In the Guardian, Patrick Collinson looks at the media’s response to the British government’s recent “granny tax” moves:
In case you missed every newspaper front page (the Telegraph went for “Granny tax hits 5m pensioners”, the Daily Mail said “Osborne picks the pockets of pensioners”, but Metro won with “Gran theft auto”), at issue is the decision to freeze and then scrap the higher personal allowances for people over 65.
But let’s first ask why people in retirement are awarded better income tax breaks than those who are working? There was a fascinating analysis in the Financial Times last weekend of the economically “jinxed generation” — and they’re not pensioners. It found that today’s adults in their 20s will be the first generation who won’t be better off than their parents. What’s more, the disposable income of people in their 60s is now higher than people in their 20s, for the first time ever. We’ve created a society where the non-working retired earn more than working people — and that’s before adding up the largely unearned wealth tied up in the houses of those in their 60s.
It wasn’t like this when the welfare state started. Before the second world war, retirement was for most people short and miserable. It was entirely right that as a rich society we found a way to improve the lot of the elderly with better state pensions and free healthcare. Along the way, we added better personal allowances, fuel payments, free bus passes, free TV licences, free prescriptions and so on.