The Conservative Party is set to unveil a new policy today aimed at “rewarding work” by offering a £5,000 tax rebate to young people entering their first full-time job — a measure intended to help them save towards a deposit on their first home.
In a speech at the party’s conference in Manchester, shadow chancellor Sir Mel Stride is expected to outline the proposal for a so-called “first-job bonus”. Under the plan, a portion of an individual’s National Insurance contributions would be redirected into a long-term savings account, helping to ease the path to home ownership.
The Conservatives say the initiative will be funded by £47bn in public spending cuts over five years, targeting areas such as welfare, the civil service, and the foreign aid budget. Sir Mel is expected to warn that there can be “no more pretending we can keep spending money we simply do not have.”
The announcement comes nearly a year after Kemi Badenoch was elected party leader. In the past 12 months, the Conservatives have faced significant political headwinds — including the growing challenge from Reform UK and a series of major defeats in local elections earlier this year.
As the party gathers in Manchester, it is hoping to reset the narrative and position itself as fiscally responsible and more competent on public spending than its rivals.
The proposals also arrive as the Labour government presses ahead with its own sweeping housing reforms, which aim to cut costs, reduce delays, and halve the number of failed property transactions. Ministers say the reforms could benefit hundreds of thousands of families and first-time buyers, in what is being described as the most significant overhaul of the housing market in decades.
In his conference speech on Monday, Sir Mel will say: “We must get on top of government spending.
“We cannot deliver stability unless we live within our means.
“We’re the only party that gets it. The only party that will stand up for fiscal responsibility.”
His proposals, aimed at delivering £47bn in public spending reductions over five years, include:
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£23bn in welfare savings
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£8bn by reducing the civil service headcount from 517,000 to 384,000 — the level seen in 2016
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£7bn from cuts to the overseas aid budget
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£3.5bn by ending the use of hotels to accommodate asylum seekers
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£4bn by restricting benefits and access to social housing to UK nationals only
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£1.6bn by scrapping green subsidies, including support for heat pumps and electric vehicles
The Conservative conference comes six weeks before chancellor Rachel Reeves delivers her Budget on 26 November.
Property industry responds to government’s home buying reform plans
The Conservative Party? Oh yes, I remember them — but not in a good way.
These are the same people who allowed ultra-low interest rates to run for fourteen years — creating what some insisted was not a false economy. ( Did you ever study economics?)
Once unemployment fell below 7%, it was no longer stimulus — it was inflationary.
Keeping rates low at that point didn’t build resilience; it inflated confidence, asset prices, and personal debt instead of productivity.
Now those cheap mortgages have become a powerful constraint — money tied up in assets that can’t easily be released.
The time to have thought about the future wasn’t today in Manchester; it was April 2014, when the choice was made to chase feel-good wealth over sustainable economic growth.
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A £5,000 “first-job bonus” sounds helpful until you look at the numbers.
Across England and Wales, the average price of the lowest 20% of housing transactions is around £130,000 — rising to £600,000 in parts of London and falling to £60,000 in places like Hull.
That means the £5,000 incentive represents somewhere between 8% and less than 1% of a typical purchase price — and that’s before stamp duty, legal fees or furnishings.
The policy may sound positive, but it’s largely symbolic. It doesn’t address the structural issues created by fourteen years of ultra-low interest rates and the asset inflation that followed. Those cheap mortgages fuelled demand, not productivity, and left households asset-rich but cash-poor.
Today, many long-term workers still can’t afford to buy — not because they lack effort or savings discipline, but because the market itself has been distorted.
The real problem is that no one in government seems to be looking at the numbers with an eye to understanding them, let alone offering meaningful solutions.
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@Robert_May, I couldn’t agree more. £5k will be swallowed immediately as a price rise and is simply a soundbite.
Economics 101 – governments use inflation to “pay off” government borrowing. Governments love a bit of “controlled” inflation.
As an example, an inflation rate of 2% means that in 50 years time, a debt of £1billion issued by the government to itself only costs only about £370million (in real terms) to pay back. If spent wisely, the investment will easily pay for itself, many times over.
To persuade people to save (and to make the banking system work) the savings rate must be worthwhile, i.e. it must be greater than inflation, typically by 1%. This equates to something between 3% and 4%.
Again, for the system to work, the borrowing rate must be above the savings rate, again, typically by 1% which equates to 4% – 5%.
This concept underpins government borrowing and helps makes the world turn for everyday living. However, it was completely bent out of shape by the Credit Crunch and then by Covid. Oh, and by the abuses of the banking institutions themselves.
Government debts around the globe have spiralled out of control and most politicians have buried their heads in the sand. Right-wing soundbite politics makes having a sensible conversation about the debt almost impossible.
And as the financial system quietly comes off the rails, it will be up to the middle classes to pay for it all while the already wealthy cream off even more profit.
Have a lovely day everyone!
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As if they will ever be the next government. Delusional.
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