An Intergenerational Commission set up by the Resolution Foundation think-tank has published a report on young Britons’ strained living standards and the elderly’s concerns about health and social care.
The report concludes that 25 year-olds should receive a £10,000 “citizen’s inheritance” to help them buy their first home or reduce their debts, stamp duty should be lowered for people moving home and billions more should be spent on health. The commission has said that in order to find the money for these expenditures there should be an introduction of new taxes on property and wealth.
Statistics obtained by the commission found that those in their late 20s and early 30s were the first generation not to have higher pay on average than people of the same age 15 years earlier. Millennials (those born 1981-2000) were only half as likely to own their own home by the age of 30 compared to the “baby boomer” generation (those born 1946-1965). People under 45 also have less space in their homes and longer commutes than their counterparts 20 years ago. Moreover, as more young people have to live with exorbitant rents, the average millennial spends 25 per cent of their income on housing, compared with roughly 17 per cent for “baby boomers” when they were younger, a figure that subsequently fell for that generation as their incomes rose in the 1980s and 1990s. The report also remarks that the younger generation are expected to have lower retirement incomes and pensions that are less secure than that of their parents. All the evidence points to a dramatic drop in the standard of living for those born after 1980.
The “solution” to this problem, suggests the report, is a government spend of £7bn for the £10,000 “citizen‘s inheritance” for everyone at the age of 25. Another “solution” is the halving of stamp duty for moving home and increasing the tax differential paid by those looking to buy their own home to live in and those who buy to let. Some funding for “citizen inheritance” would come from pensioners paying National Insurance on their employment income. Although, the majority of the funding would come through a new property tax, coming mostly from wealthy properties in London and the Southeast.
“Progressive taxation” and “citizen‘s inheritance” will not stop the rise of the rentier class and the contradictions of a capitalist system that makes life worse for future generations. These are “solutions” that tackle symptoms instead of the cause. Whilst, in general, there is a generational divide in terms of wealth, getting pensioners who work to pay NI is absurd. Most working pensioners will be doing so out of necessity. Making them pay National Insurance is just another attack on people who cannot afford to pay.
Bourgeois economists blame low productivity and poor growth for the crisis in young people’s living standards. These are features of the current crisis, but not their cause. The economists’ proposals will do nothing to alleviate unemployment or wage stagnation for the youth. These things are products of economic crisis, which is built into the foundations of the capitalist system.
We need large-scale building of social housing to provide safe and decent homes for all. This would eradicate the basis for the parasitic rentier class. Such a programme of house-building would be possible with a nationalised and planned economy. Socialist policies like this would provide the basis for meaningful growth and decent jobs to secure a future for the youth and the working class.
by Dillon Lauder, London Marxists