Last night’s YouGov daily poll has some initial questions on the Autumn statement, full tabs are here. As we regularly see in the trackers on the Sunday Times polls, the public are deeply negative about the state of the economy and how they will fare over the next 12 months – that hasn’t changed. 56% of people think the government is handling the economy badly, with 34% thinking they are doing well. That said, while people think the government are doing badly, they think Labour would be worse: 37% of people think the economy would be even worse were Labour in power, with only 25% thinking that Labour would be doing a better job.

There is a similar picture if you replace the government & Labour with Osborne and Balls. People think George Osborne is doing a bad job as Chancellor by 49% to 24%, a sharp decline from when YouGov asked the same question after this year’s budget when 34% thought he was doing a good job. However, Osborne’s lead over Ed Balls on who would make the better Chancellor has grown. 30% would now pick Osborne, with Balls on 24%, compared to a lead of 25% to 23% in July.

The survey goes on to ask people’s preferred party on various aspects of economic policy and here views are a bit more nuanced. People see the Conservatives as the party best able to reduce the country’s deficit, steer the economy through the crisis and support British business. However, Labour are seen as more able to create jobs, keep prices down and encourage growth.

Asked what is most to blame for the much lower growth forecasts, the government are continuing to avoid the largest share of the blame, with only a minority blaming them for the current state of the economy. Asked to pick the two main factors for slow growth the largest group of people blame the debt crisis in the Eurozone (44%), followed by the last Labour government (32%), the banks (31%) and 28% the current government.

YouGov asked about the specific measures contained in the Autumn statement, with mostly predictable results – it goes almost without saying that large majorities approved of the cancellation of the January hike in fuel duty, a lower rate of increase in rail fares and an increase in the bank levy. Interesting ones are the public sector pay freeze (supported by 47%, opposed by 41%), increasing the state pension age to 67 by 2026 (supported by 40%, opposed by 51%) and increasing the discount on right-to-buy (supported by 34%, opposed by 50%). The decision to update benefit payments in line with the 5.2% rate of inflation split opinion down the middle – 40% of people thought it was the right thing to do, 44% think it was wrong.

Finally YouGov asked about perceptions of what parts of the country the statement helped most. I thought this would be interesting given many of the big infrastructure projects were in the North, and whether that would be picked up at all. It doesn’t seem to have been! There were large chunks of don’t knows on all the regions, and those who did answer percieved it to have helped the South the most. Of course, in floating the possibility of regional pay scales for public servants the statement could indeed help the South the most, but I expect the answers to this question actually just reflect people’s pre-existing view of the Conservatives caring more about London and the South than the rest of the country.


298 Responses to “YouGov poll on the Autumn statement”

1 3 4 5 6
  1. colin

    I take the eloquent thrust of your point (and yes my use of ‘gratuitous’ was er gratuitous ;-)

    However

    “……”Brutal” ( I’ll ignore “gratuitous”) …….after 70.6% Real Terms increase over ten years ?”

    Similar points are often made by Coffee house blog and by Dan Hannan on his blog.

    The real politik IMO though is that- even under this scenario you lay out- the front line and the thin edge of public services are going to suffer visibly and personally as far as the majority of the electorate are concerned. That may well be because Brown overspent but I don’t think the whys and wherefores will be paramount come the next GE.

    Any strategy which offers the electorate ‘lite’ relief (especially after 5 years with two more years promised) but is one that acknowledges that debts have to be paid off albeit at a slower rate- is I think one which has a chance of outwitting the ‘don’t let Labour cock it all up again’ narrative that we all know is going to be the mainstay of the next Tory campaign.

    However (and obviously): the two EDs have to grasp all this first of course- and as Fraser Nelson points out today- they have not done yet…so, as he ends, “Lucky old Osborne” :-(

    http://www.spectator.co.uk/coffeehouse/7446028/ballsblind-misjudgement.thtml

  2. @Neil

    Blimey, it must be different in the South West if you still have Education Welfare officers! Up here in Manchester they’ve all gone – cuts, dear boy, cuts.

  3. SOCAL

    @”I admit I’m no expert but seeing as they are a Communist state, aren’t most workers in China employed by the public sector?”

    I have no idea-it is such a strange & developing mixed economy .

    You may be right.

    …but it’s not really germane -The Chinese representative of China’s Sovereign Wealth Fund ( I characterised it as Mr Wen Jiabao because he is the Chinese leader) said, when invited to Europe to chip in to EFSF, that they might consider it if & when EU countries became ( by inference) better credit risks .

    He suggested that EU economies were now uncompetitive ( he said the Chinese worked harder) and too wedded to their unsustainable welfare benefits.

    Of course-this is a country in which ( I imagine) welfare benefits are at the opposite end of the scale to those in EU.

    BUt I think he has a point. THere are clearly vast disparities in competitiveness within EZ-hence the fiscal imbalances. THere are also (imo) totally unsustainable welfare benefits too. I think anyone who studies the Greek public finances would agree. Sarkozy has just told the FRench people that EU working time & retirement arrangements were a mistake.

    So-whilst the messenger may not be one that appeals to us-the message should.

    There seem to be signs that it is sinking in in certain quarters.

  4. @ NICKP

    What evidence?

    Fair question. I will need ohers with greater economic knowledge to help me out here. I remember a Chancellor’s statement back at the time the top rate was cut to 40% and it was revealed with some astonishment that the following year the Treasury had actually raised more income from that tax bracket after the rate had been dropped to 40%.

    Can anyone else remember this?

  5. @Valerie,

    We still have them. Think they may have changed their name though.

  6. h ttp://www.plymouth.gov.uk/education_welfare_service.pdf

    I’m wrong. They still have the same name.

    You want to get yourselves a Tory council, Val…

  7. @ Richard in Norway

    “Sorry to pop your bubble but the black Friday sales were on negative margin, which means that stores were so desparate to get rid of stock that they sold at a loss across the whole range of goods not just a few lost leaders, the unemployment figures look good on the surface but who’s being counted, a hundred and twenty jobs added sounds good but is less than the number of new workers being added to the workforce. But the unemployment rate fell from 9% to 8.6%, how did that happen? Was that 99ers falling off the list? Or just people giving up looking cos nearly half a million people left the labour force in one month!! And the labour force participation rate fell to its lowest since 1983. Oh and apparently you had a decrease in population last month as well!! Lies damm lies and statistics to quote a Tory.”

    Well, don’t think of the glass being half empty, think of it being half full. You are correct about people being rolled off the unemployment rolls but the economy still added a significant number of jobs. We’ve had 23 straight months of private sector job growth. This has come in spite of Congress nearly shutting down the goverenment and nearly sending us into default for the first time in history in the same year. I have not heard anything about a negative margin. Even if that was the case though, the increase in sales is still positive. Because stores were unable to unload that merchandise previously. So these are positive signs of improvement even if they’re not going to alleviate all problems overnight.

  8. @Neil

    Well we all know that Tory Councils are facing far less savage cuts than their Labour counterparts.

    Feathering the nest?

  9. ROB

    THanks & appreciated.

    RE “Any strategy which offers the electorate ‘lite’ relief (especially after 5 years with two more years promised) but is one that acknowledges that debts have to be paid off albeit at a slower rate- is I think one which has a chance of outwitting the ‘don’t let Labour cock it all up again’ narrative that we all know is going to be the mainstay of the next Tory campaign.”

    Yes-I see the attraction for a care worn electorate in that suggestion.

    I think both Tories & Labour have to transfer it to the problem of Debt reduction , rather than Deficit elimination, because that is the phase we will probably be moving into early in the next Parliament .

    The salient points are a little more nuanced than for Deficit reduction & include things like sustainable Debt INterest, Target %DEbt/GDP, etc

    But -given that a balanced budget is in sight coming up to the next GE-the speed of DEbt reduction may be more fruitful ground for Labour at that point, than speed of Deficit elimination has been to date.

    However, I guess the markets will have a view as well-and of course Gilt Yields will be so much more important when our DEbt is 50% higher than it is now !

  10. @ Neil
    And EWO’s used to be qualified Social Workers, But, hey, who cares about having properly trained staff. It’s only kids….

  11. Nice picture of young Michael Gove on the picket line fighting for union recognition.

    h ttp://www.guardian.co.uk/commentisfree/2011/dec/02/michael-gove-comrade

  12. @ NICKP

    I don’t have the figures, but I am told by a friend that it was Nigel Lawson who announced in 1989 that the yield from 40% top-rate taxpayers was greater in the current year than it had been in the previous year when it had been at 60%.

    Are there any treasury chaps out there who can provide the numbers please?

  13. @Rob Sheffield

    My post below apparantly went into moderation because i joined up Sc unthorpe (|-) as one of the constituencies. It is therefore now a very late response, but I hope it gives food for thought on your idea of a Lab overall majority on the revised boundaries. :-)

    ” That is a majority over all other parties of 34.

    See? STOOPID- just like ‘wot U sed’ ”

    Err ……….. actually No!

    Taking the suggested Lab 39 (+9), Con 36 (-1), LD 10 (-13)

    This means changes as follows: Con/Lab 10, LD/Lab 23, LD/Con 12

    For England by Region on new boundaries:

    NE
    Con -1 (Hexsham)
    LD -1 (Berwick)
    Lab +2

    NW
    Con -7 (Copeland, Darwen, Chester, Morecombe, Blackpool N, Bury N, Carlisle)
    Lab +7
    Con +4 (Hazel Grove, Southport, Cheadle, Kendal)
    LD -4

    York
    Con -5 (Kingston, Leeds NE, Mirfield, Sc unthorpe, Bradford W)
    LD -1 (Sheffield SW)
    Lab +6
    Con +1 (Guiseley)
    LD -1

    East Midlands
    Con -11 (Broxstowe, Derby W, Sherwood, Northampton N, Corby, Mid Derbyshire, Lincoln, Loughborough, Derby S, Erewash, Notts S)
    Lab +11

    West Midlands
    Con -6 (Wyre, Worcester, Walsall S, Cannock, Birmingham Erd, Meriden)
    Lab +6
    Con +1 (Solihull)
    LD -1

    Eastern
    Con – 8 (Luton N, Thurrock, Waveney, Ipswich, Watford, Basildon, Bedford, Stevenage)
    LD -1 (Norwich S)
    Lab +9

    South East
    Con -5 (Milton S, Hastings, Southampton Test, Brighton, Gillingham)
    Lab +5
    Con +3 (Abingdon, Eastborne, Eastleigh)
    LD -3

    South West
    Con -3 (Stroud, Gloucester, Swindon S)
    Lab +3
    Con +7 (Bodmin, Truro, St Ives, NE Somerset, Glastonbury, Torbay, Cheltenham)

    London
    Con -9 (Hendon, Ilford N, Eltham, Stanmore, Chingford, Brentford, Ealing, Erith, Wanstead)
    LD -2 (Willesden, Hornsey)
    Lab +11
    Con +1 (Richmond)
    LD -1

    England seat totals
    Lab 173 +60 = 233
    Con 292 -55 +17 = 254
    LD 36 -5 -17 = 14
    Speaker =1

    Scotland Difficult to say without more detailed polls but current scottish polls do not show Lab increasing its polll % to significantly increase its projected new boundaries holding of 37.

    Welsh Proposals have still to be finalised but at best Lab could hope for say 24.

    This gives a UK less NI total for Lab of 233 + 37 +24 = 294

    Conclusions:

    The poll figures given do not even give Lab an overall majority let alone one of 34.

    Con will still be the largest party in England. If Lab form the govt it will have to be a coalition and once again the Con Maj in England will be outvoted by the Lab MPs from Wales and Scotland. When was that Scottish independence vote?

  14. Tony Dean
    “I remember a Chancellor’s statement back at the time the top rate was cut to 40% and it was revealed with some astonishment that the following year the Treasury had actually raised more income from that tax bracket after the rate had been dropped to 40%.

    Can anyone else remember this?”

    Yes I can, though a bit hazy about chapter and verse.

    Colin
    “I think both Tories & Labour have to transfer it to the problem of Debt reduction , rather than Deficit elimination, because that is the phase we will probably be moving into early in the next Parliament .

    The salient points are a little more nuanced than for Deficit reduction & include things like sustainable Debt INterest, Target %DEbt/GDP, etc”

    Do you think the majority of the electorate would be able to follow the nuances? I expect there are quite a few who aren’t aware of the difference between Deficit and Debt. The message needs to be very simple and clear, like the Jeux Sans Frontieres advert someone quoted earlier.

  15. @ Neil A

    “Re: retired police officers (and other civil servants) getting well paid new jobs.

    This is a very common practice, and on the face of it seems outrageous. But when you put that initial reaction to one side and give it some thought, it’s not quite as bad as it seems.”

    I don’t find it outrageous at all. Or bad. It seems perfectly reasonable to me. There comes a time for many cops when they no longer want the extreme stress and demanding hours of the job of being a police officer. Sometimes, injuries contribute too (officers get older and can no longer be as effective due to physical degeneration, etc). Yet they’re still able to work and want to (fishing up in Oregon only appeals in the 80’s). And for many companies, hiring former police officers is something that’s highly desireable.

    And frankly, I think those cops deserve it. Every time a cop goes out for duty, they put their lives on the line. Being a police officer requires a high level of training and requires one to be in shape and requires one to be educated and skilled. It also means giving up certain benefits that others get to have. You might have to work Christmas Day or Thanksgiving when other similar people get those days off (or in your case, I suppose, days off to celebrate the royal wedding instead of Thanksgiving). Police officers serve society, I think they’re more than entitled to take other jobs after retirement.

  16. Liz

    You should know better than most that there is no shame in changing political allegiance. Many people in their youth have espoused political views which in later life they have come to regret, Mr gove is just one of them.

    Please don’t force me to defend a blue again, please!!!

  17. @LEFTYLAMBTON
    “Of COURSE no party is going to promote CGT on houses. I simply proposed it as an interesting way of finding out on what principle people oppose it. Come the glorious day, we’ll have the morally dubious ones shot. In front of their families.”

    OK. But I thought this site discussed “political realities”, rather than being a variation on the [ghastly] Moral Maze. I would shoot everyone with a personalized no. plate: 4×4 drivers first: This strikes me as the quickest way of identifying & removing undesirables: eg. Clarkson.
    PS. My younger colleagues often compare me to Clarkson. Apparently I resemble him [DAMN!] & am loud-mouthed, belligerent & rude. I soon realised that they actually admire & like Jeremy — ye Gods — & this was meant as a great compliment! Obviously I have never watched Top Grunge in my life.

  18. @ Neil A

    “Would it be wrong to allow retired public servants to work in private companies? Or to run their own business? If they did so would you suspend their pension rights?”

    Absolutely nothing to answer your first two questions. And no to answer your third.

    The reason that public sector employment has so many great benefits is twofold. First, the government wants to attract the best and the brightest and for the most part, they want them to be career civil servants. Not everyone is cut out to be a civil servant. You can’t do that if you don’t pay well and offer nice benefits and a decent salary (it can’t be too high because there’s only so much the government can admittedly pay). The second reason is that for many of these best and the brightest, they are trading away potential lucrative professional and business careers and the potential for enormous future profits in order to land something with the government. So the benefits are part of the tradeoff.

    After someone has worked for the government for a long time, I think they have the right to go off and try and make it in the private sector. Many do (though there are many who don’t, it’s an individual choice). Now the only place where I see trouble is with lobbying (former government employees being paid to lobby the same agencies they once worked for) and former elected officials who enter into lobbying firms. Obviously, they should be allowed to do so but there needs to be regulations and proper disclosure and with ex politicians, there need to be some limits put in place.

    But I don’t see anything wrong with former public servants taking private sector jobs.

  19. @RIN
    “You should know better than most that there is no shame in changing political allegiance. ”

    You change political allegiance but not your principles i.e. change affiliations because your principles are no longer represented.

  20. @Robbiealive

    OK. But I thought this site discussed “political realities”,

    Damn and I thought it was for the non-partisan discussion of polls.

  21. FrankG

    “The poll figures given do not even give Lab an overall majority let alone one of 34.”

    In terms of the BC *proposals* that was the point in that – long lost- post I was making !

    If there is an election before late 2013 (say the LD’s cannot agree a formula that allows for the red book to trump the LD manifesto) then it is an election on the current boundaries- and on the poll numbers that were the basis of your post that is a clear working Labour majority.

    An election after late 2013 will be on amended versions of the 650 member HoC not the proposals as they currently are….so your projection is inaccurate ALSO !

    ***

    Colin

    Yes those pesky markets !

  22. @ Valerie about Neil
    And EWO’s used to be qualified Social Workers, But, hey, who cares about having properly trained staff. It’s only kids”
    Valerie, if I didnt detest yellow blobs, I would give you one.

  23. @ FrankG
    “Damn and I thought it was for the non-partisan discussion of polls.”
    Point taken sport! I award you a yellow blob & I am utterly shamed by yr response & by the fantastic industry behind your great post on seat projections. I am now going away to study it.

  24. Rob Sheffield
    “If there is an election before late 2013”

    The Fixed Term parliament bill makes this unlikely. The only reasons for an early election are:
    1. if a motion of no confidence is passed and no alternative government is found
    or 2. if a motion for an early general election is agreed either by at least two-thirds of the House or without division

    I can’t see either of these happening even if the coalition splits.

  25. @ FrankG.
    PS. I may have missed an earlier discussion but re the NW: on the basis of the May 2011 elections, details provided if you want them, & the large student/public sector/third sector vote in Manchester Withington — my patch — I would bet heavily that Lab will take this seat from the LDs. Valerie, another S. Mancunian, may have a view on this.

  26. Some interesting results of polling of Conservative members being shown on Conservative Home Web-Site tonight:

    Will deficit be under control by the end of this parliament?
    Yes 29% – NO 58% – DON’T KNOW 13%

    Will immigration be cut to tens of thousands by the end of this parliament?
    Yes 15% – NO 74% – DON’T KNOW 1%

    Will Britain repatriate significant powers from Europe by the end of this parliament?
    Yes 21% – NO 64% – DON’T KNOW 15%

    Will Cameron be in an election winning position by the end of this parliament?
    Yes 33% – NO 30% – DON’T KNOW 37%

    Not a lot of confidence in Cameron/Osborne’s ability to deliver in these numbers is there?

  27. @ FrankG

    PPS!! Manchester Withington has lost two v. strong LD wards [The leafy Didsburys] & gained a strong Lab. ward [Whalley Range].

  28. I found this on a right wing blog which suggests that the Lawson story is a bit of an urban myth cos if it was true these rabid rightwinger would have used to make their case

    “UK, 1979: Chancellor Geoffrey Howe cuts marginal tax rate from 83% (!) to 60%. Before the cuts, the top 1% of taxpayers were paying 11% of total income tax received. Nine years later, despite the hefty cuts, they were paying 14% of total income tax.
    UK, 1980s: Chancellor Nigel Lawson cuts marginal rate further, to 40%. By 1997, the top 1% of taxpayers are paying 21% of income tax received. Thus halving the marginal tax rate doubled the income tax receipts from the wealthiest 1%.”

    What they fail to mention is in the same time span the top I% share of national income exploded while the bottom third’s collapsed. It’s a given that 83% of a hundred is less than 40% of 400, so this is a bit of a dodgy comparison

  29. If it is true (as I once heard said) that having a higher rate of tax actually costs more to collect than just having a basic rate, I say let’s not have a higher rate.

    But is it true? The economic cycle affects receipts as much as marginal rates.

    What about the first £10,000 is tax free, thereafter everybody loses half their pay? NI subsumed into the tax?

    How much would that collect?

  30. Nickp
    Great idea, but 50% seems a bit steep. How about 35%, which is about what Tax+Ni is now?

  31. PETEB

    @”The message needs to be very simple and clear, like the Jeux Sans Frontieres advert someone quoted earlier.”

    Yep-something like :-

    Right-we’ve got rid of the annual Deficits-now we have to halve our Debt . That will take ten years…………..then we can start sharing the proceeds of growth.

    Not very catchy is it?-open to suggestions :-)

  32. pete b

    It would have to be costed, but bearing in mind the first £10,000 is tax free, half the rest ensures that the poor keep most or all of their pay and the rest pay up.

    35% of £100,000 plus would be measly. We do actually need to pay for services and the public sector, you know.

  33. In a progressive tax system, you must of course increase direct taxation with income to offset the fact that indirect taxation takes a higher proportion of lower incomes.

    But I fail to understand why we have to have sudden jumps in tax rate at given levels, leading to high marginal rates. In the age of spreadsheets, surely an income tax rate that smoothly increased with income according to a formula, going from, say 0% at £8k to 60% at £200k would be equitable, easy to implement and would remove high marginal rates and the supposed disincentives associated with them at a stroke. The formula could be very straightforward: say Rate=60*(Income -8k)/192k, Rate=0 if Income200k.

    Why do we persist in using an approach predicated on the assumption that everyone is innumerate?

  34. The question I’d like answered amongst all the unanswered questions thrown up by the Autumn Statement….is if the Chancellor’s figures now imply that ‘the government will be unable to deliver upon the coalition pledge to balance the books by the end of this parliament…and the LibDems are signed to that…does that mean the LibDems are now signed up to entering the next election as coalition partners with the Conservative Party and if that is the case what does that mean for the LibDems and the Conservative parties respectively…. and have the LibDems even noticed that their notional freedom of political manoeuvre has been eliminated with the failure to eliminate the deficit the coalition rhetorically erected as the sole measure of its political competence.

    …As a man sows so shall he reap…as Miss Prism once said…

  35. Bloody iPhone again

    Rate =0 if Income 200k

    Summat like that any road.

  36. Ok, it’s Anthony’s site not liking greater than and smaller than signs.

    You’re all big boys and girls. You can figure out what I meant.

    If you’re interested.

  37. Lefty
    I like your idea of a smooth transition to higher tax rates. It might also act as a disincentive to tax avoidance. i.e. if someone’s tax rate is about to go from 20% to 40%, he has a big incentive to rearrange his finances, which would not be so significant if his rate was going to go fro 39% to 40%.

    I still prefer a flat rate though. If someone has £10,000 of taxable income at 20%, he pays £2,000, and someone who has £100,000 pays £20,000. So the second person pays 10 times as much for the same services (in fact likely less service because he would be more likely to use private schools and private medicine).

  38. It goes without saying that if you are paying 50% income tax them old purchase taxes would have to be slashed.

    Except on fags. Cos I don’t smoke no more.

  39. @Tony Dean – “Fair question. I will need ohers with greater economic knowledge to help me out here. I remember a Chancellor’s statement back at the time the top rate was cut to 40% and it was revealed with some astonishment that the following year the Treasury had actually raised more income from that tax bracket after the rate had been dropped to 40%.

    Can anyone else remember this?”

    As previously pointed out, this was indeed Lawson, and yes, the take from the new 40% top rate did indeed go up. basing top rate tax policy on this simple fact however, represents one of the more neanderthal economic policies.

    I did a lengthy post on this a long time ago, and afraid while I can’t be bothered to go back and dig up the data, what I did was to compare the graphs of GDP growth, salary growth, and the top rate tax take. Guess what? When GDP and wage growth is strong, the tax take goes up. The correlation with changes to the tax rate was entirely coincidental.

    The reason the tax\take went up after the 40% rate was brought was entirely a function of the Lawson boom, which created rapid salary inflation and eventually a nasty bust.

  40. @Robbiealive – “OK. But I thought this site discussed “political realities”, rather than being a variation on the [ghastly] Moral Maze.”

    I once lost my way in a warren of hedges and alleyways, eventually coming across a man sexually molesting a dog. I realised I was lost in an Immoral maze.

  41. John

    We have discuss your point at length, or at least long enough for me, rob informs us that there are rumblings of disapproval in the libdem ranks which would not surprise me. For what it worth I don’t think that the send will go into the next election in a partnership with the blues even though it is what nick wants. But I do think that the fiscal plans of the three parties will be so similar that it won’t make any difference. Also the financial situation will be a lot worse that the OBR think. At some point cuts will have to be deeper and taxes will have to be steeper and the three main parties will sign up to that. unless they reject the current debt money system and market rule they will have no choice. I notice that the blues on this board are already mentally prepared for 15 years of austerity, so they are almost there. But it won’t be followed by tax cuts

  42. Here’s a few thoughts from the New Statesman that I thought were on the right track:

    “Labour’s first problem is that it is still blamed for the deficit. Whilst it was conducting a lengthy leadership election last year, the coalition partners successfully persuaded the public that gross profligacy during the Labour years was to blame for the ballooning deficit.

    Labour has never given a convincing answer to this charge. It hasn’t consistently articulated an alternative account of why the deficit grew so large during the 2008/9 financial crisis, other than to blame the global economic meltdown and admit to the failure of its light-touch regulation of the City of London. Consequently, it remains vulnerable to the criticism that it is in denial about the deficit.

    Yet it doesn’t have to be boxed into this corner. In reality, Labour got the tax — not spending — side of the tax-spend equation wrong. Although it should have been running a small surplus in the run-up to the crisis, its big failure was consistently to over-estimate tax revenues. And ultimately, this was about the structure of the economy itself: the tax base was too reliant on revenue from the City, the housing market and wealthy individuals.

    Labour should acknowledge its responsibility for the deficit in these terms, rather than apologising for over-spending as its critics demand. Indeed, a reckoning with its fiscal record of this kind is precisely what would allow it to build a bridge to the kind of responsible, long-termist, rebalanced capitalism that Ed Miliband has made such a central part of his platform.

    The party’s second problem is a paradoxical one. It is this: the more it is right about the Coalition’s “too far, too fast” fiscal strategy, the greater the task it sets itself to persuade the public to trust it again on the public finances at the next General Election.

    Labour has got it broadly right on fiscal strategy over the last year. But politically, all the talk of cuts simply reinforces the perception that Labour doesn’t acknowledge the need for fiscal rectitude in the medium term. The party has made no tough spending choices — nothing at least that the electorate might recall.

    It is on this score that Osborne has now ridden to Labour’s rescue. By pushing back his structural deficit reduction plans into the next Parliament, he has forced Labour to acknowledge what its position would all along have entailed: that if you cut less now, you have to cut for longer.

    In his speech to the IPPR last week Ed Miliband made a virtue of this fact, saying to Osborne that if he failed to eradicate the structural deficit in this Parliament, Labour would have to finish the job. Commentators immediately pricked up their ears. Labour was on a path back to fiscal prudence.

    Of course, had it been in power Labour would have arrived at the same place by a different route. It will also mercilessly attack the government for having failed meet its targets because of weak growth and high unemployment.

    But the central political fact remains that at the next election, Labour will now be in the business of fiscal rectitude in a way that it has previously not had to acknowledge.

    It should now use the opportunity presented by this changed political landscape to develop new, politically compelling routes to social democracy that don’t rely on spending increases. Instead, it should rest instead on the central pillars of deep economic reform, switches of spending into public services that support higher living standards, like childcare, and the reform of public services to secure greater efficiency and effectiveness for given levels of spending.

    If it completes these tasks, it may find it has much to thank Osborne for”.

  43. @RiN (9.34 pm)
    Richard,
    Thanks for that explanation of the increased revenue from reduced higher tax levels. I couldn’t work out how this was feasible unless a high number of higher tax payers left the country or found better ways to “fiddle” their disclosed income.

    Your explanation once again shows how politicians can distort the truth by selective use of data.

  44. It is strange how only 37% think Labour would be doing a worse job on the economy.
    Surely almost 100%, deep down, know that is the case.

  45. Joe James B

    37% think Labour would be doing worse. 25% think they would be doing better.

    I would guess the other 38% haven’t a clue…and they are probably the honest ones.

  46. @Joe James B – “Surely almost 100%, deep down, know that is the case.”

    Alternatively, back in March, an Ipsos MORI poll for the Economist was finding that “… 70% of Britons think that his [Osborne’s] deficit reduction plan is too quick for a fragile economy.”
    .
    While the proportion of those who think Labour are to blame for the cuts seems to be declining over time, the coalition will be hoping public opinion does not become too entrenched about deficit policy.

    h
    ttp://www.economist.com/node/21016980

  47. @Robbialive & Valerie,

    When I first encountered EWOs, in the mid 1990s, they were not qualified social workers. Perhaps they were once upon a time but if so then we’re talking decades ago.

    Not really sure what part of an EWO’s job would require a social work degree and the commensurate £25-30k plus salary.

    Anyway, its nothing much to do with my original point!

  48. NickP

    Actually 29% said they’d be ‘much the same’ only 9% said ‘don’t know’. Opinionated lot the YouGov panel.

  49. @ Colin

    “I have no idea-it is such a strange & developing mixed economy .

    You may be right.

    …but it’s not really germane -The Chinese representative of China’s Sovereign Wealth Fund ( I characterised it as Mr Wen Jiabao because he is the Chinese leader) said, when invited to Europe to chip in to EFSF, that they might consider it if & when EU countries became ( by inference) better credit risks .

    He suggested that EU economies were now uncompetitive ( he said the Chinese worked harder) and too wedded to their unsustainable welfare benefits.

    Of course-this is a country in which ( I imagine) welfare benefits are at the opposite end of the scale to those in EU.

    BUt I think he has a point. THere are clearly vast disparities in competitiveness within EZ-hence the fiscal imbalances. THere are also (imo) totally unsustainable welfare benefits too. I think anyone who studies the Greek public finances would agree. Sarkozy has just told the FRench people that EU working time & retirement arrangements were a mistake.”

    He may have a point. Though sometimes it seems like the Chinese have a habit of blowing smoke. They make grand statements in order to bolster their own reputation and denigrate the reputations of others but if you actually look into the reality behind what they say, they’re wrong (for example, if the U.S. defaults on its debts, that will screw China because of all the Chinese investments in U.S. bonds).

    When it comes to sustainability, you ultimately have to be able to pay for your spending. That doesn’t mean that debt is wrong or running deficits is a bad thing. But eventually, you have to be able to balance your books and pay for what you have. And it seems that some European governments are unable to do that.

    I don’t believe in simply having large public sector employment. However, when that does occur, getting rid of that should be done in manageable stages. If a country works better by having a majority of people employed by the government, so be it….but the government has to apportion out benefits appropriately so that everyone can get some and the government can still afford it.

    One thing Obama has been really good on (that you might actually appreciate) is that he and all his key economic advisors have been adamant that fixing unemployment cannot be done through mass government hiring and that new jobs must come from the private sector.

  50. @LEFTYLAMPTON

    Sliding scale tax… Well in theory it would be straightforward. But only if we significantly simplified the tax rules. Just look at the mess HMRC make with the current bands!

    And the problem with simple rules is that income and wealth aren’t simple things (although, to be fair, for most people just outside benefits they are).

    I’m also not sure that there is any real disincentive to hiding wealth. After all this is exactly what companies do – move capital and goods around to create the lowest possible marginal tax rate.

1 3 4 5 6