Tower Hamlets Labour Party

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A Budget for the Next Generation?

"The Tories (and all of us) learnt a valuable lesson in May of last year: in politics, if you repeat something often enough people will start to believe it is true. The relentless repetition of the phrase, “long-term economic plan”, will forever be etched into the memories of Labour canvassers across the country..."

- By a member of Tower Hamlets Young Labour

- By a member of Tower Hamlets Young Labour

The Tories (and all of us) learnt a valuable lesson in May of last year: in politics, if you repeat something often enough people will start to believe it is true. The relentless repetition of the phrase, “long-term economic plan”, will forever be etched into the memories of Labour canvassers across the country.

But, in this year’s Budget the government seemed to have adopted a new favourite phrase, “next generation”. Osborne tweeted beforehand that the budget would be for the next generation and it was the most used phrase in his speech on the day.

He will have probably found a new phrase by the next Budget, but in case he decides to start repeating it incessantly, let’s investigate the claim that this government and this year's Budget are good for young people.

First question: How have young people fared since 2010?

Answer: Pretty badly.

Although youth employment has risen, and is still rising, young people are still much poorer than they were when the Conservatives came to power in 2010. After accounting for rising prices, it looks likely that young people will be no richer in 2020 than they were when Clegg and Cameron fell in love in the Rose Garden.

Not only are young people struggling in terms of what we earn, we are also finding it increasingly difficult (if not impossible in a place like Tower Hamlets) to find affordable housing. It is no surprise that this issue has risen to the top of the agenda for the upcoming Mayoral election. Private rental prices are racing away and those on modest incomes in London would be wise to give up any aspirations of home ownership in our city. London is no place for the young any more. Last year, for the first time since the depths of the financial crisis, more thirtysomethings left London than moved here.

Second question: Is this Budget really good for the next generation?

Answer: On balance, no.

Of course, there are some elements of the Budget worth praising – the sugar tax is a good thing (though should arguably be more ambitious). The new Help to Save scheme to encourage those on lower incomes to save more is also welcome (though it won’t help anyone on less than £6k a year). The new Lifetime ISA is also something that Labour should support. It is certainly the case that most of the benefits of this policy will go to those on high incomes able to save up to the £4,000 a year annual limit, but almost anything that encourages saving is a good thing.

Aside from a few isolated policies, the Budget really lacked ambition where it needed it most. If the government really cared about the next generation, it would be investing more in the future. We don’t invest enough in infrastructure but we are also quite far down the league tables of investment in research & development. When interest rates are as low as they are now there really is very little economic justification for the low levels of government investment we are currently suffering through in the UK.

The next generation also needed a Budget that was serious about fixing the housing market, rather than inflating it. The government could have acted to reduce the cost of renting, by banning letting agents fees as is the case in Scotland. It could also have increased public house building; levels of which has fallen off a cliff since the financial crisis, but it did nothing of note to fix the housing crisis. 

Let’s not forget that the Tories enjoyed a 2 million vote majority among the over 65s at the last election. For all the talk, the evidence suggests that it’s this group of voters which the government puts first. Young people deserve more than a slogan and token policy gestures. For now, at least, it looks like this is exactly what we’ve got.

 

If you would like to contribute to THYL's blog, please email Rex Ejimonyeabala at rexejims@gmail.com

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