Youth and the General Election 2015: Time to Stop the Slide

Transcription

1 Youth and the General Election 2015: Time to Stop the Slide How intergenerational fairness has evolved between the 2005, 2010 and 2015 General Elections Date: March 2015

2 The Intergenerational Foundation ( is an independent, non- party- political charity that exists to protect the rights of younger and future generations in British policy- making. Whilst increasing longevity is to be welcomed, our changing national demographic and expectations of entitlement are placing increasingly heavy burdens on younger and future generations. From housing, health and education to employment, taxation, pensions, voting, spending and environmental degradation, younger generations are under increasing pressure to maintain the intergenerational compact whilst losing out disproportionately to older, wealthier cohorts. IF questions this status quo, calling instead for sustainable long- term policies that ensure younger and future generations are better protected by policy- makers. For further information on IF s work please contact Liz Emerson: Intergenerational Foundation 19 Half Moon Lane London SE24 9JS info@if.org.uk The Intergenerational Foundation charity no:

3 Contents Page: Introduction 4 Executive Summary 5 Methodology 7 Findings in detail 8 The Intergenerational Foundation charity no:

4 Introduction With two months to go until the General Election on 7 May 2015 there is unprecedented interest in intergenerational fairness and its impact on our society. A conversation has begun about fairness between the younger and older generations in the creation of policy that has been largely absent in previous elections. Following the Scottish Referendum which encouraged far more young people to get involved, there is real sense that the imbalance in voting patterns that we have seen across the UK with young people far less inclined to vote can be addressed in the 2015 elections. 1 The Intergenerational Foundation has been keen to understand what impact the two most recent electoral cycles have had on intergenerational fairness. Building on the now well- established annual UK Intergenerational Fairness Index, 2 we have looked at a range of indicators to see how values have shifted between 2005 and 2010 and then again between 2010 and the most recent data that is available. It is valuable to assess the changes in intergenerational fairness across the two most recent electoral cycles, punctuated as they have been by the most severe recession that the UK has seen since the 1930s. At the same time we acknowledge that this is not a perfect methodology given the potential crudity of annual data sets and the lag in the impact of policies as they are implemented. We hope, however, that a knowledge of how intergenerational fairness has altered in the past decade will help the political parties to shape their policies in their forthcoming manifestos and to ensure that political, social and economic fairness is encouraged between the generations across the UK. 1 In this paper, young people generally refers to anyone who is under the age of intergenerational- fairness- index The Intergenerational Foundation charity no:

5 Executive Summary Worsening picture for intergenerational fairness. Our analysis of ten indicators of intergenerational fairness over the last two electoral cycles shows that the damage wrought by the recession of 2008 has continued, and the position of young people in our society is now significantly worse than it was prior to Whether it is the period from 2005 to 2010, 2010 to the present or 2005 to the present, the position of young people has worsened in the majority of indicators. Overview of s in the Indicators 2005 to 2005 Major concerns for government debt, state pension costs and private rented sector housing. For four of the indicators the proportion of households renting in the private sector, the costs of renting in the private sector, the costs of the state pension, and levels of government debt the position has worsened between 2005 and 2010 and then again between 2010 and the present time. The costs of two of these indicators in particular increasing levels of government debt and the spiralling costs of the state pension will have significant implications for younger people into the future. The Intergenerational Foundation charity no:

6 Youth unemployment better now than in Our two indicators of unemployment among younger people the proportion of 18 to 24 year olds who are unemployed and the proportion of 18 to 24s who are Not in Education, Employment or Training (NEETs) both worsened significantly between 2005 and 2010 but have improved between 2010 and the present time. Both indicators remain in a worse position now than they were in 2005, with levels of youth unemployment almost a third higher than they were at that time. Income levels squeezed hard since The squeeze on incomes since 2010 has had an impact on house price affordability for young people. The benefits of the fall in house prices that were seen after 2008 have been reversed since 2010, as incomes of the young have stagnated and house prices have risen rapidly since Housebuilding remains low. Although housebuilding completions rose slightly in the last year, they remain at extremely low levels and at just three- quarters of their levels in Low voter turnout by the young. While turnout by young people in elections remains a significant concern, there are some signs that the gap between voting levels by those aged 18 to 24 and the electorate overall may be narrowing. The gap narrowed slightly between the 2005 and 2010 general elections and, in the most recent round of elections in 2014, 45% of those aged 18 to 24 were found to have voted compared to the overall turnout of 48%. The big issue, of course, is whether this improvement will be sustained into the forthcoming General Election. The indicators and how they have changed are summarised below. A minus sign (and a red background) indicates that intergenerational fairness has worsened and a plus sign (and green background) that it has improved. Indicator 2005 value 2010 value 2014/ Most recent value 2005 to to present 2005 to present 1. % of 18 to 24s unemployed 10.7% 17.7% 14.3% 7.0% + 3.4% 3.6% 2. NEETs as % of 18 to 24s 16.3% 18.9% 17.3% 2.6% + 1.6% 1.0% 3. Ratio of median house prices to median income of young people 4. Dwellings completed GB % + 7.7% 27.7% (000s) 5. Private sector rent costs (Index) % all households private renting 11.7% 15.6% 19.4% 3.9% 3.8% 7.7% 7. Total expenditure state pension 63,058 74,956 86, % 15.4% 37.2% ( million (2014/15 prices)) 8. Public sector net debt (% GDP) 35.1% 65.7% 80.9% 30.6% 15.2% 45.8% 9. Ratio of % whole electorate voting versus % young people 10. Median income levels of young people (inflation adjusted) 18,278 19,767 18, % 6.6% + 1.1% The Intergenerational Foundation charity no:

7 Methodology This report assesses how, across a range of ten indicators, intergenerational fairness has changed between 2005 and 2010 and between 2010 and the most recent data sets that are available for them. The report builds on the work of IF s annual UK Intergenerational Fairness Index. In the table below we show that, while some of the indicators that this report uses appear in the IF Index, we have also included three other indicators which we believe offer valuable insights into the environment in which young people currently live their lives. The three new indicators make use of: - The numbers of young people aged 18 to 24 who are Not in Education, Employment or Training (NEETs) in England. - The numbers of Private Sector Renters. - An index of Private Sector Rental Costs. Electoral cycle research indicators Unemployment: youth unemployment Unemployment: NEETs Housing: affordability Housing: house building Housing: private sector rents Housing: numbers renting in the private sector Pensions: state pension Government debt Participation in democracy: voting Incomes Whether also used in the annual IF Fairness Index Yes Yes Yes Yes Yes Yes Yes For the most part, the indicators offer data on an annual basis. Where that is the case, the indicator used in this analysis is the one that has been published for that year (eg 2005). Where data is published more frequently (eg monthly), the data point selected is that of the month of the election (May of the year in 2005 and 2010). Comparison between the May 2010 election is then made with the most recent data point available (eg December 2014). Throughout this report a positive figure indicates an improvement in intergenerational fairness and a negative figure indicates a worsening in the position. The Intergenerational Foundation charity no:

8 Findings in Detail The detailed results of the performance of the ten indicators are as follows: 1. Unemployment: Youth Unemployment 2005 to 2010: The impact of the recession led to a significant worsening in levels of unemployment among those aged 18 to to present: Significant improvement since to present: Youth unemployment levels remain higher than in 2005: Indicator Proportion of those who are aged 18 to 24 who are unemployed Data Sources Summary of labour market statistics. Date of Publication: 18 Feb market- statistics/february- 2015/table- a01.xls (Table 2 (1)) Data Point May to June value 2005 to Most recent value Oct- Dec 2014 Period % 18 to 24 unemployed May Jul May Jul May Jul May Jul May Jul May Jul May Jul May Jul May Jul May Jul Oct Dec (% points) 2005 to to most recent to most recent 3.6 The Intergenerational Foundation charity no:

9 2. Unemployment: Not in Education, Employment or Training (NEETs) 2005 to 2010: Increase in the proportion of 18 to 24 years olds not in education, employment or training to present: Decline in the proportion of NEETs mirrors the fall in youth unemployment levels to present: Overall slight increase in from 2005 levels. Indicator Young people not in education, employment or training (NEETs) as a proportion of the number in that age group in England Data Sources Numbers of those not in education, employment or training (England) data/file/375999/neet_harmonised_supplementary_tables_national_tim eseries_inc_q xlsx Table 2: Percentage of young people Not in Education, Employment or Training (NEET) in England Data Point Q3 values: 2005 to 2014 Year (Q3) Percentage of young people (18 to 24) Not in Education, Employment or Training (NEETs) in England % % % % % % % % % % (% points) 2005 to % 2010 to most recent + 1.6% 2005 to most recent 1.0% The Intergenerational Foundation charity no:

10 3. Housing: Affordability 2005 to 2010: Improvement in the ratio of house price affordability to the incomes of young people following the decline in house prices after the credit crunch and the start of the recession to present: Rapidly rising house prices post 2011 drive a worsening of the position again to present: Rapidly rising house prices return the position to close to 2005 levels. Indicator Ratio of (1) median house prices to (2) the median income levels of young people Data Sources 1. House Price Price Paid Data: registry- monthly- price- paid- data 2. Incomes. Annual Survey of Hours and Earnings (ASHE) survey- of- hours- and- earnings/index.html (Age Group Table 6.7a Annual pay) Data Point 1. Median of Price Paid 2005 to 2014: 2. Young Persons Median Income (2005 to 2007); to = provisional data Year Median house prices Median income of young people (age to 07; to 14) Young persons affordability ratio (House Price/Income) ,500 15, ,000 15, ,000 16, ,000 18, ,000 18, ,000 18, ,612 18, ,000 18, ,000 18, ,000 18, Absolute change in ratio 2005 to to most recent to most recent The Intergenerational Foundation charity no:

11 4. Housing: House building 2005 to 2010: House building completions decline by almost a third to present: Position little changed until slight increase in completions in to present: Current levels remain more than a quarter below 2005 levels. Indicator Data Sources Data Point Numbers of permanent dwelling completions Great Britain Statistical data set on house building: data- sets/live- tables- on- house- building By Country: Wales data/file/86138/livetable245.xls Scotland data/file/86139/livetable246.xls England data/file/86137/livetable244.xls Annual figures. NB Provisional figures for England for 2014; re- use of 2013 figures for Scotland and Wales (England represents C. 84% of all house building completions annually) Year Dwelling completions Great Britain (000s) (%) 2005 to % 2010 to most recent + 7.7% 2005 to most recent 27.7% The Intergenerational Foundation charity no:

12 5. Housing: Private Sector Rents 2005 to 2010: Steady above- inflation rise in private sector rents to present: Continuing pattern of rising rents to present: Rental costs now almost 20% higher than in Indicator Index of private housing rental prices (inflation adjusted) Data Sources Experimental index of private housing rental prices index values (monthly data): January 2011 = of- private- housing- rental- prices/october- to- december results/rft- iphrp- dec14.xls England only data May 2005 to Dec 2010; Great Britain data Jan 2011 onwards. Latest update: 30 January Data Point May values 2005 to Most recent value December 2014 Year Index of private sector rents (January 2011 = 100) May May May May May May May May May May Dec (Index points) 2005 to to most recent to most recent 19.0 The Intergenerational Foundation charity no:

13 6. Housing: Numbers Renting in the Private Sector 2005 to 2010: Steady rise in the proportion renting in the private rented sector to present: Continuing rise in the proportion renting in the private rented sector to present: Overall proportion of all households privately renting has risen from just over 1 in 10 in 2005 to almost 1 in 5, based on the most recently available data. Indicator Data Sources Data Point Proportion of all households in the private rented sector English Housing Survey housing- survey Most recent report is the English Housing Survey HOUSEHOLDS published 25 February 2015 English Housing Survey headline report 2013 to 2014: section 1 household tables data/file/406547/ _section_1_households_tables_and_figures_final.xlsx Worksheet (Purple Tabs) AT1.1 Annual 2005 to 2008 (data from the ONS Labour Force Survey); Financial Year onwards (data from English Housing Survey, full household sample) Year Private renters as % of all households % % % % 2008/ % 2009/ % 2010/ % 2011/ % 2012/ % 2013/ % (% points) 2005 to 2009/10 3.9% 2009/10 to most recent 3.8% 2005 to most recent 7.7% The Intergenerational Foundation charity no:

14 7. Pensions: State Pension Costs 2005 to 2010: Rapidly rising costs to present: Rapidly rising costs to present: In real terms, the total costs of state pensions are now more than a third higher than in Indicator Total state pension expenditure, million (real terms (2014/15 prices)) Data Sources Autumn Statement 2014 Gov.UK ata/file/389497/outturn- and- forecast- AS xlsx Data Point Outturn data 2005/06 to 2013/14; forecast 2014/15 Year Total state pension expenditure, million (real terms (2014/15 prices)) 2005/06 63, /07 64, /08 66, /09 69, /10 73, /11 74, /12 78, /13 82, /14 84, /15 86,517 (%) 2005/06 to 2010/ % 2010/11 to most recent 15.4% 2005/06 to most recent 37.2% The Intergenerational Foundation charity no:

15 8. Government Debt 2005 to 2010: Rapid rise post credit crunch of public sector net debt as % of GDP to present: Rising levels tailing off post to present: Levels of public sector net debt (as a % of GDP) have more than doubled since Indicator Public sector net debt (excluding public sector banks) net debt as a % GDP Data Sources Public Sector Finances. Date of publication: 20/02/ sector- finances/january- 2015/rft- appendix- a.xls Worksheet PSA1. Dataset identifier code HF6X. Data Point Q3 values to : most recent data = Q4 Year (Q3) Net debt as a % GDP Q (% points) 2005 to to most recent to most recent 45.8 The Intergenerational Foundation charity no:

16 9. Participation in Democracy: Voting 2005 to 2010: Higher proportion of young people turn out in the 2010 elections (relative to overall electorate) than in to present: Often extremely low levels of turnout by younger voters in non- general election years but voting levels of 18 to 24 years old were far closer to overall voter turnout in the 2014 Local Council and European Parliament elections to present: Voting levels remain a significant concern ahead of the 2015 election. Indicator Data Sources Data Point Turnout of young people (aged 18 to 24) in elections compared to the whole electorate Principally research undertaken on behalf of the Electoral Commission British Election Survey: Election: mori.com/researchpublications/ researcharchive/2613/how- Britain- Voted- in Election: data/assets/pdf_file/0017/ /Post- polling- day- public- opinion- report- for- 5- May pdf Elections data/assets/pdf_file/0004/ /May GB- post- poll- public- opinion- report.pdf Local Elections Figure 2 page 10: data/assets/pdf_file/0020/ /2013- Post- election- survey- Report.pdf Elections. data/assets/pdf_file/0009/ /2014- Post- election- survey- UK- tables- WEB.pdf Election day research Year Young Person Voting Ratio (Whole electorate turnout/turnout those aged 18 to 24) Absolute in Ratio 2005 to to to The Intergenerational Foundation charity no:

17 10. Incomes 2005 to 2010: Overall improvement in young people s income levels up to to present: Decline post particularly rapid between 2010 and to present: Income levels remain well below pre- recession levels. Indicator Data Sources Data Point Median income levels of young people (inflation adjusted) 1. Income Data. Data from Annual Survey of Hours and Earnings (ASHE): survey- of- hours- and- earnings/index.html (Age Group Table 6.7a Annual pay) 2. Adjusting for Inflation. GDP deflators: December 2014 (Quarterly National Accounts). Published 12 January data/file/394588/gdp_deflators_qtrly_national_accounts_december_201 4_update.csv 2. Young Persons Median Income (2005 to 2007); to = provisional data Median income young people (real terms Year (2014 Prices)) 2005/ , / , / , , , , , , , ,471 (%) 2005/06 to % 2010 to most recent 6.6% 2005/06 to most recent 1.1% The Intergenerational Foundation charity no: