It is high time the ‘generation warriors’ got their facts right

Many of the arguments being used to pit the supposedly hard-done-by youth against the supposedly affluent elderly do not stack up, writes Mary Dejevsky

The Tories’ new national insurance policy is pitting young against old (PA)

Ever the master of political timing, Boris Johnson has seized the social care bull by its horns, steered it through the House of Commons and looks to escape unscathed – for the time being. But he may have created two bigger problems for the longer term.

The first is that, while he has saved some family houses for grateful heirs, many people and/or their families will still have to make a sizeable contribution to the costs of their care – in addition to the tax they have already paid – and, so far, the scandalously confused and unaccountable system remains intact, with some providers creaming off vast profits from stratospheric fees, while paying their staff a pittance.

The changes also do nothing to encourage developers to build decent accommodation for older people, such as exists in many other countries. Why would people “downsize” when there is so little for them to downsize to, that is in a place they want to live and convenient to shops and services? Where such housing exists, what is more, the move can cost as much, with stamp duty, as the bigger house they are leaving. Why bother?

Nor do the changes get to grips with the basic unfairness: that different conditions are treated quite differently. If you have the misfortune to be diagnosed with heart disease or cancer, it’s an NHS job and you don’t pay anything, however much you earn, however huge or how many your homes. Dementia, Alzheimer’s, and some chronic conditions – tough; you are suddenly on the wrong side of an often subjectively drawn line. You don’t need medical treatment, you need “social care”, and off you are shunted into a labyrinth of patchy and often expensive provision.

Just consider if Boris Johnson had been proposing to reform the NHS along social care lines. Need a heart bypass or an emergency caesarian or state of the art cancer drugs, and you could find yourself facing volumes of paperwork about your finances and discovering that you had to pay the whole cost out of your savings or other assets. Only those without savings would qualify for completely free treatment. What would you think? Why try to provide for your future, if it all gets taken away by the chance of illness?

On the other hand, you might think – and I might not completely disagree with you – that those who are better-off could, or even should, contribute proportionately more to their health costs. This is how many continental insurance systems work, and they generally produce better results than ours.

But that is not what is happening with social care. Aside from some tinkering with the means-testing, the basic inequity remains. The hit to your finances depends entirely on what is wrong with you. It can only be hoped that a more comprehensive reform of social care is still ahead. If the emotive matter of enforced sales of family houses has now been removed from the agenda, however, I am not optimistic.

The lack of real reform is only the first problem, however. The second, and in many ways the more corrosive, problem is the way that today’s “generation warriors” have seized upon on the proposed rise in national insurance – the chief mechanism that Johnson and his ministers have chosen for raising the enormous sums now destined for health and social care – to support their case that older people are being cosseted at the expense of the young. And for the most part, they are getting away with it.

The pandemic is one reason why. Questionable claims that young people sacrificed their freedom, their education, their prospects, even their lives, to protect older people more at risk from Covid – reinforced by government warnings about not “killing your granny” – have encouraged a belief that young people “deserve” some payback.

Very many of the arguments being used to pit the supposedly hard-done-by youth against the supposedly affluent elderly in what passes for the social care debate, however, simply do not stack up. That includes the idea that the pandemic demanded more of them than of their elders, who have lost time, jobs and sometimes lives they will never recoup. The young have their lives ahead of them.

But there are plenty more dubious claims about elder privilege that have masqueraded as facts in recent months which need to be crushed too. I offer these for a start.

First, and perhaps most important, barely half the current social care budget is spent on people of state pension age. The rest goes on working-age adults who need state help, often in the form of long-term residential care. Per capita, the cost of care for working-age adults is much greater than the cost of a carer dashing in to help an elderly person get up or go to bed. But the two categories are merged in the budget, leaving the impression that this is an age issue. It is not. The sooner the two budgets are differentiated the better – if only so that the meanness of the funds for elderly social care can be laid bare.

Second, I have lost count of the times, in the period since the rise in national insurance was first mooted, that it has been described as a “tax primarily on the young” or, still more emotively, “on young working families”. Older people, often described simply as “pensioners”, it is said, will pay nothing. The only true fact here is that people of pensionable age do not pay national insurance, even if they are still earning – which is something that could be reconsidered.

But the idea that taxes, national insurance or whatever are paid predominantly by those of working age, is a fundamental principle of tax systems everywhere. In practice, the taxes paid by people who are able to work go to support those who cannot, whether for benefits or pensions. I fail to see how national insurance is a particular tax on young people. Everyone pays it out of their salary, throughout their working lives.

Third, it has been argued that pensioners currently pay “less tax” than others. The calculations appear to rest on their (current) exemption from national insurance, their receipt of non-means tested benefits, such as bus passes and fuel allowances, and the fact they don’t have to repay student loans. But this is an absurd argument. Pensioners pay income tax just like everyone else. Age-related benefits are there for a reason, and they are being whittled down. The free TV licence for over-75s has already gone.

Would it have been better, as some argue, for the NHS and social care levy to come off income tax? There is an argument to be had, but national insurance is also paid by employers which both increases the total yield to the government and may also suggest why there is such a fuss.

Fourth, and you hear this so often that no one really questions the figures: your average pensioner household is better off today than your average young family. Really? Yes, more people have a private pension, but the days when most people retiring from full-time employment received a pension that bore any relation to their earnings are long gone. These claims are often made by public-sector employees and well-off retirees, who have not the slightest idea of how the other more-than-half live. The UK state pension is among the lowest in all the OECD countries, and this is all that a third of older people have to live on.

Among the reasons, and this is my fifth myth, why pensioner households are said to be better off now than working families is that the figures are customarily given “after housing costs”. This means among other things that mortgage payments – which should be seen as an investment – are calculated as a cost. Pensioners for the most part have paid off their mortgages, if they had them, but that does not mean their housing costs are negligible. Their homes may be older, poorly insulated and in need of repair, but this is not taken into account. What is included in the figures, or not, distorts the picture.

As for why the misconceptions are so little challenged, I hazard feelings of guilt among some of the really well-off that their own wealth may not be “deserved” (and that their children can’t afford a house in a desirable part of London in their early twenties); the widespread belief that a Conservative government protects the interests of older people at the expense of the young, and some ignorance on the part of those with, or looking forward to, a secure retirement about how the other more-than-half live. Whatever the reasons, however, it is high time that the “generation warriors” were challenged. And if they want to pick a new fight, national insurance and social care are probably not the best terrain.