The chancellor’s budget, hailed by a former Labour MP as the ‘best in my 42 years in politics’, gives young people little to celebrate.
Much commentary has been concerned with the revenue-raising measures it contains – in particular, plans to freeze income tax thresholds (a de facto tax increase due to inflation) and increase corporation tax in April 2023. These have drawn gasps of disbelief from right-wing commentators, and accusations of plagiarism from segments of the left. However, the most important measures for young people relate to housing, where the government has pledged to extend a tax break for people buying houses worth less than £500,000, and to offer mortgage guarantees worth up to 95 percent of the value of a property to homebuyers.
This is terrible for anyone looking to get on the housing ladder for two reasons – one economic, one political. Firstly, both measures are likely to inflate house prices, already growing at their fastest rate in six years, even further. There is a broad consensus that the obstacles to home ownership for the unpropertied lie on the side of supply – there are not enough houses where they are needed – rather than on the side of demand; it follows that all these demand-side measures will do is cause further house price inflation. Instead of turning ‘generation rent into generation buy’ as the government briefed the papers before the budget, its policies will make the prospect of home-ownership even more remote for young people.
However, the second reason for pessimism is more significant. This new budget, in which the Johnson government broke self-consciously with its predecessors in many areas of fiscal policy, actually reaffirmed the essentials of Conservative housing policy as they have stood since George Osborne introduced Help to Buy. It’s no coincidence, for example, that the pledge cited above was first delivered by David Cameron at the 2015 Conservative Party conference. While inflationary house price rises are bad for the unpropertied, they are a boon for homeowners, who see their house not only as a place to live, but also as a commodity whose sale will generate a profit to cover their social care when they are old, and provide an inheritance to their children when they die. Politically, then, the government has made it clear to young people that they will not be included in its ‘levelling up’ agenda, and that it is existing homeowners, not those who aspire to own a home, who are closest to its heart.
Politically, then, the government has made it clear to young people that they will not be included in its ‘levelling up’ agenda, and that it is existing homeowners, not those who aspire to own a home, who are closest to its heart.
Viewed in terms of narrow partisan political interest, this may seem rational. Homeowners – both those who have a mortgage and those who own their houses outright – have long been the bedrock of the Conservative Party’s electoral coalition. This trend has only increased in recent elections: Ipsos Mori show that between 2010 and 2019, the proportion of those who owned their home outright who voted Conservative increased from 45 percent to 55 percent; in the same period, the proportion of mortgaged homeowners voting Conservative increased from 36 percent to 43 percent. This policy area is at the bottom a zero-sum game – one cannot lower house prices for young people without also lowering the profit margins of homeowners – and so the Conservatives have legislated in ways that avoid alienating their core constituency, at the expense of the unpropertied young. After all, as the proverb goes, a bird in the hand is worth two in the bush.
This policy area is at the bottom a zero-sum game – one cannot lower house prices for young people without also lowering the profit margins of homeowners – and so the Conservatives have legislated in ways that avoid alienating their core constituency, at the expense of the unpropertied young.
The operative word here is ‘narrow’. In fact, by continuing to dismiss the interests of the young people, the Conservative Party has adopted the course of greatest electoral risk. The same Ipsos data which shows that homeowners tend to vote Conservative shows that there has been a sharp swing to Labour among private renters since 2010 (from 29 percent in 2010 to 46 percent in 2019). If, after the worst of the pandemic passes, work-from-home arrangements are largely suspended and office work resumes (and there is little reason to expect this won’t happen), the magnetic pull that London exerts on job-seeking graduates will cause its private rented sector to heat up once again. For the Conservatives, whose electoral fortunes in the capital have never recovered from the dizzying heights of Boris Johnson winning the mayoralty of London in 2008 and 2012, an influx of tenants offers a poor platform on which to stage a revival. This is a challenge that will be reproduced across the UK’s ‘core cities’, the main area which the Conservatives failed to reliably penetrate in the 2019 general election.
However, more than risking their electoral prospects in the present, the greater peril for the Conservatives is losing the opportunity to bed in a new generation of partisans for the future. Thanks to a loud minority among students, and a media that oscillates between gullibility and cynicism, it has become a well-established trope in British political culture that the Conservative Party has ‘lost’ my generation, which is caricatured as a homogenous mass of ‘bleeding heart liberals’ whose politics and values consist of reading theory, dodging honest work, and criticising stridently and perpetually anything and everything about the established way of things. Yet many of us have instincts which are quintessentially small-c conservative. Far from wanting to hammer swords into ploughshares and make the lion lie down with the sheep, we want the very things the Conservative Party tends to present itself as valuing: jobs; the individual responsibility that comes with leaving home, a roof under which to settle down and (eventually) raise a family; and the chance to live a better life than our parents. With things as they are, even these modest ambitions seem unrealistic, as should the prospect of any of us voting Conservative after a long wait at home or in the private rented sector to save for a deposit while house prices continue to rise and rise. After all, the evidence suggests that wait could be very long indeed.
The last time this happened, in the late-twentieth century, the Conservative governments led by Margaret Thatcher seized the opportunity to bed in a new generation of middle-class support through Right to Buy, which enabled tenants living in social housing to buy their home from their local government at a sizeable discount. As a policy, it was incredibly successful at realising its nakedly partisan objectives, as indeed was and remains the associated policy of restricting the subsequent regeneration of Britain’s stock of social housing. Its principal flaw is that it worked too well: by creating a large and efficiently distributed landed middle class on which the Conservatives have come to rely, Right to Buy has created an intractable, and (thanks to subsequent Conservative policy, growing) obstacle to embedding a new generation of latent Conservatives. Challenging its landed supporters now is a thorny issue for the Conservatives; but leaving this nettle ungrasped, keeping the housing bubble perpetually expanding, and subjecting young would-be supporters to a purgatorial stay in the private rented sector would be bad economics, and fatal for the party’s long-term electoral health.
For anyone concerned about this government’s capacity to accept short term pain to avert a greater long-term danger, its handling of lockdowns during the Coronavirus Pandemic should be a cause for alarm. Informed commentary around the time of the third lockdown suggested that the reason the Johnson government was consistently late to enact restrictions that were widely seen as inevitable – closing schools and shops, and cancelling Christmas – was because the prime minister is incapable of risking short-term unpopularity if he believes he can possibly avoid it. In any context where, as it were, the deal keeps getting worse all the time, this is a huge problem which means issues tend to inflate to lethal proportions before they are grappled with, as we have seen. Now the vaccination programme has turned out to be a rip-roaring success, the government’s prior sins have been somewhat forgiven – evidenced by its recent bounce in the opinion polls. However, the crisis in housing remains a present and growing fact of life for young people, and a latent danger for the Conservative Party. If the party does not find the will to engage with it now, while it is in government, it will all too soon find itself in opposition, wishing it had.
 Hughes and Southwood (2021), Strong Suburbs, London: Policy Exchange, p.17.
 McKibbin (2016), ‘A Brief Supremacy: The Fragmentation of the Two-Party System in British Politics, c. 1950-2015’, Twentieth Century British History, 27(3), pp.450–69.