Young people are facing significant challenges, including the long-term financial repercussions of pandemic-related debt and a less flexible labor market, according to Daniel Hannan.
Writing in the Daily Mail, Hannan contends that addressing these grievances requires policies that lift burdens from the young rather than imposing additional taxes on older generations. He rejects the idea of "intergenerational justice" through equalizing suffering, advocating instead for a system where younger individuals can secure well-paid employment and afford housing.
Hannan criticizes proposals, such as one from the Institute for Public Policy Research, that suggest increasing taxes on the elderly, particularly through property taxes. He notes that current taxation levels in Britain are already higher than at any point since the post-World War II era, arguing that further tax increases are ill-advised and counterproductive to economic growth.
He asserts that the focus should be on reducing government spending, returning it to pre-lockdown levels, and stimulating economic growth akin to that seen in the 1990s and early 2000s. Hannan believes that economic growth, rather than higher taxation, will enable younger generations to support themselves and future retirees. He explains that high taxes and redistributed benefits can disincentivize work and slow economic productivity, exacerbating financial problems in the medium term.
Hannan calls for a reduction in non-essential spending before any tax increases are considered, citing the significant rise in state spending as a percentage of economic output. He points to substantial spending on benefits for working-age adults and promotional campaigns encouraging benefit claims.
Instead of increasing taxes, which he fears will worsen employment prospects for young people, Hannan suggests removing obstacles that hinder their success and contribute to emigration. He highlights a decline in graduate job vacancies, from 55,000 in July 2017 to 8,000 in July of the current year.
To address these issues, Hannan proposes reversing the increase in the employers' share of national insurance, which he believes would eventually pay for itself through job creation. He also suggests immediate, cost-neutral measures such as freezing the minimum wage to encourage employers to hire young people and pausing certain provisions in the Employment Act that he views as making hiring new staff too risky.
Hannan outlines a broader economic strategy to lighten the load on the economy, which he likens to a person carrying a heavy burden. This strategy includes cutting regulations, particularly employment-related ones, freezing benefits to incentivize work, reforming the National Health Service, and ensuring currency stability. He also advocates for tax cuts on savings and investment.
He acknowledges that implementing all these changes might be ambitious but suggests that even partial adoption could foster a more favorable environment for young people. Hannan concludes that by cutting taxes for young people, increasing housing construction, removing employment regulations, and rethinking university funding, the country can become a place where ambitious individuals can thrive, leading to deficit reduction and economic strengthening, potentially avoiding cuts to the state pension.