March 1, 2021

Give everyone under 30 £2,000 a month

Aris Roussinos, Contributing Editor

Like any good crisis, our year-long Covid confinement is as much an opportunity as a disaster. The stultifying political and economic consensus of recent decades has been swept away: across the West, states are returning to interventionist mode, backing industry and introducing policies that would have been dismissed as too radical just a year ago. In America, Mitt Romney’s widely-acclaimed proposal for state financial handouts for families shows just how quickly everything has changed — and also hints at the scale of ambition we should demand at home.

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For multiple reasons, the state should support young families, but it’s the generation below them that have suffered most from Covid. Despite being at only an infinitesimally small risk of serious harm from the disease themselves, they’ve borne the brunt of lockdown, all to prolong the lives of the middle-aged and elderly.

That’s a generational imbalance that amplifies the already unfair discrepancy between the lifestyles of the young and those of their parents and grandparents. Born into a faltering global economy, with plummeting career and lifestyle prospects, destined for miserable lives as among the new precariat class, the young have already been dealt a raw hand. Unless we make radical changes now, they are unlikely to ever own their own homes, know secure, well-paid employment, or form stable family lives of their own.

This is deeply unfair for them, but it’s also a risk to Britain’s political stability. Much of the revolutionary fervour of recent years, from Corbynism to BLM, can be traced to the terrible prospects suffered by the millennial generation: the prospect of zoomer radicalisation against the system ought to be taken seriously, and averted before it’s too late.

So why not roll out a form of UBI to the young? Imagine everyone under 25, or even under 30, getting a no-strings-attached cheque for £2000 every month, at least until the economy stabilises. It would be an economic stimulus targeted at those who have begrudgingly put their lives, educations and careers on hold for the greater national good. With that financial cushion, they could start businesses, retrain for different careers, save up for mortgage deposits, or just pump the money back into the economy by going out and having fun. Youth only comes once, after all. The state should reward the young for their year-long sacrifice: not just because it’s fair, but also out of a sense of self-preservation.

Bring back the nation of shopkeepers

Mary Harrington, Columnist

The most recent unemployment rate, according to the ONS, is 5.1% — and the Bank of England expects the rate to peak in 2021 at around 7.75%. Sky was already estimating in August last year that 730,000 jobs had been lost due to coronavirus lockdowns and economic contraction. You’d think public bodies would be celebrating Brits’ inventiveness in finding new means of survival under such tough conditions. Not so much.

There’s been a boom in micro-kitchen businesses, as households with a good cook create and sell food either via local neighbourhood connections or social media. But far from lauding this innovation, the Food Standards Agency is horrified by what a spokesperson called a “concerning” explosion of “rank outsiders operating off the radar” without proper regulatory oversight.

The Conservative Party could support those hardest hit by the pandemic, while also furthering the naturally Tory love of entrepreneurship and personal responsibility. It could scratch the deregulation itch and rebalance our economy away from big business interests. There’s an obvious solution. Boris must slap down the Food Standards Agency and its ilk, and radically deregulate micro-businesesses.

It’s sensible to ask a commercial kitchen to obey food hygiene regulations, but holding a lemonade stand or home cupcake business to the same standard stifles entrepreneurship and imposes a regulatory burden on micro-entrepreneurs that simply isn’t called for. Instead of a thicket of rules, the thick nature of local connections works as a form of regulation by word-of-mouth. It’s a safe bet that if locally sold cupcakes are inedible, word will get round and the business won’t thrive. And if it thrives, and grows past a certain turnover, it can be regulated.

This shouldn’t just apply to food businesses but across the board. If I want to run a tiny grocery shop from my sitting room, why shouldn’t I do so without having to wrangle reams of paperwork on commercial and residential property?

Encouraging such enterprise would also help newbuild communities lose their box-fresh sterility. New housing is typically delivered by large developers, who rarely include retail premises in their plans. A flourishing, deregulated ecosystem of micro-retail operating out of private homes on newbuild estates would address this problem, while encouraging walkability, reducing car use, improving local community connections and widening opportunities for flexible working around childcare.

These benefits are all consistent both with a 20th century Tory pro-business mindset, as well as the 21st century Tory pivot toward environmental and community concerns. Deregulating microbusinesses would send a strong message about trusting, rather than nannying, the British public, as well as encouraging British resourcefulness. And it would signal a clear Tory shift away from a (frankly deserved) reputation as the party of big business toward being a demotic, popular party for ‘a nation of shopkeepers’.

Guarantee full employment

Paul Embery, Contributor 

“Unemployment is bigger than a political party. It is a national danger and a national scandal.” So said Labour MP Ellen Wilkinson, whose constituents of Jarrow famously trudged to London in 1936 in protest at the evil of joblessness.

As we emerge from the pandemic and the job support schemes come to an end, the prospect of mass unemployment is once again very real. History tells us that reliance on market-driven outcomes is never enough in such a scenario. When households and businesses are retrenching, it is incumbent on government — as the only actor in the economy with the power to do so — to step in and put things rights.

Tinkering at the edges would prove insufficient. We need, at this hour, a radical plan to prevent surging unemployment and the devastation that would accompany it. We need, in short, a jobs guarantee.

The government should commit to becoming an employer of last resort and provide a job to everyone who needs one — to pick up the slack where the market fails to deliver. There is no space in the looming jobs crisis for the failed nostrums of the past — embraced by leading politicians of all political stripes — which contend that, even in periods of downturn, governments must have no more than the most limited role in the life of the economy.

Full employment should at all times — and not just during a crisis — be the prime goal of economic policy. Not only because the denial of a job to someone who wishes to work is a personal tragedy, but also because there is, in the end, nothing efficient about having vast numbers of people willing and able to work sitting idle.

To protests questioning the likely cost of guaranteeing everyone a job, the answer must be: no greater, in the end, than handing out billions in unemployment benefits, sacrificing similar in lost tax revenues, and paying the enormous social costs — such as rising crime, family breakdown and lower life expectancy — that always come with widespread joblessness.

With the Bank of England predicting an unemployment rate of 7.75% by the middle of the year, it is time the frontiers of the state were rolled forward a little. Standing idly by as the dole queues begin to form may serve to create a new generation of Jarrows. And that is a fate from which some towns may never recover.

Make civil servants run small businesses

Peter Franklin, Associate Editor

Does central government understand what it’s like to run a small business? Insane proposals — like the idea that all businesses should have to file quarterly tax returns — would suggest not.

To bridge the gap between Whitehall’s desk jockeys and the people who pay their wages, I’ve got a little suggestion.

Every government department, including the Treasury, would be required to buy and manage at least one small-or-medium-sized enterprise (SME). This would be in a sector for which the department is responsible. For instance, DEFRA could run a small farm; the Department of Transport, a taxi firm; the Home Office, a security outfit. You get the idea.

As for Downing Street and the Cabinet Office, let’s see how they get on with a brewery.

Civil servants — including senior officials and the brightest new recruits — would be seconded for at least a year to provide the hands-on management. They’d be allowed to hire some permanent staff, but the secondees would have to do all the admin themselves — and especially the paperwork generated by government regulation.

Once deployed, the civil servants would get no more help from their colleagues. The only government support they’d be allowed to access is whatever’s available to the general public. To help them take their temporary roles seriously, a big chunk of their normal salaries would be paid as a bonus instead — the size of which would depend on the performance of the business.

Ministers should have some skin in the game too. It wouldn’t be practical to send them on a ‘tour of duty’ with their civil servants, but they should have to make an annual statement to Parliament on the performance of each departmental SME. Obviously, it would be very embarrassing if it made a loss — or even went bust.

Most importantly, the ‘lived experience’ of actually running an SME would help inform government efforts to cut red tape. All departments would have to keep the bureaucratic burdens they place on SMEs within a set ‘time budget’. They’d have to prove that the paperwork they generate for others can be completed with the maximum time allotted. This could be checked against the work diaries of their own seconded civil servants.

How much would this all cost? Well, nothing at all — if, that is, the small businesses broke even. And it wouldn’t be that hard for Britain’s civil servants to ensure that happened. Would it?

Defund the universities

Poppy Coburn, Student

It’s hard to pinpoint when it became obvious that British universities are doomed. Perhaps it was the moment, at the beginning of the pandemic, that the University and Colleges Union announced HE institutes faced a £2.6 billion shortfall in funding? Or was it last month, when the Professor of Modern History at the University of Oxford accused her own institution of “dismal failures” over free speech? Rather than conjuring up the idea of free discourse and academic excellence, “university” is now shorthand for a furious wave of anti-enlightenment thinking and financial incompetence.

It needn’t be this way. Universities were once the domain of the few, with polytechnics and apprenticeships providing a more practical training for the wider workforce. The shift away from council-led funding towards the student loan model — which aimed to reduce the burden upon the taxpayer of subsidising higher education — has sped up a marketisation process that has seen universities scrambling to attract more students, often via costly building developments and a lowering of academic standards.

These student-consumers hold considerable power over their educators: they “buy themselves grades”, demand exorbitant funding for Student Unions and block controversial speakers. If a massive influx of young people feels coerced into taking on student debt, why shouldn’t they demand the best educational product? And is it any wonder that, when they realise, post-graduation, that the real world isn’t as tractable — that society doesn’t have enough high-paid, high-status work to placate them — they become disillusioned, impassioned actors in the culture wars?

Estimates suggest that, by 2024, the Government could be spending £22 billion subsidising student loans. If Boris Johnson is serious about restoring the good reputation of our universities, he must attack the source of their failures: reverse marketisation by slashing funding to ailing institutions, and instead invest money into skills-based programmes that can give young people a path to gainful, meaningful employment.

Bring down house prices for the young

Ed West, Senior Editor

Of all the terrible pieces of government advice dished out this past year, there was one advert that particularly, irrationally grated with me. It was a video by the German health authorities hailing young people as Covid heroes for lying on the sofa all year, and I suppose it reaffirmed just what an appalling waste it all is, to make life so meaningless.

For middle-aged people, the last year has obviously been terrible, but at least it’s been terrible in a structured sort of way; when you have kids, every day is lockdown to a certain extent, so spending Saturday night on Google Maps is not a huge lifestyle change (well for me at any rate).

For 20-somethings it’s been considerably worse, so in some sense the coming budget has to be about paying back the people who lost one of the best years of their life. And there really is one issue that crowds out every other issue — housing.

Lockdown aggravates all the worst things in life and for many it’s brought home the fact that they live in overcrowded properties, in flat shares for way too long, or are still living with their parents. High housing costs have a huge impact on productivity; they are known to hugely reduce family-formation and also push people radically to the Left.

There is much sentimentalising at the moment of the Attlee government, and a belief that we should return to 1945 — a time when young heroes were rewarded. But it was the Attlee government’s Town and Country Planning Act which made house-building unusually hard in Britain.

Now we find ourselves in a tragedy of the commons, where people block development because individually they suffer from new housebuilding, which makes their lives worse. Yet they are collectively ensuring that their children are too poor to give them grandchildren.

This has to change, and maybe there is a solution at hand. A couple of weeks ago Policy Exchange published a paper proposing “street votes”, by which residents of low-density suburban streets could vote to build up to four or five storeys.

It’s reckoned that two million new homes in the most sought-after parts of the country could result from this, without building on any green belt land, making lots of (Tory-voting) suburban houseowners very rich and also bringing down the cost of rent and house-buying, and so creating a new generation of (Tory-voting) young homeowners.

They’ve spent a year on the sofa, at least give them the chance to one day have their own living room.

Harness people’s pandemic savings

Polly Mackenzie, Contributor 

Rather more by accident than design, Britons have accumulated £125bn in savings during the pandemic. With hardly anything to do, or anywhere to go — with commuting costs slashed and lunches at home, with holidays cancelled and pubs closed — millions of us have left part of our pay packet just sitting in our bank accounts waiting for the end of the pandemic.

It’s one of the many ways in which lockdown has been unfair. While millions have lost their livelihoods and struggled to keep their heads above water, others find themselves rather more comfortably off than they have ever been before. But let’s see the positive: there’s the opportunity for a big economic stimulus — one that will benefit everyone, if we can get some of those stockpiled pounds and pence spent on something useful.

The Bank of England is forecasting that we’ll go on a bit of a mini-binge once lockdown is over, and 5% of all those savings — £6.25bn — will be spent, boosting growth in the second half of the year. Most of that will probably go on new work clothes, given that everyone I know has either piled on a stone or taken up running and shrunk two dress sizes.

But what about the rest of it? The Northern Research Group of Conservative MPs have proposed a Northern Recovery Bond, which would offer savers the opportunity to invest in infrastructure spending; Keir Starmer has proposed a similar, national scheme of Recovery Bonds that would offer a secure return to savers in a time of uncertainty.

Why not go one step further and create a sovereign wealth fund — with a mandate to invest in the transition to a green economy — in which all citizens can buy shares? Government can still borrow at shockingly low rates, so it could also put money directly into the fund, and give away those shares as a reward to those many low-paid workers who’ve served the country during the crisis. And it could bring back the old Child Trust Funds, too, to create small investments for the next generation.

Some will argue that this would just be financial smoke and mirrors. Government should keep it simple — borrow and invest on our behalf to grow the economy — and people should save wherever they fancy; eventually the capital will find its way to the most productive investments. But that would be to ignore the huge benefit of inspiring a spirit of collective action, not just for recovery but in support of the economic transition we need to go through in the face of climate and technological change.

People are fed up with change; and yet change is inevitable. One of the key questions the Chancellor should be asking is how to get people excited in, and emotionally invested in, the economy of the future. The answer is to help them get literally invested in it.