How each party will alter benefits spending on each generation
Tonight on Channel 4 News we look at the intergenerational contract. Lord (David) Willets warned the government it had been broken as resources were skewed unfairly away from working age citizens towards the country’s older citizens.
Theresa May in her manifesto declared that looking after the old while not disadvantaging the young was one of the “five giant challenges” facing the nation. It was a repudiation of the Cameron/Osborne triple lock on pensions and the existing arrangements for social care. The care proposals came a cropper but the fundamental shift in policy focus and emphasis has attracted some praise from normally critical quarters.
Labour said the Tories were simply trying to set the old and young against each other as a decoy for across the board cuts.
The older section of the population have been taking an increasing share of the spending cake across the whole of spending but the numbers are starkest when you look at the benefits spend.
Iain Duncan Smith, when he was Welfare Secretary, would buttonhole visitors to his department showing two tallies of benefits, divided into working age and retired peoples’ benefits. He’d jab his finger at the retirees’ benefits complaining: “George won’t let me touch that.”
Theresa May, we now know, shares that irritation. But her policies announced (and then unannounced in one case) so far can only be seen as a down-payment on a shift in intergenerational burdens if she is serious about realigning things.
Costing the Winter Fuel Allowance mean testing at a £1.7bn saving (we don’t know exactly what it’ll save as we don’t know where the cap will be set) and factoring in the £2bn that Labour says it will put into working age benefits, the Resolution Foundation came up with the following graphs to show how the three main UK parties are altering the graph lines on inter-generational benefits distribution.
Here are the existing pre-election plans based on existing government current policy: spend per head on pensioners would be 15% higher than in 2007-08, on working age adults 2% higher, and on children 14% lower.
Under the new Conservative manifesto plans, spend per head on pensioners would end up 13% higher than in 2007-08, the rest remains unchanged from current policy. (Worth mentioning that the Winter Fuel Allowance savings have been dedicated to the care budget for older people.)
On Labour manifesto plans, spend per head on pensioners remains unchanged from current plans, on working age adults it would be 3% higher, and on children it would be 10% lower.
On Liberal Democrat plans, spend per head on pensioners remains unchanged from current plans, on working age adults will be 9% higher, and on children will be 1% lower.
Under Tory plans, the triple lock change doesn’t take effect until 2020 (the original end date of the last parliament and expiry date for the 2015 manifesto pledge).
There is a mixture of boldness, engaging with the intergenerational issue, taxing inherited wealth to do it, alongside a wariness of going too far too fast (hence the U-turn on care and the continuation of the triple lock until 2020). So far, all the indications are that the relevant voters heard about the hit and skipped the caveats.