We need to engage younger voters in the referendum on leaving the EU. One argument which may appeal is that taking the EFTA option would allow us to scrap student fees.
Firstly, for the benefit of those who are not aware of EFTA, is is the European Free Trade Association (See www.efta.int.) Norway is a member of EFTA and is one of the wealthiest countries in Europe. The majority of its electorate do not want to join the EU.
EFTA countries have an economic agreement with the EU, allowing for free movement of goods, services, people and capital. However Liechtenstein has ‘special provisions’ for controlling immigration, far more powerful than the feeble “Emergency Brake” which David Cameron needs to ask permission to apply.
But what are the issues for younger people and students?
Lower income – poor job opportunities and downward pressure on wages from immigration
Middle income – high rents and house prices, making it difficult to save for a deposit, due to immigration demand on housing, also downward pressure on wages from immigration and also student loans to pay off.
In 2014, the UK paid a net £11 billion to the EU. Norway does not pay to be part of the Single Market, it diverts some of its foreign aid to the EU – something the UK could also do, and use the £11 billion savings for getting rid of student tuition fees and also outstanding student tuition fees.
At the end of 2014-15 there were 4.6m borrowers with outstanding student loans, with a total debt of £64.7 billion. So with £11 billion to spend in the UK, that would allow, all loans to be paid off in 7 years.
Maintenance loans could be worked out using the minimum wage for the weeks studying and not working. For example £7.20 per hour * 35 hours in a week = £252 per week
Average weeks studying, winter 10 weeks, Spring 10 weeks, summer 8 weeks = 28 weeks
28 weeks * £252 = £7056
For 3 years is, £7056 * 3 = £21168
Perhaps the after tax amount could be calculated and also an expectation that students have some sort of part time job during studying time. I.e. working out the amount using 25 or 30 hours a week.
There are other ways to speed up the paying off of all outstanding student loans, by reviewing how easy it is for new immigrant to access benefits, for example needing to contribute for 5 years, or only receiving the amounts they would get in their own country.
Current benefits to EU immigrants include: Housing benefit, tax credits and unemployment benefit of £2.5 billion – a significant amount. With more immigration, this amount could increase even more. If other people in other EU countries avoid paying their taxes and vote for corrupt, irresponsible and incompetent politicians, there is no reason for the UK taxpayer to be held financially responsible.
Some studies have shown that every person unemployed costs the taxpayers around £10,000 in benefits and lost tax revenue. So if the UK had Norway’s and Switzerland’s average unemployment rate of around 4% instead of 5.1%, that would be around 1.36 million, instead of 1.7 million, an extra 340,000 paying tax, or another £3.4 bn. If the UK had 3% unemployment, this could add another £6.8bn.
All helping pay off outstanding student debt faster.
Free Student tuition and maintenance grants, calculation
250,000 students with £35,000 debt = approx £9 bn
Current outstanding student loans = £64.7 bn
Savings from leaving the EU and switching to a win-win EFTA Single Market + Opt Outs agreement
Current net EU contribution = £11bn a year
Cost of projects due to higher population HS2 = £42.6bn
Cost of projects due to higher population, Hinkley point nuclear power subsidy potential = £20bn
Since the foreign aid budget is set to increase from £11bn to £16bn by 2020, this extra money could be used for any aid projects in Eastern Europe.
Likely the fastest way to increase the paying off loans is by having a trade balance, and so an increase in tax revenues. Leaving the EU and joining EFTA is the easiest and fastest way. Increasing average income to Norway’s level would also help i.e. £ 36,000 compared to the UK of £24,000. Younger voters and undecideds voting to Leave the EU would be voicing their emancipation proclamation, freeing themselves from financial serfdom.
Since the UK also has a trade deficit with the EU, which means loss of jobs and loss of company sales, then a trade balance will help in increasing government revenues from more: income tax, corporation tax, VAT, council tax, fuel duty, business rates and other taxes. So allowing the student loans to be paid off, and restore free higher education, as before the UK switched to the EU, from the EEC. The reduction in regulations would also be like a tax cut for businesses, helping making it easier to grow their businesses. In addition the hidden cost affecting the public sector of the EU style of top down ideas, centralisation/mergers, poor communication, and low morale would also be lifted allowing better decisions, communication and higher morale.