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| From grave to cradle: how the budget gets worse as you get younger | From grave to cradle: how the budget gets worse as you get younger |
| (35 minutes later) | |
| In terms of home ownership, income and work, all the data demonstrates that there is a growing penalty on youth. If the chancellor were a concerned social commentator, his budget might have addressed this. But he is instead a singularly ruthless operator, much less interested in arguments about intergenerational equity than in the Ipsos Mori post-election analysis revealing that the Conservatives did 20 points better among the old than the young. He will be keenly aware, too, that Labour was in precisely the opposite position. | In terms of home ownership, income and work, all the data demonstrates that there is a growing penalty on youth. If the chancellor were a concerned social commentator, his budget might have addressed this. But he is instead a singularly ruthless operator, much less interested in arguments about intergenerational equity than in the Ipsos Mori post-election analysis revealing that the Conservatives did 20 points better among the old than the young. He will be keenly aware, too, that Labour was in precisely the opposite position. |
| To grasp the generational aspect of the budget, take a stroll from grave to cradle. Let’s begin at the far end of the road of ageing, with someone who is in fact dead. If they were lucky enough to leave behind a £1m home, the chancellor this week diverted scarce public revenues to enable them to pass it on tax-free. | To grasp the generational aspect of the budget, take a stroll from grave to cradle. Let’s begin at the far end of the road of ageing, with someone who is in fact dead. If they were lucky enough to leave behind a £1m home, the chancellor this week diverted scarce public revenues to enable them to pass it on tax-free. |
| Stepping out of the grave, and into old age, such priority was given to free TV licences for the over-75s that an entirely unprecedented raid was made on BBC finances to cover the costs, undermining the whole licence-fee model by snatching a chunk of this supposedly independent stream of revenue to pay for a government social policy. Slightly younger pensioners will once again, as throughout the last parliament, enjoy near-total protection from benefit cuts, and pensions should soon be rising in line with recovering earnings, thanks to the “triple lock”. Winter fuel payments will continue to be paid, and for those pensions big enough to attract income tax, there’s now a higher allowance too. | |
| Step back further, into the child-rearing phase of life, and the picture dramatically changes | Step back further, into the child-rearing phase of life, and the picture dramatically changes |
| Roll back a few more years, and consider a couple of empty-nesters in their 50s, working away after the kids have left home. For them, the budget was fairly kind, with their income tax coming down by a little bit, and by a little bit more if either earns enough to pay 40% tax. If they are a bit poorer and rely on benefit top-ups, the news is more mixed, as such payments are now to be frozen for several years. On the other hand, if either spouse is on the minimum wage, there is a pay rise of £1 an hour or so, which may well be enough to compensate for that. Things will vary between households, of course, but “it’ll all come out in the wash” is probably a decent summary for the average 50-something. | Roll back a few more years, and consider a couple of empty-nesters in their 50s, working away after the kids have left home. For them, the budget was fairly kind, with their income tax coming down by a little bit, and by a little bit more if either earns enough to pay 40% tax. If they are a bit poorer and rely on benefit top-ups, the news is more mixed, as such payments are now to be frozen for several years. On the other hand, if either spouse is on the minimum wage, there is a pay rise of £1 an hour or so, which may well be enough to compensate for that. Things will vary between households, of course, but “it’ll all come out in the wash” is probably a decent summary for the average 50-something. |
| But step back further, into the child-rearing phase of life, and the picture dramatically changes: most especially for the working poor. Osborne and Iain Duncan Smith this week agreed to start clawing back family tax credits the moment that earnings rise to a meagre £3,850 (rather than today’s £6,420), and they will be snatching the money back faster too. Many families will find not only that work pays less than before, but also – if they choose to make good the losses with longer shifts – that each extra hour will pay less as well. For cash-strapped parents, tax credit cuts will entirely overwhelm small income tax changes, worth a couple of pounds a week, and – very often – the minimum wage rise too. The sharper clawing-back of credits will, on its own, sting 3 million working poor families for an average of £1,000 a year, with other cuts and freezes piling more pain on top. | But step back further, into the child-rearing phase of life, and the picture dramatically changes: most especially for the working poor. Osborne and Iain Duncan Smith this week agreed to start clawing back family tax credits the moment that earnings rise to a meagre £3,850 (rather than today’s £6,420), and they will be snatching the money back faster too. Many families will find not only that work pays less than before, but also – if they choose to make good the losses with longer shifts – that each extra hour will pay less as well. For cash-strapped parents, tax credit cuts will entirely overwhelm small income tax changes, worth a couple of pounds a week, and – very often – the minimum wage rise too. The sharper clawing-back of credits will, on its own, sting 3 million working poor families for an average of £1,000 a year, with other cuts and freezes piling more pain on top. |
| Related: What have young people done to Osborne to deserve such contempt? | Polly Toynbee | Related: What have young people done to Osborne to deserve such contempt? | Polly Toynbee |
| Other nasties are targeted squarely at younger adults. The new minimum wage does not apply to under-25s, so there is no compensation for their benefit cuts. Now only half as likely as a generation ago to own property, young adults could find that a stealthy raid which the chancellor made on housing associations aggravates the shortage of flats. For the under-21s, getting somewhere to live is going to be doubly difficult because the right to housing benefit is being abolished. If mum and dad have a Notting Hill attic conversion to head to, then there’s no panic; but if they are in a council house, the bedroom tax is already pressing them to surrender your childhood room. Moving on to a 17-year-old, contemplating heading to university from a poor home, before the budget there was the promise of a maintenance grant. Now there is only the promise of a maintenance loan, to add to the overall mountain of student debt. | Other nasties are targeted squarely at younger adults. The new minimum wage does not apply to under-25s, so there is no compensation for their benefit cuts. Now only half as likely as a generation ago to own property, young adults could find that a stealthy raid which the chancellor made on housing associations aggravates the shortage of flats. For the under-21s, getting somewhere to live is going to be doubly difficult because the right to housing benefit is being abolished. If mum and dad have a Notting Hill attic conversion to head to, then there’s no panic; but if they are in a council house, the bedroom tax is already pressing them to surrender your childhood room. Moving on to a 17-year-old, contemplating heading to university from a poor home, before the budget there was the promise of a maintenance grant. Now there is only the promise of a maintenance loan, to add to the overall mountain of student debt. |
| To see the budget at its most brutal, however, go even further down the age range – and consider the runt in a brood of three or four brothers and sisters. In the past, Titch would have carried the same right to tax credits as older siblings. But now Osborne has rebranded Titch as a luxury good, a consumer choice made by the parents, and said that he now deserves to get no credits at all. This restriction only affects means-tested payments for the poor: universal child benefit stays, protecting middle-class younger siblings. If it is economic purgatory to be young in Britain today, to be both young and poor is very hell. | To see the budget at its most brutal, however, go even further down the age range – and consider the runt in a brood of three or four brothers and sisters. In the past, Titch would have carried the same right to tax credits as older siblings. But now Osborne has rebranded Titch as a luxury good, a consumer choice made by the parents, and said that he now deserves to get no credits at all. This restriction only affects means-tested payments for the poor: universal child benefit stays, protecting middle-class younger siblings. If it is economic purgatory to be young in Britain today, to be both young and poor is very hell. |
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