This week’s YouGov/Sunday Times poll is up here. Topline figures are CON 29%, LAB 41%, LDEM 12%, UKIP 12%.

Economy

The economic trackers are as bad as usual for the government – people think the government are managing the economy badly by 65% to 25%, 67% think George Osborne is doing a bad job as Chancellor, only 11% of people expect their economic situation to get better in the next twelve months. Asked if the government’s economic strategy is working only 7% think it is, 36% think it isn’t but will in the fullness of time, 45% think it is unlikely to ever work. Take note of these figures – they are the background to this week’s budget and we’ll see next week if it has a positive or negative effect (in recent years budgets have had negative effects far more often than positive ones).

On the budget itself YouGov asked people what they wanted to see happen to spending and taxes in the budget – and how it would be paid for (otherwise everyone tends to say they’d like more spending and less taxes). 32% of people (mostly Conservaitves) said they wanted to see spending cut more, 25% (mostly Labour) that they wanted to see spending cut less, 25% that cuts should stay at about their current level. People were similarly divided on taxes – 24% wanted to see tax cuts, 22% tax rises, 38% that taxes should stay at their current level.

These should all be seen in the context of the more regular YouGov polling on cuts that does show that people dislike the spending cuts – they consistently say they are bad for the economy, too fast and being done unfairly. However they are also consistent in saying that they think they are necessary, which proably explains why people answered this week’s poll as they did.

The survey also asked about ringfencing spending on various areas after Liam Fox’s call for NHS spending not to be protected. His stance was, unsurprisingly, not widely popular! 74% think it is right for NHS spending to be protected, 18% think it is wrong. There is also widespread (67%) support for protecting spending on education, but 76% are opposed to protecting spending on international aid.

Leveson

The poll also had a series of questions on Leveson, which generally speaking show the public pretty evenly divided. Some of the aims of the proposed regulations, such as forcing newspapers to print corrections or making newspapers who do not join the system subject to larger libel fines met with widespread support (90% and 62% respectively), but questions on the details of how the system works met with divided replies and large proportions of don’t knows. To be honest, I suspect that while people would like an effective and independent system of press regulation, few outside the industry or politics really care about the difference between underpinning by royal charter or by legislation.


432 Responses to “YouGov/Sunday Times – CON 29, LAB 41, LD 12, UKIP 12”

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  1. @ Carfrew

    “Eh? Why is the economy unimportant politically? Clearly it matters to the budget hence corporation tax cuts etc. ..”

    Because the budget itself is not important. Its structure has not changed (on either side), so why should it matter? A budget that would shake politics would radically change the structure of expenditures and revenues.

    The change in corporate tax is economically a bad move because it gives the opportunity (does it really?) to lazy British firms that have been unable to figure out how to compete to continue to their somewhat idiotic obsession with costs.

    The change in NI is simply a cut in the wage – it is not a tax on employment. This NI cut has to be given to employees as wage increase – if not, they will be worse off.

    This is a wonderful status quo budget. If it had gone to more spending or more tax cuts or whatever (and now I’m excluding politics) it doesn’t change anything about the economy, because it is not the cause of the economic problems of the UK.

  2. Sorry for the grammatical error in the last sentence. It should be “it [demand, supply, whatever management] wouldn’t have changed anything about the economy…”

  3. @LASZLO
    Oh I see, I thought you were suggesting all budgets were not important pollitically etc.

    But you’re saying that this budget in particular isn’t because it’s mostly moving deckchairs around?

    There are things they could have done that could have been good for VI. .. help with cost of living, VAT cut etc…

  4. “This is a wonderful status quo budget. If it had gone to more spending or more tax cuts or whatever (and now I’m excluding politics) it doesn’t change anything about the economy, because it is not the cause of the economic problems of the UK.”

    ———–

    That doesn’t follow at all.

    You can’t say that spending/investment wouldn’t work simply because it wasn’t the cause of the problems.

    An operation to fix your leg can be of benefit even though something else injured your leg.

  5. @ Carfrew

    Taking December and January together, unemployment rose by 192,000 – the biggest two-month increase in the jobless total since June 2009, the very depths of Britain’s deepest recession in generations.

    In other words, not only is unemployment rising, it’s rising at an alarming rate.”
    —————–
    I expect the fall in employment will be as inexplicable as the ‘fact’ that jobs were previously increasing despite output (GDP) being static.

  6. @ Carfrew

    No, he (they) couldn’t have done it, because of the constraints elsewhere. In my view, the dependencies among various factors (political mainly, because the budget deficit is that for example) are such that really reduced the whole thing to, as you said with a very nice metaphor, deckchairs moving. Then it becomes really just a calculation – would it make A vote for us and at what probability, would it make B to vote for someone else and at what probability.

    I don’t think they did it scientifically. It was more likely intuitive (probably supported by some focus groups), which could actually punish the coalition pretty badly.

  7. @ Carfrew

    The problem of the UK economy is not that it cannot produce, but that it cannot produce with the rate of return expected by the shareholders and chased by the managers to keep their job. This is the reason for the re-leveraging of firms.

    You won’t help that with demand or supply management, you will only create a half year boost with some inflation.

    If the government decided that they would nationalise the largest construction firms and then use these for infrastructure investment, it would be a different proposal (not that I would support it as such) – it would create a completely different interlink-series at the level of firms. The problem is there, not at the aggregates.

  8. LASZLO
    @ Carfrew
    “No, he (they) couldn’t have done it, because of the constraints elsewhere.”

    ———

    Ah, now that’s a different reason to what you said before. I agree there are constraints, the main constraint being a lack of demand. Without growing the economy we end up racking up debt for little benefit. ..

  9. @Lazslo

    “Everything else would have been worse, I believe, in terms of votes.”

    Indeed. It could be that GO is also looking to get back the AAA rating by demonstrating consistent economic policy.

  10. LASZLO
    @ Carfrew
    The problem of the UK economy is not that it cannot produce, but that it cannot produce with the rate of return expected by the shareholders and chased by the managers to keep their job.

    ————

    Nah that’s obviously wrong, been through it before. NuLab despite a massive seven percent hit to the economy got us back to 2% growth inside 2 years

  11. STATGEEK
    “It could be that GO is also looking to get back the AAA rating by demonstrating consistent economic policy.”

    ———–

    Lol, that’s how he lost the rating. ..

  12. @ Carfrew

    That’s really nice. Any relationship to what happened in 2007-2009?

    Look at any kind of rate of return figures. Also look at the money chasing investment opportunities (so few of them).

    Since 1999, UK firms have been able to increase their sales only if they increased the assets. There is no improvement there. It’s a stock market game and played well until… Well, until the rules of the markets came in.

    The pressure on the rate of return then gives two options: increasing output (would you deduct the financial sector from that 2% – would you be still happy?) or cutting costs. The UK incentive system for all levels encourages the latter one, which constantly creates over-capacity and hence problems to investment (thus the government has to step in to pump up investment). It also – in the medium term – destroys competitiveness, but that really leads far too far from original point (the budget) and belongs to the most important point (which is not discussed here).

  13. @LASZLO

    None of that alters the fact that despite a big hit from the banking crash, we got back to growth inside 2 years. Therefore whatever you claim about rates of return etc. the fact is we could grow the economy and reap the rewards in terms of enhanced tax and reduced welfare costs.

  14. @ Carfrew

    “None of that alters the fact that despite a big hit from the banking crash, we got back to growth inside 2 years”

    Only by pumping up demand and exploding the deficit by 3% of GDP in the space of just one year. Anyone can do that. The problem is, it’s totally unsustainable.

    The mistake everyone’s making (and that includes the voters) is that what happens with the economy is entirely and completely decided by fiscal policy. It isn’t. So much else is happening at the same time – oil and food prices, the Eurozone crisis, falling North Sea output.

    Sadly, people don’t understand that and they end up voting on false premises.

  15. Interesting Red Book this time.

    DA seems to have beavered away at grabbing departmental underspends-no wonder he got a vote of thanks from GO.

    Some verbal sleight of hand on what’s happening to “borrowing “(1) :- Stripping out the APF ( QE) coupon transfer & PO Pension fund transfer it is in fact unchanged for the three years 11/12 to 13/14 inclusive-£120bn pa

    Pleased to see OBR using a 13/14 growth assumption lower than any of the other external forecasts quoted. Gives some hope that there may be upside here for a change. The markets seemed happy with that approach-though comment on 2.3%/2.7%/2.8% for 15/16 to 17/18 was less sanguine.
    Politically though-they are another time , another place.

    (1) This bloody confusion over the difference between “borrowing” -ie ANNUAL Deficit-and “Debt”-ie cumulative deficits to date , reared it’s head again in HoC exchanges.

    Why can they all not agree to NOT say “Borrowing” -because that could mean annual , or cumulative-but to say either “Annual Deficit” or “Cumulative Debt”?

    Drives me nuts!

  16. RC

    “Only by pumping up demand and exploding the deficit by 3% of GDP in the space of just one year. Anyone can do that. The problem is, it’s totally unsustainable.”

    —————

    Yes that’s right. You borrow to invest and grow. People, businesses and countries do it. We did a lot more of it after the war and saw two decades growth. It’s sustainable because growth brings the deficit down by increasing tax revenues and reducing welfare costs. As opposed to choking off growth and seeing a hit on tax and welfare as happened under the coalition. Provided you borrow long term at decent rates which we can do. ..

  17. RiN

    @”govt loans for buying houses,”

    No-they are guarantees.

    They had to be , because the scope is very large , and the numbers are over £1bn.

    So it’s “off balance sheet” & does not add to Deficit/Debt.

    But it’s significance shows GO is pinning a lot on this one. Shares in main housebuilders spiked imediately at that point in the speech.

  18. Nice to see the “Chancellor” got a dig in about inheriting the Fuel Duty Escalator from Labour!

    Such a pity he forgot to mention that it was the Tories who introduced it in 1993.

  19. “Ratings agency Moody’s has just commented on the Budget — saying that it expects to maintain its “stable” rating on the UK (having already slashed the rating by one-notch to AA1 last month).”

    This is really interesting given that Moody downgraded us because of the Debt trajectory & scale

    GO is now Budgeting for a peak Debt/GDP% of 85.6% in 16/17-compared with previous forecast of 79.9% in 15/16.

    This is pretty eye-watering. One can only presume Moody saw through to this forecast.

    Debt Interest forecast now within a whisker of £60bn pa by end parliament !

    …that’s 3% of GDP-or half the total VAT receipts.

    Squeeky bum time.

  20. I agree and disagree with Laszlo, I agree about about any policy targeting supply or demand not being effective except in a very short term way. But although he’s right that profit margins are too high. The bigger problem is the debt overhang, of course a major reason is concerned to excessive profit margins

  21. New thread!

  22. Actually those mortgage guarantees have a £12bn tag which, given the gearing, equates to over £100bn of mortgage lending.

    Big bucks.

  23. Big bucks on the wrong place, it shows that they have learnt nothing

  24. It’s not “the wrong place” for young people short of a deposit Richard.

  25. I agree with Laszlo.

    I also will not make the comment I made earlier because it has already been made (leaked) by me, if you follow me.

    I went shopping, instead of watching HoC debates. I noticed that, in Morrisons, petrol was down a penny to 137.9. Now that is the sort of movement that can shift VI. Well it would, if I had been 127.9. I can remember a decade ago, the whole country behaving not as we British were previously renowned for behaving, just because it went up from 84 to 87p. But that was after ‘Diana’ and think all self respect went out the window after that era.

  26. Colin

    Well if you think asset bubbles are a good thing

  27. No – of course not.

    House prices have fallen -which is a good thing.

    But credit is tight & required deposits are high.

    The Bank of Mum & Dad is not available to everyone…….

    What to do?

    Nothing?

  28. Americans are already calling George’s budget a housing bailout!! Lol

  29. Apologies Richard-there is a Government Loan on offer :-

    http://www.guardian.co.uk/money/2013/mar/20/help-to-buy-scheme-how-it-works

  30. Not sure about this just yet. Home loans are interesting, but do we really want to see growth on the back of rising house prices – not too sure about that.

    The NI changes equally are interesting. This will have far wider benefit than the move on standard rate Corporation Tax. I haven’t really thought through this as yet, but while both these measures will help company profitability, I’m not too sure they will have a big impact on employment. I’m not yet clear whether this applies to any payroll, or just new employees, so I need to work that out. If it is for all employees, then the risk is much of this will simply increase profits with no additional employment – as it would be for my own company if it applies to us.

    Where I have concerns is that I’m not altogether sure that we should be focusing resources at boosting employment – today’s figures aside, this is one area where things have been going reasonably well. I’ve not seen anything in the budget about investment, which is where I think the key to growth lies. There was a mention of tax breaks for investing in social enterprises, which is good, but I haven’t yet noticed anything much else.

    The trick really would have been to create an economic boost using other peoples money. This comes down to investment incentives, and the CT and NI measures may well end up encouraging lower competitiveness and greater profit extraction, rather than actual growth and investment. They may even help keep failing forms afloat, when they really need to be wound up.

    I’ll probably make my final judgement on the budget in about a weeks time, but so far I haven’t seen much to inspire.

  31. @ Carfrew

    “It’s sustainable because growth brings the deficit down by increasing tax revenues and reducing welfare costs”

    No, it isn’t sustainable because it doesn’t do either of those things enough to make up for the amount spent in the first place.

    Even on the most optimistic of multiplier estimates, your theory is just bone wrong. Sorry.

  32. Sure it does.

    Do the maths.

    We lost seven percent of the economy in the crash. That gave us a nasty deficit.

    We had over 2 percent growth when Labour left office on an upward trend.

    Let’s say it stabilized at just 3%. You’d get back to where you were in a little over 2’years and wipe out the deficit caused by the GDP hit in the process.

    Not entirely: you’d still have the interest on the debt, currently equal to about 3% of GDP. Another year or two to wipe that part of the deficit too. ..

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