Saturday, 24 July 2010

The Over 60s are going to be with us for a long time

Recent UK official data have revealed the massive burden of Government capital and interest repayments which will fall on the next generation of taxpayers - unless, of course, they repudiate their parents' and their grandparents' debts. If those who incurred the debt were obliged to pay it off, then the present generation of taxpayers would be looking at an all-round 30% tax hike.

At 63, I am one of those who benefited significantly for the first fifty or so years of my life from other people's taxes: in school, university and in a career as a university teacher. This is one reason why for the past ten years I have made my academic work available on line with free download. It's there for today's students if they want it (www.selectedworks.co.uk). I think all old academic work should be made available like this and not hidden behind paywalls of one kind or another.

My occupational pension is modest enough to indicate that my career was not a material success (I net £1170 a month) but the pension contributions also came from public money.

Now I am self-employed and in the month of July I have to pay my half yearly tax, quarterly VAT and quarterly self-employed National Insurance contributions: this time round, a bit over £6000. I know that much of that money will be squandered by the government, but on balance I count myself fortunate in being fit enough to work, to like the work I do and to enjoy a standard of living higher than my pension alone would permit me.

But government and the over 60s have a very different outlook. Governments encourage women to leave the workforce by offering them a lower age (60) at which they can collect their Old Age Pension. And even if they continue to work, women can still collect their pension. They do not have to pay further National Insurance contributions. Men have to wait until 65. It is the biggest piece of legalised sexism still in existence.

Governments also indicate to all the over 60s that it is time to take it easy and stop contributing to society. Free Prescriptions, Free Swimming, a cash handout every Christmas (allegedly for "Winter Fuel" but you can winter on the Costa del Sol and still collect it)and, of course, the iconic Free Bus Pass.

These freebies are essentially patronising and paternalistic electoral bribes. There is absolutely no reason why the government should pay a person's bus fares just because they are over 60. It distorts the transport market, discouraging walking and cycling and encouraging binge bus riding. Rather than put the funds into a higher state pension, leaving people free to decide how they spend it, the Bus Pass shepherds older people to a government-preferred pattern of consumption.

Worse, it has created or reinforced a culture of dependency among the over 60s. They now firmly believe that the Bus Pass is a Human Right, part of what society owes them. As a result, some now think they should also get free rail travel and goodness knows what next. It is a culture of benefits scroungers. The benefits are modest - they are freebies - but the beneficiaries are often affluent. And mean.

Since this group of over 60s is going to increase as a percentage of the population, a cultural shift is needed. The over 60s should be encouraged to think that they are responsible for themselves so long as their health allows it. Their children should be encouraged to accept more responsibility for them as they get older and more frail - they get their reward in the end: an inheritance. The government should define its responsibilities more narrowly. The vulnerable elderly who are beyond voting but need expensive care are a primary responsibility. The state pension comes next, but that should be more clearly framed as a contributory scheme even if it is a compulsory one. After that, I am not sure that the government should be doing very much. All the freebies should be abolished.

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