Pity the AVOCADOs

British politics is an acronym soup. It is a land of nimbys (not in my back yard) and yimbys (their antonyms). oaps have long been feared and courted by politicians. The henrys (high earners, not rich yet) have emerged as another key category. For a decade, “waspi women” (Women Against State Pension Inequality) dressed as suffragettes have berated politicians outside party conferences for equalising the pension age between men and women in 1995. To this list, another must be added: avocados.

The Aggrieved Victims Of Crushing Academic Debt Obligations have it rough. Life has been particularly unkind to the 5m or so youngish people who entered university between 2012 and 2023. High housing costs in places that have good jobs butcher living standards. A career-stalling and social-life-wrecking lockdown interrupted their 20s and left scars, both psychological and economic. To cap it off, Britain’s student-loans system acts as an age-based tax system, whipping away 9% of earnings—or 15% for postgrads—above a certain income. In Britain, when you were born determines how much you pay in tax as much as how much you earn. And, often, avocados pay the most of all.

When Rachel Reeves, the chancellor, ran through her budget on November 26th, it was avocados who were among the hardest hit. Freezes to income-tax thresholds mean that the taxman will take a greater share as their wages increase throughout their 20s and 30s. But the repayment points of student loans were also frozen, meaning that the Student Loans Company (the taxman in plastic glasses and fake moustache) will take a greater share, too.

For now, avocados are treated like pollution—an externality to be punitively taxed. An avocado with a master’s degree on £30,000 ($40,000) faces a marginal rate of 43%. Someone over 66 in the same job would pay 20%, as they are exempt from National Insurance, an income tax in all but name; a non-graduate would have to earn more than three times as much before they paid a higher marginal rate. Earning more to pay it off faster is little help: when an avocado’s salary rises, so does the interest rate on their debt, up to 6.2%. Students should pay for degrees that benefit them. But avocados are squeezed until the stone squeaks.

It was not supposed to be like this. Labour is, after all, the avocado Party. When elected last year, the average age of new Labour MPs was 43, and more than 20 on their benches were 20-somethings. The party’s voting alliance was one that skewed heavily towards the young and well-educated. Why would a party of avocados not govern for avocados?

Partly, it is the politics of least resistance. avocados vote far less than other age groups. Turnout among the under-35s did not break 50% at the last election. Likewise, student loans are largely ignored, compared with other issues. Changes to the loans will raise £400m (0.01% of GDP) per year, or roughly as much as a new “mansion tax”, levied on homes above £2m which attracted far more screeching. Newspapers were filled with the victims of a brutal reverse-mugging by the housing market, which wrestled their wallets open and filled them with housing equity.

Outright intergenerational warfare is never a vote-winner. Grandchildren love their grandparents and grandparents love their grandchildren; political conflict is often within generations rather than between them. All parties can do in such circumstances is govern well, making the tax system as fair and efficient as it can be. Instead, Labour is hitting people who support the party with exorbitant marginal rates, and giving distorting perks to people who will never vote for them and who, often, have little need. Is it politically astute? No. But is it the right thing to do? Also no.

Mostly, however, it is cowardice. If ever there was a moment to placate the avocados, a 148-strong majority with little reliance on older voters was it. Such opportunities for sweeping reforms to Britain’s unfair intergenerational settlement are rare. Rather, Ms Reeves made it worse. A pensioner solely reliant on the state pension will not have to pay income tax once it creeps over the threshold, pledged the chancellor; pensioners can keep more tax-free savings in cash rather than stocks. A government unwilling to make pensioners pay a token amount of tax is unlikely to unpick the triple-lock, which guarantees that pensions will rise by the higher of average earnings growth, inflation or 2.5%, and which will engulf Britain’s finances if left untouched for long enough.

So who will speak for the avocados? Reform UK is too right-wing for progressive 20-somethings. The Conservatives are hopeful that younger people, fed up with giant marginal tax rates, will return to what has historically been Britain’s low-tax party. But the party of economic dynamism relies on the votes of pensioners who would rather put their feet up. An avocado would not fit in.

Increasingly, the young, well-educated and annoyed are heading to Zack Polanski’s Green Party, which welcomes avocados. At the last election, it pledged to look at student-loan forgiveness, which—given the student-loan book is about £267bn—would fix the iniquities in the current system by creating gaping new ones. But when growth is low, politics becomes zero-sum: a fight for a bigger slice rather than a bigger pie. Why bother with a party that will simply make student loans fairer? Politics becomes extractive. Seize the state and then divert its proceeds into your own wallets.

The avocados will not go away. Due to stiff interest rates and lousy real-wage growth, student debts, unlike student politics, will not fade over time. Instead, the avocados will ripen into middle age, curious why their pay packet seems so light every month, especially when compared with a colleague who skipped university or who is entering their dotage. It will shape politics for a generation to come. Rotten fruit can make a stink. ■