INVOKING the spirit of the Blitz, Britain’s Conservative-led government says that, when it comes to austerity, Britons are in it together. Yet the group born under the shadow of the country’s wartime trials is largely exempt. Since 2010 the basic state pension has risen by 16%—5% in real terms—under a formula that guarantees generous increases whatever the economic weather. Pensioners also enjoy free TV licences, free bus passes and a handout to help pay winter fuel bills. The government even subsidises their savings, by offering bonds yielding 4% interest—more than five times its own borrowing cost—exclusively to the over-65s. And if the Tories are returned to power at the general election in May, oldies can expect more of this largesse. On February 23rd David Cameron, the Tory prime minister, promised to protect their handouts on the basis that “these people have fought wars, seen us through recessions—made this the great country it is today” (see article).
That argument is economically senseless and morally indefensible. Over the past five years, the average British household has seen its income fall by about £500 as a result of coalition tax increases and spending cuts. The average two-pensioner household has taken a hit of just £23. Yet far from being the shivering, uncomplaining veterans of Tory spin, its members more typically came of age in the easy-living 1960s. Buoyed by generous pensions and decades of soaring house prices, the wealthiest fifth of pensioner households enjoy average incomes well over twice the British average: for such lucky wrinklies, the winter-fuel allowance is less an inducement to turn on the radiator than an invitation to chambrer some decent wine. And as more British home-owners approach retirement, the numbers of rich pensioners will grow. The truth is Mr Cameron is motivated less by a desire to uphold the dignity of age than to bribe pensioners—the Britons most likely to vote Tory.
