How dare entitled MPs say the ‘middle class' doesn't deserve financial help

Telegraph

9 hours ago

This week, 11 MPs on a combined salary of £1,032,944 decided one of the only saving products to help first-time buyers should be scrapped because they fear it is used by too many middle-class people.
The Treasury Committee urged Rachel Reeves to 'consider the future' of the Lifetime Isa (Lisa), a tax-free saving product that allows people under 40 to invest up to £4,000 per year, which is matched by a £1,000 contribution from the Government.
They took particular aim at the 25pc bonus, suggesting this £600m outlay was not a good use of taxpayer money given the 'current strain on public finances'.
Of course, these MPs, who were handed a £2,558 pay rise in April, are spot on. It has never been easier for young people to get on the housing ladder. Everywhere you look young people are buying homes like never before!
Walk down a residential street in Britain, all you can see are happy young people moving into their first homes. It's about time we stopped this Lisa racket and stopped giving the bloody middle class a hand up in getting on the property ladder.
Are these really the thoughts that were racing through MPs' heads? I have to confess I am one of those young people, aged 25, hopefully saving into a Lisa each year, but stuck at home with little hope of getting out. According to NatWest, I'm not alone. They found the average person now lives with their parents until the age of 28.
House prices are now eight times higher than median wages – more than double what they were in the 1990s. Meanwhile, the average age of a first-time buyer is creeping ever closer to 40. It now averages 34 in England and 35 in London, according to the English Housing Survey.
These figures have become almost meaningless today. They are rattled out all the time. Half of them were even in the Treasury Committee report. But clearly these MPs don't understand the significance of them.
They don't understand that while they collect a salary of £93,904 per year, while also being able to expense their rent and travel, millions of young people are sitting in their parents' basement growing ever more disillusioned with their future.
The lifetime Isa, launched in 2017, offered a way on to the housing ladder. It certainly isn't perfect. The purchasing cap of £450,000 has remained frozen since its inception, leaving many home buyers in the South East facing a punitive 25pc withdrawal fee if they buy a home above this price.
The cap would be £600,000 if it had risen in life with inflation. But again, the Committee squirmed at the idea that the Government should support anyone but the neediest in owning a home.
They said the frozen £450,000 cap was justified because it 'ensures that Government spending supports those who need financial assistance the most'.
It is such an infantile argument to suggest that the Lisa should be reformed because it's not used by the poorest in society.
Any form of savings account will always be disproportionately used by those who have more money because they can afford to put aside some of their salary each month.
By that logic, you might as well scrap all Isas. Just scrap all savings accounts, and we can all be poor and equal.
There is no doubt the 25pc bonus is generous. No other savings account will pay out such a return, but rather than this being a poorly targeted support that aids the super wealthy, it is in fact a great leveller.
There are 1.4 million active Lisa holders. Since 2018-19, 228,000 people have used Lisas to buy 182,500 homes, which equates to an average of 38,000 homes purchased each year.
These are not the super-rich, but the hard-working middle class. Moneybox, one of the largest providers of Lisas, said 80pc of its account holders earned £40,000 or less. Tembo Money found its Lisa customers earned £41,000 a year on average, and were able to buy a home four years earlier than those without Lisas.
Be in no doubt – these people would have been less able to afford their home without the 25pc bonus.
It's hard to understand what message this cross-party group of MPs therefore are trying to send to young people.
Dame Meg Hillier, a Labour MP and chairman of the Committee, questioned whether it was 'the best way to spend billions of pounds over several years'.
But £600m is a drop in the ocean of the £3bn about-turn Sir Keir Starmer has made on personal independence payments. And it doesn't compare to the £1.25bn winter fuel farce either.
Chancellor Rachel Reeves would do well to ignore almost every one of the 64-page report put together by the Treasury Committee. There is a breaking point at which young people will stop paying for about-turn after about-turn from their parents' basement.