So I agree with you, there is an inter-generational contract that is implicit. The only time that people have wrought anarchy has been at the behest of politicians on your side of the house. Now, we [Labour] might have done exactly the same thing — when you look at pensions we went on to decimate the actual landscape — but the baby boomers were never presented with the choice, knowing that these costs are not sustainable. We never offered the baby boomers, or other generations, the choice on whether contributions should go up, or whether benefits should be lowered, so that this extraordinary benefit could be shared among a growing number of people and through generations.
So I feel you've put them in the dock, and part of the charge sheet is against politicians who didn't win many votes by doing this, but who have had a huge effect on the inter-generational contract.
DW: Certainly I think what has happened to mutuals has been a loss to our financial landscape, and employers' contribution holidays weaken the position of our pension funds. So politicians do have to take our share of the blame, and it didn't all start in 1997, but if you look at the way in which our houses shot up in value, particularly in the last few years...
FF: Again, which governments — plural — encouraged.
DW: Yes, absolutely. But I show in the book that even the Treasury was saying that an increase in the value of your home is tantamount to saving more.
FF: But I've never seen a demonstration of baby boomers with banners, saying, "Push up the price of our houses." It was we who did it. It's the political class that ought to be in the dock, not the baby boomers.
DW: Do you think that what has happened though — to try to disentangle the motive and the effect — is that some of these decisions have left the younger generation at a disadvantage compared with what they might reasonably have expected?
FF: I do and again I don't blame the baby boomers for that because we used to debate the rights of older people to continue working. We always had a single example of a pensioner working in B&Q. We had no other example. Now, you have a single example of two baby boomers in New Zealand bungee-jumping — burning, I think that's the phrase you use — their children's inheritance.
DW: Spending their children's inheritance.
FF: Now, my evidence, partly because of the social groups that we mix with, comes from those baby boomers who are concerned about how they transfer some of their assets to their grandchildren to try and mitigate the cost of the relative price of housing. These people know that no government is putting any pressure on them to make transfers. They are nevertheless taking action in the absence of government action.
DW: We've established a key bit of common ground, which is that the baby boomers, for whatever reason, have ended up advantaged, compared with the younger generation.
FF: Yes. You've got a table in your book that compares wealth and age, which is way beyond what you would expect from people who, like me, towards the end of their working lives, expect to have quite a lot, if we were lucky. But the table is staggering, isn't it?
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