youth budget 2012

YOUTHBUDGET

2012TH

E R

EP

OR

T

www.youthbudget.org.uk

YouthBudget2012_FINAL_Layout 1 05/03/2012 13:39

As the voters and taxpayersof the future, it is moreimportant than ever that thevoices of young people areheard. Aviva is thereforedelighted, once again, tohelp them have that chancethrough the launch of thesecond UK Youth Budget.

Informed, passionate youngpeople are crucial to the country’s future economicprosperity. Aviva’s partnership with the CitizenshipFoundation on the Paying for It programme andChance to be Chancellor provides teachers withfinancial education tools to equip young people withthe knowledge they need to take informed financialdecisions for themselves, now and in the future.

We are proud to be investing in financial education;having invested in young people, it is incumbent onus all – Government included – to listen to theirvoices.

Trevor Matthews, UK CEO, Aviva

We are proud to present theYouth Budget 2012, givingthousands of young peopleacross the UK an opportunityto have a say on theeconomy. We believe that itprovides a clear example ofhow citizenship education isenabling young people to getto grips with the big issues ofthe day.

The Citizenship Foundation greatly values ourpartnership with Aviva now in its fifth year. Withouttheir commitment and dedication to increasing theeconomic awareness of young people throughoutthe UK, this report would not be possible.

Andy Thornton, Chief Executive

Citizenship Foundation

From the Citizenship Foundation From Aviva


YOUTH BUDGET 2012

1

Welcome to Youth Budget 2012 2

A letter from the winner of Chance to be Chancellor 3

Executive summary 4-5

Youth Budget 2012 6-10

Taxation

Work 6

Consumer 6

Business 7

Public spending 6-9

Social protection 7

Health 8

Education 8

Tax relief & benefits 9

Defence 9

Public order & safety 10

Environment 10

Creating their own policies 11

Chance to be Chancellor entries 12-13

Conclusion 14

Acknowledgements 15

Methodology 15

About us 16-17

Contents


YOUTH BUDGET 2012 - WELCOME TO THE YOUTH BUDGET

Welcome to the Youth Budget - the youth voice on Budget 2012.

Between January and February 2012, 1,175 14-18 year olds fromacross the UK took part in Chance to be Chancellor, an onlineeducational challenge that gives young people the opportunity tolearn about, and share their opinions on, the Budget. Youth Budget2012 is the result! Participants were also invited to make a case fortheir budget choices and enter into a national competition.

Why publish a Youth Budget 2012?

Young people have a valuable contribution to make to public debateand they have the right to have their voices heard. Whilst 14-18 yearolds cannot vote, they are the next generation of voters, and willultimately ‘pay’ for economic decisions made today.

Welcome to the Youth Budget 2012

'The real Chancellor gets to deliver his budget on the 21st March but ofcourse it’s you who’ll be affected…what he chooses to spend on and whathe chooses not to spend very much on at all. And you don’t usually get to haveyour say; well you will have withChance to be Chancellor.’Nick Robinson, BBC Political Editor


2-3

A letter from the winner of Chance to be Chancellor

I am delighted to have wonChance to be Chancellor 2012!I’ve always had a passion forpolitics, however young peopleare never really provided withthe opportunity to voice theirviews. As someone who is notyet able to vote, it was anopportunity for me to have mysay on the economic decisionsthat will affect both me and other

young people across the country. I believe youngpeople should be more involved in decisions regardingthe economy and have the opportunity to share theiropinions, as the decisions that are made now will affectour future.

By speaking together through the Youth Budget 2012,we have been given a voice, a voice that needs to beheard. I want the Youth Budget 2012 to give youngpeople a presence in the discussions on the economicchoices facing our country.

From taking part in Chance to be Chancellor I have agreater appreciation for the implications of the toughdecisions that the government has to make. I see it asthe Chancellor’s job to try and reduce the deficit whilesupporting all parts of society, and making decisionsthat secure the future of our country - ensuring thatGreat Britain will always retain its greatness and thatwe will always be one of the most powerful, influentialand exemplary economies in the world.

Isaac Warburton

Chance to be Chancellor 2012 winner.

‘I see it as the Chancellor’s job totry and reduce the deficit whilesupporting all parts of society,and making decisisions thatsecure the future of our country’

After taking part in Chance to be Chancellor, young people were invited to create a case arguing their

own budgetary choices and enter into a national competition. Isaac Warburton’s entry impressed the

judging panel and was named the winner of Chance to be Chancellor 2012.


YOUTH BUDGET 2012 - EXECUTIVE SUMMARY

Overview

The young people who took part in Chance to be Chancellor, andwhose views are represented here, were faced with four policyoptions across ten areas of Budget 2012. The results show:

• The majority of young people would tax more (65%) and spend less (69%) in order to reduce the deficit to a greater extent than the Government;

• An overwhelming majority (76%) reduced Budget 2012’s deficit by more than the Government;

• Only a small minority (3%) would tax and spend at the samelevel as the Government.

Compared to Youth Budget 2011...

• In 2011, 84% of young people opted to spend more than theGovernment in direct contrast to this year’s results.

Priorities

When faced with real world policy choices, the young peopletaking part in Chance to be Chancellor chose those that reformedboth tax and public spending to increase public revenue, reduce

costs and enable targeted investment while tackling the

deficit.

Executive summary

‘Putting more investment into theeconomy, especially in long-termprojects and sustainable developmentis imperative because of the risk of adouble dip recession and theincreasing competition in the East.’Manish Patel, Year 12, ColfesSchool, London

© Daniel Berehulak/Getty Images News


4-5

Of the policies presented to participants the followingtable outlines the top and bottom three choices:

Taxes

• There was a strong consensus among young peopleto raise the level of income earned before paying taxand to maintain the current top rate level of tax;

• Young people understood tax as a stimulant or adisincentive - the majority (60%) targeted taxincreases on tobacco, alcohol and unhealthy food andeither froze or cut corporation tax.

Public Spending

• Both education and the environment were areas ofinvestment through maintaining or increasingspending on schools (63%) and investing in greentechnology (65%);

• Defence, health and policing budgets were allareas targeted for spending reductions with reformand efficiency savings rather than cuts to the frontline;

• In social protection young people chose policiesthat reformed entitlements to change the incentives towork, with a majority opting both to reduceunemployment benefits and increase the income taxthreshold;

• The single most popular policy was the removal ofchild tax credits from top rate tax payers (56%).

Compared to Youth Budget 2011...

• Opinions where the same on education - youngpeople maintained or increased spending (69%) butopinions on the environment have changed - lastyear 60% chose to reduce spending here;

• As with last year Defence, health and policing weretargeted for minor reductions that protect andprioritise essential services;

• Simularly too for social protection; last year 80%chose to reduce spending by reformingunemployment benefits;

• In 2011, the single most popular policy was toreduce health spending by £9bn by focusing on thepoorest areas in the UK and the most essentialservices to help the NHS to cope with the economicchallenges.

Three most popular

Budget 2012 policies

Remove child benefit fromhigher rate taxpayers

Reduce Jobseekers Allowance by 10%

Introduce a GreenInvestment Bank to fundgreen technology

Three least popular

Budget 2012 policies

Reduce support forchild care

Cut fuel tax by 1%

Scrap the Winter Fuel Payment

56%

53%

42%

11%

13%

14%


YOUTH BUDGET 2012 - POLICY AREAS

As the largest area of taxation in Budget 2012 it isclear that while opinion was divided upon by howmuch the tax threshold should be raised there was aconsensus to increase it and maintain the top rate oftax.

• 77% of young people chose those policies whichwould maintain the top rate of tax at 50% for thoseearning over £150,000;

• A further 54% would further increase theGovernment’s planned raise of the income taxthreshold with opinion varying by how much;

• Only 26% saw increasing National Insurance as anoption for increasing tax revenues.

Work

The majority of respondents targeted tax raises in thisarea to both raise more public revenue and to act as adisincentive to certain consumer behaviours andcreate cost savings to other areas of the budget.

• 66% would tax unhealthy food by 1% and increasethose taxes on tobacco and alcohol, arguing bothincreased revenue and cost savings to the healthbudget;

• Only 13% opted to cut fuel duty prioritising cuttingcarbon emissions and helping the environment overreducing living costs for consumers and businesses.

Consumer

10%

20%

30%

40%

50%

60%

13%

37%

29%

22%

It can be argued that this option (to keep the top rate oftax and cut the lower rate) creates a fairer society andsustains the UK’s welfare, as the unequal distribution ofincomes between individuals in the economy, as a marketfailure, is being corrected and the poverty gap is beingdecreased. ”Edward Cummings Year 12, Salesian College, Farnborough

Increasing tax on tobacco and alcohol by 0.1%would decrease demand for these demerit goods andhelp society as a whole. ”Rob Gladding, Year 12, Salesian College, Farnborough

Cut fuel taxby 1%

Increase taxon tobaccoand alcohol

by 0.1%

Introduce a1% 'unhealthy

food tax'

Reduce VATto the

previous levelof 17.5%

10%

20%

30%

40%

50%

60%

26%

20%

31%

23%

Stick tocurrent plansincrease NI

Stick to currentplans

Keep the toprate of tax andcut the lower

rate

Cut incometaxes for bothhigh and low

earners

“ “


6-7

Participants clearly avoided adding to the tax burdenon business due to the precarious economic climateand for want of encouraging investment.

• 60% would either maintain the current level or reducecorporation tax to promote stability and encourageinvestment;

• Despite the current discussions around the bank levyonly 19% of young people viewed this as an effectiveway of increasing tax revenues.

Business

As the largest area of public spending in Budget 2012it is clear that young people prioritised it for reductionto both find savings and set the right incentives.

• Only 23% choose to maintain or increase publicspending on social protection;

• 67% of respondents chose to reduce the welfare billwith just over half targeting a reduction to JobseekersAllowance by 10% to strengthen the incentive towork;

• Concern with the right incentives to work also led tothe majority supporting a cut in council tax benefitand only 17% electing to maintain it at its currentlevel.

Social protection

Encourage nationalised banks to lend more to smallbusinesses. ”Henry Allen, Year 10, King Edward VI Grammar School,Chelmsford

More job creation schemes should be put in place andvolunteering should be compulsory for the unemployed. ”Rebecca Miller, Year 11, St. Joesph’s RC High School, Newport

10%

20%

30%

40%

50%

60%

16% 17%

53%

14%

Increase the basic

state pensionby 5%

Keep counciltax benefit at

currentlevels

Reducejobseekersallowance

by 10%

Scrap thewinter fuelpayment

10%

20%

30%

40%

50%

60%

20% 19% 19%

41%

Increasecorporationtax by 1%

Increase thetax levy onbanks by0.013%

Maintaincorporationtax at 26%

Reducecorporationtax by 1%

“ “



Health

A majority of respondents chose to either maintain orincrease education spending with a quarter ofrespondents seeking savings in the education budgetthrough placing greater responsibility to pay costs ateither end of the education system.

• 63% of young people would either maintain orincrease spending on education;

• Investment was split between introducing freeschools (36%) and investing in a schools rebuildingprogramme (27%);

• The 27% who chose to reduce spending felt that atboth ends of the education system – early years anduniversity – citizens should assume more of the cost.

Education

As the second largest area of spending in Budget 2012,three out of the four policies proposed NHS reform toprioritise services and reduce spending. Young peopleviewed it as necessary to reform the health budget toincrease its productivity and find efficiency savings.

• 73% of participants chose policies to reform the NHS tofind savings in the health budget;

• These policies varied from halting investment ininfrastructure and charging for non essential operations(24%), pay freezes on all but the lowest paid (30%) andcutting managerial posts and introducing competition(19%);

• Only a quarter of young people chose to spend moremoney on the NHS due to respondents viewing furtherhealth spending as an unsustainable demand on theBudget.

Education is such a fundamental part of society; a well-funded and efficient education system should be high onthe priority list of any government. ”Alex Ainsworth, Year 12, Kimbolton School, Cambridgeshire

By adding a charge for unnecessary operations thiswould increase the income of the NHS and wouldcounteract the deficit. ”James Ferguson, Year 12, Merchant Taylors' School, Middlesex

10%

20%

30%

40%

50%

60%

18%

27%

36%

19%

Cut freepre-schooleducation

Invest in aschool

rebuildingprogramme

Maintainspending &

introduce freeschools

Reformuniversityfunding

10%

20%

30%

40%

50%

60%

30%26%

19%24%

Findefficiencysavings inthe NHS

Increasespending to meet

current healthchallenges

Keep to thecurrent level

of healthspending

Reform NHSbudget

“ “


8-9

With the fourth largest defence budget in the worldworth 2% of the country’s GDP, there was an equalsplit between those respondents who sought tocontinue investing in defence and those who targetedit for budgetary savings.

• 53% would reduce defence spending primarilythrough the efficiency savings gained from bettermanagement, or the selling off of Ministry ofDefence land;

• 47% would either maintain the current level ofdefence spending or increase it to invest in cyberdefence.

This area of Budget 2012 contained both the most andleast popular policies. The results show that a majorityof young people would reform universal tax relief andbenefits to achieve savings.

• 67% of respondents would reduce spending on taxrelief and benefits with 56% choosing to remove theentitlement to child benefit from higher ratetaxpayers;

• Despite this it is clear young people would reformentitlement rather than cut spending to find savingsas only 11% opted to reduce childcare support,making it the least popular policy in Youth Budget2012.

Tax relief & benefits Defence

Better management would make the Ministry of Defencemore efficient without impacting on the UK defencecapability or compromising national security.”Lottie Sudell, Year 12, City of London Freemen's School, Surrey

Removing the child benefit from higher rate tax payersshould be done and I’m surprised it hasn’t been donebefore. ”Freddy Sternberg, Year 12, King Alfred School, London

10%

20%

30%

40%

50%

60%

17%

30%

24%29%

Invest inincreasing

cyberoperations

Keep thecurrentdefencebudget

Reducedefencespending

Sell offsurplusmilitary

land

10%

20%

30%

40%

50%

60%

18%15%

11%

56%

Increasesupport forchildcare

Increasesupport forlow income

earners

Reducesupport forchildcare

Remove childbenefit fromhigher ratetaxpayers

“ “



Public order & safety

65% of respondents chose to use public funds toachieve a low carbon economy through investment ingreen technology rather than find savings in this areaof Budget 2012.

• Of those who chose to invest in green technology amajority of 42% thought that introducing a ‘GreenInvestment Bank’ was the best option;

• While 23% chose to maintain investment in ‘CarbonCapture and Storage’.

Environment

Young people chose to find budgetary savings inpublic order and safety by either backing theGovernment’s current plans or seeking additionalreductions through efficiency savings and policereform.

• 71% would reduce spending on public order andsafety with 34% taking the Government’s position,while 37% opted for further reductions;

• 29% of young people chose to reverse theGovernment’s planned cut and increase spending onthe police;

• While only 19% backed the introduction of electedpolice commissioners due to concerns that electoralpressure would deter efficiency savings.

I would introduce a green investment bank… as it wouldincrease investment in green technologies and help the UKmove towards a low-carbon economy. ”Erin Burton, S3, Kelso High School, Kelso

We need a more efficient police service; the 2011 Augustriots prove that. ”Thomas Pham, Year 12, King Edward VI Aston School,Birmingham

10%

20%

30%

40%

50%

60%

18%

42%

23%

17%

Cut spending onnew technologiesto capture green

house gases

Introduce a GreenInvestment Bank

to fund greentechnology

Maintaininvestment innew carbontechnologies

Scrap theRenewable

HeatIncentive

10%

20%

30%

40%

50%

60%

18% 19%

29%

34%

Further reducespending on the

police & implementefficiency savings

Further reducespending on thepolice & reform

the force

Increaseplanned

spending onthe police

Stick tocurrentplans

“ “


10-11

In addition to choosing from a range of real economicpolicies taken from Budget 2012, participants wereinvited to submit their own policy ideas. There was atotal of 188 suggestions submitted and a summary isprovided below:

Taxes

• Work taxes received 31 ideas suggesting a cut to thetop rate of income tax of between 5-10% (41%) or anincrease of up to 10% (34%);

• 30 suggestions were submitted on consumer taxes,with half recommending a further increase in tobaccoand alcohol duties by up to 10% while 25% wouldsubsidise healthy food;

• Half of the 12 ideas for business would furtherreduce corporation tax and create preferential ratesfor those companies taking on apprenticeships.

Public Spending

• Social protection received the most submissions (34)evenly split between means testing Winter FuelAllowance and the including a work programme withinJobseekers’ Allowance;

• In the area of health eight out of the nine suggestionswould charge for the treatment of self-inflicted injuriesrelated to obesity, tobacco or alcohol;

• In education 11 out of 17 ideas suggested variousways of driving down the cost of a universityeducation;

• Under tax relief and benefits eight out of the nineideas submitted argued for the introduction of meanstesting and an increase in support for low earners.

Creating their own policies

‘Reduce the Jobseekers’Allowance by 10% andincrease the NationalMinimum Wage by 10%.’John King, Year 10, Bexley Grammar School, Kent ‘Give firms a Corporation

Tax break if they take onstaff aged between 18-24.’Rachel Clark, Year 13, The Sixth Form CollegeFarnborough, Hampshire.


In addition to sharing their opinions on Budget 2012 participants were offered the chance to submit an argumentfor their own choices and enter into a national competition with a chance to win great prizes and become the faceof Youth Budget 2012. 160 entries were received, varying in style and format - here is a selection of the winningentries:

YOUTH BUDGET 2012 - COMPETITION ENTRIES

Chance to be Chancellor entries

WinnerIsaac Warburton (Year 13)

'My policies may not be popular with everyone,but they are fair. We need to encourage morepeople back into work. We need to createopportunities and also a workforce that’s willingand able to make use of these opportunities.'

Runner upGeorge Whittingham (Year 11) on Environment

'We should be dedicated to ensuring a costeffective range of policies not only to meetenvironmental objectives, but also to maintain asound economic position. Therefore, we shouldincrease the Renewable Heat Incentive for thosewho earn less than £50,000 per year as this willsupport lower earners to become carbon neutral,as well as reducing UK carbon emissions.'


12-13

Full entries from the finalists are available online: www.youthbudget.org.uk

Runner upCeci Swindell (Year 13) on Education

'Free schools will bring new expertise andinnovation into the education system that willdrive up competition amongst schools and raisestandards at a low cost, keeping it to £67.8bn.'

Runner upAmmar Malik (Year 12) on Defence

'I intend to sell off excess military land which hasbeen considerably neglected. This will achieve adrastic fall in maintenance costs for the Ministryof Defence and provide land that can be openedup for the construction of 20,000 new homes by2015, providing further boosts to our constructionindustry.'


YOUTH BUDGET 2012 - CONCLUSIONS

When faced with a range of policy choices from Budget2012 the young people who took part in Chance to beChancellor tended to tax more and spend less in orderto reduce the deficit to a greater extent than theGovernment. As with Youth Budget 2011, thecountry’s deficit remains the greatest economicchallenge facing the country to young people. However,the Youth Budget 2012 sees a change in attitudes fromlast year, more towards reform than cuts.

The central themes to Youth Budget 2012 were:

• Setting the right incentives and entitlements; • Targeting investment in the future; and • Getting the economy back on track.

Youth Budget 2012 demonstrates that when given theopportunity and a more detailed understanding, youngpeople have a valuable contribution to make to publicdebate.

It’s vital that young people are equipped with theknowledge, skills and confidence to effectively engagein our democracy. This means:

• Schools & teachers facilitating learning on currentpolitical and economic debates as a part ofcitizenship education;

• Charities, business & Government providingresources and opportunities for young people to formand express their opinions;

• Politicians & policy makers engaging young peopleon the big issues of the day and considering youthvoice in developing policy.

Help us make the Youth Budget an important channelfor young people to express their views on the Budgetand the economy by:

• Writing to your MP about the Youth Budget 2012;• Promoting the Youth Budget 2012 online and in print;• Encouraging colleagues, friends and students to get

involved;• Getting in touch with the Citizenship Foundation with

any opportunities to talk publicly Youth Budget 2012.

Conclusion What can you do?

‘In class today I asked the pupils each to writethree things about Chance to be Chancellor andan initial look through their comments shows: itgave a greater insight into how the governmentoperates and how the Chancellor decides whatto spend, a better understanding of currenteconomic issues and it is a good idea.’Penny Brooks, Teacher, City of London Freemen’s School


14-15

The Citizenship Foundation would like to thank all

the young people, teachers and volunteers who

participated in Chance to be Chancellor.

Thank you also to the following people in

particular for their support, advice and contribution

to Youth Budget 2012:

Deborah O’Malley, Evan Hirsch, Sharon Orr (Aviva),Mark Jaeckel (un-titled), Daniel Crabbe (JYNK), SamFleming (The Times), Mike Gibbs (Nomad Graphique),Kate Fairclough and Clare Coffey (Hill & Knowlton),Richard Wilson, Elizabeth Morgan, Michael Cornford(HM Treasury), Fiona Whittenbury, Robert Geddis,Fiona Whyte (Citizenship Foundation).

Also a big thank you to the following economists whovolunteered to help us develop the content of Chanceto be Chancellor: Chris Milhan, Laura Powell, ThomasWalters and Susan Gillie.

The facts presented, information used and viewsexpressed in Chance to be Chancellor are notnecessarily those of the volunteer economists. Thissimulation is based on the real world and realdecisions that the Government has had to make, but ithas been simplified to ensure it is an enjoyable andinformative learning tool.

Acknowledgements

ACKNOWLEDGEMENTS & METHODOLOGY

Methodology

The data presented and analysed in the Youth Budgetreport was gathered using the Chance to beChancellor web-based educational tool:www.chancetobechancellor.org.uk. It provides a rangeof background information on the Budget and theeconomy for users to explore.

Chance to be Chancellor presents users with ten areasof Budget 2012 - three in taxation and seven in publicspending. Each area contained a brief introduction, theBudget 2012 value and four realistic policy options.

After choosing a policy option for each area covered,participants were presented with a summary of theiroverall Budget, how it compared to Budget 2012 andthe potential consequences of their choices. They canthen edit their choices before submitting their finalchoices.

All policies and consequences were written by theCitizenship Foundation in consultation with a group ofvolunteer economists and are based on policiesproposed by the Government and from October 2010’sComprehensive Spending Review.


YOUTH BUDGET 2012 - MARKETING & ABOUT US

Marketing

Chance to be Chancellor was specifically designed,and made available online, to maximise accessibilityand participation.

Chance to be Chancellor was promoted exclusively to14-18 year olds and their teachers with targetedposter, online and social media campaigns. Teacherswere encouraged to run Chance to be Chancellor as alesson or special activity, as part of the broader Payingfor It programme which offers free lesson plans,teacher training and support.

The challenge was open from 3rd January to 20thFebruary 2012 and was completed by1,175 registeredparticipants.

About Paying for It

Paying for It is an educational programme that helpsyoung people to develop their economic awareness byexploring the relationship between the economy,government and society with real life examplescovered through lesson plans, supporting materialsand teacher training. The programme culminates inthe opportunity for students to participate in Chance tobe Chancellor and contribute to the Youth Budget.

Paying for It is run by the Citizenship Foundation, inpartnership with Aviva. For more information pleasevisit: www.payingforit.org.uk


16-17

About the Citizenship Foundation

The Citizenship Foundation is an independenteducation and participation charity that aims toencourage and enable individuals to engage indemocratic society. Founded in 1989, our particularfocus is on developing young people’s citizenship skills,knowledge and understanding of the law, democracyand public life. We do this by:• championing civic participation;• supporting teachers, schools and colleges with the

delivery of citizenship education;• working with young people in community-settings on

issues that concern them.

www.citizenshipfoundation.org.uk

General enquiries:

Fiona WhittenburyCorporate Partnerships [email protected] T: 020 7566 5038

Paying for It programme & press enquiries:

Robert Geddis Project Manager, Paying for [email protected] T: 020 7566 4136

About Aviva

Aviva is the world's sixth largest* insurance group. Weprovide 44.5 million customers with insurance, savingsand investment products with total worldwide sales in2010 of £47.1 billion** We are the largest insurer theUK with over 14 million customers. Aviva is ranked asone of the UK’s top ten most valuable brands andAviva Plc are in the top 10% of socially responsiblecompanies globally on the Dow Jones SustainabilityWorld Index. In the UK, Aviva invested £5.3 million intolocal communities in 2011. Aviva’s relationship with theCitizenship Foundation forms a key part of ourcommunity investment strategy.

www.aviva.com/cr

General enquiries relating to Aviva:

Deborah O’MalleyCommunity Affairs [email protected]: 01603 689160

Press enquiries:

Jenny ChapmanSenior Media Relations Manager, [email protected] T: 01603 689894

* based on gross worldwide premiums at 31 December 2010** at 31 December 2010


YOUTHBUDGET

2012

TH

E R

EP

OR

T

www.youthbudget.org.uk


youth budget 2012

Documents