The budget presented by the Chancellor on 15 March gives little reassurance to young people that the government understands their struggles. Instead of addressing issues such as housing, low pay, crumbling public services and a looming ecological breakdown, the major announcements concerned tax reliefs for wealthier and older people and for corporations. Alec Haglund, IF Researcher, discusses what was said and what was left unsaid in the budget.
The dog that didn’t bark
This budget presented very little for young people to be excited about. Although there were some positive announcements, such as the welcome help in reducing childcare costs, some of the most important policy areas did not even receive a mention.
Although real wages have been falling for years and are expected to fall another 5.7% over the next two years, there was no announcement of a wage increase for public sector workers such as teachers and nurses, nor a much needed increase in the National Living Wage. Across generations we all depend on our public services, but they cannot function properly if they do not receive adequate funding.
Even though we are living through a housing crisis, there was not a single mention of any policies aimed at overcoming this crisis. Every day that the government avoids tackling the problem of housing, more and more people, many of whom are young, will suffer from homelessness, unaffordable rents, and substandard living conditions.
The short discussion on climate policies left much to be desired. In the context of a cost-of-living crisis and a climate crisis, this budget would have been an excellent opportunity to announce a programme of mass insulation and energy efficiency improvements of the housing stock. This would help people across generations who are struggling to pay energy bills and improve our chances of reaching Net-zero targets.
We need urgent action to end low pay, solve the housing crisis, boost green investment, and overcome the cost-of-living crisis, but this budget only offered more of the same.
More unfair taxation policies
In a budget that can be characterised more by what was left unsaid rather than what was said, a major policy was to eliminate the lifetime tax-free pension saving allowance. This extraordinary announcement will cost billions of pounds in lost tax revenue, only to subsidise the very wealthiest of individuals, which largely comprises older people in more senior position with higher wages. The only people who benefit from this policy are those who already can afford to put aside £60,000 per year towards a pension or who already have a pension pot worth over one million pounds. Businesses received their fair share of tax cuts as well, amounting to lost tax revenues of £9bn in business tax reliefs.
Instead of aiming to push older and wealthier people back to work by tax-relief giveaways, funding the NHS properly would have much better results for the economy as a whole. Many who have left the workforce have done so due to long-term illnesses, and an unhealthy population leads to an unproductive or absent workforce, which can only be overcome by solving the crisis in the NHS through proper funding and pay increases.
It would have helped young people to raise the tax-free earning threshold in line with inflation. However, since such a policy was not announced, they will instead see a squeeze on their take-home pay due to inflation.
The (lack of) climate policies
The announcements on climate policy left much to be desired. Indeed, the few announcements that were related to environmental policy can be seen as more damaging than helpful.
Although it is sensible to explore all avenues to tackling ecological breakdown, the spending focus on carbon capture and storage is evidence of the lack of commitment to any meaningful climate programme. Carbon capture and storage is largely unproven, and its potential is often vastly exaggerated, as those who promote it tend to use it as an excuse to continue with business as usual instead of undertaking the structural changes needed for a zero-carbon economy.
Furthermore, the reclassification of nuclear energy as an environmentally sustainable source is contentious at best, given the massive environmental risks of nuclear power and the problem of storing radioactive waste. Although nuclear power is a low carbon form of energy production, its usage implies that future generations will have to live with the constant risk of maintaining the secure storage and handling of its toxic waste for thousands of years. Energy sources such as solar and wind are much more environmentally friendly and often more cost-effective. Many had hoped that the bans on onshore wind power would be announced, but such hopes proved to be in vain.
Radical actions are required but nowhere to be seen
The budget represents a continuation of austerity by stealth. Young people would like to see investment into public services, affordable housing, and renewable energy, but instead the only reference to future generations in the budget speech was to excuse the lack of investment and the continuation of austerity by not creating more public debt.
Not burdening future generations with debt is an honourable goal. However, it would be much more economically sensible to tax those with the broadest shoulders to deliver on such a goal instead of letting our public services crumble while pushing young and low- and middle-income earners into higher tax brackets through inflation.
Many young people have lived their whole life through a constant state of crises. The great recession, falling real wages, an underfunded NHS, the lack of affordable housing and the ever-growing threat of ecological breakdown have been constantly present in the lives of young people. All of these problems can be solved through policy, but that requires commitment to radical action across many fronts.
One can only hope that soon there will be a budget speech when future generations are referenced not to justify austerity by stealth, but instead to undertake radical programmes of building affordable housing across the country, ending low pay, and tackling the climate crisis.
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