Those angry baby boomers who want to Leave

Flip Chart Rick looks at the generational divide in the EU referendum. Support for Brexit peaks in the 65-74 group, but is high in the 55-64 and 45-54 groups. [1] People in this ‘baby boom’ generation have on average seen rising prosperity, both in terms of private and public goods, over a period in which we have been part of the EU. If they own a house, they have seen its price rise substantially. They have pensions younger generations could only dream about. Rick asks why is this generation so angry, but you could equally ask why are they so ungrateful? As one former Prime Minister, who tried to join the EU [2] but was turned down, might have said: relative to their parents or children this generation never had it so good.

But is support for Brexit really such a puzzle? The last eight odd years have not been so good. Real wages have seen a record fall. Public services, and particularly the NHS on whom pensioners particularly depend, has seen sharp cut backs and in recent years clearly deteriorating services. So people who have known better might naturally ask what has gone wrong.

Now pretty well all of those reading this will think the answer to this question is obvious. It was the financial crisis and austerity. And pretty well all of those reading this will have a university degree, which means you are overwhelming likely to support Remain (source):

But supposing your only sources of information are the tabloid press and the broadcast media. You have been told by your government that funding for the NHS has been protected. The media hardly mention the financial crisis these days. Instead the newspapers you read tell you that the real problem at the moment is the large increase in immigration over the last decade, and this comes from freedom of movement in the EU. Politicians and the media seem to agree that this is a very important problem: immigration is hardly ever described in positive terms, and when it comes to refugees they are seen as a threat. You do not have that much contact with immigrants yourself, but some of the things you read about in the papers … Here is the breakdown of Brexit support by newspaper readership:

Newspaper readers tend to be old: 77% of those who read the Mail are 45+. The old are also the most concerned about immigration. And amidst all the claim and counter claim in the media about the economic effects of Brexit, one point seems blindingly obvious: you cannot control immigration from the EU when you are part of the EU.

[1] Among those 75+ support for Brexit is lower than in any of those groups. Could this be because they were around when Europe was not at peace?

[2] Then called the EEC

Tuition fees: a last throw as the election slips away

Mainly for those interested in the forthcoming UK general election

I do not remember much from my university days, but I remember one meeting where the subject was student finance. This was a time of student grants rather than loans, and the proposal being debated was to replace grants with some kind of loan or tax. Speaker after speaker went through how student grants amounted to a payment from those not attending university to those that did, while those that did benefited from the return on the ‘human capital’ a university education gave them. The logic on equity grounds for switching to loans seemed compelling. Then someone stood up, and talked of his background from a mining family in Wales, how he was the first of his family ever to go to university, and how this would never have happened if they had not had access to a grant. Those arguing for loans fell silent, and their proposal was lost.

Can the same logic be applied to Ed Miliband’s proposal to reduce the maximum tuition fee from £9,000 to £6,000? It is a very different starting point, as most UK students now pay this fee from a loan rather than a grant, but the distributional consequences are essentially the same. In the UK graduates only have to start repaying their loans once their income exceeds a threshold, and many will not pay some or all of it back as a result. Reducing the loan therefore mainly benefits those students towards the top of the income distribution. Labour’s proposal has mitigated that effect slightly by increasing the interest rate that high earners pay, but the IFS say that “mid-to-high-income graduates are the primary beneficiaries of this reform, with the very highest earners benefiting the most, despite the rise in interest rates that they would face.” The fact that the policy is being funded by cuts in pension relief which will hit similar groups is not really relevant, because that money could have been used for something else.

So why are Labour proposing to increase inequality in this way? Is it because they hope that lower fees will encourage those from poor backgrounds to go to university? One of the remarkable features of the Coalition’s decision to increase fees is that it does not seem to have reduced the numbers becoming full time students coming from such backgrounds, although the numbers are still very low. Of course we cannot be certain what might have happened to these numbers without the fee increase. It is also important to note that applications for part-time enrolment have fallen back as a result of higher fees.

However I doubt very much if encouraging the poor to go to university is what lies behind this policy announcement. Labour are slowly but steadily losing this election. Every time I look at the predictions for the number of seats, it seems as if Labour has dropped one or two at the expense of the Conservatives. Putting luck to one side, there seem no obvious events between now and May that will change this trend, while George Osborne has a budget that will be sure to include plenty of pre-election bribes to carefully selected groups, to add to the many already announced.

Perhaps Labour’s only hope is that they can galvanise those who traditionally do not vote: the young. The old are much more likely to vote than the young. In 2010 just over 50% of the 18-24 age group voted, but nearly 75% of those 65 or over voted. And the young vote left.

The chart below shows the ‘age gap’ by party, where the age gap is the percentage of the 18-24 age group who voted for a party, less the same percentage for the 65+ age group. The data for ‘now’ is taken from this Populus poll (Table 3). The age gap for the Conservatives has been steadily increasing over time. The LibDems benefited hugely from young voters in 2005 and 2010, but perhaps partly as a result of their change in policy on tuition fees that gap has completely disappeared. The youth vote has gone back to Labour as never before, but it is vulnerable on two counts. First there are the Greens. In this Populus poll 16% of the 18-24 group said they would vote Green (compared to just 2% of the 65+ group), but in this YouGov poll they were on level pegging with Labour. This volatility suggests there is all to play for. (Only 5% of the 18-24 group intended to vote for UKIP, compared to 17% for the over 65s.) Second, there is the question of how much this group will vote. 

UK voting age gap between young and old. Source (actual elections): IPSOS Mori

Labour therefore need to galvanise the youth vote, and to do this it needs a cause. The collapse in the LibDem vote among the young suggests tuition fees could be a potent force, whatever the actual distributional consequences of the policy are. This against a background where young people are finding it more and more difficult to buy a house, and the distribution of income and wealth is moving in favour of the old. This is an election more than ever before about a clash of interests between the old and the young. The Conservatives have already given their fair quota of bribes to the old, so it really was a no brainer that Labour would do the same to the group that could just save this election for them.