Alex Boscott discusses the effects of the Chancellor’s new budget on young people across the UK
When Theresa May stated that ‘the end is in sight’ regarding austerity at this year’s Conservative conference in Birmingham, a vast sense of optimism brewed within the public sector that an eight year campaign of cuts and frozen wages could finally be coming to a welcomed end. It is with these rose-tinted glasses the public sector awaited the Chancellor’s budget announcement on Monday – a change from the regular Wednesday budget statements however, as it would’ve been Halloween, Hammond can be forgiven for this change of schedule.
Numerous handouts were announced by the Chancellor in a budget out-of-character for recent Tory governments. The personal allowance threshold, previously standing at £11,850, will rise to £12,500 in April which will be seen as a much needed relief for those working part-time or in low-paid professions – benefiting those earning the national minimum wage or working part-time. Young people, in particular, will benefit by earning more before paying the required 20% income tax rate – allowing more money to be allocated for ever rising costs such as rent in a market which is becoming ever more inaccessible. Far too many young people are earning minimum wage due to the allowed age discrimination regarding hourly wage, an injustice that this proposal most certainly helps.
However, Mr Hammond has also provided much needed relief for Britain’s young people in regards to the current housing crisis preventing some from getting on the property ladder. He announced that the government will be extending stamp duty relief ‘to all first time buyers of shared ownership properties valued up to £500k’ but admitted that, in this regard, the government ‘have more to do.’ This pledge, aimed directly at young voters, builds on the 2017 budget pledge of abolishing stamp duty, a lump-sum tax of a percentage of a properties worth upon purchase, and extends this relief to shared ownership homes. This relief means that those who own a percentage of their own home alongside a housing association will also be exempt from paying this tax – relieving the financial burden on many young people who fall under the £80,000 a year salary bracket.
The chancellor also promised an additional £500m in a bid to correctly finance the Housing Infrastructure Fund to enable the building of 650,000 new homes in the UK. From the standpoint of simple economics, more houses means reduced prices – allowing more first-time buyers into the inflated market. Being a young person in this current economic climate, this move is a positive step forward and one I embrace. However, there is much more to be done regarding the lack of young first-time buyers.
Not every handout is without controversy, however. Universal Credit, the replacement benefit system introduced by the Tories, has been criticised from all sides of the political world. However, he appeared to stick to the party line when saying that ‘Universal Credit is here to stay, and we are putting in the funding it needs to make it a success.’ Therefore, it came as no surprise when he announced a £1bn fund over five years to help sustain the controversial system. In a move that will potentially leave working recipients of Universal Credit £630 better off, work allowances are set to increase by £1000 before benefits start being reduced. When up to 30% of 14-24 year olds in the UK live in poverty, I believe this commitment is crucial to aiding young people in need.
Despite this, the national living wage will only rise for over-25s to £8.21, ignoring calls for a more just living wage for young workers. Many young people are unfairly paid for the equal contribution they make to their workplace, I for one wholeheartedly believe this wage should be increased to reflect the valuable work of Britain’s young population.
With many on the Labour benches claiming that this budget’s spending increases are more of a hollow gesture, a potential no-deal Brexit could cause the scrapping of this budget’s pledges altogether to make way for an emergency budget. Not all is gloomy, however, as beer, cider and spirit duties will continue to be frozen – a promise that is sadly also dependent on how Britain exits the European Union in March next year.