Tomorrow’s budget

A version of this post also appears on the YouGov website here

Ahead of the budget tomorrow here’s a round up of the various questions that YouGov have asked about the budget in recent weeks, mostly in the YouGov/Sunday Times polls.

The budget comes under a background of deep public pessimism about the state of the economy. Only 4% of British people think the economy is in a good state, compared to 75% who think it is in a bad condition. Only 10% expect their financial position to get better over the next year. The government’s cuts are unpopular, are still seem as unfair by 60% of people, too deep by 45%, too fast by 50% and bad for the economy by 49%. However, the public have largely accepted the government’s argument that they are necessary (55% agree) and that they are largely the fault of the last Labour government (63% blame the last Labour government compared to 51% for the current government, including 27% who blame both).

The coalition are still trusted more than Labour on the economy by 32% to 26%, and the public are fairly evenly split on the government’s economic strategy. 38% think they should stick to their present strategy of prioritising deficit reduction, even if this means growth is low. 34% would prefer them to prioritise growth, even if this means the deficit stays longer or gets worse.

If George Osborne has money to spend in the budget though, the public would like his first priorities to be cutting living costs for those struggling (31%) and cutting taxes for those struggling (21%).

50p tax rate and taxing the wealthy
YouGov’s polling has consistently shown widespread opposition to the abolition of the 50p rate, with only 27% supporting the abolition of the 50p tax rate.
Support for the 50p rate would not be much diminished even if it was shown that it was not raising much money, one of the arguments that has been made for its abolition. Asked what should happen if it was shown the tax was not raising extra money, 41% of people would support its abolition, but 40% would still want to retain it anyway for moral reasons.

One idea that has been suggested is to replace the 50p tax rate with an alternative tax on the wealthy, with a common suggestion being a mansion tax. Our polls have shown that a mansion tax on property worth more than £2million is popular in its own right – supported by 75% of respondents including 68% of Conservative voters. While the 50p tax rate was seen as both a fairer and a more effective way of getting wealthy people to pay more in taxation, people were evenly split on the idea of replacing the 50p tax rate with a mansion tax – 34% would support the replacement, 37% would oppose it.

Another suggestion has been to remove higher rate tax relief on pension contributions. YouGov’s polls suggest a broadly even split on this, with 38% of people supporting the abolition, 37% opposing it.

Personal tax allowance
There is wide public support for an increase in the personal tax allowance to £10,000. 90% of respondents would support an increase in the allowance to £10,000.

Polls on tax, however, will almost always find support for a cut if the question doesn’t ask them to balance the cut against how it might be paid for. In this case though there is still majority support for an increase to £10,000 or more if respondents are prompted to consider the need to balance an increase in the personal tax allowance with tax hikes, spending cuts or more borrowing – 54% would still support an increase in the personal tax allowance to £10,000 or more.

Fuel duty
A cut in fuel duty remains overwhelming popular. 77% of respondents would support a decrease in the level of fuel duty on petrol and diesel, 16% think it should be kept the same with only 4% supporting a rise. Asked to pick priorities for tax cuts, a reduction in fuel duty came top on 34%, making it more popular than an increase in personal tax allowance (31%) or a cut in VAT (23%).

Asked to balance the need to cut the deficit against their support for lower fuel taxes, 59% of people think it is more important to cut fuel taxes than it is to cut the deficit, compared to 20% who think that the state of the economy means it is more important to reduce the size of the deficit.

Child benefit
There have been some suggestions that George Osborne will take measures to soften the planned withdrawal of child benefit from households with a higher rate taxpayer. Our polling shows 61% support the existing plans to withdraw child benefit, compared to 27% who oppose the move. However, there is a widespread perception that the proposed arrangements, whereby a family with a single higher rate taxpayer could lose the benefit despite earning less than a family with two basic rate taxpayers that would keep the benefit. Only 24% of respondents think this is fair.

YouGov/Sunday Times(17th Feb)
YouGov/Sun on Sunday (24th Feb)
YouGov/Sunday Times(26th Feb)
YouGov/Sunday Times (2nd Mar)
YouGov/Sunday Times(9th Mar)
YouGov/Sunday Times(16th Mar)
YouGov/Sun (19th March)

5 Responses to “Tomorrow’s budget”

  1. Most people would support the 50p tax rate if it didnt raise any money. -> That is somewhere between staggering and mad.

    Considering then it would the after-tax income of the rich would be lower and thus they would spend less money and provide fewer jobs and lower income to the poor that is total madness. It must be down to jealously of those who have done well. Thats really sad to be honest. Why do we live in a society where doing well is considered socially unacceptable be it in our schools or in jobs. Something needs to change

  2. Joe R

    I think its more people worrying the message it sends out. Leaving some to suffer and others to prosper obviously will have an emotional affect beyond just ‘jealousy’. Not to mention it could create social unrest if the economy continues on its current path (or god forbid, gets worth). People are smart enough to think that from a governing perspective its a ‘bad idea’.

    Not least the idea of it ‘raising revenues’ is based on people ‘deciding’ to pay their tax. Why would you expect people to support such aristocracy?

    (Personally I think its all based on past assumptions from when times were good and a reduction will lead to a reduction of revenues.)

  3. RE: 50% tax rate

    “but 40% would still want to retain it anyway for moral reasons.”

    Eh? What has taxation got to do with morality? There’s nothing moral about one section of society wanting another section to pay more than themselves (regardless of the situation). Tell it like it is. They want to eat the rich. I wish I was rich, rather than wishing the rich would pay for my lack of riches.

  4. High marginal tax rates for the very well paid act as a disincentive to distribute profits as income, and encourage investment. It’s very arguable that the excessive salary/bonus culture seen in big business and banking derives from the brakes being taken off. Increasing marginal taxation makes such excesses unreasonably costly.

    And this isn’t a drop in the ocean. When the bonuses in one bank are totalling more than 2bn, this represents a significant drain on the economy. Rich people don’t spend their money, they accumulate wealth (e.g property), driving up prices and causing others to have *less* money to spend.

  5. Re: 50% rate

    The “moral reasons” are that if a 50% rate were not raising money, it is because people were avoiding paying it, not because nobody earnt that much. To remove it would send a moral message that tax is at the level you’re willing to pay, not at the level which is economically fair. Tax rates should be set by the state, not by the precedent of the wealthy. It’s a common sense moral, opposed only by diehard rightists.