What does the Budget mean for us? 1 month ago

What does the Budget mean for us?

Young people generally are the least at risk from Covid-19, but have been hit hardest by the social and economic carnage it’s brought with it

Data from the Office for National Statistics found that more 16-24 year olds have fallen out of employment than any other age group. 

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And, in the three months leading up to November, data shows that redundancies among 25-34 year olds are five times higher than the same period last year, at 16.2 per 1,000. 

Hospitality, which has a higher proportion of younger workers, has unsurprisingly been hit hardest by Covid restrictions as the virus forced restaurants and pubs to close.

And, with over 4.5 million people on the furlough scheme, millions of jobs still hang in the balance. 

Furthermore, recent Universal Credit figures, which many young people are relying on to pay the bills, show that over 20 million Brits relying on it will be in financial hardship by May.

So did Rishi Sunak’s Budget today offer some reprieve? 

In middle of the worst recession in over three hundred years, it was always going to be a tall order.

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The commitment to extend the furlough scheme will be warmly welcomed, although it’s difficult to see why it wasn’t announced earlier - given the Treasury trailed it yesterday.

Providing certainty months ago may have saved jobs and prevented unnecessary redundancies. And the small print on businesses battered by the pandemic being required to foot 10 per cent of the bill in July, and 20 per cent in August and September, likely won't go down well. 

The self-employed were provided with some reprieve in the form of grants. But, with only 600,000 set to benefit, it still leaves millions without support and, more worryingly, the Chancellor declined to make the £20-a-week Universal Credit uplift permanent. 

Minimum wage increase

Elsewhere, the minimum wage will be increased. Sunak said workers aged 23 and over will see their salary increase to £8.91 per hour from the start of next month.

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This is the first time the government's highest rate has included those aged 23 and 24, with it currently applying to those aged 25 and over.

Under the current rate, over 25s receive a minimum wage of £8.72 an hour, while those aged between 21 and 24 get £8.20.

The new rules would see 21 and 22-year-olds receive £8.36, whereas those aged 18 to 20 get a rise from £6.45 to £6.56.

There's also a slight increase for those aged under 18, who will now receive £4.62, not £4.55, with apprentices getting £4.30 instead of £4.15.

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Support for first time buyers

The chancellor also announced a 5 per cent deposit scheme for first time property buyers.

Buying a property usually requires a much larger deposit, north of 15 per cent. That has proved a big obstacle for generation rent, whose wage stagnation, combined with inflating house prices, has cast them further and further away from getting into the property game.

Prior to this, most mortgage lenders only allowed buyers to borrow 4.5 times their salary, meaning you'd have to earn over £40k a year to get a mortgage on a house worth around £200,000.

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The government’s commitment of £2.8 million for a 2030 World Cup bid will lift the spirits of football fans up and down the UK, giving people something to look forward too. And for the Department for Culture, Media, and Sport, £410 million is set to be made available for arts, culture, and heritage sites - which have taken a battering during the pandemic.

Many will argue the Chancellor’s budget didn’t go far enough, and few would suggest we shouldn’t start working out how we’re going to pay for it all. 

After a flurry of speculation from politicians and economists alike, Sunak made it clear in his Budget today that "now is not the right time to raise taxes." Strangely, this is likely to be music to Labour’s ears - who last week said they opposed any tax rises in the budget to help pay for the pandemic. 

The question of tax policy, however, is far from over, with rises now widely viewed as an inevitability. After 10 years of austerity, what's left to cut?

It’s not a matter of "this is it" but more of a "to be continued," and for young people in the UK, there's a lot to be desired.

Expert analysis

Institute for Public Policy Research Associate Director Clare McNeil said: "With the rapid rise in long-term unemployment for young people, we needed the chancellor to guarantee an offer of a job or training place for all young people, not just for a few. At a minimum, the chancellor should have extended the Kickstart scheme, which is due to close to new applicants before the end of the year.

"We welcome the boost to bonuses for employers who take on apprentices which takes investment closer to the £1.5 billion Apprenticeship Fund we have called for. But this needs to be directed to the individuals and businesses where it can make the greatest difference - young people, those with fewer qualifications and smaller businesses.”