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Ed Miliband is losing Generation Right

19 June 2014

Rigorous welfare reforms for the under-25s must be combined with targeted tax breaks. That’s the best way to get young Britain going and galvanise the new electorate.

For keen observers, Ed Miliband’s speech on welfare may sound familiar. Last November Labour dropped plans — to scrap benefits for the under-25s — like a hot potato after vicious attacks from activists. Yet a few months on and Miliband rehashes these, pledging to continue good work this government is already doing, for instance young people already receive a lower rate of Jobseeker’s Allowance and can already take up training and continue receiving their benefits.

It seems that Ed Miliband is the timid toad sat at the edge of the pond, just dipping his toe-in. If Labour are going to be the Party that governs for young Britain they have to go big, be bold and lead the charge on welfare reforms for the under-25s and combine these with targeted tax incentives.

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If we are going to crack deep-rooted youth unemployment once and for all and make sure that young people move from school into training, university or work, whatever the economic forecast, we need a fundamental rebalancing of the system.

The Prime Minister has already pledged to go further than Labour, announcing his intention to have every young person under the age of 25 earning or learning with no automatic entitlement to benefits. This follows in the footsteps of Australia where nobody can claim benefits under the age of 25 but are entitled to a Youth Allowance – with a likely six month wait after leaving school. This will help thousands of youngsters go straight into new training courses and real jobs – not leave them kicking around on benefits – whilst also saving millions of the budget’s bottom line.

But this stick is in need of a carrot, our youngsters should be in jobs that pay a worthwhile wage and not get clobbered by the tax system. As we can all testify, it’s expensive to get yourself off the ground: a rent deposit, new work clothes, saving for a family, so we need to make sure the tax system works alongside welfare to help those who are just getting going.

Why, for example, should a 19-year-old earning just £5.03 an hour pay more than £200 in National Insurance Contributions each year? Similarly, apprentices receive training wages as they prepare themselves for their careers – yet they also must give a way a chunk of their salary to the government. We should start thinking about a special youth tax rate to let the under-25s keep more of what they earn. Raising the tax threshold to £12,000 would cost less than £400 million and be easy to administer through PAYE, as the current higher tax threshold is for older workers. This would save a new school leaver roughly £400 a year, that’s a month’s rent in Newcastle.

Tough welfare reforms are absolutely essential if we are going to set young Britain up for the future, but to have maximum impact they should be combined with a new Youth Tax Rate. Only the Party that gets this and earns the respect of Gen Y will engage the new electorate; winning over Generation Right.

Lottie Dexter is director of Million Jobs

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Show comments
  • Howard Chase

    Million Jobs is clearly a right-wing astroturfing operation – support for workfare, watering down of equality legislation, tax cuts. It would be interesting to find out where the money for it is coming from?

  • GIN1138

    This gradual right-ward drift of the 20 and 30 something generations is good news and bodes well the common sense possibly returning to the UK later in the century.

    Of course, first we need the silly, selfish, greedy, “something for nothing” baby boomer generation to lose their influence – Something that probably won’t start happening for another decade, but the baby boomers day’s will soon be numbered and then hopefully sanity can start returning to the UK’s economy and finances.

  • fundamentallyflawed

    A 19 year old pays national insurance to contribute like everybody else.
    Why a special tax rate for U25s? Is there a magical wage increase when you hit 26 (I must have missed it if so). What about the people made redundant from well paid manufacturing jobs who were told that its great news that ASDA need new shelf fillers or checkout operators? Do they not deserve a special tax rate as well???

  • Snoxy01

    Gen Y are losing faith in welfare spending as they realise they face many years of higher taxes to support the increased health spending for our aging population. They realise that ever increasing spending is unsustainable.

    Interesting piece on it here –

  • anyfool

    Is the Speccy using young wannabe Labour activists as column fodder, I hope they are not getting paid for these offerings, they seem to be written by Command Central

  • Smithersjones2013

    [Yawn] Not another over educated lobbyist parasite. When will the Spectator have people with proper jobs write on here. No wonder productivity is down when young people can survive in these non jobs….

    it’s expensive to get yourself off the ground: a rent deposit, new work clothes, saving for a family,

    And young people need to learn the difference between a right and a privilege. None of those are rights.

  • ohforheavensake

    Yep. Forcing people into poverty. That’s how you get their votes.

  • Alexsandr

    If there is to be training it has to be good training. I hear most is just rubbish.
    but employers dont want people who have had training. they want people who have real experience and can hit the ground running.

  • andagain

    Strange how many people are convinced that parties can get the young to vote for them by cutting spending on them. They don’t seem to think that is true of older age groups.

  • dado_trunking

    Labour are obsolete in Britain.
    There no longer are any industries, workers are now self-employed avoiders of NI, taxes on labour are history. There is no one they could possibly appeal to so state imposed energy price freezes are the only thing that will resonate, with an ever smaller number of fuel poor citizens whose only hope remains a tax on assets and mansions. That position is of course fully covered by the LibDems and we all know where that got them.

    • ohforheavensake

      And they’re ahead in the polls, and have been for a while.

      • Fergus Pickering

        Aren’t these polls curious. People are asked who would govern Britian better. The Tories, they cry. And who are you voting for? Labour, they cry? I am puzzled. Can any of you experts explain this?

        • Inverted Meniscus

          It is called being thick.

          • Fergus Pickering

            I fear so. A glitch in democracy.

            • Kitty MLB

              Democracy is stupid people being allowed to
              vote for stupid people whose policies only
              benefit stupid people.

              • Fergus Pickering

                I wishI could think of a better way to do it, Kitty.

                • Kitty MLB

                  It might help if Labour didn’t have that inbuilt
                  advantage.The Lib Dums said they wanted to
                  make politics more fair.Very funny, we can see
                  by the way they went back on that promise
                  and how much control they have regardless
                  of only having 14% at the last election, that
                  there is nothing so undemocratic then
                  so could democracy.
                  You go and think of a better way, Fergus.

                • Fergus Pickering

                  What about proportional representation? That would probably deliver a Tory/Ukip coalition. I don’t mind that.

                • Kitty MLB

                  A very bad idea with PR you might have a coalition between
                  Trotskyist Party of Great Britain ( it exists) and the Green party or the Monster Raving Loony Party and UKIP but
                  unfortunately the hats would clash with the latter.
                  Also who on earth would wish for another coalition, besides a
                  unfilleted Kipper, who still likes to swim in blue waters.
                  Besides Dave & Nigel would not have any chemistry and
                  Theresa & Nigel might have to much, besides if the Conservatives don’t get a majority, well miss the chance to
                  send hundreds of shoeless children up the chimney.

                • Fergus Pickering

                  Oh Dave would have to go. It would be Nigel and somebody else. Ah who?

                • Kitty MLB

                  ‘ Oh Dave would have to go’ You were almost rubbing your
                  hands together with glee as you said those dismissive words about our current prime minister. It just makes me even more
                  protective of the poor chap and I never used to be.
                  Oh why don’t you just let golden boy chose, he certainly wont
                  chose Anna Soubry.
                  The Conservative replacement ( one day) will be a woman
                  and clearly the elegant and determined Theresa May has
                  fallen out of favour with Fergus who would clearly chose
                  Nadine Dorris these days. Or maybe Margot James is a possibility. But all this is relative, Cameron is staying.

                • Fergus Pickering

                  Not at all. I quite like the chap. But he can’t have any relationship with UKip because he is so unfailingly rude about them. So he hs to go. In the end ALL politicians have to go. As Enoch Powell said, all political lives end in failure..

        • DavidL

          It illustrates the point that the General Election is the only poll that matters. The Conservative Government of 1979-1997 was almost always way behind in the polls except when it mattered.

          • Fergus Pickering

            I’m afraid we UKippers will do for the Tories. It’s a pity, but there it is.

  • jorjun

    The fallout from wrong-headed minimum wage policy continues. Small businesses were immediately priced out from hiring unproven kids in their neighbourhood.

    The alternative as somebody has suggested is to let the large corporations take up the slack (as they originally wanted) and is the current corporatist fashion – but this will mean unemployed having to relocate to find the work at the company HQ (down South), or remain in their locality but work in the nearest franchise retail outlet. Pretty sad really for economic diversity. We have gone from being a nation of family/small businesses to this sorry situation where wasted talent satisfies corporation who have paid for their politics.

  • DaveTheRave

    How can we set up the youth of this country with welfare reforms and tax reforms when the biggest effective ‘tax’ is the chunk of hundreds taken out each month from successful graduates’ pay packets? Ok, not everyone of them is a graduate, but these are the very people who we expect to take the professional jobs for the future.
    Say graduate A marries graduate B and both get good careers, the combined monthly outtake by the government would register in hundreds, hundreds that could pay a mortgage for a house etc.
    This situation is an abomination and another classic, heinous example of how despised and shackled the English are in their ‘own’ country..
    and this was done by a TORY, I say a TORY government with LibDems support. And Labour would’ve done exactly the same.
    Let us rule ourselves, give us our rights. If it’s going to be ‘Little England’ then I don’t care, you can call us what you like. What matters is justice.
    Disgusting, outrageous.

    • Andy

      And any graduate will in all probability earn considerably more than a non graduate and yet you expect the non graduate to pay. If you want to go to Uni, fine. You pay for it.

      • Fergus Pickering

        That is not true. A driver of a tube train will earn more than a teacher. Nigel Farage earned far more than any other political leader. And Sir John Major is not lacking a few bob. And there aren’t a lot of graduates in the England cricket team. But they are awash with money. And good for them.

  • LadyDingDong

    There are plenty of jobs for young people but unfortunately they are not always where young people want to live. In my youth there was a mass migration of youngsters who were ready, and able to leave home, find digs or shared accommodation and get a job. Now it appears to me that there is an expectation, an entitlement even, that the young (and not so young) are unable to leave their homes and that jobs must come to them – ergo the constant cry from the left ‘there are no jobs’. Millions have moved across the continent to find work in our towns and cities and many are prospering here but we can’t get an 18-year old to move from the employment black spots of the South West, Wales, the Midlands or the North within their own country. We can’t even get the over-pampered blighters to contemplate a bus or bike ride of more than 30 minutes in order to find dignity and gainful employment.

    • dado_trunking

      Well said once again. An obese Britain will soon no longer restrict itself to overfeeding its underclass – the virus will spread to the Made in Chelseas next. Many will welcome that and we will welcome others to replace the latters’ economic activity, in very much the same way as we have replaced the formers’ inactivity already.

    • andagain

      Are you suggesting that people should move to find work? That would require building houses in those area where there is work.

      We can’t have that.

    • Mike Barnes

      That makes no sense, youth unemployment is almost as terrible in economic powerhouse London as it is in the north east of England.

      People aren’t jumping at the chance of leaving their family and friends to move to a more expensive city only to face the exact same problem of not being able to find a job.

    • Lady Magdalene

      EU citizens moving tot he UK get a sizeable grant from the EU (ie us) to help facilitate their move. British citizens moving within the UK don’t.
      EU citizens often have a network of contacts, so they have somewhere to stay whilst setting themselves up: in the case of Eastern Europeans they seem willing to live 6 – 10 to a house in cramped, unhygienic conditions. British citizens living in the regions are unlikely to have such a network of contacts and may not want to live in squalor. And to be honest, I have some sympathy with them.
      Perhaps if the Govt gave British youngsters who were prepared to move around the UK to look for work a bit more financial and logistical assistance, they’d be more inclined to do it.

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