I don’t think anyone could deny that young people are getting a raw deal. But every time the conversation turns to young people, the go-to issue is tuition fees.
There are so many issues which have a much greater impact on young people than tuition fees, especially those from low-income backgrounds.
Here are 5 examples:
1. A lower minimum wage
The minimum wage of £7.83 per hour is far too low. But the rate is even lower for Under 25s. For 21-24 year olds it is £7.38, and for 18-20 year olds it is £5.90.
Maybe (at a push) you could justify a lower minimum wage for Under 18s, who are usually still living with their parents so face a lower cost of living.
But what kind of warped mind could justify a lower minimum wage for 24 year olds? Landlords and supermarkets don’t give them an “under 25 discount”! They pay the rent like anyone else. So why on earth should they be paid less than other adults for the same work?
2. Child Poverty
30% of children in Britain, and 37% in London live in poverty. No that’s not a typo. It really is that bad.
There are many different approaches we could take to address this. Childcare costs, housing costs, low pay – they all have an impact. In fact, the London Child Poverty Alliance has published a manifesto with twelve concrete suggestions for how councils can address child poverty. We should champion these solutions, to support young people who are growing up without enough money to get by.
3. Child Benefit
While we are on the subject of child poverty, did you know that parents are not entitled to child benefit for their 3rd child? This horrendous policy was bundled through in response to the populist sentiment of – “how dare poor people continue to have children which they can’t afford, when we all have to pay for it!”
Whatever you think of that logic – it doesn’t make any difference to how much money is needed to support a child for 18 years. Why should “third children” not be given the same resources for their care, just because the Government thinks that they should not have been born? Is there any evidence that these sorts of “deterrent policies” stop people having children anyway?
The criticism of this policy has largely been about the so-called “rape clause” – which is extremely bleak – but I think this criticism misses the point. The whole policy is abominable, not just the rape clause.
4. Exams
Our education system is not built with young people’s welfare in mind. From a young age the focus is on obsessively measuring their performance with an endless stream of testing, so that we can sort the best from the rest as frequently as possible.
I have many problems with the “exam approach” in schools – but a key one is that it treats young people’s wellbeing as collateral damage. The fact that this level of examination is extremely stressful is considered an unfortunate side effect of the system. No wonder we have such a problem with young people’s mental health.
Our schools should prioritise young people’s welfare, and not see them as competitors whose prime purpose is to pass an exam.
5. Maintenance Grants
Fine, fine – let’s talk about university. People repay tuition fees once they are earning a stable salary, which is why I am not too concerned about the impact that they have. But by replacing maintenance grants with loans, the Government have put an additional barrier in front of poorer students, which wealthier students won’t face.
University should be equally accessible for people from all backgrounds. If we want the funding system for universities to change, we should focus on maintenance grants, not tuition fees.
We need to change the narrative to champion the issues facing the most vulnerable young people. Because the lack of attention is being exploited by a Government who knows that we are looking the other way.
* Ben is a Councillor in Sutton, and the Vice Chair of the Environment & Transport Committee at Sutton Council. He has been a member of the party since the 2015 election, and used to work for the Sutton Liberal Democrats as a volunteer organiser. Ben now works for a charity promoting the greater use of Restorative Justice in the criminal justice system.
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55 Comments
The minimum wage situation is utterly appalling. There can be absolutely no justification for paying anyone between 18 and 25 less than the national minimum wage. It is blatant discrimination.
Young people may earn less due to less experience – but jobs paying the minimum wage you would think wouldn’t require 10 / 20 years of hard graft / technical experience to master. It is an utter disgrace.
I am personally of the belief that the minimum wage should allow you to rent comfortably in a slightly down at heel part of town, and allow you enough to buy a basic flat.
Talking of which – you miss 6. Housing. Mark my words there will be a revolution over this sooner or later. The working class youth who are basically screwed – try buying anywhere on 15 grand a year or try getting a council property – forget it. They will most likely vote in Socialists or a variant of UKIP. Or when the next generation of young doctors and lawyers cannot afford to buy or live in house shares like students, and eventually gain influence and power in society, and then don’t need to resort to populist voting, they can simply change the laws and force redistribution, either through gaining political power or through influence.
This party needs to ditch “centrism” as in establishment Blairite / Osbornite idiocy, and remodel it’s economic positions to that of the Nordic countries. I’d very much like to have the option to vote for a party which will make us more like Norway or Iceland. Perhaps the Brexit question could be dealt with by advocating EFTA and the EEA too, rather than becoming a one issue reverse UKIP.
It has never been easier to start a small business via the internet, the uptick in salary in doing a few years in a proper apprenticeship is massive, the endless opportunities of self promotion via social media is amazing, we live in a country full of endless opportunity that is slightly mugged by a far too intrusive State… yep, you have a small percentage of youth who are clueless, turn to violence and drugs, or just dropping endless kids for something to do and expect the tax-payers to ride to their rescue and then scream blue murder when they don’t have the money to buy a 50 inch TV, etc. Pandering to them is a waste of time.
I agree that tuition fees are not the biggest issue facing younger people, although that £70 a month would be nice to have in my pocket.
I think the biggest issue facing younger people, however, is housing. We simply are not dealing with the supply side issue, and have instead opted to just focus on demand side solutions.
As a university lecturer in my 30s, I chat to current undergraduates about this kind of thing from time to time. That’s why I bring up tuition fees a lot. My current younger students really care about tuition fees, and they still blame the Lib Dems for introducing them, even though they were about 10 or 11 when it all happened. The details are mostly forgotten- all that is remembered is the sense of betrayal, like the Iraq War or the Poll Tax.
The simple fact is that they will have something like £60k of debt when they graduate, whereas I only had £18k of debt (on MORE generous repayment terms — much lower interest rates).
If they do succeed in getting a professional job that pays £40k or so, they are looking at paying £100 (post-tax) a month for 30 years; might as well be forever when you are 22. £100 a month is not nothing; put into an investment account it will build up a decent pot of money.
So they rightly think that trying to argue that the system isn’t really that bad is patronising.
You’re right about the child benefit 2 kid limit. But making a fuss of it stinks of hypocrisy to a lot of people, given the crucial Lib Dem role in the bedroom tax.
So why on earth should they be paid less than other adults for the same work?
To encourage people to hire them.
All things being equal, you’d prefer to hire a 25-year-old than a 19-year-old: they have more skills, they’ll probably be more disciplined, they’ll bring more value to the company (okay, so there are probably individual 22-year-olds who are more mature than individual 27-year-olds, but it’s difficult to figure that out in a short interview, so you’re going to go with the numbers).
So unless there’s some bonus to hiring younger workers — like them being cheaper per hour — no sensible employer will ever hire them, and the unelpoyment rate in that age group will be massive.
So the minimum wage for that age group is lower in order to even the playing field.
Good post, Ben. I hope Vince et al can pick up on all these items and campaign on them with vigour – Richard is right on housing – as well as the dreaded Brexit.
Mr Fowler ought to reflect on whether it’s possible to tackle any of these issues in his ‘country full of endless opportunity that is slightly mugged by a far too intrusive State…’ without the intervention of said intrusive State. It would be nice if said State ‘mugged’ the directors of United Utilities for a bit more tax as a contribution after announcing a £ 180 million dividend payout today two days before introducing a hosepipe ban.
Funny old thing unrestrained rampant ‘market forces’.
I disagree on 5 – just because maintenance loans essentially are in part grants when they get written off anyway.
I think the biggest problem with maintenance loans is that they’re too small. I was able to just about live off mine (very much on a student budget), so long as I was able to earn about £2-3k during the summers.
I was able to do that, with 2 paid research projects and 1 summer in a supermarket. But I was lucky – not everyone can get paid summer projects, and I certainly wouldn’t have been able to afford to do an unpaid one. That means people who can afford not to do paid work over the summer can get a headstart on their careers. Even getting a normal summer job in a supermarket/office/whatever isn’t a given, especially if you live in a non-university town where there are thousands of students in the same boat, coming back looking for short term work.
I’d like to see government funded bursaries available for people doing research over the summer, and some form of incentive (I don’t know what) to encourage employers to take students on on a short term basis over the summer.
To Dev:
Yes, that is the reason. But why should young people, whose living costs are the same as 25+ year olds, be the ones who bare the brunt?
There are many other ways the government could incentivise hiring young people – perhaps a tax rebate based on the number of under 25s / under 21s / under whatever employed.
But why should young people, whose living costs are the same as 25+ year olds, be the ones who bare the brunt?
Because under any other scheme I can think of, like the one you suggest, it’s the taxpayer who bears the brunt? And why should that burden fall on the taxpayer?
(Also I’m not sure their living costs are the same as 25+ year olds: they are likely to live in smaller houses or even in shared accommodation, and are less likely to have families and have the higher living costs that supporting a family brings.)
@Former Dem
“they still blame the Lib Dems for introducing them….
The details are mostly forgotten.”
Yes, piffling little details like the fact that the Lib Dems didn’t introduce them.
Living in a part of the country where there are no tuition fees, this sadly still results in our party getting a pasting for their introduction. I believe they are a problem, but not the number one issue.
Getting a decent job with a good wage is the big issue for many young people.
If they can manage that, (whether they have fees to repay or not) means that minimum pay is not an issue for them. Child poverty or child benefit will not be problem issues, if they have children.
Exams at some stage of life will always be there, but I part of the problem is that our education system is very much geared towards those who are academic, at the expense of many others.
Access to decent housing at a fair cost should be on the list, as it is now out of reach for many, even those on a good income and the “Bank of Mum and Dad” is now a major lender in the UK, but even this is only available to those youngsters from reasonably wealthy families.
One other major issue is “isolation” – in a world where Facebook “friends” and “likes” matter more than the company of real people and where self harm and suicide amongst the young are much more common amongst young unemployed men from lower social classes than those worrying about tuition fees.
If we could develop a society where the young felt included and with an optimistic outlook for the future, including good employment prospects, many of the above issues would be much more easily dealt with.
Easier said than done.
Whether or not tuition fees are a problem for young people, they are a problem for Lib Dems.
They still symbolise the catastrophic loss of trust in the party.
And even if the party can persuade voters that the current system of tuition fees is no bad thing, it still leaves questions about the party’s competence if this new policy, pretty much dropped on the party by its leadership, is so much better than the one chosen by the members before that.
Former Dem – you mentioned that when speaking to undergraduates – “they rightly think that trying to argue that the system isn’t really that bad is patronising”
It might be worth introducing into the discussion with your students the fact that many years ago the basic rate of income tax was much higher (33% and 30%) Now at 20% plus the 9% tuition fees repayment, this is still significantly below the basic rate of tax paid by everyone at the time when we, who were lucky enough to be students, paid no fees and received grants.
I am not so sure a basic rate of tax of 30% or 33% and no fees would be appealing to either students now or voters for any political parties who wanted to introduce it.
If they are fortunate enough to go on and earn high salaries they will avoid the top rate of income tax which was then 83%.
Maybe it “isn’t really that bad” now – for graduates in well paid jobs. Or is that patronising?
Back in the day, all my friends who were students spent all summer working and maybe went on holiday for a couple of weeks. Now all my friends’ children, who are at university, spend all summer travelling and maybe work for a couple of weeks.
Thanks everyone for your interesting comments.
I wanted to reply to @Dav first, because I think there are a few problems with your argument:
1) Lots of minimum wage jobs are things like bar work, cafe work, events, supermarkets etc. I did them myself when I was under 25, and many of my colleagues were in that age group too. I don’t think there is any reason at all why people wouldn’t trust people in their early 20s to do this work just as well as anyone else? What basis do you have for this?
I don’t think that your point about “skills, discipline and value” are true at all. In fact, it is often the other way around – because 22 year olds doing minimum wage jobs are often moving up to more skilled work in the future, whereas older minimum wage workers are less likely to have been able to progress in their careers for whatever reason.
2) Even if what you argue is true (which I don’t accept) – the solution isn’t just to pay young people less. Because £5.90/£7.38 per hour is no where near enough to live on, especially in London. So we either end up with young people in poverty, or with the state topping up their wages to keep them above the poverty line. Neither are a good options for anyone involved.
@ John Barrett
> It might be worth introducing into the discussion with your students the fact that many years ago the basic rate of income tax was much higher (33% and 30%) Now at 20% plus the 9% tuition fees repayment, this is still significantly below the basic rate of tax paid by everyone at the time when we, who were lucky enough to be students, paid no fees and received grants.
Their marginal tax rate (29% including fee repayments) is only slightly below 33%/30%. And if we are going to compare things to the early 80s, there are a number of ways in which students were better off: couldn’t they claim benefits during the long university breaks? Not to mention that housing was vastly cheaper.
(And haven’t national insurance rates gone up a fair bit? Need to check.)
And your remark is a bit disingenous, because I was comparing the situation with when I was an undergraduate, in the early 2000s. Tax rates were nowhere near 33% then! Today’s students unquestionably have it worse than I did then.
> Back in the day, all my friends who were students spent all summer working and maybe went on holiday for a couple of weeks. Now all my friends’ children, who are at university, spend all summer travelling and maybe work for a couple of weeks.
With respect, do you think this might have something more to do with the circles you move in? That is certainly not true of many of my students, who are often working to make up the difference between the living expenses loan and their actual living expenses. (A room in our halls costs basically the entire maintenance loan.)
‘And why should that burden fall on the taxpayer?’
Because that’s the fair way to do it, and means people aren’t discriminated against because if their age.
As for being more likely to live in shared accommodation etc… Have you considered that young people live in shared accommodation because of low income? Looking it the other way, arguing that they don’t need/deserve to be paid the same because they have shared accommodation is absurd.
@Paul Walter – Yes you are right, the Lib Dems did not introduce Tuition Fees, Labour did.
And they introduced Fees after they got elected on a manifesto that said “We will not introduce top-up fees and has legislated against them”.
But the problem for the Lib Dems is that Nick got almost all our MPs to sign a pledge “To vote against any increase in fees in the next parliament and to pressure the government to introduce a fairer alternative.” And we had a PPB on “An end to broken promises.” It was in fact a signature policy showing we had a better way of doing politics. It was an opportunity to prove to the British public that having Lib Dems in national government would be good – as good as many of them knew we were in running local councils, where we did fight for the people and causes we said we would.
And that is why it was so much worse for the Lib Dems than for Labour and why so many Lib Dems’ refusal to countenance for five long years that our leaders had totally messed it up, led to people not only stopping voting for us but ultimately stopping even considering us as an option.
@Richard Easter “Young people may earn less due to less experience – but jobs paying the minimum wage you would think wouldn’t require 10 / 20 years of hard graft / technical experience to master.”
Such a casual dismissal of the value of the skills and experience required for a job which pays the minimum wage does not reflect well on Lib Dems.
@Ben Andrew “because 22 year olds doing minimum wage jobs are often moving up to more skilled work in the future, whereas older minimum wage workers are less likely to have been able to progress in their careers for whatever reason.”
Oh dear.
As a white, male, middle-aged, middle-class graduate with a profession, I suppose I should feel perfectly at home in the Lib Dems, but I find the attitude implied by some of these comments a little discomfiting.
Hi @Peter – I didn’t mean any offence by that comment, apologies if it made you uneasy.
I was only trying to rebut the idea that younger workers would necessarily be of less value, with a potential counter explanation. I think all workers regardless of age should be treating with the same respect, and given the same minimum wage.
Peter Watson – perhaps then these jobs should be paid rather more if they do require all the years of training and experience which apparently we are told warrants lower wages for younger people? To me, minimum wage work should be essentially entry level work. Someone with years of experience should not be paid so lowly.
If people are required to build up years of training and experience to receive the minimum wage for all their hard work, then it says something very bad about the job market and / or some employers in my book. Perhaps this is why Labour are doing rather better in the polls amongst the low waged…
While not all minimum wage jobs are unskilled many are. Paradoxical older people in warehouse work are getting paid more than under 25’s while the younger workers are probably more efficient given the physical nature of the job. The paying younger people less is discrimination and should end.
It is simply not true that jobs offering minimum pay are low skill, for the inexperienced or under-qualified. There are areas such as publishing that are endemically low paid. The artificial age distinction can mean that those who are better qualified get paid less.
The idea that with a bit of experience it is easy to move on to well paid jobs is similarly ill-founded.
David,
The problem is the Lib Dems claimed to be different and better and then under Clegg provided they were not. Until that hard truth is acknowledged and trust rewon the Lib Dems will be sailing against the wind. On the plus side Brexit is going so badly anything that occourred before will look like a golden age ( every cloud etc). We just have to regain our compass and avoid paying to much attention to the deluded Brexiteers cries to find our inner Scrooge.
Paradoxical older people in warehouse work are getting paid more than under 25’s while the younger workers are probably more efficient given the physical nature of the job
Surely if that were true, some warehouse company would offer over-25s minimum wage to under-25s, recruit all the under-25s, undercut their competitors because of their increased productivity more than making up for the increased expense, and so all the others would be forced to up their pay for younger workers as well?
The minimum wage is after all a minimum, not a maximum. There is nothing stopping employers from offering more than the minimum wage, and they will have to do so if the supply and demand in the job market warrants it.
OK what about housing?
I’m ashamed of many of my own generation (55+) who have not just been content with doing well out of the housing market for themselves. They’ve used their good fortune to further leverage an advantage by using their existing property as collateral for the Buy to Let market and helped push prices out of the reach of younger people.
At the same time they are raking in on on both rents and capital gains.
If I used what might be the correct words to describe these people I suspect my comment wouldn’t be allowed! Roll on a collapse in property prices! It won’t affect those of us who just have a single home, but it will hurt the buy-to-letters.
The more painful the better!
“Roll on a collapse in property prices! It won’t affect those of us who just have a single home, but it will hurt the buy-to-letters.
The more painful the better!”
Unfortunately that’s just not true. A large collapse in house prices will hurt most of all those who have recently stretched themselves to buy houses with a relatively small deposit (ie, the relatively young), who would end up trapped in negative equity.
Buy to letters would get hurt too, but anyone who owns a substantial amount of equity in a house would be unhurt.
@Dav the trouble with these kind of libertarian thought experiments is that they are useful for teaching economics 101, but too simplistic. In this case, what you say would only apply if (i) the extra efficiency of the younger workers oughtweighs the cost of paying them the higher minimum wage, (ii) they were not already seeking to maximise the number of under-25s they employ, for example by recruiting near schools, and most importantly (iii) there actually are competing warehouses in the area who can engage in the kind of labour market you suggest. In lots of places including my hometown where warehouse work is common, there are only one or two very large employers.
“Surely if that were true, some warehouse company would offer over-25s minimum wage to under-25s, recruit all the under-25s, undercut their competitors because of their increased productivity more than making up for the increased expense, and so all the others would be forced to up their pay for younger workers as well?
The minimum wage is after all a minimum, not a maximum. There is nothing stopping employers from offering more than the minimum wage, and they will have to do so if the supply and demand in the job market warrants it.”
On the general question of wage levels, there needs to be more appreciation that they are more than just a cost to employers. Employees are also customers. So the level of wages determines their purchasing power.
If workers are underpaid and employers aren’t investing their profits back, with more spending, there isn’t enough demand in the economy to shift everything that is produced.
So, sure, we can replace a worker with a robot on a car production line but the robot isn’t ever going to be a customer in a car showroom.
@ Former Dem,
Yes it is a good point about those who have recently stretched themselves. I should have included them.
There’s no simple fix to this problem though. To help the young we need housing to be less expensive and more affordable. So either prices stay high or they don’t.
Either way someone will be adversely affected.
@Peter Martin
The recommended fix is to try and keep prices stable for a decade (easier said than done), and allow inflation to make housing a bit more affordable.
Doesn’t give you the vengeance you seek against BTL landlords, though!
There are areas such as publishing that are endemically low paid. The artificial age distinction can mean that those who are better qualified get paid less.
Then why doesn’t any company outbid its rivals by offering the better-qualified applicants the higher minimum wage, snapping them up, and thereby outdoing their competitors?
The only reason I can think of is that better qualifications don’t translate into significantly more value for the employer, in which case why should they be paid more?
In this case, what you say would only apply if (i) the extra efficiency of the younger workers oughtweighs the cost of paying them the higher minimum wage, (ii) they were not already seeking to maximise the number of under-25s they employ, for example by recruiting near schools, and most importantly (iii) there actually are competing warehouses in the area who can engage in the kind of labour market you suggest
Right, but if not (i) then why should they get a higher minimum wage, if they are not worth more to the employers? Employers aren’t charities, the point of paying people is to get value from them, if there’ s no extra value why should they pay extra money?
If not (ii) then surely that proves that there is ample supply of under-25-year-olds to meet demand, in which case, again, there’s surely no reason for the wages to go up? If the market clears then the price must be correct. That’s simple supply and demand.
If not (iii) then that might indeed be an issue, but if there aren’t, and there’s an untapped market, you’d expect one of the warehouse chains to notice and open up a branch in the area so they can undercut the existing one, so that should sort itself out, albeit on a longer timescale.
@Dav, the points you make are not strictly speaking incorrect, but it seems to me that your arguments commit you to opposition to any minimum wage (which by definition requires employers to pay more than what the market requires). It would be better if you were just upfront about that.
TL;DR I think you’re a libertarian, not a liberal.
I pick up on Richard Easter’s point on housing, from some of the comments, I think many equate ‘housing’ to houses for sale ie. mortgage etc. For the under-25’s, I suggest a wider definition that includes ‘accomodation’ is necessary.
Dav,
Employers get away with paying as little as possible. The minimum wage in many warehouse jobs is actually the maximum and yes they try to employ the cheapest labour. To be honest if slavery was legal they’d probably invest in slaves, humanitarians they are not. Now as a libertarian right winger ( which you are) that might sound a perfect world but it isn’t for the people who work there. The reason trade unions and revolution stalked through the Victorian and Edwardian eras was simple the people didn’t like your libertarian world and they won’t like it any better this time.
Employers aren’t charities even if they themselves are charities!
A local charity has run a young apprenticeship scheme for several years now, in obtaining funding for it, funders expect those on the scheme to be on minimum wage…
it seems to me that your arguments commit you to opposition to any minimum wage
I don’t think they require me to oppose any minimum wage, but they very definitely require any such proposals to be looked at sceptically, as an interference in the market which can only be justified if there are clear aims which cannot be achieved in any other way, which I think is fair enough.
With regards specifically to the point at issue, I would have thought that encouraging employers to employ young people (by making them cost less per hour) would be seen as a good thing, not a bad one, as it will help young people build up an employment history which will make them more attractive bets to employ in the future.
Basically having a lower minimum wage for young people gives young people an unfair advantage over those aged 25+ in the jobs market. Is that not a good thing for young people? Why are people seeing it as a bad thing?
After all, the alternative, if the minimum wages were the same, isn’t ‘young people earning more’ it’s ‘fewer young people employed’, which hardly seems that great for young people.
We need to give young people the kind of education, in its broadest sense, that will really equip them for the challenges of the future, whether in or out of the EU. That means we should get away from the idea that only a university degree is the way forward.
By all means pay them a fair wage/salary; but they should not expect to be earning anywhere near the same as more experienced colleagues from Day One. I see no reason why school leavers who initially fail to find employment should expect to receive benefits with no strings attached. Offering work experience is a good way of inculcating good working practices, for example. Call it exploitation if you wish. I call it getting your foot on the first (albeit lowly) rung of the employment ladder.
As far as housing is concerned, while we are wedded to the concept of the ‘property owning democracy’ and don’t build enough homes either to buy or to rent, we will get nowhere. If we ever get near the required number we had better get used to the idea that owning any property is not, and never should be again, a licence to print money (howls of protest from the baby boomers).
@Dav – I think you are really misrepresenting the market for “minimum wage jobs”.
Most of these jobs are not highly skilled work, and don’t require expertise or a stringent job selection process. They are jobs with high turnover and without high competition per place. None of the minimum wage jobs I did ever checked my CV, it was pretty much just “when can you start”.
Unemployment is very low at the moment, but working poverty is high. Your concern should not be about, “how do we get Under 25s any sort of job” – even if we need to pay them a hopeless wage. It should be, “how do we help young people to earn enough to get by”?
So when you ask “why are people seeing it as a bad thing that employers can pay under 25s less than everyone else?” It’s because £7.38 and £5.90 per hour are not enough to make ends meet. These wages push people further into poverty.
Former Dem: The Liberal Democrats did not start the Iraq war, they were the only nationwide party who opposed it. They did not introduce the poll tax either. Facts seem to be in short supply amongst our opponents. Perhaps they cannot find anything genuinely bad to complain about.
@Dav I also wholly reject your premise that employers for these jobs would rather hire an over-25 than an Under-25. It’s completely baseless.
nvelope – Actually, I think Former Dem was using Poll Tax and Iraq as examples of how all three main parties (as were up to 2010) messed up and betrayed people – not just the Lib Dems.
I agree with the comments of others. Tuition fees were a slap across the face (there’s no money left and a huge deficit…triple locked pensions all round!)
Housing however is less a slap to the face more multiple boots to the crotch.
Housing is the matter that needs to be addressed here.
Richard Easter – ‘Or when the next generation of young doctors and lawyers cannot afford to buy or live in house shares like students.’
It’s been like that for some years! That’s the problem. It’s not just the poor now, people in good jobs on decent money are still on the tender mercy of those champions of social justice the BTL landlords.
As long as the political class is wedded to the idea that it is an absolute privilige to hand over half your take-home we’ll never get anywhere.
We need serious building and serious crimps on BTL. And before anyone says it – start with the field at the back of my house.
Young people have been having a hard time since the Tory/lib dem coalition so think Lib Dems should help address issues facing those young 7 years ago also. Life hasn’t suddenly jumped forward into being much better just because we reached 25.
Little Jackie Paper,
“As long as the political class is wedded to the idea that it is an absolute privilege to hand over half your take-home we’ll never get anywhere.” This is the bottom line, but it is not BTL Landlords that are the problem. These are mostly individuals trying to make some provision for their retirement without a private pension to fall back on.
I read a draft paper over the weekend comparing the UK and German housing sectors. Germany simply does not have the problems we do despite a larger population and a massive influx of immigrants.
The principal problem lies with land and our economic policies. Banks create money to lend to each other for the purchase of land at ever inflated values. So even as interest rates go down, land values and hence interest costs as a proportion of income go up. it is not BTL landlords that benefit so much as the financial sector over the lifetime of a mortgage.
The author of the paper makes the following recommendations:
A transition to Land Value Tax for both business rates and council tax.
Reform of the 1961 Land Compensation Act and use of community land auctions to facilitate land release.
A revision of fiscal rules around public sector borrowing such that the measure of the ratio of gross debt to GDP is replaced by a net debt measure, which nets off the marketable land assets owned by the government;
Financial incentives to encourage local government issue of planning consents and a far greater public or social sector housebuilding programme to provide affordable homes.
Hello, so pleased to see you standing up for yourselves.
Housing will be your biggest issue. When you want a home, and maybe later a family, you are going to find life difficult. Until the buy to let is controlled, and private renting is less of a money making concern, you are going to find things difficult.
Yes, poverty is on the up for children, Greggs run breakfast clubs, you can donate if you pop in. If, I remember rightly, 25 pence buys one breakfast. The more funding there is, the more children eat breakfast.
Depression, cyber bullying and suicides, you have much to do.
I’m not being political, I’m being supportive on a subject I find totally shocking.
I wish you lots of luck, it’s a very important subject.
Re the various comments on the minimum wage for under 25s. I find, having worked in the hospitality trade and now employing people to work in it, that there is usually a bigger problem with reliability of turning up for work in the 18-21 age group. There is a cost of having a high number of people in this age group and employers, if they had to pay everybody the same, would probably often go for older employees for this reason alone. I do agree that 25 feels too old for the full minimum wage to kick in and probably should be lowered by a couple of years.
One thing we can do – and it is I appreciate a small gesture is to use businesses that pay their young workers more – and indeed their workforce as a whole a living wage.
My first job I was paid the equivalent at today prices taking into account inflation – £2.75 an hour and of course I had to get up before I went to bed – cue Monty Python joke :)!
Actually doing away with the triple lock etc. actually harms young people more than current pensioners – as they will be harmed more by the state pension not going up as much. I calculated that the Tory pension changes at the last election would cost non-pensioners some £10,000 if they had to find the money to make up for the pension shortfall over their lifetime.
It is actually not all gloom and doom for youngsters – they actually have a longer, better and healthier life to look forward to – they are smoking and drinking less.
Housing – yes is a problem. The solution would be as they say not starting from here!
The cost of housing is a severe barrier to young people making the correct life decisions. Whether renting or saving for a mortgage, many find they are postponing having children because of the cost. Many maternity benefits are just not sufficient to maintain the home.
This article http://www.publicsectorexecutive.com/Public-Sector-News/lessons-from-germany-to-fix-the-uks-housing-crisiscontrasts the more stable German Housing market with the UK. Key points are:
1. Germany relies far less on the market to solve its housing supply problems. For example, its local authorities have powers to declare “urban development measures” where sites are not being developed – a common problem in the UK. They assemble land (paying owners what it is worth in its current state), arrange housing construction, and use the difference in money paid, and money received, to finance infrastructure.
2. Whereas in England the small and medium-sized (SME) building sector imploded in the 1980s and never recovered, in Germany there is far greater diversity, with most houses built by locally or regionally-based firms, and complemented by housing associations and public housing companies. The large upfront financial investment in preparing planning applications with uncertain outcomes has long been a complaint of UK SME builders, presenting a huge barrier to entry. German planning processes offer greater certainty to would-be housebuilders earlier on. When land is earmarked for development, provided particular tests are met, the final planning permission is likely to be granted. This brings benefits for communities, too, by allowing early consultation and meaningful input into land use allocation.
3. Although homeownership remains an aspiration for many Germans (especially in rural areas), the fixation with this is less apparent than in England, and public support for rented housing is stronger. This is not unrelated to the fact that renting in Germany is, for established tenants, characterised by stable rents and security of tenure.
4. Germany has a more conservative mortgage market than the UK, which keeps a lid on house price booms, reduces exposure to financial crises, and means that those looking for a home are more likely to see renting as a desirable alternative to buying.
Former Dem – You are correct to say that my comments were based on the circles I now move in and an earlier period of time when I experienced those rates of tax, but also on the fact that I live north of the border where there are no tuition fees now.
However it is worth mentioning that during those times a much smaller percentage of school leavers went to university and benefited from those grants and non payment of fees compared to the present day, so I agree that the issue is more complicated than can be detailed in a few short comments.
Back then, most of the people, In the circles I moved in then, did not go to university and we’re working and paying those rates of tax, while the few, like me, did not and were funded by them. I am not sure whether a return to those days is possible with the much higher percentage of school leavers who now wish to go to university. I was not being disingenuous, I was only stating what it was like at the time.
I could have added that there was also a degree of resentment then particularly from young low paid workers who wondered why they were paying for us to then go on and earn more in higher paid jobs than them.
On point 3 – Child Benefit has not been restricted for 3+ children – it remains at £20.70 for the first and £13.70 for each subsequent child. For higher earners (over £50k/£80k?) I think there is an offset taper in income tax which does remove it.
I think you are referring to Child Tax Credit, which has been stopped for children born since April 2017 for the third and subsequent child. As someone who works as a Welfare Advisor in the social housing sector, I must say that a pro-rata increase in payments for children does not make sense. After all, you only heat the house once, pay tax once, meals have economies of scale etc. Those with 4 children complain about not having enough for school trips, those with one child worry about providing food and heat. Sadly, giving money to parents does not always filter down to the children, going on upgraded mobile phones, TV subscriptions, cigarettes etc. There are of course a lot of parents who do put their children first. The most progressive thing we could do for those on low incomes is to make working pay properly. The supports in place for low incomes often fall off quicker than the money earned (eg free school meals), making it a rational decision to avoid working with all the isolation and dependency culture that creates. The best thing the LDs did in government was to increase the income tax threshold so that low paid workers kept more of their money. Perhaps a scheme that quantifies ALL benefits and guarantee that for every £1 earned, the worker would be at least 50p better off, would be the biggest encouragement for many in the welfare system for a long time. While tempting to throw cash at the poorest in society – it simply creates a new poorest, ironically those on low wages and variable hours who make themselves absolutely poorer by trying to work their way out of poverty.
@Adrian Fullam “For higher earners (over £50k/£80k?) I think there is an offset taper in income tax which does remove it.”
And that is removing the entire child benefit, not just for 3+ children (tax charge starts at £50k and cancels out child benefit at £60k). A controversial aspect of that was that it was based on one parent’s income, so two parents earning just below the threshold could keep their child benefit despite having a much higher joint income than a family with one earner.
@Adrian Fullam
There is the family element to child credit which you get whether you have 1 child or more which takes into account that you only heat the house once etc. (although it is likely to be a bigger house if you have more children). I would hazard most costs are on a per child basis.
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A key problem is that someone moving to work full time on the minimum wage may be only be better off by a £1 an hour of the £7.83 they earn – before the extra costs of working – getting to work, work clothes etc. etc.. It is extremely dependent on individual circumstances. But firstly they lose council tax support so may well be paying an extra £1k-£1.5k there. Most housing benefit will go which could easily be worth £500-£1k a month. They are paying national insurance and so on.
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At the £40k-£60k bracket and £40k-£50k in particular the tax system is a complete mess – with you moving up to 40% marginal tax at one level, but down from 13.8% NI to 2% at another. There is the child benefit issue but you reduce your income for this by putting more into pension etc. and it is likely that you will be able to take greater advantage of things like ISAs.