We recently conducted another survey of the UK public. We wanted to understand what the population thinks about the Covid debt, how we will pay it back and how it will impact on our lives.
The survey found that the UK public believe it will take 35 years to pay back the Covid deficit. People also think they will be retiring two years later than they had originally planned as a result of the pandemic, and they were less confident about many aspects of their financial future. You can read the full results here.
A key theme that was visible throughout the results was the feeling that the younger generation are going to be the ones who pick up the tab, through taxes, for many years to come. 43% of all respondents said the group most likely to take on the burden of debt will be today’s 18–30-year-olds.
Meanwhile, nearly two thirds (65%) of the population expect further tax rises in future – particularly on income tax – to pay for Covid and some suggested that new forms of taxation could be introduced, like a carbon tax or a wealth tax.
But characterising our emergence from the pandemic as just a matter of raising taxes to pay down the debt is to over-simplify the challenge that lies ahead, and to miss a potential opportunity.
Stimulus and incentives
I believe the debate needs to broaden beyond taxation if we’re to make a meaningful and long-lasting economic recovery. This is important because young people are at risk of paying for the pandemic in more fundamental ways than the pound in their pocket.
As such, I would like to see the Government concentrate on stimulus and on incentivising the creation of jobs and opportunities for young people as a priority. Along with the much-needed support it gives them to jump-start their ambitions, it has wider benefits for us all.
Secure, stable employment
At an economic level, you can’t tax fresh air. We have to create jobs first that we can generate tax revenue from. High-quality employment opportunities for young people are vital for this. We have taken on more than 50 staff in the last 12 months and furloughed none. We’re doing what we believe is right for the business, our team and wider society over the long term.
Some businesses, like technology-led companies and online retailers, have done very well throughout the pandemic, benefiting from the changes to our lifestyle brought about by lockdown living. But we often see a disconnect between their successes and a contribution to the recovery. It’s already well-documented that many of these businesses take a selective approach to paying their taxes. For example, in the 2019-20 tax year, Amazon paid only £293m in UK tax on nearly £14bn in revenues, and just £6.3 million of this was in corporation tax.
What’s more, in the burgeoning gig economy, many of these companies don’t offer the type of secure, stable employment and earning opportunities that would enable their often young staff to make long-term financial commitments. Deliveroo are being shown up for just this type of behaviour right now, as a number of large investors shun shares in them after concerns over workers’ rights.
Confidence is crucial
With good jobs that offer attractive prospects comes the financial confidence to spend, invest and live our lives again. The Bank of England recently predicted that we as a nation will potentially have amassed a savings total of around £250bn by the end of lockdown in June.
While this is a nice national nest egg we need to get this money moving and the economy ticking over again, which means we need to build financial confidence. We want the population to become more comfortable in taking big financial decisions, like buying a new car or moving house, often the type of financial activity that is very much driven by the younger generation.
Just as we all have the opportunity as individuals to take stock of our financial situation before normal life returns, we have a responsibility to have a bigger conversation about stimulus and job creation at a society level.
We will be living with the impact of the pandemic for a generation or more into the future, so creating opportunities and restoring financial confidence in the young will be a key driver of the recovery.