Soak the oldies

As an example of illiteracy in the presentation of 'statistics' a recent report by the Intergenerational Foundation would be hard to beat. It was used as the basis for an article in the Times (Think the Unthinkable About the Untouchables) by the paper's political columnist Rachel Sylvester, arguing that older citizens who are well off should be deprived of some of their traditional perks, such as free bus passes and the winter heating allowance, and that governments should summon up the courage to stop being swayed by the fact that most of them use their vote and to tackle this 'final taboo'.

It appears the Intergenerational Foundation (IF from now as I may have a good deal to say about it) has devised an Intergenerational Fairness Index, based on various indicators of, presumably, fairness and that the index is moving relentlessly in a direction that is less fair to the younger generation. This reminded me of the alcohol affordability index that I wrote about some time ago and I was similarly intrigued. My own position as an oldie entitled to a bus pass but not yet to a free TV licence, and very definitely not one of the 'almost 2 million people over 60 in households with assets above £1 million', might not make me a target of the initial attack but these things have a nasty habit of creeping once the initial breach has been made - airport departure tax being a glaring recent example.

So I looked up the IF's report presenting the index and read its 29 pages. Page 1 revealed that the IF is a charity, though it describes itself as a think tank. Oh how I would love to work for a think tank. After the contents list there is an entertaining foreword by one Professor Laurence J Kotlikoff, who asserts that intergenerational inequality is 'the moral issue of our day'. It involves a 'systematic Ponzi scheme' and 'accounting practices that would make Enron blush'. The developed economies have engaged in 'fiscal child abuse and . . . educational, health and environmental child abuse'. The index, it is claimed, makes this clear.

The meat of the report defines (well, describes) 16 measures of intergenerational fairness under nine headings that have been tracked retrospectively for a varying number of years, though with gaps in some cases, and been given a base value of 100 back in 2000. The values for the following years have then been calculated, anything over 100 representing an increase in unfairness. The headings with more than one measure have then been averaged to find a single measure for that heading and the nine headings themselves averaged to arrive at the latest available Index, which is apparently 128 for 2010. 

I found the report worryingly naive in its logic and alarmingly so in its statistics. The young are variously defined, to suit the available data, as under 25, under 29, under 60 in one case, or as the workforce or the employed. The proportion of those aged 25 to 34 voting in general elections, lower than for the population as a whole, is apparently a measure of unfairness. And there was I thinking it was up to them. The level of CO2 and greenhouse gas emissions is presented as a crime against the young when some might argue that the expensive steps being taken to deal with them, which will have minimal effect globally, are what is poisoning the economy and doing rather more harm to the young and their employment prospects.

Happily examination of the final table shows that only two of the measures, government debt and the cost of pension provision, both generally and for the public sector, have a significant effect on the index. Since these are well documented and widely accepted as problems - for all of us, not just the young - the IF index has added little to the debate. Maybe if the young voted in larger numbers, and they outnumber the old even now, they could influence policy in the way the greedy oldies are seen as doing. It seems to be starting to happen in America. 

Rachel Sylvester is of course welcome to advance her views but it is not such a good idea to rely on her readers' blind acceptance that a quoted source of information and research is a sound choice. As for a body such as the IF being a charity, that deserves separate discussion, shortly to be provided.