Charlotte Salomon is Deputy Chairman Membership for Saffron Walden Conservatives.
It’s not easy being young and free, with a full set of teeth to maintain now that you’ve hit adulthood. There’s a lot expected of Generation Rent. Firstly, they’re expected to stop renting, stop job-hopping, and raise children, despite Mumsnet telling them they’re doing it wrong. They will perform something called baby-led weaning and pay off large amounts of student debt, eventually. They’ll have to know the difference between good plastic and bad plastic, and survive without wet-wipes and cotton buds – drink through soggy paper straws and Instagram their last meal. Their social media posts will define them for the rest of their life in a world where trolls are no longer confined to bridges. The young are unable to find their financial footing in the monetary foundation of today’s society, because government didn’t embrace the young. Instead, it’s been chasing them.
And this week, the Resolution Foundation proposed that all UK-born citizens be given £10,000 as a “universal minimum inheritance” when they turn 25 to help address growing wealth inequality. The study estimates that all UK born 25 year olds could be afforded the substantial hand-out by 2030, which would be funded by a lifetime receipts tax and by selling off the government’s stake in the Royal Bank of Scotland,
Acknowledging the giant floating question mark beside inflation and Brexit, the think-tank acknowledged that, by 2030, Britain could be sitting in a very different place in the fiscal cycle. However, although the spending this money would be limited to education, housing and pensions, it wouldn’t address the runaway housing market, or guarantee job security. It would round the corners of hardships faced by Generation Rent temporarily – but it wouldn’t fix them.
I agree with the principle: we should invest in the young, but why not make it more sustainable?I sat in on a research study conducted by Kent University and the Except Project in which an open discussion took place about the labour insecurities faced by younger people. Much of the audience fell into this category, and almost all had experienced financial uncertainty, due to the volatile jobs market.
Youth unemployment doesn’t just hold economic implications; labour market insecurity has affected trajectories of well-being and health in the short and the long-run, reducing peoples’ lifelong earning and career potential. In 2016, PricewaterhouseCoopers estimated that youth unemployment costs the British economy £45 billion a year.
Seventeen per cent of 16-24 year olds are not enrolled in full-time education, training nor employment (the so-called NEETs), compared to Germany’s ten per cent. If the UK could match Germany’s figure, our GDP would be increased by 2.3 per cent (a value worth that £45 billion, by the way). Young people are three times more likely to be unemployed than the rest of the working population. So my question is: why?
Could it simply be a case of age discrimination? Even with a freshly-issed University degree, employers might be reluctant to employ graduates without real-life practical work experience and a proven track record – something their older job-market competitors usually have. Up until the 1970s and 1980s this wasn’t an issue, since apprenticeships were a practical path to secure life-long employment. However, these were firmly embedded in industry and manufacturing and, when Britain’s economic landscape changed, factories closed and the traditional apprenticeship vanished along with them
In an attempt to recalibrate higher education, the Government has reinstated apprenticeship schemes, not just in traditional skills but more broadly across the employment spectrum. Ministers have promised three million new apprenticeships between 2015 and 2020, putting apprenticeships and traineeships on par with graduates, and steering young people away from unpaid university degrees.
The apprenticeship slogan ‘earn while you learn’ may not apply to traineeships, however, since they are not subject to minimum wage laws – unlike apprenticeships, which legally must be paid, and meet the Apprentice National Minimum Wage.Traineeships are aimed at 16-24 year olds as an educational stepping-stone to apprenticeships or employment. And although the Government is encouraging employers to provide trainees with financial support to meet their travel or meal costs, there’s a degree of push-back from education institutions.
Traineeships typically last six months, and allow employers to offer a unique training course the fit their specific workforce needs. However, colleges are finding themselves caught up in bureaucratic difficulties, and are dropping the programmes altogether. The courses are under-promoted, and the path from traineeship to employment appears a little foggy. Students need reassurance that in-work benefit rules are not a barrier to participation in traineeships, since they are committing to six months of unpaid training, and although the rebranding of the apprenticeship has been successful, traineeships have fallen short of expectations.
Another sustainable investment is childcare. In the age of the baby-boomers, it was typical for a mother to stay at home and raise the children. Today, many women choose to remain in education or employment. Some may even not have the fortune of choice, such as the single parent who has no other option than to seek employment. We haven’t stopped having children, and nor should the young be discouraged from it. So in 2017, as part of the Government’s ‘Plan for Britain’ scheme, an extra £50 million capital grant was pledged, providing nearly 18,000 free childcare places.
The policy implemented last September granted parents of three and four year’s olds 30 hours of free childcare per week. It is an ambitious plan. However, as in the case of traineeships, I wonder if the Government is only dealing with the iceberg above sea level. On average, local authorities pass on £4.34 an hour to childcare providers, and this has left some nurseries struggling to subsidise their provision – forced to charge parents of younger children higher rates and begging for voluntary payments. Some nurseries have been compelled to ask for household items to be brought in, such a toilet roll or plasters. Far more menacingly, 30 per cent of childcare providers have cut investment in training, and 18 per cen have lowered staff-child ratios.
The young aren’t accumulating assets as their parents did. The chances of a young adult on a middle income owning a home have more than halved in the past two decades. The Government abolished stamp-duty for property valued under £300,000. and there is legitimate concern that this has created an opportunity for home vendors to raise prices. To keep control, Minister should be looking at ways to reduce interest rates on first-time buyer mortgages, instead of the help to buy scheme.
Help to Buy is an equity loan of 20 per cent, interest-free for five years, with competitively low rates thereon. Cutting through the benefits of getting a leg up onto the housing ladder, this is an equity sharing loan, which means that the Government owns 20 per cent of the property. If the value of the property rises, so does the amount you have to pay back – unlike a straightforward mortgage.
Generation Rent are the future, and we need to stop drawing conclusions from the preceding generations. Young people require investment, not easy-come, easy-go cash hand-outs. They need time and resources spent on preparing them for employment and for life. The young don’t need a free bus pass. They need their Government to adapt as quickly as they are doing.