This should have been a golden opportunity for the Chancellor to ‘level up’ the country, not just geographically but demographically too. But the frightening potential of Coronavirus is likely to dominate the conversation today – and rightly so. Iona comments on what today’s Budget (and indeed its Corona provisions) could mean for young people…
Young people should be more attracted to Conservatism as they get older and acquire assets like their own home. But millennials are feeling disenchanted about their prospects and the onset of a public health emergency is unlikely to help their situation (at least in the short-to-medium term). This current government faces a serious disconnect with a whole generation unless it acts fast.
Wages had been set to rise for young people before COVID-19 came along. Obviously, we need reassurances that more workers can access sick pay from day one and have proper breathing space from their debts if they can’t work due to self-isolation. RBS/Natwest led the way this week in confirming it would allow customers to defer mortgage and loan repayments if they were affected by coronavirus – though it should have also waived all interest payments. Other banks and building societies must surely follow suit, and Rishi Sunak needs to confirm that no borrower (whatever age) will not be penalised if their earnings are hit by the virus.
And what about the self-employed? Younger people are more likely to work precarious short-term contracts and are faced with an appalling decision to either go to work and risk public health or stay at home and lose vital pay. Mr Sunak needs to confirm there will be a fund beyond Universal Credit for freelancers to access so they can stay afloat.
But longer term, the Budget needs to outline radical reforms to the housing market, particularly in relation to planning and development, so we can deliver the right homes in the right areas at the right prices. First Homes should be the start of a blueprint to transform Britain’s housing market, and hopefully won’t be more of the same.
We need a coherent plan for weaning the housing market off the Help to Buy equity loan scheme, which has been a disaster (pushing up prices for shoddy homes and tipping desperate young buyers into negative equity and unnecessary debt).
We also need to consider extending free travel to young workers – surely we’re just as (if not more) vulnerable than many relatively well-off pensioners who enjoy free bus passes?
We need to leave pensions alone (they affect young people too) but also consider reducing the withdrawal penalty on the Lifetime Isa to 20%. It is unduly harsh and detracts from the product’s many advantages.
Finally, we need to revisit previous commitments to beef up financial education and not just view it in the context of maths. Money management is becoming an essential life skill in our complex modern economy, and our generation has paid a high personal price for its absence from the wider curriculum.
Sadly, I think the wait for bold reforms will go on long after today’s Budget – and partly for good reason. We need to see how the coronavirus shakes out before we commit public money to projects away from hospitals, small businesses and vulnerable people who may slip through the net. On the positive side, we may see in the longer term a renewed interest in long-term saving and investing to prevent people caught out by ‘Black Swan’ events again.