William Hague Tories can do better than imitate the Left

We need to transfer the financial burden from the young to the old – let’s cut tax for everyone under 30

In 1977, as a 16-year-old, I felt I had to stand up at the Conservative conference and speak for a “lost generation” who were not then supporting the Tories. Forty years on, the same debate is back – an overwhelming majority of young people voted Labour at last month’s general election.

The Government now has to think long and hard about how to appeal to younger voters before it can contemplate another election, and there are signs that it has begun to do so. Damian Green, the First Secretary of State, is reported as having said the Tories have to be ready to “change hard”, and to have a “national debate” on the vexed issue of tuition fees that did so much to create a surge in Labour support.

The case for some hard thinking is not just electoral, but also that the discontented people in their late teens and twenties have a point. They are the first generation since the 1930s growing up in the expectation of being worse off than their parents. They face house prices bid up to impossible levels because of shortage of supply and permanently low interest rates. Pension funds that hand out index-linked defined benefits to their elders are largely closed to them. Tuition fees their parents did not have to pay are indeed an additional burden for many. Rapid changes in technology and the nature of work make a steady career harder to build. And soon they are going to be hit by having to pay for the long-term care of a vast older generation who live longer than was ever expected.

Fairness and the whole cohesion of society demand an answer to this, and the election campaign just demonstrated that simply attacking the assets of older people is unlikely to provide that on its own. The Conservative policy on social care had a lot to be said for it, although suddenly producing it in the middle of the election did not.

Nor will becoming a pale version of a Left-lurching Labour Party be the correct solution, on this issue or as a political strategy overall. Ministers and MPS who now rush to advocate higher spending should remember the crucial need for sound economic management, both electorally and for the long-term health of the country. The right alternative to a party that offers a totally unaffordable programme is unlikely to be a semi-totally unaffordable programme.

Thinking carefully about generational inequality is not about adopting some of Jeremy Corbyn’s policies in a panic. His intention to abolish tuition fees may have been popular, but that does not stop it being ill-thought out, hypocritical and counter-productive. Such fees were initially introduced by a Labour government, have improved the funding of our universities, increased the demand from students for value for money in their education, and have been accompanied by a rise in university applications – including from students from poorer backgrounds.

While abolishing the fees is one way of reducing the financial burden on young people, it is far from the best way of doing so, since it would involve forsaking these advantages and would do nothing to help the half of that age group who don’t go to university. What Corbyn was offering was to give a large cash sum to those who are still predominantly drawn from better-off families and who will go on to earn much more through their working lives than the other half, who would receive no benefit from this.

So Tories should be starting with a clean sheet of paper to solve this problem, and avoid the temptation of thinking that copying an ill-conceived policy will earn them the transient joy of being cheered by an excited crowd at Glastonbury. It is thinking of a fairer and more sustainable solution that will lead to cheers, applause, votes and a happier nation on a more permanent basis.

Part of that has to involve a massive effort to liberate house building by the private sector, something that a minority Government can attempt as a cross-party initiative and a top national priority, as I have written before. Yet that will take years to show benefits, if it is done at all, and the divide between the generations goes deeper than that.

A Tory solution to that divide should be based on encouraging enterprise, innovation, wealthcreation and self-reliance. If we are going to transfer a financial burden from younger to older people, why not reduce the rate of income tax for everyone under the age of 30? Not just the standard rate, but higher rates and the rate of Capital Gains Tax as well.

As a former minister I can well imagine the horror on the faces of Treasury officials produced by such a question – which is part of the fun of asking it – and the mass of objections to an idea of this kind. It would complicate the tax system. Yes, but not half as much as everything else they like doing to it. It would mean a sudden jump in tax at whatever was the cut-off age. Yes, but that already happens at different levels of income. It would mean young entrepreneurs would sell their businesses when they were 29. Yes, but it would have encouraged them to be entrepreneurs in the first place.

Most importantly, it would mean raising taxes for older people to pay for it. True, but at a rough guess a 1 per cent tax rise for people over 30 would pay for something like a 5 or 6 per cent reduction for those under 30 – possibly more – reducing their income tax by more than a quarter and giving them many thousands of pounds extra in the years they start their working lives.

This, of course, is just an idea that has popped in to my head. Brilliant policy brains might have a better one. But my point is that Tories can do much better than imitation of the Left. Let’s be open to radical ideas that support a young generation in earning, owning, risk-taking and boldness. In the process we could make sure Britain is a magnet for young, talented people in many walks of life – the best place in Europe to bring your energy and ideas, whether you went to university or not. Let us, indeed, have a national debate. With some imagination and careful thought, Tories can go on to win it.