Generations unite!

Reject the divide-and-rule propaganda.

Since I began working in the DHSS (now DWP) in 1980, it has been government practice to vilify in turn particular sections of society who they claim are a drain on resources. Firstly it was 'feckless' 16 and 17 year old benefit claimants who had their rights to claim removed on the basis that education and training were available. The fact that they may live in households where everyone was on benefits due to the massive contraction in employment in the 1980s was not considered relevant. Quite often the consequences were either financial hardship for the whole household, or the young person being thrown out. I don't believe it's a coincidence that the modern version of homelessness began around this time. Next in line were the chronically sick and disabled and the single parents, who had all previously been exempt from the requirement to be available for work; they too were told they could no longer expect something for nothing. Now it's the turn of pensioners.

None of this is new: there have always been attempts to divide and rule the populace, whether the basis is class, ethnicity, religion, gender, sexual orientation, family structure (such as the demonisation of single parent families or same-sex couples raising children) or employment status. It is a more recent tactic to try to make younger generations feel deprived because of the privileges allegedly enjoyed by the so-called baby boomer generation.

I was one of several ARMS NW members who attended a Generations United Against Austerity conference in November 2016 organised by the Merseyside Pensioners Association. The overriding theme was opposition to government and media attempts to create divisions in society based on the flawed concept of generational unfairness. Quite crudely, the older generation stands accused of various privileges, such as having final salary pensions, state pensions received earlier than those now working ever will, bus passes, winter fuel payments, and so on. Some of us are even guilty of owning our own homes that we paid for over a lifetime of work. Downsize, we are now being told, to make room for younger people who can't afford to get on the property ladder. The nonsense here is that downsizing will not reduce house prices by a single penny, but it does help stoke the deliberately-cultivated impression of a selfish older generation jealously guarding its privileges, while concealing the reality that housebuilding has declined massively in recent years through deliberate government inaction. There simply aren't enough houses to go round, and shortages always result in price rises, thus perpetuating a vicious circle of ever more unaffordable homes.

It is true that many younger workers will have worse pensions than those paid to their older counterparts with the ongoing collapse of final salary schemes, and the suggestion is that such schemes are becoming increasingly unaffordable, but how true is this assumption? As I recall, the big question about pension schemes in the 1970s was not whether they could be afforded, but what to do about the fact that, because they had so much money, they were distorting the Stock Market. Pension fund investors were accused of being too cautious and unwilling to take risks, thereby constituting an obstacle to entrepreneurship and innovation in the economy which, it was argued, impacted negatively upon growth. The Thatcher government therefore introduced pension contribution holidays, whereby employers could take a break from paying into funds that, supposedly, had more than enough capital to meet their obligations. Light touch regulation, a euphemism for no effective regulation at all, allowed employers such as Robert Maxwell to steal from their companies' pension schemes with impunity. The taxpayer ended picking up some of the pieces, but the Maxwell pensioners still lost out badly; I doubt any of them would agree they were generationally privileged. Former BHS employees today probably feel similarly aggrieved.

One of the first acts by Gordon Brown in 1997 was to abolish the tax relief pension funds earned on dividends from stock market investment. Presumably he was still of the mindset that pension funds were cash cows waiting to be milked, rather than deferred wages upon which ordinary people without huge reserves of capital had to depend in their later years. The consequence of all this political interference in pension funds was that they have gradually slipped into deficit, but our rulers still insist that demographic changes (meaning increased life expectancy – politicians love words like 'demographic') are the primary cause of the collapse of final salary pension schemes.

There are some exemptions to the assault upon final salary schemes: boardroom executives still continue to retire early on final salary schemes (such as Fred 'the Shred' Goodwin), while MPs accrue a pension equal to the average UK salary (£27,600) in under 15 years, and after 40 years can have a pension of £74,962. For everyone else, the reduction of pension scheme benefits continues unabated. The recent Tata Steel settlement requires the workforce to abandon its final salary pension scheme in favour of a less beneficial money purchase 'defined contribution' fund.

Parallel with all this talk of generational unfairness has been the rapidly widening chasm between boardroom salaries and shop floor wages. Chief executives are frequently paid millions of pounds per year, with huge bonuses on top, while the average wage in the UK is £27,600. In the 1970s, bosses might receive 40 times what their employees did, but now they are paid hundreds of times more.

It is this increasingly unbridgeable gap between bosses and workers, between rich and poor, between the governing classes and those they rule, that all the talk of intergenerational unfairness is trying to obscure. Many in the media are happy to go along with this facile nonsense, but seeing that 43% of UK national newspaper columnists were privately educated (according to Government research published in 2014), this is scarcely surprising. Most MPs are millionaires now, so it is clear where their instincts lie, even among some who might call themselves socialists. It is important we reject these new myths of generational privilege and focus upon the real causes of unfairness in our society.

It would be wrong to suggest that all pensioners live in poverty; clearly that is not the case, and no one is seriously making such a claim, but when I listen to official pronouncements about pensioner privilege, the mindset behind the propaganda that I perceive is that the natural condition of ordinary retired people should be poverty. Actually, that's the direction we're going with pensioner deprivation on the increase. For example:

• According to the Office for National Statistics, 24,300 older people died of cold related illnesses from December 2015 to March 2016, with rising fuel costs being seen as the main cause.
• Since 2010, social care budgets have been cut by around £5bn and experts say that next year there will be a £1.9bn shortfall which will increase to £2.3bn by 2019/20.
• The number of councils providing meals on wheels to vulnerable older people has now dropped for the first time to below 50%, according to the National Association of Care Catering.

The government disguises the reduction in state support for older people with their rhetoric of generational unfairness. Wealthy MPs, i.e. most of them, will never suffer in old age from the indignities and poverty they are increasingly imposing on a 'privileged' generation of retired people.

A final thought for younger workers who may find the intergenerational unfairness arguments persuasive: the consequences of cutting benefits and pensions for older people now will come to you in time, and will certainly not enhance your own prosperity, neither now nor at any time in the future. Quite the opposite is likely: cutbacks will continue until it's your turn to retire, leaving you in an even worse position. The main aim of the inter-generational conference was to oppose cuts that affect all people - young, old, unemployed, students, workers and pensioners - and resisting the 'divide-and-rule' tactics that are being deployed against us all. If we do not, then what we all lose will contribute to the further enrichment of the already wealthy. 

Neville Grundy

ARMS NW