‘Are NICs the Tories tuition fees moment?’, I read on my Twitter feed following the spring 2017 budget. The comparison felt like another example of older generations not understanding young people’s lives.
Spreadsheet Phil’s attempt at an up-beat but low-key budget does indeed seem to have backfired. Just take a look at Thursday’s newspaper front covers. Remarkable, really, that in the face of no opposition the Conservative leadership have managed to create their own.
Hammond remained bullish in his television rounds on Thursday morning, confident of his plan to increase national insurance contributions (NICs) for the self-employed. NICs can’t be included in the vote on the budget package, so parliament will vote separately on one NIC bill. By combining an NIC saving for the lower earning self-employed with the NIC increase for higher earners, Hammond is confident of passing the legislation, but Theresa May has said a vote will be postponed until the autumn.
Hammond’s big problem? The 2015 Conservative manifesto made a commitment to not raising NICs – no ifs, no buts. Whether a Philip Hammond auto-tuned apology makes its way to YouTube in the near future remains to be seen. Already, though, are the comparisons to the Liberal Democrats disastrous broken promise on tuition fees during the coalition.
A disastrous broken promise not just for Liberal Democrat PR, but for young people. Young people who Wednesday’s budget did nothing for.
The proposed increases for the self-employed who earn more than £16,250 will mean modest additional annual contributions of roughly a hundred pounds, for middle income earners. Roughly a hundred pounds is what a many graduates, for example earning one of the big fours entry level salaries, repays in student debt ever month. A figure which barely covers the interest that accrues each month. Yet again, small changes effecting older generations receive outraged coverage while the impact of recent changes to young people’s circumstances are poorly understood.
This was another budget with no ‘up-beat’ news for young people, but it could have been. The government’s own White Paper last month described the housing market as ‘broken’, so where were the Chancellor’s assurances to millennials about getting on the property ladder?
Research by the Resolution Foundation shows that millennials’ earnings are no higher than the earnings of those the same age 15 years before. The OBR’s growth figures upward revision may mean the possibility of a millennial pay rise, but that’s set against upwardly revised inflation. Only government intervention, not just market forces, can provide young people the security and prosperity enjoyed by previous generations.
Theresa May talks of a new intergenerational contract. She’s right to, it’s desperately needed. But we’ll have to hold our breath to see what her government has to offer young people. Let’s hope it’s worth the wait.
Fraser Burt, Research Executive
Email Fraser: Fraser@mailpbconsulting.com
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