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The Resolution Foundation should not be setting generations against each other

SO, let’s get this straight, the Tory universities minister who advocated increasing tuition fees from £3,225 to £9,000 per year now discovers that young people are in a financial pickle.

David Willetts’s Resolution Foundation Intergenerational Commission report wants 25-year-olds to receive a £10,000 state benefit to help them get on the property ladder, pay for education, set up a business and invest in pensions.

This would be financed by abolition of inheritance tax to be replaced by a lifetime pre-tax limit of £125,000 for beneficiaries of family gifts.

Our NHS would receive a cash injection of £2.3 billion, funded by working state pensioners paying national insurance, while chronically neglected social care services would benefit from a similar sum generated by a property tax.

All this is passed off as new thinking because “many people no longer believe that Britain is delivering on its obligations to young and old,” says Willetts.

The commission, which mimics once prevalent government tripartite practice by sitting CBI director-general Carolyn Fairbairn and TUC general secretary Frances O’Grady alongside Willetts, concludes that the intergenerational contract that “lies at the heart of society” has failed, but this assessment is way off target.

Government policies — mainly but not exclusively Tory — are responsible for shortcomings that the commission identifies.

Why would 25-year-olds need £10,000 to help buy a home if government refusal to finance council housebuilding had not contributed to housing costs spiralling out of reach?

Why would they need help to pay for education if ministers who enjoyed the right to free schooling at all levels had not pulled the ladder up after them?

Why would they look to set up a small business, knowing the mortality rate of such ventures, but for awareness that government and corporate sector have united to restrict wages at levels seen a decade ago through freezes, zero-hours contracts and bogus self-employment?

Those sparking intergenerational tension portray so-called baby boomers as homeowners without an outstanding mortgage, living comfortably on index-linked defined-benefits final salary company pensions, while 18 to 25-year-olds can expect to be the first postwar generation to experience lower living standards than their parents.

This shallow generalisation ignores the reality that companies are constantly axing defined-benefits salaries, which only ever applied to a minority of workers.

Successive governments turned their backs on collective provision of pensions through the state, accepting only recently that the value of the state pension has been allowed to plunge to an unacceptably low level.

Government encouragement of private pensions delivers more benefit to private insurance companies than to contributors to these glorified personal savings accounts.

Inadequate spending on the NHS and social care, which both bear the scars of privatisation in various forms, and reduced funding for comprehensive education, local authorities, police, custodial, fire, ambulance and other essential services epitomise the slimmed-down-state theory championed by Willetts as a political adviser and minister to the Thatcher and Major Tory governments.

No credence should be given to his commission’s divisive formulas, given its failure to acknowledge the real cause of today’s greater social disparities and injustices and to identify the tiny elite that has benefited so disproportionately.

Setting generations of working people at each other’s throats to squabble over scraps is classic ruling-class tactics.

No socialist or trade unionist should be fooled by this ploy designed to obscure the acute need to use taxation of the wealthy and corporate elite to provide the necessary means to redress the yawning gap between rich and poor.

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