Tory peer suggests ‘wealth tax’

A former conservative minister says that the ‘baby boomer’ generation, born between 1946 and 1966, should put their hands in their pockets to fund the spiralling bill for public services and not leave it to the younger generation to pay.

Lord Willetts, who was Universities Minister under David Cameron, has made the suggestion because the public purse will be around £160 billion in deficit by the mid-2060s as the number of people over 65 grows by almost a third. Meanwhile, the working age population is expected to increase by only two per cent.

To add to this, the Office for Budget Responsibility’s (OBR) forecast predicts that healthcare spending will need to almost double from 6.9 per cent of gross domestic product (GDP) in the early 2020s to 12.6 per cent by the mid-2060s, and it is clear that someone will have to foot the bill.

According to Lord Willets, who is now Executive Chairman of the Resolution Foundation think tank, that bill could be paid through more taxes on property and inheritance, particularly by the ‘baby boomer’ population, who are sitting on record levels of wealth and who are set to receive a bumper 20 per cent more in support than they will have contributed in taxes over their lifetime.

As he makes clear, while this is happening, young people are struggling to find affordable housing, are earning less than people the same age did 15 years ago and are now facing a steep decline in their take-home pay in order to fund their parents’ care in retirement.

Lord Willets said we have a stark choice – either we act now on changing our approach on taxation or we will have to cut access to the NHS and let social care get into an even deeper crisis.