What Gen Z needs most is economic growth

Britain is constantly told that young people have fallen out of love with capitalism. Apparently, they prefer ‘socialism’ and distrust profit-making enterprises. They want the state to do the heavy lifting. This story is neat and tidy. It’s also comforting and a little self-congratulatory for those who bought houses before the millennium. It’s also wrong.

For their entire adult lives, younger Britons have suffered under an economy that hasn’t grown, paid them well or provided decent careers. Young Brits have lived with a system that promises opportunity but quietly withholds it.

Freshwater Strategy and the Institute of Economic Affairs (IEA) recently released a report on British public attitudes towards growth that captures the mood. Younger voters are pessimistic to the point of cynicism, but they are certainly not anti-growth. Quite the opposite. They are desperate for it. They have just never experienced it.

Since 2008, UK productivity growth has averaged around half a per cent a year – barely a third of its pre-Global Financial Crisis growth rate. Real average earnings have risen by just 1.6 per cent over the same period. Had the pre-crisis trend continued, GDP per person would now be roughly £11,000 higher than it is. These aren’t abstract numbers. They show up in rents that swallow salaries, wages that are stalling, and the sense, which was repeatedly voiced in the IEA focus groups, that working hard no longer moves the dial. If work doesn’t pay, then why should young people work harder?

This context matters. Because when growth disappears, so does trust in the system.

In our research, younger participants overwhelmingly supported economic growth in principle, but struggled to articulate how it happens or why it matters. Not because they’re hostile to business or markets, but because growth has simply not been part of their lived reality. In one of our groups, a young man put it bluntly: ‘I don’t think I’ve ever seen real economic growth to know what it actually feels like or looks like.’

In that vacuum, suspicion rushes in. Large majorities of Brits believe that growth mainly benefits someone else, like the government, big corporations and high earners. Fewer believe growth can benefit them personally or their families. That belief is reinforced by a striking misunderstanding of business economics. The IEA research shows that many Brits are painfully out of touch with the realities of entrepreneurship. People dramatically overestimate corporate profit margins, particularly in politically sensitive sectors like energy and utilities. If you think firms are minting money already, then it’s easy to conclude that the system is rigged against you.

But scratch the surface and the instincts of young Brits are unmistakably pro-market. Indeed, younger voters repeatedly identify high energy costs (85 per cent), high taxes (75 per cent) and excessive regulation (74 per cent) as major barriers to growth. These are precisely the constraints that are most damaging for entry-level workers, for renters and early-stage start-ups. Nearly three-quarters of voters say that they support cutting taxes to grow the economy, and six in 10 say that they support reducing regulation. Eighty per cent of Brits say it’s important for the government to make it easier for people to start and grow a business, a sentiment that resonates especially strongly among under-35s.

Energy prices are a central economic fault line. Though decarbonisation is a fairly popular ambition at face value, when forced to choose, 78 per cent say that they prioritise affordable energy over Net Zero targets. Green ideology is clearly far less widespread among the public than in Westminster.

The supposed turn of Brits, particularly young ones, to socialism or to radical environmentalism looks very different when viewed through this lens.

In our focus groups, younger participants often described themselves as ‘socialist’. But, when pressed, their priorities were highly practical. Lower taxes on themselves, cheaper bills, less government waste and an easier pathway to get ahead were what they wanted.

One focus-group participant neatly summed up the tension, combining a deep distrust of government competence while seeing the state as the only actor big enough to fix a system that feels broken.

That contradiction runs through the research. People blame government and politics more than anything else for Britain’s stagnation, yet instinctively look to the government to solve it. It’s a symptom of leadership failure in a low-growth era.

The most important finding in the IEA research may be the simplest. Britain is not a ‘degrowth’ nation. When voters are confronted with how far the UK has slipped internationally, behind much of Western Europe, and behind every US state in terms of income per capita, the reaction was not indifference. It was shock, embarrassment and anger. Crucially, it also led to a greater openness to serious pro-market reform.

Young people are not rejecting capitalism. They are rejecting a country that promised opportunity, but which has so far delivered only hardship.

The behaviour of young Brits reflects this. They embrace side-hustles, flexible work and new technologies. They’re willing to invest, take risks, move towns and migrate abroad. These are not collectivist instincts. They are the behaviours of people trying to outrun an economy that no longer rewards hard work and risk-taking.

If Westminster takes the youthful ‘anti-capitalist’ rhetoric at face value, then politicians will misread the public mood. What young Britons actually want is not a bigger state managing decline ‘more kindly’. They want costs down, wages up, affordable energy, more homes and growth restored, so that any ambition they have no longer feels naive or wasted.

Capitalism and pro-growth policies aren’t unpopular with young Brits. Stagnation is. It’s time we had a government that grasped that distinction.

Dr Michael Turner is a pollster and strategist. He is also a director at Freshwater Strategy.