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A new political party is needed to serve the battered under-45s

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WHEN did the last person in receipt of an American Civil War pension die? Bear in mind that the American Civil War ended in 1865. The answer to the question is 2001. The recipient was the widow of a civil war veteran. He was very old when she married him in the 1920s and she was very young. She inherited his veterans' pension after he died.

The purpose of this little vignette is to show that when a society makes a commitment, it needs to calculate very carefully what it will cost, how long it will last and who will end up paying the bulk of it.

This week the ESRI confirmed that young people are being hit by the recession a lot harder than older people.

The data from the think-tank show that disposable income for the under-45s rose to a peak of €1,000 per week at the height of the boom in 2005.

By 2010 it had dropped down again to around €800 per week.

But the disposable income of the over-45s suffered no drop. In fact, it is now higher than it was during the boom. It also stands at €800 per week.

What's happening is that financial insecurity is increasingly a function of age as well as social class and the financial insecurity is much more likely to be experienced by younger people than older people.

It will get worse over time. David Willetts' book 'The Pinch' (from which I stole the civil war vignette above) is all about the financial burden the older generation is placing upon the younger generation by, among other things, ill-advised economic and social policies.

Willetts (nicknamed 'two brains') makes the point that probably the luckiest generation in history (materially anyway) is the baby boomer generation which is now entering retirement.

They got good, secure jobs during the post-war economic boom. They bought houses when they were still affordable.

They had fewer children than their parents did which increased their disposable income further still, plus they set up a lavish welfare state that would look after them when they retired or needed medical care.

They further enriched themselves during the property boom at the expense of their children, assuming they were smart enough to sell their investment properties on time.

Now the chickens are coming home to roost.

The children of the baby boomers are having to pay the cheques their parents wrote for themselves.

In addition, younger people are being squeezed by much more intense labour competition from countries like China, India and Brazil.

As John Bruton correctly said last week at an event in Christ Church organised by the Schuman Centre in the Netherlands to coincide with our presidency of the European Union, this is the single biggest cause of the financial squeeze and it's not going to go away.

It is made worse, however, by the continued and increasing transfer of wealth from younger people to older people and it will get worse again as the number of younger people shrinks in comparison with the number of ageing baby boomers.

This isn't right and it's a matter of intergenerational fairness that we correct it. But how? Older people make up a disproportionate number of voters. Politicians are scared of them.

The troika might well tell us that benefits for older people like universal free travel, medical cards, free TV licences and so on are very generous by international standards, but what politician is going to be brave enough to tamper in a serious way with these?

Who is going to properly represent ordinary working families in the face of this? This is why, with each passing day, it becomes ever clearer that we badly need a new political party.

Such a party should represent first and foremost ordinary, private sector workers and families with dependent children.

It could, for example, promise to introduce some tax breaks for families with children in recognition of the enormous expense involved in raising children and in recognition of the fact that if we don't have enough children we won't have enough taxpayers either. And then the whole thing grinds to a halt.

Here's my (pipe?) dream; from the abortion grey cloud we get a silver lining in the form of a new party.

Let's suppose enough Fine Gael TDs and senators break the whip over the issue and are expelled from the parliamentary party as a result, including Lucinda Creighton.

Lucinda would not set up a new party there and then because that would be a mistake.

But along with the other breakaway Fine Gaelers she could begin to champion families and ordinary private sector workers from the backbenches.

Gaining a reputation for this over the space of say a year, she and a core of (now) ex-Fine Gaelers (and maybe some Fianna Failers) would then set up a new party.

It's by no means beyond the bounds of possibility that such a party would shave 5pc of the vote off Fine Gael, 5pc off Fianna Fail and attract 5pc of the current undecided voters gaining 15pc support from the get-go.

If Lucinda, as head of this, then played her cards right, it could build on that and find itself as the junior party in the next government.

This probably is a pipe dream but in the present economic mess, we're all entitled to our dreams.

And mine is to have a political party that will genuinely champion young families and ordinary private sector workers.

Irish Independent