Young workers are set to shoulder the burden of Covid spending and addressing the crisis in NHS and social care, according to the Intergenerational Foundation think tank. A recently published report outlines how the ‘packhorse generation’ are being taxed by stealth. For example, graduates earning £27,000 can expect to see their disposable income drop by nearly 30% in the next four years.
With inflation rising, workers are fighting to win pay rises. But as the report outlines, in some cases pay rises will push workers into the next income tax bracket, not helped by the fact that the government has deliberately frozen these thresholds. By 2025-26, the Treasury expects this to increase government revenue by over £13 billion a year. Meanwhile, those with unearned income, landlords’ rents and bosses’ dividends, escape.
Likewise, by freezing the student loan repayment threshold at £27,295, the government has ensured that thousands of graduates who get even a modest pay rise this year could be forced to begin repaying loans, wiping out any pay rise before even considering the true rise in the cost of living.
Finally – less by stealth, more like a punch in the gut – national insurance contributions are being raised.
The report tells us what we already know: the government wants to make workers pay for the cost of Covid. The report is correct when it states that those with unearned income should be made to pay. What it doesn’t make clear is that it is the capitalist class that collects the overwhelming majority of ‘unearned income’. It is incorrect, as the report does, to pose it as a question of intergenerational conflict.
What is needed is to build intergenerational solidarity of the working class, to build the strongest possible movement to challenge for the wealth hoarded by the bosses. This includes fighting in the trade unions for inflation busting pay rises, but also building a political movement that challenges for the vast wealth hoarded by the capitalist class and fights for socialism.