Budget Day
Today is budget day and it is normally the excuse for lots of newspapers to commission polls, so in the next few days we can expect to get lots of data to paw over. Meanwhile, here’s a pre-budget poll for accountants BDO Stoy Hayward by YouGov.
It looks as though Alistair Darling faces his first budget with something of a reputation to mend following a pretty bad start. His reputation as a politician has hitherto been as a safe pair of hands. His repuation as Chancellor though looks poor – 31% of respondents thought that he had done a worse job than Gordon Brown so far (only 1% thought he had done better) – of course that could be a reflection of Brown’s high repuation rather than Darling’s low one; more crushingly 46% said they had “no confidence at all” in his ability to look after the economy in the current slowdown, with only 3% saying them had a lot of confidence. Asked to rate his first 9 months in the job out of ten his average score was 3.36.
The only positive sign for Darling is that there was no great swell of support for George Osborne and the Tories as an alternative – only 28% thought they would do a better job, 40% thought they would not.
YouGov asked what people thought Alistair Darling should do if he had no option but to raise taxes. The most popular (or least unpopular!) option was an increase in corporation tax, backed by 37%. Next least unpopular was capital gains tax, suggested by 20%, income tax 9% then inheritance tax 7%. Only 2% would like to see increased national insurance or stamp duty. The pattern is unsurprising, people would much rather businesses suffered than them themselves.
UPDATE: Just as I typed this I’ve been sent details of a new MORI poll. They have 28% of respondents satisifed with Alistair Darling’s performance as Chancellor, but have 44% disatisfied – a net rating of minus 16.
Filed under: Economy, MORI, YouGov
Anthony,
Slight miss print I think;
“Darling faces his first budget”
Shouldn’t that be “last”……
Peter.
Peter , see my comment on the Populus thread re the Scottish subsample .
Not too much to say really. But, leaving aside the content, not a bad performance from Mr. Darling I thought.
Will be interested to see how it works out in the polls. Not sure Nick Clegg did himself any favours by attacking so strongly. He looked a little bit shrill….
Doom, gloom, plagues of locusts (say Cameron & Clegg) – but FTSE up by 80+ and a calm, measured approach by Darling who was playing a very difficult hand skillfully. Hardly a dead man walking – so no, Peter, not his last budget! (Although he will have to keep his fingers crossed that we get through the next year with as little damage as he hopes).
The FTSE went up as a result of the liquidity injection by the banks (esp the Fed). If it had gone down, we’d be stuffed! Also, it was over 6000 a couple of weeks ago.
Fingers crossed? Exactly!
I thought he sounded even more boring than Brown used to sound, and I suspect his popularity will rise a little as a result! I don’t think people want flashy chancellors.
A report in the Guardian today quotes an idependent study of Northern Rock suggesting they will be in a position to repay in full the £25b loan within a year. I wonder how that might affect poll ratings of competence a year closer to an election?
johntt
According to Cameron we are stuffed – but that doesn’t seem to be the considered reaction. I agree that Darling’s calm/boring approach may be a plus rather than a minus for his reputation. It again left Cameron sounding shrill and over-the-top. He even had to drag in loss of data discs and other off-the-boil jibes. And, as Alec points out, Darling’s handling of Northern Rock may yet seem to be another plus rather than a minus in the longer term.
I repeat, Darling was very far from sounding like a dead man walking, even though he (and we all) need some luck, as well as competent government, in the year ahead.
So:-
Petrol/Spirits/Beer/Cigs – up
Income tax for the lowest paid workers – up
new car tax
plastic bag tax
Borrowing up-but in the black by 2012-so that’s OK then.
Can’t wait for the headlines in the morning.
One up to Clegg for digging out that the Winter Fuel Allowance is one off this year.Its going to be a warm winter in 2009 then?
Best moment:-
Cameron-We have the highest taxes in our history.
Balls -heckles
Cameron-The Minister for Children says “So what”
One for the Election Posters?
New car tax – good.
Plastic bag tax – not quite, but there should be.Frankly its ridiculous we don’t have one.
Booze up, but still cheap by historical standards…. I don’t see too many casualties there.
Actually I don;t think it was a great budget, but it wasn’t a terrible one either. What really comes through for me though is the way that all the parties are fighting over the same tiny issues. Above all though, none of the parties, despite what they say is really facing up to the scale of the environmental problems we could all soon be facing, that its a real worry, and I think voters are increasingly beginning to see it too
Colin, would agree with every word save the people in with me thought the Cameron to Balls gag, ‘Just because you are the Minister for Children doesn’t mean you have to act like one’ got the biggest laugh – but lets not split hairs, Balls Bating is Balls Bating, a game for all the family.
Can’t believe some of the comments here.
This was one of the shortest dullest budgets ever and the Chancellor had very little to say apart from trumpet his Government’s record over the last 10 years. I am admittedly a fan of Cameron’s but I thought his performance was very good.
The reason The Chancellor had very little to say was because he has very little room for manoeuvre. He has increased taxes modestly raising about 1.2BN per year when some people have been telling him to raise taxes by 8BN to balance the books. But of course he can’t raise taxes by 8BN because of the perilous state of the econmomy.
Once again Government borrowing is way over target and could go much higher still. The National Debt has gone up by 200BN over the last 10 years.
Economic competence – don’t make me laugh!
I can’t believe a budget like that with the likely media coverage to follow can be anything but bad news for Labour in the polls but I may be wrong – we’ll see. There are likely to be a lot of new polls coming out soon.
Seriously though Colin, DC was really brilliant today. Stunning. That is not a partisan remark, merely a statement of the blindingly brilliantly stark staringly obvious:-)
Unfortunately, most will not see it.
“Highest taxes in our history”… you’d have to be rather selective with the data to justify that statement. And ‘Just because you are the Minister for Children doesn’t mean you have to act like one’ might get an easy laugh from the people behind Cameron, but it’s hardly up to Oscar Wilde standards for repartee.
Maybe Darling’s less histrionic approach is more convincing than Cameron’s Balls-baiting and other forms of Punch & Judy politics.
KTL – your comments on the national debt are a little one sided. You can’t look at the headline debt figure without reference to the overall size of the economy. Hence in 1997 national debt was equivalent to 43% of the economy, now it is 38% (although we could argue about where the Northern Rock committments sit in these calculations). In anyone’s book, that has to be a significant achievement, when set against the huge boost to public spending we have also seen over this time.
I think the main questions need to be has the money been well spent, and were the benign conditions of the last 10 years really down to Labour or just part of a strong international picture with factors like low oil prices and extremely cheap consumer goods from China boosting consumer spending while keeping inflation low. In truth, its probably a lot of the latter and a bit of the former.
This was a positioning budget, and in as far as he feels elation, I think Darling will be elated to be described as dull – its dull solidity that Labour are desperate to project at the moment. I don’t see Cameron’s response as particularly useful. It’s good knockabout debating chamber stuff, the sort that makes the elderly blue rinsers wet their knickers, but long term unless the economy really nosedives he will be seen as the boy who kept shouting fire – in nthe end noone believed him. A more thoughtful analysis is what’s needed currently from the opposition, so if the economy does pick up by the next election as it probably will, they still have some good bullets to fire.
Apologies Anthony – bit of a diversion from polls, but it is budget day after all.
apart from the pro labour move on hear today, the conservatives are right with alot of things, why put beer up by 4p, yes great idea putting vodka and such like up by 55p a bottle, but on the other side what is the reason behind putting cider up 3 a litre, the only things this dose is punishes village pubs which have very little in the way of drinking problems and a low drinking base in the areas in which the tax hike is being directed, but i can only shine on the govenment for putting the price of a pack of cigarettes up by 11p. in the next year or so hopefuly i’ll be a driver my self but with the price of fuel and the prospect of road priceing i’ll be hard pushed to pay all the costs of driving, my view is the best way to protect the green belt andthe environment is not to build on it or plant more trees on it as soon as you can, but i think a poll damageing budget we’ll see nearer the end of the week what damage if any has been done so far my prediction for the next few weeks looks closer than it did last month CON 43 +3 LAB 28 -5 LD 14 -3 OTH +1
Sally C-yes I thought Cameron was very good.He is quick on his feet & was clearly well briefed.
Actually I was completely flumoxed by Darling.I’d watched Sky beforehand-the guy who runs Alchemy & a City suit-both painting this black picture.Then Darling ambles in & starts burbling about lots of rather inconsequential bits & pieces & repeating the word “stability” a lot.
Ends by saying we will go from £40bn in the red to £nbn in the black by 2012 because growth will return to 2 to 3 ish % pretty pronto.
I was thinking -what the hell is all the fuss about then?
We’ve been here so many times before with GB-he gets his forecasts wrong every time & repeats that it will all come right the day after tommorow & on we go in a blaze of public expenditure & the sky doesn’t actually appear to fall in.
I guess they will get bad headlines tomorrow.They will certainly forfeit the vote of the ordinary bloke in the pub, who’se pint appears now to be the epicentre of both the war on binge drinking & large additional tax revenues from now till Doomsday.
But until it actually starts to hurt people seriously,Gordon & Alistair will presumably continue with the smoke & mirrors.
Maybe 4p on a pint & petrol & food up a lot is enough to shift opinions-I just don’t know.
All will be revealed by Anthony as the Polls role in.
Off to watch Mrs Balls on Adam Boulton-my teeth are gringing already!
Sorry-that’s “grinding”-though “gringing” is certainly induced by watching either of the Balls for too long.
Colin – be a little careful when comparing Treaury forecasts of growth with the city & media picture. Consistently over the last 10 years the government forecasts have been more accurate than the vast majority of city projections. Brown was often ridiculed for over ambitious forecasts, but has been proved correct every time. Where the Treasury has been less sucessful is in predicting public borrowing – this is an area where I would guess there will be much uncertainty.
Having said that, up until January the city was confidently expecting the PSBR to miss this years target by a wide margin, but this time they were wrong and the government was right.
There are still plenty of areas of the UK economy that are performing well, and the Asian economies are wondering what all the fuss is about – they are still projecting 4 – 5% growth. I don’t think Darling’s growth figures are particularly over optimistic and the team behind him have a good record in calling the odds on this one.
stuart gregory – are you Mike ‘The Orifice’ Richardson’s 15-year-old son? Nothing else could explain the POLL predictions, let alone the spelling…
Was disappointed that Lab had not realised that the abolition of the 10% tax rate is going to hit low earners harder and thus abandoned it. Many people who earn under 17k will actually be worse off. Once this kicks in and people start seeing their money disappear there could be a backlash in the polls
Interesting comment on Lib Den Voice about an ICM poll telephone poll.
http://www.libdemvoice.org/live-blogging-political-polling-call-by-icm-2343.html
I wonder how this fits with what they have said about their usual first question.
Mark Senior,
Can’t find it, any chance of posting a link.
peter.
There are those of us who like me like a drink but are not binge drinkers, nor once drunk do we go out to cause mayhem, rather perhaps they lie on the sofa and fall asleep. I’m not sure, but having to pay extra because of a few louts will not be too popular. Or is something to do with raising more money?
Keith,
There is a wider issue than Binge drinking.
The fall in the real price of alcohol, the rise of off sales and changing drink patterns, in particular the increase in low cost wine with meals, has meant that the numbers of people developing drink related problems in middle age is rising alarmingly.
Across Britain GP’s have been reporting a huge growth in what are to all extent pensioner alcoholics, people with time and money who have slowly drifted in to being drink dependant.
Peter.
Keith-Its to do with raising more money-but as you say it is unfair & way off target.
It’s a vote loser – I hope!
Alec-understood-I was refering to Borrowing forecasts.I accept that growth has stood up-so far.Darling has two years to find out-if he turns out to have been wildly optimistic they will probably lose the election.
If he’s right it could win it for them.
I thought it was quite a good performance from Darling I felt he was calm and composed and delivered it impecably.
I also feel that the content was pretty good on the whole, pleased to see taxes on fags go up, however, I was disappointed not to see such a high tax on Cheap ‘cider’ and other paint-stripping drinks.
I also feel that he has done well to continue to grow the economy when most of the G7 nations are facing a recession.
I also feel some of the opposition MPs were a bit overly critical of the Trade Deficit, they must remember that the UK is leading more in High Tec industries rather than smaller manufacturing industries.
It is also no surprise to see that the SNP are still continuing with their oil fetish. I think at every budget some Nat pops up and tries to make a point about Oil Revenues. Thye continue to get the same answer though.
And Peter if this is Darling’s last budget, then lets face it Swinney is going to look even more of a lame duck when the LIT proposals fall flat on their face!
Falkirkbairn01,
Your web link isn’t working I think you missed out a “w”
“http://ww.grangemouthlabour.org.uk/”
Given that Oil hit $110 today which accounting for inflation is the highest price in history, I’d say that from a Scottish perspective oil was an issue.
As to LIT, we may well struggle to introduce it, but that doesn’t stop it being fairer than the Council tax. Were certainly entitled to the same level of support for local taxation as anywhere else in the UK.
Peter.
It means nothing, and has little significance, but from the point of view of someone who is particularly interested in oratory, and who does tournement debating at university level, I thought Cameron’s responce was outstanding. It was agressive, funny, structured and fluent. I wish I was as good a speaker as he is, he’s very good indeed.
ChrisC-
no i am not mikes son far from it, and spelling well i do use spell check on e-mails but no sign of that on this web site. sometimes mike can go a bit far in his predictions but as you can see i have kept it within reason unlike mikes predictions. and when it comes to drinkers people like me who drink 5 or 6 pints a week will be hit in the wallet more than wine drinkers and stay at home drinkers, and with the low amount of money i earn a week i’ll be worse off their to as the new 20% rate kicks in, more to that in around six months to a year i’ll hopefuly be driving and i’ll be paying more tax for that now as well. and finaly i sit on a local darts league committee and a parish council both of them will be afected by todays budget,in the darts league the price of drink will drive people away beacuse they can get it from tesco for half the price even with the 4p that was put on to the price of beer yesterday another nail in the coffin for the pub trade and pub sports like darts & skittles. with parish councils theyshould get more money to help pay for local improvements and projects to help the local villages and residents, not just the cost of overheads such as the clarks payments and hire of halls for meetings. all i say is if we do get a new govenment it must give strong powers to parishes & town councils so that things can be ran at the most local level and not by some remote govenment office in someware we have never heard about, countrys are just as bad for this bending to the ever controling govenment at their beck & call every time, but i’ll be worse off how about you.
countys not countrys
LukW – thats Cameron’s problem. He revels in the smart arsed student debating style – he is very good at it, but do you really think thats what makes real people vote? William Hague was a great orator, so was Neil Kinnock. Thatcher was rubbish – she couldn’t even deliver a decent punchline properly. Whether people win has nothing to do with the debating techniques they use in the House of Commons – I’m afraid that’s one seriously big turn off, and – don’t take it personally – I actually think politics in this country is hampered by an obsession with people who should have grown out of the university debating type of thing and got down to some serious, imaginative analysis and discussion about what needs to be done. Cameron is not doing this and nor will he.
Cllr Cairns – As an exiled Scot, I remember the 1970s independance debates, and I seem to recall the threat from the Shetland Isles that if Edinburgh gained independence from London they would seek to revert to their historic Norwegian alliance – and presumably would take most of the oil with them?
Recieved wisdom is that exciting budgets usually end in tears, a dull budget without much content is probably the best one can expect in the circumstances
Alec,
Shetlanders are rightly proud of their Norse heritage but they are not Norwegians.
On a whole range of issues they are far more closely linked with Scotland than Norway and indeed if they wanted to be part of Norway they could hold a vote to join it now, without independence, but they haven’t and are unlikely to.
It’s one of those anti independence stories that comes up from time to time that takes a theoretical possibility and tries to portray it as a certainty.
So along with Shetland UDI we have;
Being throw out of the EU, Invasion by Russia if we are not in Nato, dependence on diminishing oil, falling population, uncontrolled immigration, a haven for terrorists, ruled by Brussels, on the edge locked out of Europe, having no influence in the world and the list goes on.
I don’t mind debating Independence and I think I’ve been open here about pros and cons, but I draw the line at engaging with the ” Is that what you want, Cos that’s what will happen” brigade
Stuart Gregory,
Try looking at your general settings, although it might not work on a PC, on my Mac I have set it to spell check all text, so when I type on here any miss spellings are highlighted and can be corrected.
Peter.
Peter, i do not dispute for a second that Council tax is an unfair tax, however, the alternatives that the SNP offer are no better.
Swinney went down in flames on Newsnight when he was forced to admit he got things incredibly wrong. We already see the problems that we have from freezing the council tax, look at what we are hearing in Aberdeen almost everyday!
Alec-
Kinnock was no orator.He didn’t get the name “Welsh Windbag” for nothing.
He is and always was the supreme exponent of tautology-a believer in the idea that many words when few will do, constitutes great speechmaking.
The reverse is the case-so he always sounds like the theatrical ham he is.
Falkirkbairn01,
John didn’t answer the first question well, but did recover later, though the damage was done.
The basic answer to the “Investment Income” issue is;
“Is it right to stop a reform that will benefit almost 500,000 Scottish pensioners, many of whom are in the bottom quarter of the population by income because it will also benefit a few hundred pensioners who are in the top 5%”.
No tax is perfect and as the ratio of worthy recipients to unworthy is close to 1,000 to 1 , this one should go ahead.
To be honest the fact that the Labour party seems to be supporting what is clearly becoming an orchestrated campaign by people who will be asked to pay more ( Senior journalists, Newspaper editors and proprietors , CBI Scotland) to find any excuse to stop LIT is at complete odds with it’s traditional principles.
The harsh reality is that LIT would be a vote loser in the Home counties and London where incomes are high and where the Tories need to win.
Therefore to spike Tory guns there Labour won’t back LIT, and if London won’t back it Holyrood can’t be allowed go the other way. So labour in Scotland is left to defend a discredited tax that goes against it’s instincts.
That’s one of the reasons that Labour membership in Scotland is falling while the SNP’s is climbing steadily.
As to the problems with the Council tax freeze, I am not actually aware of any Labour Council group in Scotland, including Glasgow where you are in power, putting forward a motion not to freeze it and raise it instead.
It’s a bit rich to complain about the consequences of a Council Tax freeze when you weren’t actually putting forward an alternative or opposing it.
Peter.
“The harsh reality is that LIT would be a vote loser in the Home counties and London where incomes are high ”
I don’t see why – council tax ,related to property values which are much higher in London, isn’t necessarily higher than one based on income. The same amount of money has to be raised.
LIT in my borough would probably hurt me, since my income is high and the value of my property relatively low (though still much higher than in Falkirk or the Black Isle!)
I’d like to see a breakdown of winners and losers in a LIT system, but I suspect the voters would appreciate a system that was more akin to affordability than to house values.
Peter,
Don’t get me wrong here, I accept that council tax isn’t great and I am generally an advocate of progressive taxation, however, I do see the problems of a LIT.
Being 21 I can see firm problems for myself of paying this tax. What it will do it will cause an intergenerational shift, which means that my generation will have to pay more. Many people my age are already struggling with student debt and are struggling to get on the housing ladder. Personally I wouldn’t want to pay a tax which benefits others and I receive very little, thsi has serious repercussions for the future of our welfare state. It is also very misleading for the SNP to say that it will only affect families on a large income. This is not true. If a Household has 5 people in it and the average income is £20000 then this means that they will be much worse off.
To use one of Alex Salmond’s favourite countries-Denmark-I will try to describe the problems that can be created for business. Ultimately it will be businesses that will pick up the bill at the expense of employees, this is in contrast of Alex Salmond’s policy of bringing the best business to Scotland, as all it will do is reduce competitiveness, and ultimately cost jobs for working Scots.
The point also that Scottish Labour are opposed to it because of Middle England is frankly crazy. There are many middle class areas which are key marginals. By this i mean Stirling, Eastwood and Edinburgh South these should also be noted that they are Labour marginals where they could determine the next Scottish Govt/Executive.
John tt,
The same bands are used for all Councils in England, and if everyone has a big house they just pay less because of the balance of houses in their area.
The issue with LIT is that even in a high value area it is capped at Band H, which is double Band D and triple Band A, so the most the highest earner needs to pay is three times the poorest and LIT would change that particularly in areas with wide variations in wealth.
That will be more pronounced in the South East but has dangers for Labour because the better off are more likely to dislike it, and are more likely to vote than the poor and indeed turn to the Tories where the Tories need to win to form a Government.
Falkirkbairn01,
If your generation need to pay more it will only be on the basis of earnings so if you don’t earn much you won’t pay much, it is as you say a progressive tax.
As to student debt the SNP wants to remove the graduate endowment Labour opposes it. We are also introducing grants for first time buyers.
Given that you have said that; “I wouldn’t want to pay a tax which benefits others and I receive very little”, I have to ask exactly what are you doing in the Labour party as you seem to be against one of it’s core principles.
As to the house with 5x£20,000 these are the projections for Scotland,
________________________________________________________________________
Key Findings:
Between 2004 and 2024, the number of households in Scotland is projected to increase by 13 per cent to 2.5 million – an average of 14,800 additional households per year
Over the same period, Scotland’s population is projected to increase by just 0.8 per cent. Therefore, most of the projected increase is the result of more people living alone or in smaller households.
The average household size is projected to decrease from 2.22 people in 2004 to 1.97 in 2024
Scotland’s population is ageing, with more people in the older age groups and fewer in the younger age groups. This has an impact on household structure, as children tend to live in larger households, and older people in smaller ones
Household type
There is a large projected increase in households containing just one adult, from 770,000 (34 per cent of all households) in 2004 to over a million (42 per cent) in 2024
Older women are more likely than men to live alone.
But the number of men living alone is projected to increase more rapidly, from 330,000 households in 2004 to 490,000 in 2024, an increase of nearly a half.
The number of men living alone who are aged 85 or over is projected to increase from 9,000 to 22,000
There are also projected increases in other small households. Households containing just two adults are projected to rise from 670,000 to 810,000, though there is a projected decrease of a quarter in the number of middle-aged two adult households.
The number of households containing one adult with children is projected to rise from 150,000 to 200,000
In contrast, the number of larger households is projected to fall, with households containing two or more adults with children decreasing from 460,000 (20 per cent of all households) in 2004 to 320,000 (12 per cent) by 2024.
There is also a projected decrease in the number of households containing three or more adults, from 200,000 to 150,000
_________________________________________________________________________
On this basis I would say that the number with 5 people on £20,000 could be as low as 50,000 out of 2.5m which is 2% of the total.
Even if it was 100,000 it would still be only about 10% of the number of single adult households.
In short like the unearned income argument you seem to be using the potential impact on a small number of people to undermine a reform that will not only benefit the majority but which will give the largest benefit to the worst off.
Far from undermining the welfare state removing the tax burden from the poorest will strengthen it.
The best reform we can make of the welfare state is to move away from means testing, credits and benefits to a system where we don’t send out tax bills to people with no money who then have to make claims so that the state gives them money to pay the bill it sent them.
I see no reason why deducting tax at source via PAYE along with income tax will be an additional burden to business and it is cheaper to do and easier to collect than the Council tax.
As to your Scottish marginals,
Stirling; Lab majority 4676 (11%), Eastwood (Renfrewshire East); Lab majority 6657 (14%), Edinburgh South; Lab 405 (1%).
Only one is a marginal and that is to the LibDems who support LIT.
With 41 out of 59 seats Labour isn’t going to lose the election to the Tories in Scotland but it can in the South east and that is where the battle will be fought.
Labour can’t fight the Tories in the home counties when it is advocating a different policy in Scotland and electorally the home counties are where the election will be won. Therefore Labour in Scotland must hold the line and oppose a policy in Scotland that would be bad in the south of England.
It’s a consequence of the triangulation of the two main parties and the fall out of Poll tax that makes a radical move on Local taxation a high risk move and lets face it GB isn’t a high risk politician.
Peter.
Thanks Peter – I’d thought that banding would be abolished along with the property element, and that it would work the same way as PAYE, with thresholds etc., and shortfalls/surpluses carried over to following years.
Deducting from wages makes sense.