As we look forward to what effect the budget has on the polls, here’s an updated look at what they’ve done in the past. The graph below shows the government’s lead in the two YouGov polls before and after each of the last ten budgets (for the most recent budgets, done in the era of daily polling, I’ve taken the average government lead in the two weeks before and after the budget).

Effect of budgets on opinion poll leads

As you can see, the idea of governments getting “budget bounces” hasn’t really hold water in recent years. Most of the time budgets don’t have much of an effect at all. The exceptions were Alistair Darling’s budgets in 2008 and 2009 when his speeches brought home exactly how dire the economic situation was and had consequentially horrid effects on the government’s poll position.

George Osborne’s first budget in June last year appears to have produced a very short term boost for the government, but it was (a) only minor and (b) lasted all of a week.

120 Responses to “On budget bounces (or lack thereof)”

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  1. Class Graph! :) Love it.

  2. Shouldn’t the last group of columns be a sort of yellowy-blue colour to denote the coalition? Or does it just indicate the party of the chancellor?

  3. KeithP – Tom Baldwin got to me. I tried to paint it a yellowly/blue but he gave me chinese burns until I coloured it blue. Sob.

  4. I’d be delighted if someone can point me to the url for the detailed Angus Reid tables.

  5. Budgets are a mug’s game. The people you reward are never as grateful as those who you take from are hostile. Any budget ‘boost’ is as much likely due to increased exposure for the government in a situation where the opposition is always going to be on the back foot – partly because the question “Well, what would you do?” is always going to be raised, which it often isn’t in the rest of the political cycle.

    That said, it’s also true that the short-term effect of political events is often overrated. To take a topical example, you can look back at the effect of Blair’s ‘boost’ at the time of the invasion of Iraq, eight years ago. YouGov and ICM show an increase of 5% in Labour’s rating in March/April (at the expense of the Lib Dems), but that has evaporated by June. MORI only showed a 3% boost and Populus (who had just started doing polls) were all over the place.

    In context of poll ratings over 2002-2005, it is difficult to distinguish the effects of Iraq from the normal ebb and flow of polls over the period.

    Similarly with the most dramatic event in economics in recent decades – Britain dropping out of the ERM on Black Wednesday 16 September 1992. We think of confidence in Major’s government immediately vanishing; instead the Tories’ poll ratings took about 18 months to gently decline to their minimum – a decline they were already on. Most of Labour’s increase in the months immediately afterwards actually came at the expense of the Lib Dems.

  6. Best budget in 5 years, a poll uplift is likely.

  7. TGB I agree but why can’t DM see that. He’s resorted to talking about the weather!
    I think that yet again, he has prepared his speech beforehand (as of course he has to) but is unable to think on his feet and adjust it for measures announced, many of which are very progressive, so he just sounds negative & irrelevant.

  8. “STV will also work with online research panel ScotPulse to offer a barometer of public opinion during the election campaign.”

  9. Never make any judgement on a budget until atleast a week has passed. Governments have a tendency to give you money in one hand, while they are picking your back pocket.

    My thoughts today are that the budget was positive, but by the weekend, once the red book has been picked apart, that the budget will be viewed a pretty neutral.

  10. TGB, what makes you say that?

  11. A “fingers crossed” budget really – there is no money to spend (see note left behind by Liam Byrne) and this is quite clear from the delaying of possible tax rises till next year, where it is hoped that growth might have got going enough to support them. Judging by the way petrol prices have been going up, the 1p decrease will be wiped out pretty soon anyway.

    No doubt something will happen in Libya or thereabouts by tommorow and it will all be forgotten.

  12. What he should have done:

    Delay all cuts in public service for three years, or until the economy is back in strong growth.

    Pump money into job creation. Take the money from the banks. They are not lending it, so it is just sitting there.

    Build social housing, yes, but not on green belt land. It’s going to be a big vote loser if the green belt turns to bricks and mortar.

  13. @NICKP

    Your scenario would result in a collapse in World market confidence in the UK as a nation, leading to interest rates of 12% like Greece, no growth and unemployment running well above 5 million!

    Best budget in 5 years, a poll uplift is likely.

    good grief I hope you are joking

  15. @R Huckle

    You make a very good judgment and its a tendency for governments, particularly new governments to enjoy some sort of boosts from budget annoucment in the first week but when the seed is rooted to ground the truth is finally unveiled within two weeks by analysised.

    I don’t know why but the media always go on a fenzy and honeymoon period when a new government make’s it’s first two-three budgets but soon after they switch over in support of the opposition. Remember Brown’s 2006 and 2007 the media classed it “give in one hand, taken from the other” message in line with the Conservative’s stance.

    Personally, you do not have to be a economics graduate to see the detail and the “fine” blueprint of this budget that this budget is not a “growth” budget or a “generous giving” one.

    For example, the tax on Oil Companies to by for the 1p reduction in fuel duty sounds good but thats if you can secure the confidence of the oil companies not to push up prices. I have my doubts they will live up to that because getting to work or school via car is a nessesscity.

    Also, if you study carefully that £45 a year better off (which is a misserable amount of money anyway) gets eaten in by the 1p rise in NIC’s, an above inflation rise in road tax (which will see the average car tax go up by £10 a year), plus cuts in benefits.

    However, that’s only the obvious stuff and come two weeks time when the budget is finally scrutinised from it’s first chapter to the handback cover we will get a more real picture. For now it’s all headlines, rhetoric, point scoring and presentation.

    Personally, I think this will be a neutral budget which is not bad but due to the economic circumstances we are in (high inflation, high oil costs, job cuts, benefit cuts, wage freezes and possible high interests) the public will need more than just seeing their incomes steady. Also this adds pressure to the economy because if people save more then that reduces the economy.

  16. Budget numbers:-

    Fiscally neutral in 2011/12, & only +£335m pa to GO by 2014/15.

    Biggies ( 2014/15 £m pa . + = Treasury gain / – =Treasury loss )

    North Sea oil supplementary charge +1870
    Carbon Price levy ( Energy coys. ) +1410
    Tax avoidance +1330
    CPI indexation of Tax Allces +1080
    Fuel Duty – 2100
    Personal Tax Allces. -1230
    Corp’n. Tax -rate -1075
    Corp’n Tax-foreign owned coys. -840

    Public Finances compared with ( 2010 Budget.)

    Deficit in 2014/15 £46bn-2.5%GDP ( £37bn-2.2% GDP)

    Total Debt 2014/15 £ 1314bn-70.5% GDP ( £1284bn-69.4% GDP

    Growth – % GDP ( 2010 Budget):-

    2010/11 1.7% ( 2.3%
    2011/12 2.5% ( 2.8% )
    2012/13 2.9% ( 2.9%)
    2013/14 2.9% ( 2.7%)
    2014/15 2.8% (2.7%)

    Big reduction in 2010 growth, but rapidly back to last years forecasts over next two years.

    Slippage of £9bn pa in deficit forecasts for end Parliament; and £30 higher borrowing .

    The rebalancing & enterprise stimuli would have been useful in last years Budget-but clearly , a month after being elected, all GO had time for was a Public Finance control package to keep UK interest rates down.

    Now he really does have to get the economy motoring.-whilst sticking to his fiscal tightening plan.

    If there is significant slippage on 2.5% growth he will really start to hit credibility problems.

    2010/11 slippage on growth forecast was a gift for EM–but since the fiscal tightening doesn’t start till 5 April 2011, all he can claim is that they would have done better last year by some means or other.

    BUt 2010/11 is history now-and since ADs last Budget ( allegedly still Labour economic policy) had spending cuts of £14 bn in it, his attack on GO re 2011/12 rests on the effect of £3bn less spending cuts.

    It’s still wait & see for both GO & EM.

    But if we are talking about slippage again in a years time, EM’s mantra will gather credibility.

    If on the otherhand , the economy really does start to rebalance & grow by next year, EM will need a new story.

    Can’t see much in this either way on the Polling front.

  17. There seems often to be confusion about what is Green Belt (note capitals). These are specific allocations of land on which development is not totally precluded from taking place but which should not have the effect of producing sprawl or coalescence of nearby settlements. The space between Bristol and Bath is Green Belt and I leave you to judge how well the local councillors have looked after it. I assume you all have Google Earth. The Bristol Ring Road, M4, M5, Airport and its OOT developments are in the GB.

    Green Belt is thus by definition, outside the limits of a Defined Development Boundary. All cities, towns and large villages will have a DDB and there is a presumption of no development outside them. So when GB states that the Green Belt will be protected, he is not saying anything about the majority of the designations that protect open countryside. Indeed, by specifying the Green Belt, he is either ignorant of what he says or, by implication, doing an open sesame on the rest, which is the vast majority of undeveloped land.

    So it remains to see what will happen to that issue. The significance for the polls will be slow in unraveling but I would not rule out further middle class reaction in leafy areas and a swift backtracking in that event.

    As others have said here the implications of announcements take time to be understood.

  18. @NickP

    “Build social housing, yes, but not on green belt land. It’s going to be a big vote loser if the green belt turns to bricks and mortar.”

    There is not enough Brown field sites left, at our current rate of building we will have used them all up by 2013/15

    We have no choice but to build on Greenfield sites, unless we want to increase the housing shortage problem or increase density of already dense housing areas

  19. @Colin

    My argument if I was EM’s political advisor is that if the growth holds steady or even exceeds governments forecasts but if the coalition still continue the pace and the scale of cuts when the government was making loads of revenue then EM could argue that this was ideologically driven to “destroy public services, leave public services in a rut and on the idea of a smaller state”.

    However, if the public do not really see the need for public services in their lifes then that could backfire. However, one could argue if in 2014-15 the gov. has more money and decides to use them to cut corporation tax further then EM could argue that money could have been used to restore child benefit, help university fee’s etc. which are normal vote winners

  20. AndyC


    2015 is a long way off :-)

  21. @AndyC,

    I think you’re highlighting the essentially political argument behind economic policy.

    Labour’s political instinct is to increase public spending.

    Low growth = need stimulus = increase public spending

    High growth = more resources available = increase public spending.

    Tory political instinct is the reverse.

    The “reasons” politicians give on both sides for why their way is “economically sound” are usually hooey. It’s all about your views on the size of the state.

  22. I hate (aye right!) to point out –

    Where would you be without our resources?

  23. Colin,

    Thanks for the figures and analysis.

    One small point re Growth revision.

    Arguably, the impact of down the line cuts affected Q4 and Q1 as the psychological impact on peoples confidence has led to a greater reigning in than was anticipated by the Government and OBR.

    People who think there jobs may go save more just in case. In this sense the modest (in macro) terms larger cuts from GO last year coupled with the announced cuts have had a kind of exponential negative multiplyer effect.

  24. @ Jim Jam

    The slowdown in the 4Q was to be expected. Much of the 2Q and 3Q upturn was due to an unsustainable bounce in construction and consumer spending. Negative effects on expectations because of huge overhyping of the possible impact of government cuts didn’t help either.

    @ Colin

    Looking at all the surveys, the next quarter will be dreadful on the consumer front, not bad on the business services side and brilliant for industry. Almost certainly the 1Q figures will show growth, but how much is very difficult to guess, given the “bounce back” effect of deferred activity. If we are lucky, we will be looking at 0.4% per quarter. Not good, but it will be growth of some kind and will not help EM and Labour with their refrain that there is a double dip. Once that threat has lifted, they will have some serious problems and will have to change their tack.

  25. Is it usually the leader of the Opposition who replies? I would have expected Balls. We did get that, but in a different sense.

  26. Pete B,
    Shame on you! That was a childish and silly comment.The leader of the O pposition always replies to the budget.It was an excellent reply .
    I agree.I myself have been on the wrong end of planning
    decisions twice, I live in the National Park where planning decisions are even tighter than in the green belt.That was no protection.I expect that when this filters through this will
    cause as much of a problem as the forests.

  27. Robert, you may be right about the Q4 slowdown but the Autumn statement didn’t reflect it.

  28. JIM JAM

    I suppose GO would say that there are global factors as well as domestic ones, which have fed into the growth downgrade.


    I agree-we are going to have a very difficult time whilst GDP growth becomes less reliant on domestic consumption , financial services & state spending-& more influenced by manufacturing, exports & industrial investment.

    RE EM-he has put his chips down on a failure to grow. GO has his on growth.

    We won’t know who wins till well into next year.

    So many of the policy levers are of neccessity med/long term:-

    Technical Colleges.
    Schooling & curriculum reforms.
    Enterprise Zones.
    Welfare to work reforms

    and so on.

    It must be like turning a supertanker round..

  29. Colin,
    As you rightly say,we also have to take into account global
    factors.I still believe that the euro will have a tremendous
    effect on our economy this year. Already it is being said that Portugal is in meltdown.If the intervention in Libya drags on ,who knows how that will influence events.Oh dear I am talking myself into a depression here.I think that all we can say is who knows.And as for the polls who knows also.

  30. Pete B – it is always the Leader of the Opposition who replies to the budget statement, and has been for many, many years.

    Shadow chancellors respond to things like spending reviews, but it’s only ever the LotO for the budget.

  31. @Old Nat

    Where would you be without our resources?

    A. Where I am now. My resources in HBOS (based in Edinburgh) disappeared into thin air a few years ago.

  32. @OldNat

    “I hate (aye right!) to point out –
    Where would you be without our resources?”

    You’re claiming ownership of the North Sea Oil fields, I see and, if I was looking at life through your SNP tinted spectacles, I’m sure I’d be singing the hackneyed old nationalist refrain too. Of course, some considerable wealth has flowed into Scotland from the exploitation of the North Sea oil fields, but most of it, I admit, has found its way into the UK Exchequer.

    Ironically, the UK economy hasn’t reaped the full benefit from the oil because of the largely liberal economic, some would say neo-conservative policies we’ve followed, certainly in the 80s, since oil started to flow in the early 1970s. Compare and contrast Norway’s experience over the same period and with similar sized oil reserves in the North Sea. By 2010 they had become the second richest country in the world in terms of wealth per capita, primarily because of the mixed and essentially social democratic economy that prevailed during the oil rich years. They built up their roads, schools, hospitals, welfare state, public realm and services, sharing the wealth that was generated by the oil in a uniquely successful example of government and private business working in tandem for the common good of their citizens.

    What did we do? Allowed the oil companies to profiteer with a light touch tax regime and wasted a large part of what wealth did flow into the public coffers by using it to subsidise 4 million unemployed people (plus millions more on invalidity benefit) throughout the economic miracle/mirage that was the 1980s. A classic example of private affluence and public squalor being allowed to develop and co-exist. Norway didn’t make that mistake. Their success story was our wasted opportunity and, in my view, economic tragedy too.

  33. Meanwhile, firmly back on thread and focusing on the major story to come out of today’s Budget:

    The graph looks a bit like Ken Clarke’s head today. Going lower and lower into his chest, then shooting up suddenly as he wakes up.

    Still 12/1 at Ladbrokes to go first. Someone else thinks it’s good value too.

  34. Old Nat
    ‘Where would you be without our resources?’

    Digging coal again?

    (I’ll leave aside the Arbroath Smokies if you don’t mind)

  35. CROSSBAT11

    Yes, but look at all that posturing on the world stage that the UK did with the oil money. That’s got to be a matter of pride for the Brits.

    From either a UK or a Scottish perspective taking the revenue from a one-off resource and putting it into the current account, was simply stupid.

    Par for the course for Westminster, I’m afraid.

    We did tell you!

  36. Phil

    The “H” in HBOS doesn’t stand for Hamilton. :-)

  37. I had an email from Nick Clegg saying ‘good news for alarm clock Britain’

    (I know, someone should tell him).

    Mrs Howard said ‘what has he bought Ken Clarke one then?’

  38. Howard

    :-) to Mrs Howard.

  39. @Stuart Dickson
    I’d be delighted if someone can point me to the url for the detailed Angus Reid tables.

    They eventually seem to come out on the Vision Critical site quite a few days after the headlines appear. Go on their main site (use the Angus Reid link on UKPR), and look at “news room” and “public opinion” within that. But there’s nothing there yet.

  40. @Old Nat
    H stands for taken over by BOS

  41. @OldNat

    “From either a UK or a Scottish perspective taking the revenue from a one-off resource and putting it into the current account, was simply stupid.”

    I agree with you entirely and, as usual, you’ve put it much more elegantly and succinctly than I did!!

    Norway re-built a country while we more or less did the equivalent of p*s*ing it up the wall!

  42. I would be very surprised if the Tories don’t get a boost from this.

    I am going to be 50p a week better off due to the petrol changes!!!!

    … Oh … wait there … forgot about VAT, and inflation, and the fact that the economy has slowed to a standstill and growth downgraded from the Tories own forcasts.

    Hmmm … I take that back. I think more people are going to blame the government for the CURRENT economic mess, whether or not they blamed Labour for the previous economic mess.

    The Big Question – is, will the economy go back into recession. If it does it will not only be HUGE news, it will be much more easily laid at the door of the current incumbents.

    And for the first time ever, I think EM actually gave a good performance. Maybe even his numbers might improve.

  43. Phil

    HBOS Group Reorganisation Act 2006

  44. @ Colin
    “It must be like turning a supertanker round.”

    ..after it has already been steered right onto the rocks with a “light touch” on the wheel.

    Re budget bounces. Unless there is some major good news like tax cuts – of which there have been none for years – then it clearly isn’t going to curry any voter favour. Government popularity is driven by rising real incomes. Would be interesting to see some poll data for incumbent governments matched against % year on year rises in real disposable income.

    Next year inflation should subside and with no more tax rises, at least people’s living standards should level out. Only in 2013 will we see them improve, IF we are lucky. Enjoy the wait!

  45. Meant to say “Unless there is some major good news like MAJOR tax cuts”

    @ Adrian B

    “The Big Question – is, will the economy go back into recession. If it does it will not only be HUGE news, it will be much more easily laid at the door of the current incumbents.”

    And IF the economy does return to growth, which then accelerates, then Ed is toast. While the consumer side of the economy is poor (necessarily, due to high debt levels, higher VAT end of artificial one-off boost from lower interest rates etc), most of the rest is recovering rapidly. This year GDP will be finely balanced, but if real income levels stop being hit, more general growth will return. How convincing would Labour’s narrative be then?

  46. Portugal going down the same tubes as RoI.

    There but for the grace of GO(d) :-)

  47. @ Robert C,

    You are right that Labour’s narrative will be less compelling if there is no double-dip.

    But it will still be pretty compelling if people are feeling the genuine pain of cutbacks on their pay, pensions, grocery bills, public services.

    I think we political geeks put a lot of store by announcements (growth figures, borrowing figures, size of deficit etc.) but for normal people they judge it by how much their groceries cost and how much money is in the bank at the end of the month (or whether they have a job).

    So the real issue is the pain felt by the public. An official new recession gives the public a new place to pin the blame for their pain. But even without it they may still think, in increasing numbers, “I blame the current govt for my pain”.

    According to polling, I think at the moment people still (by a decreasing margin) blame Labour more than Tories for the current economic situation. But it will be interesting to see how that changes over the next few weeks, recession or not.


    “Your scenario would result in a collapse in World market confidence in the UK as a nation, leading to interest rates of 12% like Greece, no growth and unemployment running well above 5 million!”

    Failure to spend will lead to slump and guarantee the scenario you have described. We are in for a vicious cycle of inflation and negative growth and GO will try to solve it by cutting spending and it will make the deficit worse…of course. It ALREADY has. He’s turned growth into recession whilst the rest of the world came out. Only austerity measures GUARANTEE recession.

    It will give me no pleasure to say I told you so, but sooner or later you’ll have to stop blaming snow or blips or world conditions, and we’ll have to have a proper growth plan.

  49. I can see the Eurozone being dragged down by yet another expensive bailout (Portugal) – we need these countries to be thriving so that if our manufacturing sector recovers, it has somewhere to sell to. Growth seems to be getting progressively harder and harder to find, whether or not we have half-rate or full-on austerity.

  50. @oldnat “our resources”

    I hadn’t realised that you were a Shetlander…

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