Government continues to pile pressure on young

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Ministers are said to be considering lowering the rate of repayment on student loans. The current threshold, where repayment starts at £27,295, may potentially be reduced to £23,000, with the debt cancelled after forty years instead of thirty. 

In a move that could save the Treasury £2 billion annually, Chancellor Rishi Sunak is reportedly considering changing tuition fee policy in the autumn review. This policy may have unintended long-term consequences. The government’s decision to lower the rate of repayment comes at a time when the cost of living is already rising significantly. Young people shoulder more than their fair share of the national burden. For example, look at the decision to increase National Insurance tax to fund social care, the policy of staying at home for a year to shield the old, and most recently the rising cost of gas and food. 

The Treasury could save £2 billion annually from the move

The social contract in the UK is well-established and trusted – work hard, pay into the system and the state protects you when you are vulnerable. Recent political events have weakened that trust. 

Many feel that Boris Johnson’s government is playing with fire by provoking a generation of people who already do their fair share. Discussing Britain’s social contract in relation to education policy may seem alarmist, but political consensus must always be watched. Unilaterally reducing the repayment age chips away at that trust. When that trust is corroded too far, the social contract suffers. 

This is not helped by the fact that the government signed a contract with students about their tuition fee repayments. Changing the terms of this contract appears to be a violation of the goodwill and trust that students had when signing with their loan companies. 

Additionally, for Mr Johnson’s Conservative party, there may well be electoral consequences – if not immediately, then eventually. University graduates already lean towards Labour, and Sir Keir Starmer’s brand of ‘post-populism’ and consensus building will definitely appeal to this demographic. 

What matters is that when this group ages, they should theoretically start voting Conservative and voting more regularly at elections. Mr Johnson may inadvertently be robbing his party of its future supporters.

For the Tories, there could be electoral consequences

It appears this government has little, if any, concern for intergenerational inequality. The last-minute U-turn on including over-65s in the National Insurance hike was a small peace offering, but arguably nowhere near enough to compensate for what has happened recently. 

Young people often do not bother voting. Political leaders react to incentives like everyone else and if they can give to their supporters by taking from a group who will not impose an electoral penalty, they will. 

The response to not just changing tuition fee policy but increasing general intergenerational inequality should surely be more vocal. 

Only by threatening a political cost can Mr Johnson’s hand be moved. Young people should not be swayed from doing just that.

Image credit: HM Treasury via Creative Commons.

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