Douglas Carswell

The Political Establishment is robbing the young

Two recent stories illustrate how bad the financial prospects for Britain's young have got. First, house prices in the capital are inflated far above income. Second, falling wages since 2008 have primarily affected young working people.

These stories are the tip of the iceberg. There is a deeper issue with state pensions: young people are not paying for their own retirements, but for the pensions of current retirees. 25-year-olds who won't be able to retire at 65 themselves are paying into a welfare system that barely sustains an ageing population today, and will leave nothing for the future. This is a direct transfer of wealth from the young to the old.

Why is this happening?

Because of irresponsible monetary and fiscal policy.

Cheap credit created by the Bank of England – designed to create the illusion of sustainable economic growth – has deliberately inflated house prices above wages. But that wasn't enough for the Chancellor: he chipped in with Help to Buy, which is really Help to Borrow – incentivising young, first-time buyers to take on vast mortgages they cannot afford.

The Chancellor and the Bank of England have colluded to create a new 2007-style subprime bubble, and enrich established homeowners at the expense of young people struggling to get on the housing ladder.

The situation with pensions is even worse. As the Chancellor allows state pension liabilities to become increasingly unsustainable, the Bank is driving private pension funds into insolvency. Seen the Treasury's patronising adverts telling young people to pay into workplace pensions? Osborne and Carney are preventing pension schemes from making any money anyway. The Chancellor is taking with one hand, and taking with the other.

Student protest movements like Occupy can see that young people are losing out, but they can't see quite how dysfunctional the system is. They complain about corporate greed, and blame bankers' bonuses – but then they call for more government. They don't see that it is the Government and the Bank of England that make Too-Big-to-Fail Finance possible. More government means more corporatism and more inequality.

Cameron and Corbyn are both committed to the same thing: more spending and more monetary activism. They are both perpetuating inequality. There is only one route to real social equality: sustainable public finances and sound money.

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