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Foul is fair and fair is foul

Douglas Fraser | 06:53 UK time, Friday, 22 October 2010

It's best not to tangle with the Institute of Fiscal Studies on issue of fairness.

The Treasury's best efforts to make its spending review look fair are understandable, but it only took a few hours for pointy-heid public finance experts to dismiss it.

The IFS isn't easily dismissed, however.

Having torpedoed George Osborne's emergency budget in June with a demolition of its claim to be progressive, the institute's director was rewarded with a move to head the Office of Budget Responsibility.

Those Robert Chote left behind have lost none of their independence.

Both Treasury and IFS have chosen the battleground of income distribution to measure the claims to fairness. Understandably so.

But that's not the only way of looking at fairness.

On gender, the spending review doesn't look particularly fair to women - on child benefit changes, reduced entitlement to childcare credits, or the loss of public sector jobs, where women have a high share.

Free bus pass

Most striking of all is the split between generations.

The average family with children says the IFS, will be nearly 7% worse off, while the average pensioner couple will be 3% worse off, consistently across the income scale.

That's not by accident.

A series of decisions were made in the spending review that skew the outcome heavily towards older people.

They get pensions uprated with earnings from now on. They keep universal benefits - entitlements to winter fuel payments and TV licences - while the universal approach of child benefit is abandoned.

In England, as in Scotland, it seems free bus passes are being protected.

There's another £2bn to spend on social care, to address England's acute problems with patchy provision for the elderly in the absence of Scotland's universal approach.

And of course, the budget that matters most to most older people, the NHS, is largely protected - if pressurised by inflation and rising demand from, yes, those older people amongst others.

At the bottom end of the age range, there's some help for pre-school children in England, with consequential funds for devolved administrations.

Longer wait to retire

But look how it is for adults.

At the younger end of that age range, there are changes to allowances for those staying on in education.

The cut in higher education spending will surely load significant costs on to students and/or graduates.

Working-age adults are the ones taking the bulk of the hit on welfare.
Housing benefit, for instance, is being reduced for those aged 25 to 35.

They have to wait longer before collecting their pensions, and in a labour market that can be unforgiving on those around or beyond 60.

To be more accurate, the rise in the retirement age is being brought forward, affecting those closer to retirement age.

Those in public sector jobs can expect a pay freeze - that's if they're not to lose their jobs - and an increase in pension contributions, while final salary pension schemes are either disappearing or coming under a lot of pressure.

It's often said the mark of a civilised society is how it looks after its elderly people.

But the mark of these decisions also seems to be a decisive shift towards protecting the old at the expense of younger adults, and opening up an interesting inter-generational tension in the public spending battles yet to come.

Perhaps younger adults are paying a heavy price for not being bothered to turn out and vote.

Comments

  • Comment number 1.

    Perhaps younger adults are paying a heavy price for not being bothered to turn out and vote.

    Eh? So what you're saying Douglas is that younger adults should have voted Labour?

    So much for the ³ÉÈË¿ìÊÖ not being partisan.

  • Comment number 2.

    Had the younger voters turned out and voted labour would it have made any difference? Would it have been enough to avoid a ConDem coalition?

    I doubt it.

    In addition, protecting one group is usually at the expense of another and there is no doubt that those on pensions have had it tougher than those in work in recent times.

    Scotland, free or servile, must recognise that an overdependance on public sector jobs is unsustainable as is the ever increasing spending on "university" education. These are to areas where even I would applaud the intention if not the implementation of the unionist coalition.

    But then I thought the community charge - polltax - was a brilliant theory, albeit poorly executed and implemented.

  • Comment number 3.

    SURE I PICKED UP ON THE WORD 'TORPEDO'...SCARY NEWS JUST IN ABOUT A BRAND NEW NUCLEAR SUB THAT RAN AGROUND IN THE SAME PLACE AS ANOTHER ONE! REALLY VALUE FOR MONEY THESE THINGS ARE! JUST HOPE THE SCARY RED BUTTON IS WORKING OK!!

  • Comment number 4.

    Don't be so childish, Wee Scamp. The point Douglas Fraser is making, with perfect clarity if I may say so, is that by not voting a group's interests are ignored in favour of other groups who do choose to vote. Would the Tories really be clobbering the young right now if the young had just delivered them a General Election victory? David Cameron chose to bribe older voters in his election campaign rather than younger ones, and for good reason.

    Of course, the biggest losers in the budget are children, who sadly do not have the franchise. However, if their parents were considered more likely to vote they might have enjoyed some degree of protection, too.

  • Comment number 5.

    The idea of a article to judge who is or not a winner in what is going on the now is some kind of joke. This is a failing British oligarchy who have one finger in the hole to hold the dam. You know how bad it is when you see them cut defence its a culture on it's death bed
    with the British now staging a step by step withdrawal from Scotland, with the end of the Scottish regiments, now only amalgamated in to one, and with the closure of air bases, and what looks like the last serious orders with the aircraft carriers which are a contractual commitment, now no longer a crouch which unionist politicians can flag up. It would be nice if like the nationalists the unionist parties would focus on employment and building a economy not centred on the last embers of the failing British state. it's no-longer a joke the idea of a Scottish defence forces there could well be more employment in Scotland taking it's place in the UN and a peace keeping role. The Scottish Government should seek talks between senior army and service personnel in Scotland and the European union to look to integrate and or include Scot’s in European defence i am not a member of the snp but they should be looking to match there ambitions about renewable energy with real jobs on the Clyde and look seriously ahead to when the carriers are completed. The British empire
    is history and the British state is on its last legs. The political parties in Scotland should seek
    to plan for the future rather than let it happen to them

  • Comment number 6.

    #4 Tim

    The point Douglas Fraser is making, with perfect clarity if I may say so, is that by not voting a group's interests are ignored in favour of other groups who do choose to vote. Would the Tories really be clobbering the young right now if the young had just delivered them a General Election victory?

    I've no doubt a lot of younger voters probably did vote Tory but you're missing the point completely.

    Young or old the only way to have ensured a different approach to the issue of cost cutting would have been to vote in a Labour Govt. Ergo - what Douglas is proposing is that young people should have voted Labour.

  • Comment number 7.

    "And of course, the budget that matters most to most older people, the NHS, is largely protected ..."

    Actually, perhaps a tad cynically, I would have probably said the budget that matters most to NHS Managers is mostly protected ....

    Protecting the funding of the NHS is just NOT the same as protecting the health services of the people (old or young). Nicola Sturgeon is so right to seek a significant reduction in NHS Managers. Too much money is being paid to often under-competent, under-qualified and under-capable Chief Operating Officers, Business Support Managers and the like rather than on equipment, hygiene, adequate training and the things that DO make a difference to people's health.

    Sadly, some of these well-paid NHS Managers are being increasingly discovered to be more akin to the most ruthless of bonus-grabbing bankers, rather than the Florence Nightingale image that they would like to project. Their priorities seem often to be to keep themselves in well-paid (public-paid, that is) jobs and to keep themselves on route to a nice big public-paid pension and to do similarly for their mates and cronies, rather than to have the best people in post for the money available.

    These excessive ranks of senir managers often distract from, rather than aid, the delivery, quality or efficiency of health services.

    We probably truly need Health Boards that are much more publicly accountable and more scrutinised by their communities. Sadly, in some parts of Scotland, even so-called Patient / User Forums are actually chaired, and manipulated, by the Health Board's own Managers / Officers to ensure discontent is hushed up and that the members "independently" verfify carefully selected activities.

    Of course the danger with silencing all criticism is that you don't, as a manager, find out what is going wrong within your area of responsbility. That in turn means that you won't be able to put it right, so little problems get left to grow into great big ones.
    It's the old adage - you can't manage what you don't know.

  • Comment number 8.

    Look I don't think this is a time to indulge in our pet hates, it's just the thing that the unionists want to turn neighbour against neighbour, the idea that there is some universal caricature of what it is to be a manager in the health service is offensive, just as it's not true that everyone on benefits is a scrounger and or a benefits cheat . The snp may have to cut the numbers of managers in the health service so that services can be maintained but I don't see the health minister vilifying those individuals as a means to justify it, nor should anyone. This is one of the nastiest British Governments in resent history it even makes thatcherism look tame. With the cut in housing and council tax benefits people could find themselves homeless not just jobless. But for us in Scotland that two British parties con/lib can combine and be seen to cheer this in the British house of commons beggars belief, that those in the British labour party have the nerve to act disgusted, when they made it clear they would rather have this con/lib Government rather than make a deal with the Scottish and welsh nationalists is beyond belief when the nationalists made it clear they would make a deal with labour. The idea of the ³ÉÈË¿ìÊÖ journalist is directing the debate in this direction is ugly and twisted.

  • Comment number 9.

    tamO.

    If the comment you made was in reference to my post, it's not about vilifying.

    It's ALL about how you manage public money, public resources and ensure that the public get the most outcome for each pound spent.

    Ineffective managers in the health service, town halls and many other places need to be performance-managed. Sadly some of them are as full of self-interest as any of the much-vilified and abundantly rewarded bankers who created the economic downturn through opportunities caused by loose regulation. But the BIG difference is that these public sector folk are paid to serve the public, not their own career paths.

    I'm old enough to remember Margaret Thatcher bringing in Health Service Managers, but in those days not many doctors, or nurses, or allied health professionals understood about budget management, resource management, employment law, contract law and the like. In this day and age, the need for some of these managers is somewhat less. And if you spend your Health Board money on them, then you don't spend it on anything more efficient and effective.

    And the same is true in the Town Hall, Police Forces and loads of other public sector organisations.

  • Comment number 10.

    I would like to hear the justification behind the raising of the housing benefit cut off age to 35.

    Previously councils told people under 25 that they only got the shared room rate of housing benefit as the government expected them still to be living with their parents if they didn't have a job, Also when you get to 25 you are entitled to the full rate of JSA - your income rises from 51.85 - 65.45.

    Now if you are a single adult and have worked from 18 - 34 and are made redundant you will not be able to get full housing benefit as the government believes you should still be living with your parents.
    I don't think the parents will be too happy about their adult children coming back because they are homeless. The shared room rate is £69.23/week whereas the single room rate is £86.54/week thats a shortfall of £17.31 which you will need to pay from your JSA of £65.45, leaves you with £48.14 for council tax water & sewerage (£9), electricty(£15), tv license(£5), gas (£10) food £11 - the figures I've used are the lowest averages used by money advisors.

    You may say thats an incentive to get back in to work but consider this minimum wage is £5.85/hour - 35 hours gets you a net pay of £179, you still need to pay rent £86.54 council tax increases to at least £26/week you now have travel costs, your food bill will rise as you probably need to eat lunch.
    Thanks to Osborne you now need to exist till your 35 before you get your own house unless your lucky enough to have a secure full time job or a trust fund from Daddy (tax free in the BVI).

    Oh Well at least I'm over the age limit but nae luck if your still young

  • Comment number 11.

    Perhaps younger voters should be told that they are being ignored by politicians, but if they went out and voted, their needs might be considered as important as the older voters who do vote - or would they just think politicians are cynical, and continue to ignore them?

    What would happen if voting was compulsory - politicians wouldn't know who to support. They may even have to vote based on what was best for the whole country!

  • Comment number 12.

    Douglas Fraser wrote "But the mark of these decisions also seems to be a decisive shift towards protecting the old at the expense of younger adults, and opening up an interesting inter-generational tension in the public spending battles yet to come." Most civilisations are based on the young looking after the old (isn't that why we have kids?). Why should we be different? Why do we need Government policy to ensure this happens?

    Fairliered (known to his kids as the old man)


  • Comment number 13.

    Douglas, can you please ask your old pal Brian Taylor (who has signed off for the weekend) the following question:
    Is your mother well?

  • Comment number 14.

    I urge everyone with a vested interest in Scotland and her future to have a listen to the following interview with Andrew Hughes Hallet on ³ÉÈË¿ìÊÖ Radio Scotland's Newsweek

    The interview starts around 16mins in

    /i/vg8d1/

  • Comment number 15.

    Perhaps England should have had a pre-nup agreement with Scotland and Wales with devolution and so-called 'independence' with a flow of Englsh taxes as maintenance?

    As for Alex Salmond - the self-imposed King of Scotland - as ever, he is rushing around fighting fires and corners that simply DON'T exist just to maintain his position, media sound-bites and increasing megolamania?

  • Comment number 16.

    15.

    Have you listened to the link at 14.?

    Just wondering, it might help and shatter your illusions...

  • Comment number 17.

    6. At 7:59pm on 22 Oct 2010, Wee-Scamp wrote:

    "I've no doubt a lot of younger voters probably did vote Tory but you're missing the point completely.

    Young or old the only way to have ensured a different approach to the issue of cost cutting would have been to vote in a Labour Govt. Ergo - what Douglas is proposing is that young people should have voted Labour."

    Actually, there were 3 alternative approaches to the issue of cost cutting. Giving any one of them an overall majority would have ensured a different approach. However I suspect that the Tory proposals are not that much different to what we've ended up with.

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