New research released today calculates that £16bn could be saved per year by 2015/2016 if older people shared the cuts burden.
In Sharing the burden – How the older generation should suffer its share of the cuts the IEA looks at the savings that would be made if non-means-tested benefits to older people were cut and the state pension system were reformed.
Older people enjoy a privileged position at present. The non-means-tested benefits they receive have not been removed or reduced and the basic state pension is planned to increase above inflation. They also receive particularly favourable treatment in the tax system, with higher personal allowances than younger people and even a marriage allowance if one partner is over 75.
This group has received special treatment by the government in its spending review – it has been left more or less exempt from spending cuts. At the same time younger people have felt the cuts through changes such as in tuition fees and child benefit.
Commenting on the report, one of its authors, Philip Booth, Editorial Director at the Institute of Economic Affairs said:
“The reality is that the government’s cuts announced so far only take public spending in real terms back to 2008 levels. By including older people in the cuts an additional £16bn a year could be saved. The government has imposed many new burdens on the younger generation in how it has chosen to cut and where it has chosen to raise taxes. They have let older people remain largely insulated from much of the cuts. It’s time this changed.
“These proposals should be part of a more radical review of government spending than the one on which the government has embarked. It should be stressed that this review would lead to huge tax decreases – including tax decreases that would benefit the old, such as a large