Richard Holden is MP for North West Durham.
The Hobson Pub, County Durham.
Chatting to a group of “empty nest” parents in their fifties and sixties when out for a post-work pint recently, I was struck by the political split between them and the views of many of their children.
The children who’d stayed in and around County Durham, most likely after pursuing further education vocational and technical courses, tended to hold similar views to their parents. Those who’d gone away to university were, politically at least, politically detached.
This manifested itself even more strongly post-graduation for many as they moved often to graduate jobs in cities Post-election polling from IpsosMori backs this up. We Conservatives need to understand this graduate group better in a variety of ways, especially given the fact that, at the 2019 election, 18-24s (especially students and graduates) were one of the few groups among which Conservative support fell, despite a widespread swing from Labour to us elsewhere.
Ask left-wing agitators why they feel this happened, and they’ll argue that these voters who swung behind them did so out of belief in the socialist ideals of Comrade Corbyn, or at least support for the magnificence of Keir Starmer’s second referendum policy.
I am not convinced. On the contrary, I’m increasingly certain, from the anecdotal conversations that I’ve had with both these voters and their families, that they voted on two over-riding issues: housing and tax.
Deep down, many recent graduates were voting in line with clear self-interest. It’s not that they didn’t care that the Labour Party was riddled with anti-semitism. Nor is it that they didn’t care that Corbyn and his cabal had supported every enemy of their country who had crossed his path.
It’s just that they didn’t care as much about these issues as they did about getting what they thought might be a chunky tax cut from Labour – in terms, from what is in essence a nine per cent tax levied on graduate incomes above £26,575 a year, on top of being forced to spend a huge chunk of their remaining income on rent.
With 20 per cent income tax, 11 per cent National Insurance and nine per cent student loan contributions for recent graduates, a 40 per cent marginal tax rate kicks in at £26,575. This margin rises to 51 per cent if they earn over £50,000 down the line.
When you throw in the living costs of cities where graduates tend to go for work, together with high rent, it’s hardly surprising that many graduates feel squeezed – and that, when Labour offered jam today for which everyone else would pay, it can hardly be a surprise that many jumped at the offer.
Which leaves us Conservatives with some big questions if we want to re-engage with this group of voters. Crucially, these graduates with hangover student loans won’t come back to us when they hit their 30s. Furthermore, given that they’ll be paying that extra nine per cent income tax until their mid-50s, I can’t see them doing so for a very long time.
What’s the answer? Well, Robert Jenrick’s look at housing and housebuilding, particularly in brownfield site areas, is a good start. We’ve got to get homes built, reduce the cost of housing and get these people on the property ladder. Aged 35, I’m literally in the process of buying my first home, something my (I’d imagine) equally hard-working parents and grandparents were able to do the best part of a decade before me and well before most of my peers – at least before most of those who haven’t had deposits provided by their families.
But, secondly, and perhaps more fundamentally – because it cuts across so many different things from productivity to tax – is we’ve got to have a proper look at post-18 education and training.
It’s clear that Covid-19 is going to cause at least some short-term recruitment issues, and that the Kickstarter Scheme – another really sensible move from Rishi Sunak – will doubtless really help get some young people into work, and prevent some of the worklessness issues that in the past have caused so many issues.
However, the change we need to see is much broader. We have ended up in a right pickle. Because of the rapid expansion of universities, taxpayers are still paying roughly 50 per cent of the cost of sending people to Higher Education (about £10 billion a year).
This is roughly the same as the entire Home Office budget, covering policing, counter-terror, borders, etc. At the same time, we’re also giving graduates a notional debt of tens of thousands of pounds, and so also gifting them what are high tax rates at which they have to pay it.
And, most importantly, for many young students we’re selling a false promise. According to the IFS, 71,000 students last year (some 20 per cent of the total) undertook university courses although they’d be better off not having gone to university.
That’s not good for taxpayers, it’s not good for an increasing number of young people being sold a fantasy, and it’s not good for the UK’s productivity, either. Taking people out of work for three years at huge expense to themselves and to taxpayers, and for them then get jobs in which they end up earning less in that if they hadn’t gone to university, is clear economic madness, and politically toxic too.
The solution to this is already, in part, being trailed by some of our biggest companies increasingly in the service sector at the top end – degree apprenticeships at work. It is, in essence, a return to what happened a long time ago. (I remember my first Conservative Party Agent, a solicitor who’d done his articles as a clerk and never been to university.)
Crucially, with our high-end firms increasingly reaching into this area, they’ll also start to pass the “parents evening test” too. If young Joanne has got herself a solid paid apprenticeship with degree level options at Deloitte, BAE, or Goldman Sachs (yes, all offer them), during which she gets paid to work while studying with a top employer and a Russel Group university with a job at the end of it, then what’s not to like?
The core other policy element is to revolutionise our Further Education offering more generally as a similar step up and into employment too for post-18 as well as post-16. We need to value properly what is done in this sector better, as many of our successful continental cousins do. Derwentside College in my constituency does great work as do colleges across the county, but their whole top end (level 4 and 5 – that is, Higher National Certificates, HNDs one and two year post-18 courses) have been cannibalised by some of universities offering degree level courses to essentially anyone who wants to go.
Rather than students getting good one or two year local courses, tied to local employment, they’re off to “university” for a three year course that will leave them in a worse position than when they left. There are other facets, too, but what I’ve outlined here is the fundamental start. Our obsession with kids going to university is increasingly costing taxpayers a fortune, harming Britain’s long-term productivity and crucially selling those young people a false dream.
Electorally, it’s also a complete disaster and the gift that keeps on giving to Labour. Our next generation are natural Conservatives – they’d like to own their own homes, not pay eye-wateringly high taxes and be part of a community that supports them and each other. It’s up to us to show them that we’re on their side too. Taking on the new University Establishment won’t be easy but crucially, it’s the right thing to do.