DW: Exactly, yes. This is a very important area of agreement. Now, as to why we got into this mess, the relative responsibility of politicians and public policy mistakes made by successive governments, and the baby boomers and their cohorts...

FF: And chance...

DW: ...and chance, I suspect, have all played a role. You might argue that politicians themselves were responding to what they thought were the pressures from voters — and of course the baby boomers are a very powerful voting bloc, so when we blame the politicians, maybe the politicians themselves are susceptible to political pressure. 

However, my view is that the crucial issue now is that it does need to be redressed. I do agree that the boomers, that parents and grandparents, do their best individually. There is an example from Germany. When Germany unified, the East German pensioners did particularly well because they suddenly got their pensions in this new strong currency, whereas East German workers were not doing so well. One of the first things the East German pensioners did was to pass some of this money on to their kids. So I fully understand that kind of thing. I'm not impugning their motives, but I do think that the framework of public policy — be it what we do on the environment, or what we do on fiscal policy — needs to be set right.

FF: But what I'm trying to argue with you is that you can't put chance in the dock. I'm saying the baby boomers are innocent.  The group that should be in the dock are the politicians, because they are primarily responsible. And the one example recently, which is totally against what I would have thought you wished to see, is that we've had an auction over inheritance tax. Your party decided that we should raise the tax threshold to a million pounds, and then we countered with a not so generous figure, but one very different to what we started with, which is the exact opposite of what I thought was implicit policy. 

I am pleased by that. I've always thought it's far better for people themselves to redistribute their wealth and I think we should have wealth taxation that encourages people to do just that, rather than for the state to take it and clobber them in that way.

DW: The economic argument for the inheritance tax proposal is that it is individuals who are facing a decision between spending some of the money in their house, eating it so to speak, or leaving it untouched for their heirs or future generations. Easing the burden of inheritance tax changes their incentives between consuming now and saving. 

FF: I don't want people to assume that's agreed — it's not. You think it is, but I don't.

DW: But I hope we can appeal to the better natures of the baby boomers. I don't think the baby boomers are bad people and, indeed, if you want a political argument that gets people in the head and in the gut, that does cause them to respond, it is this argument about future generations. If you're trying to win the case as to why you need to be very tough on bringing down the budget deficit, then you cite the burden on future generations. Regardless of what you think the reasons are for climate change, the reason we have to spend more money on infrastructure to protect us from flooding is because something is happening, for whatever reason, and otherwise future generations are going to bear a very heavy cost. 

FF: If we genuinely believed that, we wouldn't be proposing the old death duties. We would be proposing a tax where the tax rate is lower the more you spread your wealth among more people. Society would be stronger if somebody with £1 million decided that there were ten people at the start of life they wanted to support, rather than the government taking the million pounds and deciding that we could do with some more Sure Starts and child centres.