Polis Analysis is concerned with the effect that tax rises and lack of action to support the prosperity of young people will have on growth for the economy, addressing the intergenerational fiscal balance, and what opportunities young people have in the UK.

Firstly, the increase in National Insurance payments for employers by 1.8% will have negative effects on employment and wages across the whole economy. The Office of Budget Responsibility has stated that three-quarters of this increase will be passed on to employees, affecting pay rises by up to £600. The increased costs associated with this for firms could also lead to layoffs alongside this, and could potentially lead to some of these costs being passed onto consumers through higher prices, further affecting the cost of living for young people.

With the threshold at which employers start making National Insurance contributions also decreasing, this will affect more small firms, many of which employ lower-wage workers, who tend to be younger, so this will also affect the intergenerational balance in wages.

Polis Analysis does recognise that the increase in the minimum wage for 18-21-year-olds alongside some of the announced infrastructure and productivity investment will provide long-term benefits for younger generations. We are also pleased to see a change in the fiscal rules that allows for more long-term investment to benefit productivity for younger generations.

The increase in the minimum wage alongside the rise in National Insurance contributions for employers will cause the cost of hiring to increase, so while we recognise the importance of putting 18-21-year-olds on an equal footing in the wages they receive, the way it is being conducted could make the job market more difficult to navigate for young people and hinder their employment opportunities. This minimum wage alongside the additional burdens for business could severely hinder employment opportunities for young workers if not managed effectively.

Furthermore, the freezing of income tax thresholds will mean that young people will begin paying higher tax rates sooner, affecting their long-term ability to save to purchase their first home or make further investments, placing younger generations at a disadvantage While these thresholds being frozen until 2028 does help bring in tax revenue to reduce the current fiscal deficit, Polis Analysis hopes that this will be reconsidered, especially for younger workers, who will be more disproportionately affected by this.

While the increase in stamp duty for second homes could potentially support first-time buyers in the housing market, the lack of action on Lifetime ISA thresholds will hurt prospective young first-time buyers. Average house prices across the UK are currently nearing the current £450,000 threshold of house price you can use your Lifetime ISA towards and exceed this threshold in many areas of London. Therefore, we hope that there can be action in the future to address this to encourage young people to save and get onto the housing ladder.

Polis Analysis hopes to see policy announcements or consultations in the coming months aimed at creating economic opportunities for young people and addressing the economic imbalance between younger and older generations, and we look forward to contributing in these areas.