The BBC reports that Nick Clegg has renewed his call for the government’s cut on VAT – from 17.5% to 15% – to be scrapped. He suggests instead thousands of new apprenticeships:
In an interview with the BBC’s Chris Brierley, he said youth unemployment should be the government’s “top priority”.
He added: “We’re proposing to give young people the hope that they can stay active, stay in study, stay in work, stay in training, rather than find themselves put on a course towards long-term unemployment.
“This recession is, in my view, creating the real risk of a jobless generation and that’s an absolute tragedy, because the people who deserve least to be punished because of the problems of this recession are the young.”
Mr Clegg said the whole cost of the scheme would be the same as “just two days” of the VAT cut.
The scheme is part of the Liberal Democrats’ new “Lifeboat for a Lost Generation” policy document, which is detailed on the party’s website. The paper proposes:
Funding 10,000 more university places and 50,000 more College-based Foundation Degree places this year.
Introducing a new “Paid Internship” scheme where young people would be able to work for up to 3 months without cost to their employer, while being paid a weekly training allowance of £55. The scheme would allow up to 200,000 young people from less well-off backgrounds to gain valuable experience to improve their skills and enhance their CVs.
Creating a “Green Taskforce” of over 20,000 young people to improve the energy efficiency of millions of homes and public buildings in Britain and make lasting improvements to Britain’s transport infrastructure.
And you can read the policy paper in full here.
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10 Comments
Absolutely the right call. The devastating effect of ecnonomic recession on the lives of young people cannot be underestimated, and the wasteful non-impact of the VAT cut cannot be overstated. Nick really has hit the nail on the head here – the recession is not a bad thing because house or share prices went down (they’ll recover, some say already are), but because in order to afford the stabilisation of the financial meltdown, public services are going to be cut (especially under Tory govt) and taxpayers’ funds are being channelled into corporate bailouts whilst youngsters risk becoming another ‘wasted generation.’
Great stuff Nick!
What’s the difference between Derren Brown & Gordon Brown? One predicts all the numbers right, whereas the other…
A massively serious problem and some good ideas, but …. it still suffers from the traditional British approach of being top-down.
Thus under the heading “Liberal Democrat Policies” the paper promises that, “We will meet these objectives by:” followed by 4 iniatiatives that a putative LD government would adopt. The perspective is what WE (i.e. the government) might do to get these poor people gainfully employed or at least in training. While undoubtedly well motivated (so were Labour’s efforts!) it is not clear how much of these good intentions would survive being refracted through the middle and lower levels of government bureaucracy. By the time they reach the coal face they will be poorly focussed, not well understood and of limited value. It’s why top-down and centralised systems just don’t work very well.
What about seeing it from the individuals perspective? Each young person (and his/her parents, relations, neighbours etc) ought to have a clear understanding of what he/she can do to improve their life chances. That means quality courses (not ones with target numbers attached as they will inevitably be devalued to hit the target), employers incentivised to recruit promising youngsters (but paid only when they achieve externally validated and transferrable qualifications) and so on.
The implication is, of course, a carefully designed system that puts the initiative in the young person’s hands. I accept this is a tall order in an emergency but it’s the only workable solution in the long term.
Effective vocational training in Britain has always been done this way but naturally only for professional vocations (think medicine and accountancy). Vocational training for the ‘great unwashed’ has always been blithly ignored by the British establishment.
“Each young person … ought to have a clear understanding of what he/she can do to improve their life chances. That means quality courses (not ones with target numbers attached..)”
Does it? I’ll bet that many young people with a clear idea of their own best interests will choose a Noddy course which hits a meaningless target. Because the employers will have told them that hitting that target is the way to land a job.
LIberal Eye is right – what are we doing suggesting a central-gov top down idea at the expense of the most simple idea of all – taxing less during a downturn, keeping consumer spending high while the irrational save-urge is gripping people too hard? I actually like the VAT cut (more details on ) – it has been working, believe it or not. This looks gimmicky, I’m afraid.
This Party should not be pushing to raise regressive taxation like VAT. It’s the very last thing those struggling to keep their heads above water need at the moment. While Labour’s 2.5% cut was a drop in the ocean of what was (and still is) required to refloat the economy, at least it was a small stroke in the right direction.
We should leave VAT at 15% and take an axe to (or even scrap) Employers’ NICs. This is the best way to save jobs, build GDP, minimise welfare costs and give young people a genuine opportunity for real work. We do NOT need to repackage centrally imposed YOP schemes.
And we should pay for it by switching to taxes on the unearned economic rent that government continues to allow bankers and the asset rich to plunder from the poor.
100 years ago, this was fundamental to Liberalism – and won mass support. Where on earth are we now?
Andrew, that would be nice. But we have to find some £100bn to close the fiscal gap. VAT will have to rise, whether you like it or not. And while it would also be nice to imagine that the whole lot can come from the rich, it is worth remembering that the top 10% earn about £230bn or so, and already pay a fair amount of that in tax. There simply isn’t enough.
Nothing HAS to happen Giles – least of all re-imposing regressive taxation. And you confuse income with wealth. Our whole fiscal focus should now be shifting from wealth production to wealth appropriation – from the value added by work to the value removed by privilege. A mere 5% levy on the wholly unearned returns that are accrued by land ownership in the UK would recover around £10bn per annum for the exchequer. That should be our starting point, not adding to the transactional costs of trade and putting jobs at further risk in the process. The one third of Britons who don’t own a slice of real estate – predominantly the young – should not be penalised at the checkout or in the workplace (assuming they manage to hang on to their jobs) by the asset rich majority. And certainly not by a party espousing Liberalism.
I’d be curious to know why you think nothing has to happen – at some point, our creditors have to be satisfied, and it is a general confidence that UK governments generally face up to this that has stopped the country’s debt costs spiralling.
On VAT, I think it is regressive too, but not as much as people tend to think – the major regressive effect comes from it taking 15% of the lowest decile’s income, as opposed to 10% of the next – and that lowest decile gets 66% of its income from benefits, and so can have its relative income manipulated in other ways.
I quite agree with your starting point – read CentreForum’s “A balancing act” for fuller statement of views – but wealth is certainly undertaxed, sure; however, the trouble with the lightness of the fiscal debate so far is that people seem to think that by posturing about their starting points, they have got somewhere. No – cancelling Trident, ID cards, tax credit tapers, every damned thing you don’t like, increasing council tax on the wealthy by 50%, lowering the 50p band – all add up to hardly anything, and leave the tough choices out. If we talked like a party in power being honest with the voters, we would have to put a whole lot more in than that. And it will probably include VAT at 20%, once all the worse alternatives are properly examined – including shutting schools and hospitals.
Plus all this needs to be made politically acceptable. You may claim that it is unfair that the young don’t have wealth. Many of the old – who happen to vote – may think that this is the way it should be, and wonder why they had to earn their wealth. Explaining to them that they were just lucky won’t win many votes.
I hope that being the “party espousing liberalism” does not stop us being the “party that espouses realism” at the same time – you can imagine how outsiders find it easy to attack a party that doesn’t connnect with actual fiscal and political realities.
I’m not so convinced about the message coming across here, and think that perhaps an amendment may be in order.
There is a big problem with mainstream politicians in that they are not generally talking economics when they talk about ‘fixing’ the economy. They confuse making cars with investment.
The VAT cut was an awful idea and should either be reversed or the revenue raised from a more useful tax on consumption, such as on energy (with appropriate fuel poverty safeguards).
Where the message is right is that there’s a huge amount of talent and potential going to waste right now. Why pay them to sit on their couch doing nothing when they could be doing something useful. The thing to get them working on, though, is investment. We need massive investment to balance up the UKs trade deficit, especially in the area of energy, forestry and food. We import food, gas, coal, electricity (from France), oil and wood in massive quantities.
Those graduates could be put to use in creating urban intensive farms, assessing energy efficiency improvements, and in working in select industries on specific research to benefit the country as a whole. A generalised scheme could be as bad as doing nothing. It should be focused on our long term problems. It should target social, economic and environmental sustainability.
Anyone up for putting their names on an amendment (Lab and Tory readers: the idea of democracy at party conferences may be a little alien to you, but do keep tuning in 😉