
4) Offsetting location charges with decreases in employment taxes makes the overall cost tax neutral for most people and swings things in favour of owner occupiers and away from speculators .
May 13, 2018
Where do you get the cash to pay the tax bill on an asset they tell you has gone up in value?
May 13, 2018
If a proper location value tax was implemented properly , transaction taxes including capital gains and stamp duty should be scrapped on land/property .
Property does not normally go up in value and certainly not beyond it’s carrying cost of maintenance etc . Gains are almost entirely due to gains in the value of the location .
A location value tax would apply to every freeholder annually regardless of whether the value of the location had gone up , down , stayed the same .
The elderly who were asset rich but cash poor could be given a deferment option .
One of the benefits of a location value tax is that if the value of a location goes up , the tax goes up thus applying a negative feedback loop to prices . If location values go down then location value tax goes down .
Consequently the best time to apply is it after a land (house) price crash .
The point you and Stred appear to be missing is that in the vast majority of cases , landlord/tenant and owner occupier the economic rental value of a location is already being paid .
The only choice is whether you think people should pay it to society or whether you think they should pay it to mortgage lenders which finance almost all owner occupation and BTL .
Personally I don’t think the banks have any moral claim over land which surely a gift from God to all people .
It is no coincidence that household debt has gone through the roof since 1982 when banks gained unfettered access to the mortgage market .
May 13, 2018
Apart from s deferrment for old people you haven’t addressed the main problem of taxing abstract values of assets and where people get the cash to pay your tax.
Any repayments for tax payers when asset values fall?
Who does the valuation?
Any allowance for inflation?
May 14, 2018
T0 start with , one can use the market to obtain the rental value of a location .
Firstly determine what the rental value of properties of a general sort are by finding out what the market rent is for such a type of house in a marginal location ; i.e. with a location value approaching zero .
This can be compared with the rental value for a property of the same general type in a desirable location . The additional rent is the premium which is paid for the desirable location ; i.e. the economic rental value of the location .
Rental values of land + property were already valued by officials in the UK when we had the rates . This is crude and it’s much better to rate location value and property value separately as Denmark does today .
Once the system has been implemented and running for several years , house prices will have adjusted down towards the value of the property only and the location will essentially be rented from society rather than rented from the mortgage lender for the first 25 years .
The difficulty is the implementation – which is why it’s best to do it after a house price crash ; when location values are at their lowest and consequently land taxes are at their lowest .
Your question about “repayments when house values fall” and “allowance for inflation” show that you are either not understanding land taxation or not wanting to .
Even Milton Friedman , the great apologist for the 0.01% said land taxation of the sort proposed by Henry George and Adam Smith (annual ground rent) were the least damaging taxes .
May 11, 2018
Not only do we have to pay for our own housing, we have to pay for the total lives of every immigrant who arrives, hands out, with NO intention of ever working/contributing. They can get a massive rise in living standards, purely for arriving and doing NOTHING. . . .WE pay, culturally and financially.
May 11, 2018
High house prices is not people getting richer – it is people getting poorer.
Moving to a cheap area will mean a place devoid of services and often with a big drug and dependency problem.
Few people are winning from this except landlords.
May 11, 2018
Landlords buying now will almost certainly lose money. This as Hammond is taxing them (even when they make no profit and making them pay up to 15% Stamp Duty on purchase then 28% capital gains on non real gains. With house prices falling too in some areas and bank lending every restrictive.
The man is an economic illiterate and a total menace to the economy. He need to be replaced even more than May does.
May 11, 2018
I was always suspicious of Willetts and this report just confirms I was right about him.
The suggestion of giving young people £10,000 to effectively use as they see fit, it even more ludicrous than giving everybody a living wage not to work !
I would have less of a problem with giving younsters a contribution towards a house deposit, repayable with a low rate of interest when they have gained a certain level of equity in that or a subsequent property.
But if it could be used to help set up a business, that’s tantamount to allowing it to be used for any purpose whatsoever.
If Willetts has put his name to this barmy idea he is no Conservative.
I can see less of a problem with NI contributions for those who continue to work after 65. This would apply to my wife and I – our BTL property business continues only because penal rates of CGT prevent us selling and retaining a decent proportion of the capital we have built up. In these circumstances it would be a bit much to have to pay NI on the income on a business we would prefer not to be continuing with.
However if these contributions after State Retirement Age would result in an increase in the state pension when we eventually retired, that would be fair and equitable. Of course it won’t and if like me, one already has the maximum number of contributing years, it would be just plain robbery.
May 11, 2018
We already have one of the lowest state pensions in Europe. Mine is £700 pcm after tax. and is higher than some because of extra contributions. The private pension, recommended by the government after opting out, is £700 a year.
May 12, 2018
You are right about the new “Auto Opt In” Pension forced on employees and Employers alike. It will lure members into a dangerous false sense of security.
Nobody is being honest about pensions : With increasing life expectancy, The reality is that it will be impossible for most people to build up enough capital from all sources during their working life unless they continue to work well into their 70s.
One thing is for sure, the State can’t possibly provide a decent pension on the current basis or any other, for that matter. My State Pension is £527 pcm but by using a SIPP I have built up a very good level of private pension and we have the BTL properties as well which will continue to generate some profits, even after paying the increased taxes Hammond has imposed.
I’m with Lifelogic here : I would sack Hammond tomorrow and replace him with a proper Conservative Chancellor. The current resident at No 11 has to be the worst Conservative Chancellor in history.
May 11, 2018
Another left wing think tank espousing Corbyn magic money tree policies.
No mention of the open ended immigration that has done so much to impoverish this generation.
We have calls for a land value tax which can be set at such punitive rates that all property becomes the states. Marx would be proud.
I see we already have calls to extend the stand still transition period to 5 years5. We fought 2 world wars in less time than the civil service wants to implement a Custom system. No doubt near the end they will find it becomes impossible and cancel Brexit. Game over.
May 11, 2018
This is what happens when government policy subsidises house buying and penalises tertiary education. Why not move all that housebuilder subsidy into encouraging education in the STEM subjects by providing loan-free scolarships, so creating a cohort of qualified graduates without the burden of student loans, who are thereby able to buy houses at the going rate?
May 11, 2018
STEM subject why?
It is government policy to use immigrant labour to staff most STEM jobs, that is exactly why intra company transfer visas are uncapped, that is exactly why their holders can be subcontracted into any company and not just work for the company that brought them in, that is exactly why work visa holders get big tax perks like first year in the country free of both employers and employees national insurance.
The outsourcing movement has, and continues to, move hundreds of thousands of Indian nationals here to work in STEM. Has done the same with Bulgarian and Romanian nationals (since they all got EU passports). And many of these, and their families, have gained right to residence here and British citizenship simply for working here.
British kids actively choose not to study STEM, not because they are not interested, but because they can see the politicians are manipulating society to flood those jobs with foreign labour, depressing pay, and displacing locals from jobs. That is the real cause and affect, it is not lack of skills forcing immigration, it is immigration leading to locals not bothering to study the corresponding subjects.
It is about time there was some realism about this.
May 11, 2018
Good idea Sir Joe Soap but unfortunately this nanny state socialist Government is too stupid to think of that one.
May 11, 2018
I know lots of STEM graduates with good jobs who can no longer get onto the housing ladder in London. It’s just another ponzi problem (covered up with external investors buying property in the UK) that will eventually fall over like a pack of cards when vast majorities of people can’t buy homes in the Capital when retirees finally want to sell and just can’t afford to rent either.
May 11, 2018
The old folk tend to pass whatever wealth they have to the most-eligible younger ones: their own children.
May 11, 2018
The Resolution Foundation’s ideas are execellent.
While it is true that older generations have always been better off, no generation has ever pillaged the country, hoarded wealth and refused to share like the Baby Boomers.
This generation was gifted everything. Free higher education. Incredibly cheap (and plentiful) homes. Life long free healthcare. Gold plated pensions – state and private. Perks just for being old.
In return you gave subsequent generations nothing. Nada. Zero. Zilch. You failed to invest in infrastructure – leaving your children with inadequate schools, hospitals, railways and far too few homes. Whenever suggestions were made to build these things you objected to them spoiling your view. You repeatedly elected governments which sold off the country’s wealth. And you gifted us Brexit – which will not really affect you in your death but will make your children and grandchildren poorer all over again. And all because you don’t like foreigners.
Selfish, selfish, selfish, SELFISH.
As for the point about younger people getting it in the end. I am 44. My mother is in her early 70s and is in good health. I could have done with help in my 20s when there was no help. Now there’s no point I don’t need it now.
I, on the contrary, have diligently saved for my children. We already have more than £30,000 saved for my daughter – who is 10. My son, who is 6, has close to £20,000. We have bought a property in France which we are also gifting them – because the Euro will be worth something post Brexit, unlike the pound. We reject the selfishness of the Baby Boomers.
Still – we expect no change from the Boomers. So you carry on going on your multiple holidays each year, keeping the cruise market afloat. Replacing your cars with frightening regularity and generally shafting the young.
Reply When I bought my first home the mortgage took a very high percentage of my pay because interest rates were so much higher than they are today.
May 11, 2018
Yet the standard of living for us all, is far higher today than decades ago.
Your attempt to blame older people for expensive London house prices is silly.
Inside the M25 it is a world market like most major world cities.
Outside the capital in many towns houses and flats can be purchased for 100k
We had inflation unemployment high taxes on income and high interest rates to deal with.
May 11, 2018
“Free higher education.”
Well there’s a lie for a start. 95% of Boomers did not get a university education.
May 11, 2018
After voting and voting and voting no government (except Thatcher) did anything like the electorate wanted.
After millennia a single generation hits the good time and then it all instantly goes to rat shit. Perhaps it’s deliberate – to undermine hoi polloi and then blame then for it because the 1% could not stand oiks having an easy-ish time of it.
Look at your 1%-ers who could not stand ‘chippy’ working class people having a decent standard of living and so they deliberately ran the country in the ground.
THE BOOMERS DID NOT DO IT. The same 1%-ers are guilty as usual.
We’re going back to Downton Abbey – but gated and with armed guards and CCTV outside of it.
May 11, 2018
Even Thatcher was part of the problem too, when you think about it.
But it was NOT THE BOOMER’S fault.
May 11, 2018
This is unintelligent drivel. The slagging off of a whole, undefined, generation is as absurd as slagging off everyone of a certain race. As it happens you are completely wrong. living standards in the UK are immeasurably higher than they were 40 years ago and the transformation of the country from sclerotic socialism has meant an explosion in the variety of opportunities for young people. EC membership was probably a net positive for the first few decades. Unfortunately, since the 1990s, it’s become clear the EU is increasingly focused on a dirigiste, superstate model. As Charles Powell (a remainer) pointed out the other day, it would have been so much better had the EU adopted Margaret Thatchers vision as set out in her Bruges speech.
May 11, 2018
How do you know that all these selfish older people haven’t given their lives up for their children , haven’t bought them houses, haven’t given them loans without interest , haven’t funded their education, haven’t handed over their properties and money over to their children already . You don’t and that is because you are so full of your own achievements you are blind to others. The younger generation tricked me out of my life’s work at 34 and as a single parent I have worked hard from being homeless, to home ownership and yes have 2 weeks holidays a year suffering all the way , but determined to stop cheeky youngsters like yourself thinking they can have everything their own way . Selfish to the hilt. How about you handing over that money which you have saved to help the homeless. No you won’t… selfish selfish.
May 12, 2018
Like I have. (As Andy I am Generation X btw)
May 11, 2018
Andy
Why are YOU allowed to horde wealth but the previous generation isn’t? Why are YOU allowed to own multiple homes but the previous generation isn’t,? Remind me which generation invented the NHS? Which generation invented ALL the technology you now rely on. Our generation didnt have access to 100% mortgages as yours did. Oh and by the way it was YOUR generation that caused the financial crash
My first house cost £16,000 my salary was £3000 and interest rates were 17%
You are an “”………..who has stated publicly on this forum that you intend to sack all 30 of your staff, yet you want to lambast others for selfishness …
May 12, 2018
I don’t want to sack anyone. As I have said elsewhere your Brexit will probably force me to lose staff. And xenophobic pensioners will be to blame.
I enjoy reading the comments of you Baby Boomers. You have monumentally screwed up the country through your mass generational selfishness – and you seek to blame everyone else but you.
‘Oh – but we had it so hard in the 1960s and 1970s’. Drivel. You did not.
One of you worked. The other stayed at home with the kids. You didn’t have to worry about childcare – which is one of the hardest things facing you families today.
Free education was an option for you – though, granted, many of you failed to take it up (and it shows). And if you didn’t get a degree it didn’t matter – you could walk into a good job without qualifications. Today you do not even get an interview for a good job unless you have a degree – and that costs you £27,000 in tuition fees alone.
Your houses were ridiculously cheap compared with your earnings and although interest rates were higher housing took a far smaller % of your salary.
You had it good. You has it easy. As a generation you FAILED your children and grandchildren. None of you would get by today. Most of you would be in low level employments and poor quality rented housing.
The truth hurts.
May 13, 2018
You are so wrong Andy
Women in the 60s and 70s went out to work.
You are thinking of the 40s and 50s.
How can you fail to take up free education?
It is compulsory from 5 to 16.
You say we could walk into jobs.
You need to check out the unemployment levels in the 70s
Millions were unemployed.
Houses were cheaper but interest rates were high and even today outside London there are many properties for sale at under 150k
None of us would get by today, you claim.
Well most of us are still work in, earning money, employing people and paying tax.
May 13, 2018
Andy
You wouldn’t know the truth if it bit you on the backside
Those of us who grew up in the 1970’s know how hard it was
Both myself and wife worked full time we had to use family friends and time off to care for kids
interest rates fluctuated wildly so you never knew how much you had to pay out, reaching high 17% in 1979
n 1971 the top rate of income tax on earned income was 75%. A surcharge of 15% kept the top rate on investment income at 90%. In 1974 the top rate on earned income was raised to 83%. With the investment income surcharge this raised the top rate on investment income to 98%, the highest permanent rate ever
The basic rate of income tax for earnings up to £4500 was 33%
The average salary in 1975 was £2578 per annum
Thats £33 per week take home Andy , my mortgage £16,000 fluctuated between 8% and 17% thats a payment rate of £123 -£230 per month, i.e. it took ALL of 2 peoples average earnings to pay our mortgage
We had no electricity , heating or lighting 3 days per week
You DO NOT need a degree to get a job today complete cobblers, the earnings of an apprentice are greater than a graduate , we have full employment and 810,000 unfilled jobs
In the 70’s unemployment was 3,000,000 12% ( its now 4.2% )
Between 1975 and 2013, the real wages of the average full-time worker doubled, with an increase of 101%
My children are doing just fine thanks Andy , my eldest (33) son owns 2 properties outright ( no mortgage on either). My youngest son (23) owns a small house outright and rents a flat in London
The current problems faced by your generation Andy were entirely caused by YOUR generation trashing Financial services in 2007
You are having to sack your staff because you are incompetent and incapable of running a business. Maybe get in someone older, wiser and with more experience to show you how to do it ?
May 12, 2018
“Oh and by the way it was YOUR generation that caused the financial crash”
Yes. Generation X did this. Getting things before they had the money for them.
May 11, 2018
Reply to reply. Yes John, I remember high interest rates and job losses well. My husband list his and because interest rates were so high it was difficult to sell and downsize to something we could afford when my husband eventually got a lower paid job. Andy thinks it was easy for us baby boomers when in fact many of us took on second jobs to make ends meet . Andy lives with his head in the clouds.
May 12, 2018
You can’t seriously think you are the only couple providing for your family!
May 11, 2018
The only inter-generational injustice I would like to cite is public sector pensions being drawn by those who were supposed to fall off their perch after about 10 years. Instead, they are lingering on and drawing it for 30 years, at the expense of those currently working.
There is no guarantee on the value of my private pension when I retire, yet I am a co-guarantor of those on public pensions.
As regards the report from the Resolution Foundation, we can rely on the grey vote to ensure this never informs a successful mainstream party manifesto. Recent experience shows what happens when you kick your voting base in the teeth.
May 11, 2018
All of the people who go on cruises are in receipt of public pensions and payoffs. Your private pension will be worth bugger all.
May 11, 2018
JR: “Mr Willetts wants to penalise savings and home ownership ”
Yea, why not jump on board with both feet. The administration you support have been penalising savings for the last seven years. Interest rates at 1% or below, inflation between 2 – 4 %
If you don’t recognise a penalty for saving when you see it. You probably shouldn’t be writing on economics.
JR: “They argue that older people have too much of the country’s wealth, ”
This is just extreme Marxism, if you’ve been alive for sixty years, and reasonably financially responsible during that period, you may well have accrued some assets.
Vilifying people for being old and responsible is just the sort of thing Marxists and the collectivist running dogs do.
May 11, 2018
Agreed, Mr.Willetts for me has always fallen into the category of “why is he rated so highly”. Obviously I do not know him personally but that has been my impression confirmed by this episode and a recent radio series with young people given tasks to find solutions to long standing problems, when he, as an expert, seemed out of his depth and less impressive than the participants.
Housing has never been straightforward or in plentiful supply or even particularly affordable.
You have to work hard and save for a start, £1000 so called smart phones with ongoing rental charges are not the way to achieve that. Uncontrolled immigration is a major factor in the shortage and government could be vastly more progressive and innovative e.g. abolish stamp duty to £1m to get the market moving.
May 11, 2018
Incidentally – I hear regularly that leaving the single market and customs union was in the Conservative manifesto, so it must be delivered.
And yet today an annoucement on faith schools goes completely against the Conservative manifesto.
Does this government follow its promises only when it suits?
May 12, 2018
I quite agree with you on this . Mrs May is beyond redemption.
May 11, 2018
The problem is that some OAPs are Nimbys. They know the councillors, local press and all the planning and conservation legal tricks and use these to prevent housing developments. This pushes up prices by restricting supply.
May 11, 2018
The Academics are back in charge of the madhouse!
May 11, 2018
Thank you for challenging Willetts and the nonsense he espouses.
Going back to Brexit, I found this in today’s Telegraph in reference to Michael Gove”
“He believes that the EU’s Irish border “backstop” could be used as a “Trojan Horse” during negotiations in the 21-month transition period after Brexit to keep Britain in the Customs Union indefinitely.
A source told The Telegraph that Mr Gove is concerned that if Britain accepts the backstop option “we won’t have all the negotiating cards that we would want to have in that transition period”.”
This suggests that the ‘implementation period” is now the “transition period” and has become an extension of time to reach or fail to reach a negotiated deal with the EU. Wasn’t this period meant to be the time to adjust to the new arrangements not an extension of the negotiating period? If it is now the latter when will the next “implementation period” be agreed and over what timescale? Increasingly our concerns that this is Brexit in name only seem justified.
May 12, 2018
That is just one reason we never should have had an implementation period.
May 11, 2018
The politics of envy is for socialists and the Left. Just shows how far in that direction the Tories continue to move. Perhaps next he will propose 97% as a fair tax rate on high incomes? Or punitive taxes on ‘unearned income’, another of the Left’s past slurs? They are proposing something like it in their extra charge on pension income.
Or maybe he subscribes to the idea that ‘property is theft’; after all that is the direction he is travelling in and his penalties have the hallmarks of that slant of thinking. I would dare to say he has sympathisers at the top of government, the virtue signallers and social justice warriors.
We would be foolish to imagine this will not get traction, it would not surprise me if it has had approval and will resurface as government policy in a year or two. It is not unusual for reports to be written at the behest of someone and to pretend it to be entirely the result of independent brainstorming. We have had the Left’s ideas adopted in the past after being first ridiculed.
May 11, 2018
Young people in today’s UK are recipients of one of the highest standards of living in the whole of human history. And because today’s youth is standing on the back of the capital earned by previous generations in this country, we can say present day youth has done absolutely nothing to deserve this largesse The litany of woe you hear from the modern media, the pressure groups and academia should not obscure this simple fact.
Houses are very expensive in London but in many areas of the country they are not. In any case, old people are not responsible for the planning restrictions which make it so difficult to build in this country.
The fact that the Tory party leadership seems to be flirting with this inter-generational conflict tosh almost cost them the last general election. If they continue with this, they may as well hand Corbyn the keys to Downing Street.
It’s a sad fact that most politics is unpleasant. It has set one class against another class, one race against another race and one country against another country. Now it’s the generations’ turn. What politicians really need to do is get on with increasing production thereby benefitting all.
May 11, 2018
If May gets her way there will be nothing to inherit because every home owner in England will be required to hand over everything they have spent their lives working for to the state should they need social care.
May 12, 2018
JoolsB: But it’s worth gently pointing out to those who have influence in the Tory party that this inter-generational conflict stuff makes absolutely no sense for them in the context of the present electoral system and who vote Tory. It’s a hare which the Labour party might well like set running, but the Tories should aim simply to let older people keep the money they have saved over a lifetime. They will certainly use it more wisely than the state.
May 11, 2018
Everyone loves the idea of increasing their standard of living through material and financial gain. If they have to put no effort or take any responsibility into doing so all the better. So we have found a way of doing just that we call it the welfare state. Which is in essence legally taking wealth under the threat of force from individuals and groups to enhance the lifestyle of other individuals and/or pay for the promotion and imposition of causes demanded by vested interests.
The recipients and architects of this action call this righteous and socially just redistribution of wealth. I call it theft and an aberration as it does not promote social justice it just changes who receives less or more of it. It is morally and economically damaging as it creates a culture of entitlement and reliance that reduces human worth, if a person is no longer productive because there is no financial need to be then society is the poorer. As it also relies on those who create wealth to feed those who did little to do so themselves. An unstable and unsustainable situation as it sows resentment and discord as the receivers grow in numbers with ever greater demands and the givers stop giving as their numbers decrease and their wealth has either dried up or they have left no longer caring to be fleeced.
May 11, 2018
From the Wikipedia entery for Lord Willets:
May 11, 2018
It’s only English kids that are penalised by this UK Government, a Tory one at that, because although the fees were tripled for both England and Wales, the Welsh Government (courtesy of English taxes) caps fees at just under £3,500 for Welsh students even those studying at English universities sitting alongside £9,250 fee paying English students.
May 11, 2018
If the problem is young people don’t have enough money how can the answer be the government collecting more NI/tax on pensions ? The government would just use the money to spend on the NHS or service its debt or a host of other things. Surely if they wanted to effect a direct transfer from old to young they’d set the inheritance tax rate to zero, that would do the job immediately and directly.
May 12, 2018
Yes, of course.
May 11, 2018
The best outcome for the Resolution Foundation would be to dissolve itself voluntarily if this is the most intelligent idea they can come up with. It is simply more socialist redistribution of wealth. Perhaps that would go down well with our present Prime Minister.
There is little to add to the case that you have made Mr Redwood.
May 11, 2018
I believe the Resolution Foundation has laudable aims, but the recently published solution sounds rather Marxist, and a recipe for chaos.
I, too, know how hard it is to get established from nothing – albeit, it was so much easier a generation ago. I think the RF are right to foresee that without judicious adjustment, the social order as we know it is vulnerable, and what replaces it could be far worse.
As a first step, we need our sovereignty and freedom restored (which doesn’t mean being anti-Europe); and a wise and visionary Government, less ridden with trendy liberalism.
America’s example is worthy of more respect than it seems to be getting in some quarters.
May 11, 2018
No brains Willets wants to give every 25 year old £10,000. This is the same pr-t that tripled tuition fees for every youngster in England to £9,000.
May 11, 2018
The Resolution Foundation’s ‘Repairing Britain’s generational divide’ is an odd concept, needing odd solutions.
Rapid-ageing of young folk, or reducing the officially recorded ages of old uns by 2 decades, might suit their misguided purpose.
May 11, 2018
Another lurch to the LEFT. I totally agree with you JR and Willetts should be ashamed of himself as his ideas do no more than reduce any incentive to succeed that a young person may have.
One should not forget that Gordon Brown wrecked this country’s pension system when he made pension income taxable. For some 40 or so years interest on pension investments was free of income tax on the basis that when a pension is paid it is tax as the recipient’s income and that it was wrong to tax it twice. What did Brown do with money? Squandered it no doubt on paying for all the very expensive PFIs that Blair hoisted on to the NHS and schools budgets.
We would not be having these crack pot ideas from outfits like the Resolution Soc’ if that Duo had not ruined this country’s economy. Pension funds would not have had the ‘short-falls’ that have been repeatedly high-lighted in the press since 2008.
Putting an unfair tax on pensioners will only drive them out of the country and then Lord Two Brains you have lost their income tax as well.
May 11, 2018
I agree with your analysis in general but as a pensioner with a generous final salary pension I feel that it is an anomaly that I do not pay National Insurance. If this were altered to charge NI above a certain level of pension the proceeds could be used to fund a better care system for the elderly.
I would also point out that today’s young, for all their problems, enjoy a far higher standard of living than we did when we were young.
May 11, 2018
I don’t expect you’ll be interested in publishing this, JR, but nevertheless here is my letter printed in yesterday’s edition of our local paper, the Maidenhead Advertiser, under the sub-editor’s heading
“Solution to Irish issue and customs union”
and with somewhat unfortunately altered punctuation to my original copy.
“I was staggered to read this in a Sunday newspaper, referring to Theresa May’s preferred plan for a crazy “customs partnership” with the EU: “Mrs May’s No 10 Brexit adviser, Olly Robbins, has told her that the ‘partnership’ is the only idea which will allow the UK to cut new trade deals while avoiding the need for a hard border in Ireland …”
I suggest Mrs May should get herself a new Brexit adviser who will not talk such nonsense. At present the UK collects the EU’s customs dues on imports into the UK. We are allowed to keep 20% to cover our collection costs, which makes sense while we are in the EU. But Mr Robbins wants us to carry on doing it forever, almost as though we were not leaving the EU.
It truly is a crazy scheme, as the EU itself has already said. Moreover it is not the only idea for avoiding a so-called “hard border” in Ireland; in fact by itself it would not even achieve that end.
Here is a simple alternative idea, which unlike Mrs May’s preferred scheme, would not require years for its complex implementation.
Just make a declaration along these lines: “For our part we will do nothing new at the Irish border for the foreseeable future. The present free flow of goods and people can continue exactly as now.
“If there are UK tariffs to be levied on the imports we will do that away from the border, and if that leads to some evasion we will accept that minor financial loss.
“If the EU is worried that the open border may become a back door for contraband to enter its Single Market then we pledge to take all effective legal and practical measures
to help minimise that problem for them, continuing with the existing full and sincere
co-operation we already have with the EU and Irish customs authorities.
“What the EU and Irish authorities do on their side of the border will be entirely up to them.”
I will add in connection with the penultimate paragraph of that letter sent in on Sunday that I have since found by chance that the technical term for that kind of arrangement is “parallel marketability”, and that it is well worth putting that as a search term in google, perhaps alongside “Ireland”.
Characteristically the SNP are well aware of it but see it as a possible route to what they want rather than to what the majority of UK voters want, paragraph 152 here:
http://www.gov.scot/Publications/2016/12/9234/4
“The laws of the European Single Market would apply only to those goods and services traded between Scotland and the rest of the European Single Market … In essence, this involves applying the principle of “parallel marketability” … “
May 12, 2018
we need to control immigration into England via the Irish border more than anything. already we have Dublin allowing people to fly in which the UK would not allow. they can cross the land border. Get the ferry to England with no ID check. And migrate mostly to South East England. The people of England will eventually rebel if the ongoing mass immigration is not brought under control, and this is one route being abused now, and likely to be targeted in the future. my own view is we need passport controls on the ferrys to England from Ireland, there is no other option. The DUP need to be told in no uncertain terms to recommend a way to stop out of control immigration into England via this route.
May 12, 2018
The movement of people is covered by the Common Travel Area:
https://en.wikipedia.org/wiki/Common_Travel_Area
Theresa May’s “desperate last roll of the dice”
https://www.telegraph.co.uk/politics/2018/05/11/theresa-mays-desperate-last-roll-dice-break-customs-union-impasse/
is about the movement of goods, not people.
Not a lot of goods in the wider scheme of things, as exports from the north to the south are worth about 0.1% of UK GDP:
http://johnredwoodsdiary.com/2018/03/17/my-speech-in-the-european-affairs-debate-15-march/#comment-925492
But Remoaners hope that tiny 0.1% tail can wag 100% of the UK dog.
May 11, 2018
This seems to be another manifestation of the standard socialist zero-sum view of the economy, the “fixed amount of wealth” fallacy. If someone lacks something it must be because someone else has it, and justice requires that it be confiscated from that person and redistributed. In order for this to work you have to set up some class of the people as the “haves” and conduct a hate campaign against them, preferably a class of people who are weak and vulnerable and won’t put up too much resistance. Socialists have done this throughout history, and Willetts has picked on the elderly who have worked all their lives, paid their taxes and played by the rules in order to save for their retirement.
The real reason for the housing crisis is that interest rates are far too low and have been for far too long, and this is largely a result of deliberate government policy. Instead of admitting this, Willetts has chosen to set up pensioners as the fall guys, many of whom are far from wealthy. It is clearly absurd to suggest that because young people are perceived to lack something it must be because older people have “stolen” it from them. Willett’s scheme is intellectually incoherent and morally repugnant.
Oh, and are you expecting those same pensioners to vote Conservative at the next election?
May 11, 2018
We will get Marxism quickly with Labour, rather more slowly with the Conservatives.
May 12, 2018
“The real reason for the housing crisis is that interest rates are far too low and have been for far too long, and this is largely a result of deliberate government policy.”
I will agree with you that the housing crisis has been caused by deliberate government policy but the real reason for the housing crisis is massive uncontrolled immigration.
Both Labour and Conservative governments have wanted high immigration albeit for completely different reasons.
May 11, 2018
When clearing out some papers just now, I came across this quote (source forgotten), which I think can be applied to this latest garbage:
“Much of the social history of the Western world over the past 4 decades has been a history of replacing what worked with what sounded good.”
May 11, 2018
A question not addressed (yet, at 10:10) is the impact of the cost of being in a retirement home. In the Reading-Wokingham area, the weekly cost varies between £800 and £1400 (£41,800 to £72,800 per year). Considering an average saving pot at 66 years of age of a few £100k’s, that pays for less than four-five years of RH after which the family house is likely to be used for further payment, which means that not that much will be passed to the next generation.
May 11, 2018
The pro EU Resolution Foundation also skirts over why the UK is over populated and with an large under supply of houses.
The pro EU Resolution Foundation believes in uncontrolled unlimited immigration. It also supports pro EU PM’s and Chancellors who since the 1990’s supported uncontrolled immigration whilst not building the infrastructure for it.
Reduce demand by reducing immigration which will reduce house prices. Remove the UK from the common tariff area and strike free trade deals around the world which grows at a much faster rate than the UK thereby raising the wages of the young.
May 11, 2018
Whilst they were coming up with these proposals, I suppose that they didn’t consider the higher costs of living for older persons as we get more infirm. Extra heating, partly offset by the winter heating allowance, over-the-counter medicines, assistance in the home and transport costs for those who can’t drive, to mention just a few. Without a car, I would need a cab (or a willing neighbour) to get to the doctor’s or hospital and the NHS in its wisdom has decided that my wife’s monthly blood test must be done at the hospital rather than at the surgery, an additional six miles each way. I’ve never had to employ a gardener before but this year I’ve had to do so which will cost me around £120 for a day’s work every couple of weeks.
So we’re now spending our savings quite fast, and walking round the district we seem to be fortunate in having savings as a number of the homes occupied by elderly persons are in a poor state of repair with overgrown gardens.
We are fortunate in that one of our daughters lives just a few miles away and can help occasionally, but she has her own family to look after and one can’t expect her to be constantly on hand.
And now another cost. £39 to the council for a green garden waste bin as I can no longer lift bags of garden waste to take them to the tip!
Don’t look at this as a long moan, we can manage and made allowances for what might happen. But I find it offensive when I’m told that I should pay more tax so that 25 year olds can have a lump sum, particularly when I see them walking round with smart phones or driving respectable cars.
May 11, 2018
Would the £10k ONLY be handed to English people? Would it NOT be handed to immigrants ? ( who as we all know, have arrived lying about their age to enable them to stay). If it was NOT handed to them, there would be instant calls of discrimination.
The whole idea shows how out-of-touch some people are.
May 13, 2018
The same applies of course to our existing NHS and welfare systems.
Large scale uncontrolled immigration, which will/would occur from remaining in an ever expanding EU, would inevitably mean the collapse of our non-contributory NHS and welfare benefit systems.
May 11, 2018
All the arguments against this idea pop into the average person’s brain within about 0-5 seconds.
That didn’t stop the BBC reporting it as if it were a very good idea.
May 11, 2018
@SP
No surprise there, they working hand in glove with the marxist fifth column whose intention it is to dismantle the UK and absorb it into a European superstate. Anything that weakens British society serves their strategy. #CommonPurpose
May 11, 2018
What about the recent raising of the retirement age by 5 years – sacrifice enough I feel.
Those still wanting or forced to retire at 65 years have to dig into their retirement nest eggs.
The super rich will set up trusts, buy farms or set up companies to pass on to their family.
Only the prudent will be taxed extra.
May 11, 2018
The Government is in a mess. Strong leadership is wanting but lacking. Against that background little is decided while at the same time a lot of hot air is generated.
Weak leadership displaying no passion to achieve objectives is the problem.
May 11, 2018
Exactly. Even more stupid than Gordon Brown’s 18th Party birthday bonds.
Two brains Willetts with his 1st at Oxford PPE!
“There are some ideas so absurd that only an intellectual could believe them.”
George Orwell.
May 11, 2018
Does Oxford PPE reject anyone numerate and in possession of any common sense on application or is there some sinister selective lobotomy they perform during the course? Do they do the same for some Geography students too?
Thank goodness JRM and JR did History and escaped!
May 12, 2018
And so did Kwasi Kwarteng – another one kept out of government.
May 11, 2018
..and there we have it?
The Resolution Foundation
David Willetts – Executive Chair (Age 62)
Christ Church, Oxford, studied Philosophy, Politics & Economics (PPE)
The Rt Hon. Lord David Willetts is the Executive Chair of the Resolution Foundation. He served as the Member of Parliament for Havant (1992-2015), as Minister for Universities and Science (2010-2014) and previously worked at HM Treasury and the No. 10 Policy Unit.
Interesting background
1. Studied PPE – very useful subject……of course?
2. An academic – most probably no idea of real life
3. Ex Politician – can’t trust him
4. A Lord – don’t trust him
5. The “joke” he runs an organization that wishes to penalize the hard working, now pensioners…..but laughingly he is soon to join the aged, which he and his cohorts deem as the problem?
6. Question: Will he dilute his personal assets to assist the youth of today….not on your life!
“All the ingredients for appalling hypocrisy”
You could not make this stuff up!
May 11, 2018
After thought…..
… simply say to your children and grandchildren “never vote for this idiocy” else our hard earned wealth, that you wish to enjoy later, will be passed to the Government to be wasted on the feckless, green crap, foreign aid, waste crap aka tidal lagoon/HS2/Hinkley Point, etc…..3 million “anti-idiocy” votes right there!
Then watch the “power of youth” when their inheritance is at stake?…money talks, the rest is political (useless think tanks, such as The Resolution Foundation) white noise!
May 11, 2018
I agree with you John – it is simply ‘robbing Peter to pay Paul’. Was Willetts ever a real Conservative???
The proposal smacks of a magic money tree outlook on life…
May 11, 2018
Worse still is the Foundation’s prescription to deal with this misinterpreted problem
==========
Again John you misrepresent the problem.
The problem is you are running a pension ponzi, and you are hiding the debts off the books.
A debt is negative wealth. The young are saddled with that debt and you will use violence if needed to make sure you take their money.
End the pension ponzi. It’s easy.
Just send the young a bill for 430,000 of socialist debts caused by redistribution.
May 11, 2018
It is becoming increasingly apparent that Mrs May has given her Brexit cabinet the choice to argue for a rock or a hard place. Put another way she seems intent on fudging the issue to the point where there is no agreement within the UK as to our future trading relationship with the EU. After the failure to produce a clear way forward she will turn to the public saying that there is no clear decision and settle for some half cock arrangement that keeps us in some form of customs arrangement that denies us the freedom to set up trade deals with the rest of the World.
The writing is on the wall, time for the true Brexiteers in the conservative party to collectively step forward and say enough is enough. It is not the complex conundrum that the fudgers would have us believe. The EU either accepts a free trade treaty in goods and services or it is reversion to the fall back position of trade on WTO terms. The present circus of indecision merely feeds Barnier with all the ammunition he needs to agree to nothing.
May 11, 2018
David Willetts has been banging on monomanically about this for years. Ignore. If his barking idea is rubbished yet again, he’ll be back with it next year.
Dynastically minded politicians – and many others in business and industry – assume that only parental cosseting or income redistribution can help young people to future wealth. (Tories are often the worst socialists in this regard.)
It suggests a lack of self-confidence in their upbringing skills.
If it were generally widespread, such a sense of juvenile entitlement would disable every motivational force in society that compels young people to think, act, learn, and earn and gain personal advantages for themselves, and to acquire languages and seek work abroad where it is unavailable here. It’d be a complacent, anti-motivational society, beginning with a sense of aggrieved self-entitlement to luxury, ease, and ‘the same as wot he’s got’.
That society would be exploited and overrun by leaner, keener individuals from elsewhere within a very short time.
Did David Willetts help his own children? If so, where’s his problem? If not, why should we help out?
May 11, 2018
I am often called a ‘boomer’ but I am actually Generation X. I am squeezed between elderly and infirm parents and fully grown adults in full-time education.
I voted for Brexit.
I see that what is making things difficult for them is importing lots of young people from the failed Eurozone to compete with them for their jobs and housing.
It is also a con for most to entice them into degree courses and a complete and utter lie that the boomers and GXs got their degrees for free.
95% of us could not go to university. There simply weren’t the places. We got trades and professional qualifications via day release and night school instead and learned genuine skills that people were prepared to pay us good money for.
We put up with high interest rates and mass unemployment as well.
May 11, 2018
If we are going to get Corbynomics via the Tory Party then let’s just not vote Tory.
The Willets party needs a good spanking at the ballot box.
May 11, 2018
This is simple, how many of the people in the Resolution Foundation are in line for a public sector pension? Or a final salary pension from an old nationalised industry like BT, BP etc? People with safety nets don’t have to worry about savings, inheritance pots etc. it doesn’t matter how long they live the monies not going to run out for them so they can spend, spend, and provide in the today without having to worry about their tomorrow. If they don’t believe this they won’t mind giving up their final salary pensions and moving into a Nest pension or private pension, will they?
People who have public sector and final salary pensions guaranteed or even career average just have no idea what it is like to be reliant on the private pension providers and the minuscule state pension. Where a £100,000 pension pot will buy you a tiny annuity, people in their 40’s aren’t even aware of this yet – just wait until they start waking up to it, you think the waspi women are whinging.
This belief that everyone’s home has ballooned is a fallacy too, it is a Southern-centric view, most homes in the North just don’t go up like they do down South.
May 11, 2018
Mr Redwood,
Part of their 8 May 2018 report on intergenerational issues is correct. : living standards of many younger people look inferior to those of say, the present babyboomers at the same age. The reasons for this are especially related to an OECD wide stagnation in real wages that started in the 1990s. There is much speculation about why the steady rise in real wages that started after WWII was interrupted (and even reversed in houirly terms in certain areas). Technology, the rise of China etc as manufacturing centers and also the steady decline in Union membership with associated decline in bargaining power.
Anyway there are people who feel that “society” must compensate losers and that is a global phenomenon as well. Sooner or later, demagogues will start exploiting this situation and in democracies that would play into the hands of leftist organizers. Probably the one thing keeping unions small and relatively powerless, is that the remaining workforce (after deindustrialisation) is much mode difficult to organize and that the collective memory of those remaining workers (who face price competition from younger people on weak contracts) contains company failures and relocation of production facilities. All in all then, the threat of a 1970s style destructive form of union activism is still maybe 5 years away in most countries but there is a risk that irrational but seductive leftist rhetoric may return and lead to (1) protectionism and (b) more room for state support for ailing industries, both represented in the Corbynista repertoire.
Rational argument is pointless and of course the measures proposed by the Resolution paper are unlikely to gain support. It wold make sense to have a different ppoach to the funding and pvovision of care (health and social), where health care is already means tested (funded out of general revenue which itself is partially progressive depending on the distribution of tax rvenue over VAT, personal income and profit) but the benefit of social care is much more difficult to link to” individual” cost. Council revenue should not be used for social care (but councils might be very good administrators given some revenue incentive.
May 13, 2018
Rein
You make some good points. However when talking about wages, very few people actually focus on the COST of employment.
In the last few years ENI has risen, legislation on maternity leave, paternity leave and flexible working, business rates plus of course the new workplace pensions too have all driven up the cost of employment for employers. Most wage rise potential has been swallowed up by government taxes and regulations. Oh and wages have been rising its just that in some years inflation has risen faster.
May 11, 2018
I am of the generation targetted by the “We want something for nothing brigade”. They assert that I and my fellows had it “easy”. It didn’t seem that way. I got a small scholarship to a top class Russell group University and worked during the holidays to supplement it. Got a first in Physics when less than 5% went to University and less than 5% of those 5% got firsts.
They NEVER mention that we paid all required contributions to fund our (private) pensions AND the state pensions of the previous generations who paid nothing. Now they want to tax us to gain what they have neither earned nor saved. Delusional.
May 11, 2018
I agree with all that you say and have written to David Willetts to tell him what a dreadful idea these so called experts have come up with. I wonder if we could start with contribution from himself! They are always very happy to give away other people’s(taxpayers)money. It also is NOT Conservative policy. It had better not come to pass.
May 11, 2018
The party calling themselves Conservative with the odd exception should rename themselves ‘the new Socialist party’ It’s only Corbyn’s lurching more and more to the left Labour party that allows them to get away with posing as Conservatives.
We should all take a leap of faith and vote UKIP – the true Conservative party.
May 11, 2018
Excellent article John. And quite correct also in saying that extra money goes to the younger generations anyway. I have helped with one daughter’s mortgage deposit and help pay off the other daughter’s university fees. I couldn’t have done that if Mr Willetts had made me poor.
May 11, 2018
helped
May 11, 2018
“Trying to pit one generation against another is unpleasant politics. ”
And yet politicians have always played one group off against another, divide and rule. It’s the oldest and most effective means of getting people to believe they need government.
May 11, 2018
Forget Willets and his idiotic leftist nonsense. The real problem for all Tory supporters is the useless, hopeless, clueless THERESA MAY
A lefty, virtue signalling panderer with an absence of values, appreciation of who we are and a politicians who’s embraced all things Labour social, liberal left thought
We don;t want her. We don’t need her and she will ensure the UK never leave the EU
GET RID OF MAY NOW BEFORE SHE DESTROYS OUR PARTY AND OUR COUNTRY
May 11, 2018
Mr Willetts and friends were quick to argue for a bailout in 2009, by way of QE for their multi-million pounds worth of assets to bail themselves out with the people treasury, which has left huge debts for normal people to pay by higher taxes and loss of services instead of letting the property market and markets find their own feet, even today there is no mark to market.
When Mr Willetts and friends give half of their wealth to the treasury I will consider his argument.
Does Mr Willetts and friends want loophole left as usual in the new taxes so they do not a ply to them?.
May 12, 2018
So make all public pensions ,,money purchase plans, no defined benefits.
That is the real inequality.
How about combing NI and PAYE? with a decent Personal Allowance. (say A20k).
How about a CGT rate the same as the combined above.
Maybe with a Land Tax to fund higher personal allowances.
What is his comment on not spending unwisely like examples below.
Foreign Aid, HS2, Hinkley, EU contributions. on and off books. endless immigration from economic migrants and associated uncosted billions as well as wage compression and higher rents.
May 12, 2018
Using the taxation system to allow money to trickle down from those with too much, to those with too little is in principal a good idea.
But, choosing to tax pensions and homes is simply crazy. This is taxing the two ways that people can ensure they are not a burden on the state in their old age.
I’ve read a lot about scrapping IHT, but in my view this is the one tax that sets the balance straight at the end of your innings.
May 12, 2018
The best news for those who wish to own their own home recently was the report that house prices fell by £7,000 last month. That reduction is nearly as much as Willetts is proposing to give away, and it hasn’t cost taxpayers a penny, nor ousted pensioners from their homes.
May 12, 2018
Mr Redwood,
According to The Resolution Foundation’s website they are funded by the Resolution Trust.
The Resolution Trust’s website gives no information on how it is funded.
Do you know please ?