Baby boomers born between 1945 and 1967 must pay more to contribute to the welfare bill that will support them in old age, the Rt Hon Lord David Willetts said in Cambridge on Thursday.
Older people on generous pensions and asset rich must help millennials born after 1980 ‘dodge the bullet’ of paying for the NHS and social care amid rising housing costs and depressed wages for working people, the Executive Chair of The Resolution Foundation and former Tory minister said at the imagine2027 series.
He argued the usual taxes on income and consumption would impact upon millennials first resulting in a breakdown of the ‘contract between the generations’.
Drawing on a report by the Intergenerational Commission convened by The Resolution Foundation, Willetts outlined a range of measures he believes will tackle the problem, including:
- Working pensioners should pay National Insurance contributions
- Those on pensions above a certain threshold should pay National Insurance on occupational pensions
- Replace the council tax with a progressive property tax to help pay for social care
- Reform the rental sector to limit rent increases to inflation for 3 year periods
- Pay £10,000 in ‘citizen’s inheritance’ to every 25 year old to pay for education, housing or setting up a business
The proposals were generally well received with one audience member asking whether Willetts had become more ‘left wing’. Willetts was also challenged on why he had omitted to talk about the impact of quantitative easing, which tends to add to asset inflation, and tuition fees.
One Cambridge Commons member questioned whether Willetts was overstating demographics as a contributory factor to inter-generational inequalities, and underplaying specific policy decisions dating back to the Thatcher governments of the 1980s.
What Willetts has undoubtedly helped to achieve is to open up a broader discussion of how to tackle inequality. Part of the reason for this may lie in his giving a face to the problem in the form of innocent young people, rather than the traditional emphasis on those impacted by poverty often seen to be ‘deserving’ of their plight by many on the right.
You can watch the full recording of the talk on the imagine2027 website.