Baby boomers should pay higher wealth taxes, says ex-Tory minister

Tory ex-minister Lord David Willetts will say in a speech on Monday that the baby boomer generation should pay higher wealth taxes to cover the costs of health and social care.

According to Lord Willetts, such a measure would mean baby-boomers' children and grandchildren don't have to pay for these spiralling costs, helping to ensure a better future for generations to come.

Willetts, who is also chair to the Resolution Foundation, will say: "The time has come when we boomers are going to have to reach into our own pockets.

"The alternative could be an extra 15p on the basic rate of tax, paid largely by our kids.

"Is that kind of tax really the legacy we – a generation who own half the nation’s wealth – want to bequeath our children and grandchildren?

"This is the moment when the chickens come home to roost for all of us, but the baby boomers in particular."

Young people are having trouble finding affordable homes and are earning less than the people the same age 15 years ago. With the analysis that the Resolution Foundation has found, young people would have to cover the costs of £20bn a year on welfare by 2030 and £60bn by 2040.

Lord Willetts will also suggest higher taxes should be levied on the £6trn of wealth accumulated by the baby-boomer generation, that is now set to retire on comfortable pensions, to try and fund these rising costs.

Unless reforms were made elsewhere, a 15 point hike in the basic rate of income tax would be needed to cover the resulting funding gap until 2040.