Scrap the Ibiza Tax and watch Tory votes soar!

• The Conservative Party needs to offer younger voters a package of policies to boost incomes and improve their lives
• A package of policy suggestions could transform the lives of young Britons including:
  • Scrapping the ‘Ibiza Tax’ of Air Passenger Duty charged on under-30s 
  • Making it easier for young people to live and work abroad 
• Conservatives can redress the current age imbalance with minimal cost and boost the economy

As GCSE results are released across England and Wales, a new paper by the Adam Smith Institute warns that the Tories must cut the “Ibiza Tax” of Air Passenger Duty for young people or risk losing a whole generation of voters. These, as well as other policies such as targeted cuts to National Insurance, are vital to show younger voters that their wellbeing matters to the government.

Air Passenger Duty in the UK is the highest in the world, rising as high as £150 on flights to and from Britain, and levied on everyone over the age of 16. With trips abroad such an important part of young people’s lives - visiting friends, working, travelling, studying and partying in Ibiza - the tax is a huge cost on those with the least ability to earn. 

A Millennial Manifesto by Dr. Madsen Pirie, President of the Adam Smith Institute, suggests raising the age APD is applied at to 30. Despite fuel efficiency rising the tax has not fallen – some of the windfall to the Treasury should be passed to younger people to allow them to enjoy their lives now. 

Young people should not have goodies funded at the expense of future generations, the paper argues. Rather, the cost of government should be better spread across the generations. Young people should face a lower rate of National Insurance and one that’s only levied above the tax-free allowance. By doing so the Tories could save a young person earning £21,500 some £533 a year.  

In addition to reducing the costs of working at home and travelling abroad the government should make it easier to work and study abroad. The paper suggests a focus on the countries young people most likely say they want to live and work in – Canada, Australia, New Zealand, and the United States. Free movement for under-30s with these countries should be made a priority after Brexit to show young people that a Global Britain can work for them.

The report also argues that fundamental reform to the housing market through planning liberalisation and longer-term tenancy arrangements are vital to create cheaper and more secure housing for younger people. Fixing the funding of social care along a social or mandatory private insurance lines would create a better balance of government spending between young and old.

The Conservative Party does not need to write off young voters as inevitable supporters of Corbyn’s Labour. With a bold package of policies tailored to the needs of young people, says the paper, the Tories could improve young people’s lives, increase the opportunities available to them and win their votes for many years to come.

Sam Bowman, Executive Director of the Adam Smith Institute, said:

“It isn’t easy being young in Britain. Houses are mostly unaffordable, rents are high and most high-quality jobs are in the most expensive parts of the country. For all but a very lucky few, times are tough. But the Conservatives have ignored this and ignored the concerns of young voters, both neglecting their wellbeing directly and taking positions that are badly out of touch in areas like animal welfare and openness to immigration.

“Today’s paper should start a conversation in the government and the Conservative Party at large about how to win back some of the younger voters lost to Corbyn, both in terms of specific policies that might improve young people’s prospects by raising their spending power, cutting their rents and giving them better access to the public services they need, and in terms of a wider culture shift that puts the priorities and problems of young people at the heart of Conservative governance.”

Madsen Pirie, President of the Adam Smith Institute and author of the manifesto, said:

“Older people have done very well from recent governments. And some have suggested that there is now an imbalance. There are many things that governments could do to help young people. 

“The Conservatives should look at innovative policies, like reducing the cost of travelling and making it easier to work abroad, to win over young voters.”

The report “A Millennial Manifesto’’ is available to read here.

Notes to editors:
For further comments or to arrange an interview, contact Matt Kilcoyne, Head of Communications, matt@adamsmith.org | 07584 778207.

The Adam Smith Institute is a free market, neoliberal think tank based in London. It advocates classically liberal public policies to create a richer, freer world.