Tories who tried to convince Number 10 and Number 11 to delay the hike in National Insurance have had their hopes comprehensively dashed this morning. The Sunday Times carries a joint op-ed by the Prime Minister and the Chancellor which confirms the NI rise is going ahead as planned. Raising tax on workers is estimated to bring in an additional £12bn and will see those on £20,000 paying an extra £89, those on £30,000 stung for £214 and earners on £50,000 forced to hand over a further £464. Higher earners will see sharper increases: £839 on £80,000 and £1,089 on £100,000.
Boris and Rishi try to placate backbench Tories by using their Sunday Times piece to declare themselves ‘Thatcherites’ but at least some of those backbenchers grasp just how toxic pressing ahead with tax rises could prove with traditionally Conservative-sympathetic voters, especially given public sentiment towards the PM at the moment. Tory voters aren’t the only ones who’ll be displeased by this decision. In resolving to dip into the pockets of workers, Boris and Rishi are disproportionately picking the pockets of the young.
Part of the revenue generated by the NI tax grab will be used to fund adult social care provision, a brazen act of intergenerational theft. Asset-poor zoomers and millennials will be taxed more so that asset-rich baby boomers don’t have to pay for their own social care. A generation of homeowners who benefited from higher wages and lower house prices, and who even now obstruct the building of new homes, is freeloading off the back of a generation of renters who may never own a home. That under-40s haven’t resorted to Zanu-PF-style land grabs speaks to a remarkable degree of patience on their part.
Bear in mind, this comes on the heels of confirmation that the government will freeze the earnings threshold for repaying student loans, which means graduates will see their repayments rise and more will begin to pay back sooner. According to the Institute for Fiscal Studies, this ‘effectively constitutes a tax rise by stealth on graduates with middling earnings’. (This, let’s not forget, is on top of the personal allowance freeze for income tax.) If you set out to create a generation stewing in resentment, you’d struggle to arrive at a set of priorities as perfect as these. Tories tend to dismiss such concerns with the pronouncement that young people don’t vote, or at least not in the numbers — or in the political direction — of older demographics. This fails to understand just how fundamentally the customs and conventions of British economic life have broken down. A generation is hurtling towards middle age that is worse off in earning power, assets, pensions and employment prospects than its parents’ generation.
As I’ve pointed out before, the Conservatives desperately need a policy framework for addressing Britain’s lost generation and rapidly increasing their prosperity, access to housing and financial stability. This is a political problem for the Tories as much as it is a societal one. The Tory Party has endured, despite its own best efforts, because paying a mortgage, accumulating savings, and raising children have a way of nudging people rightwards. The more you have to conserve, the more Conservative you become. There is one generation out there and another coming up that is markedly less likely to own a home, hold savings or bear children. They’ve got nothing to conserve. This prompts the obvious question: where is the next generation of Conservative voters going to come from?