With the Conservatives struggling in government following the disastrous June general election, Chancellor Philip Hammond’s recent Budget aimed at tackling a growing problem for the party – a surge of young people voting, almost exclusively for the opposition Labour Party.
Polls suggest that 64% of under-25s would vote for Labour compared to just 19% for Conservatives, and crucially the story is similar for the 25-49 age group, at 54% to 30% respectively.
After previous widely ridiculed ideas to appeal to the young by scrapping the ‘Ibiza tax’ (suggested by the Adam Smith Institute, a neoliberal think tank) and to freeze tuition fees at £9,250, will Hammond’s Budget pledges impress young voters?
The headline announcement of this Budget was abolishing stamp duty for first-time housebuyers on homes up to £300,000, a move which Hammond claimed would help 95% of first-time buyers save an average of £1,660. The unaffordability of both purchasing and renting homes are key issues for younger demographics, particularly with wages continuing to fall, but despite grabbing most of the headlines, further analysis of this policy suggest its effects will be minimal at best.
The Office for Budget Responsibility (OBR) was quick to point out that the policy would likely cause house prices to rise by around 0.3%, which a report by the Resolution Foundation put at roughly £3,200 – twice the amount that the average buyer would save. The OBR also found that only 3,500 young people would benefit from the changes, meaning that the scheme’s £3.2bn price tag would equate to spending £914,286 per buyer. By contrast, the Resolution Foundation estimated that 40,000 new social homes or 100,000 Housing Infrastructure Fund homes could be built and given away for free for just £2.9bn.
The vast majority of young people are nowhere near being able to put down a deposit on a home, with the average buyer requiring 24 years to save up and 64% of young people giving up on ever affording their own home – most will readily recognise that this stamp duty cut will have no effect on them. As reported by the Financial Times, “the main gainers from the policy are people who already own property, not first-time buyers themselves”.
Supporters of Philip Hammond will point out that policy is not made in a vacuum, and that the Chancellor also pledged to raise housing supply by 300,000 per year at a cost of £15.3bn by 2022. Hammond noted that 1.1m homes had been built since 2010, which initially sounds impressive – however, this is actually the lowest level since Conservative Prime Minister Stanley Baldwin in 1923, and ignores the fact that the population had increased by 1.84m just from 2010-2014, with net immigration alone (ignoring UK births) expected to be nearly 2m from 2010-2017. The number of affordable homes built – defined as 80% of market value, already out of reach for many buyers– last year fell to the lowest levels since 1993.
Lord Macpherson, former Treasury official, has called these plans inadequate, suggesting ‘only a massive increase in local authority housebuilding would solve the chronic shortage of new housing’. Critics will also point to the fact that the Conservatives have consistently missed their housing targets since 2010 while homelessness has soared, doubling from 2010-2016.
On housing, it seems, young people will be under no illusion that this Budget will strengthen their chances of future homeownership, while the swelling ranks of private renters will surely remember the Conservatives ‘voting against proposed new rules requiring private sector landlords to ensure their properties are fit for human habitation’, for example.
The third major carrot for young people was the extension of the 16-25 railcard, which gives holders a discount on train fares, to cover under-30s. The initial response to this announcement was again positive before flaws and exceptions began to be discovered and discussed in the news and social media. The Chancellor noted the railcard would give discounts of up to a third on fares, but neglected to mention that this would only cover off-peak travel, and so could not be used by commuters.
Since 2010, rail fares have gone up by an average of 27%, with some commuters paying 43% more for their season ticket – an increase that is twice as fast as that in pay. This does not include the next planned price rise in January 2018, which will be the steepest for five years.
On top of this, despite claims that privatisation has enabled investment and minimised costs to the public, analysis by Action For Rail has found that private investment only accounts for around 1% of all money going towards railways, and that in fact the public still bears the cost of over 90% of all new investment.
Increasingly international young people only need to look across the Channel to see publicly-run alternatives providing far cheaper, faster and more reliable services, particularly during commuter hours.
Despite Philip Hammond’s best efforts, it seems likely that his gamble aiming for the youth vote will backfire. The surge in the youth vote may have been partly down to poor Conservative strategy and an excellent campaign by Corbyn’s Labour, but it also demonstrates that young people are shedding their stereotypical apathy and beginning to engage far more with politics.
This energised demographic won’t be so easily taken in by cosmetic changes, particularly when they see their wages shrinking, inequality rising and living standards suffering their most sustained fall since records began. Philip Hammond may have done just enough to keep his job, but this Budget almost certainly hasn’t managed to stem the flood of young voters away from the Conservatives.