Budget polling

The budget is fairly unusual as an event that people actually pay attention to, and which actually has the potential to change voting intention polls. I spend most of my time hear stressing that the ins and outs of Westminster politics, the speeches, the gaffes, the policy launches. Hardly and of it is noticed by normal people who change their vote. Budgets are one of the exceptions – an annual event that does sometimes change minds. Regular readers will recognise the chart below from its outings at previous budgets – it shows the two YouGov polls before and after each recent budget (in recent years, its the weekly averages for the two weeks before and after each budget).

Effect of past budgets on government lead in YouGov polling

As you can see, while there is often talk of Chancellors revealing great vote winning bribes in budgets, when they do have an effect it is more often a negative one. Budgets can have a positive effect (2003, 2006 and 2011 all look like they shifted things marginally in the government’s favour), generally speaking the only big budget effects are negative ones – in 2008 and 2009 Alistair Darling had to deliver news of just how bad the economy was, while the 2012 budget contained the pasty tax, the granny tax and the 45p tax rate.

Anyway, while we’ll have the usual YouGov voting intention overnight, remember that the overwhelming majority of that will have been conducted before the budget was given. The actual figures we need to look out for will be those published Thurs/Fri night, and those published in the Sunday papers once the ups and downs of the budget have had time to register with the public.


278 Responses to “Budget polling”

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  1. charles

    I think you are right. Labour should embrace socialism and state intervention. If the public don’t want that, they can vote for the other guy(s).

  2. Robert Peston is (unusually, I think) astute on this. He points out that the Government is ready to punt taxpayer’s money on a possibly already over-priced housing market, but won’t put any investment into small or medium sized businesses (who actually employ people).

    Is this snobbishness, a supposition that property is a better risk than business investment, or is it something else?

    I think it was a populist attempt to do a sort of Right To Buy like Maggie and identify the Tories as “on the side of” the would-be property owner.

    We’ll see.

  3. Telegraph headline. .

    “Budget 2013: tax rises likely after 2015, warns IFS

    By James Kirkup, Deputy Political Editor1:58PM GMT 21 Mar 2013

    Households and businesses face more painful tax rises after the next election, a leading economic forecaster has warned.

    The Institute for Fiscal Studies said that George Osborne’s Budget this week had paved the way for big tax increases from 2016.

    The IFS, the foremost independent analyst of the public finances, also accused Mr Osborne of wasting public money by “massaging” spending plans to avoid the embarrassment of a rising deficit.”

  4. @NickP

    What the Public want will not matter in the end if they embrace your suggestion. A complete collapse of the e conomy will eventually ensue as it always has under that sort of system.

    The Oborne article says it all for me, exactly what i have been saying since the election on here.

  5. I respect your views Howard, but it’s for the electorate to decide.

    At the moment they aren’t getting much of a choice, are they?

  6. Firstly, I don’t take it as a compliment being scottish, I just am.

    Even so you don’t have to be Scottish to support Independence, my SNP branch has quite a few English people and a some americans and a German.

    On the Budget, as with rent rebates I think the main beneficiary of the 20% of up to £6k for child care will be Private Nurseries.

    As with voucher schemes what tends to happen is that prices rises to what the market will bare until people can’t pay the going rate.

    If at that point the Government decides to play the White Knight and introduce support then the market price will simply rise to absorb it so that people are still paying out the same amount after a short amount of time because that is what the market will bare.

    Ironically this is why housing benefit has grown so large as private rents have just risen to absorb it and the Government who announced he rebate for child care are the ones who are trying to reign in Housing benefit.

    Peter.

  7. @NickP

    I respect your views as well, even though we are polls apart politically and economically.

    I agree at the present time it will not matter who wins the election as there is little between all three parties. Of course if UKIP got 50% then we really would see a change in economic direction! I might even get excited about Politics again.

  8. Obviously Lab are wanting to keep their powder dry just at the moment. They are in a very good position in the polls, and to me EM sounds quite confident these days. They probably feel that if they announce any policies or strike out in any one direction it gives too much of an opportunity to the government to either routinely trash any initiatives Lab make OR steal them for themselves.

    So with both Coalition parties down it makes sense for Lab to wait awhile before jumping on in on where they would do things differently were they in government. This is all pretty text book Opposition with a handy lead stuff. And I might add does not necessarily mean that either Lab wish to be Tory-lite OR are set to bring about the most socially radically government of our time – they are just biding their time.

    All well and good, however 3 things stick in my mind as to why this ultimately might cause a problem for them:

    1. Its very unusual in our political system for governments to last only one term. This is because it has been well documented that constituency MPs nearly always get an incumbency bonus particularly after first being elected. Whilst challengers nearly always suffer a concurrent penalty. It like having made there mind up once, people are very reluctant to change it back again so soon except under exceptional circumstances. Perhaps it really is only the unique circumstances of the coalition and the subsequent re-alignment of the left of centre vote that is giving Lab the chance to be only in opposition for 1 term. But because the public remember their last term so vividly I think it is very important for them that they present a clear vision as to how they might take the situation forward in 2015.

    2. IMO one of the biggest problems Lab suffered under Gordon Brown was a failure to convey what his government stood for. Was it a continuation of Tony Blair and New Lab? Or was it a more leftist version of social democracy. I think GB ever made it clear which side of that divide he was on. And in politics if you don’t define what you stand for, your enemies will do it for you, to your determent. The question as to what Lab stand for now remains for mine an open question. I am not a member of the Lab party, or a likely voter of their party (which is not to say I don’t wish well of Lab) but I do believe if they don’t answer the question it will cost them votes and seats in 2015. And even if they win that election if they don’t answer it in government it will drown them just as it did for Gordon Brown.

    3. Finally, back in 2008, we saw the then Con opposition employ exactly the same opposition tactics of playing it safe, and not spelling out your message, and enjoying the problems faced by an unpopular incumbent government. Its the easiest and safest thing to do, but as an election approaches the public will want to know what it is they are backing if they are going to take a punt on the unknown. Cameron and Osborne really did not do this as the 2010 GE came around, and suffered for not having said what they stood for, their enemies portrayed it for them. It is this IMO that scared off just enough potential voters to deny Con a majority in 2010. So the lesson is there for Lab to learn when we get to 2015. If they really want to be successful they will have to do more than “seem hesitant, incoherent and opportunist”

    Like I said above its not for me to say what Lab should be doing, how they should be presenting themselves, and what the timing of all this should be. I sort of feel it doesn’t really matter where Lab eventually positions themselves. The polling opportunity they currently have is such an open goal they can hardly miss BUT I do believe that if they want to do really well, and enjoy real success on their own terms then they must have a clear vision spelt out to the public. At the moment I am not even sure they have it clear in their own head.

  9. @ TOH

    “Of course if UKIP got 50% then we really would see a change in economic direction! I might even get excited about Politics again.”

    I asked this of you in another thread but it got lost in a whole lot of other discussion.

    You are clearly a Con voter that has some sympathies towards the UKIP position but you have said you would not vote UKIP because it would open up the chance of letting in Lab. You are therefore at least in part voting Con to stop/keep out Lab.

    I am therefore interested in at what point might you stop seeing Con as the best vehicle to do this, and allow UKIP to become your vote because not only do you get to vote with your heart but it makes electoral sense as well.

    This is the so called “tipping point” at which point Con really need to fear UKIP outflanking them on their right.

    Whilst some might feel this is extremely unlikely 100 years ago its the process Lab started on the old Liberal party on its left flank.

    I realise it will be different for each individual but we have so few right wingers on here that perhaps you could humour me as a potential case study?

  10. @ TOH – To me your presence on this site helps ensure healthy debate. So to further such can I ask you some questions.

    You say that socialist measures always end in disaster. Presumably the truth of this depends on what is meant by socialist, what kind of measure you have in mind (economic ones I suspect but you might include NHS etc) and what criteria you use to assess disaster.

    So to give a sense of what might be involved, do you consider the current Chinese economy a disaster, the Scandinavian models of the state socialist and a measure which lessened income inequality but not GDP unfair?

  11. @”Wot no capcha code?”

    Yep-for me too-gone ??

  12. GRHINPORTS
    “Its very unusual in our political system for governments to last only one term”
    Correlation does not imply causation.

    In the post-war period, we’ve had two one-term governments – one Tory, one Labour. Two two-term governments, both Labour. Two three-term governments, one Labour, one Tory. And one four-term government, Tory.
    All of the governments over two-terms involved a change in prime minister and one of the two-term governments had it’s second election after only two years.
    One of the three-term governments began despite the party that came second winning the popular vote.

    The probability, purely from a ‘unusual to have one-term’ is 2 out of 7 or 29% of the time.

    Of course also ignoring that Harold Wilson served three terms as prime minister, with a ‘break’ and that 83-10 saw the ‘split left’ problem which may not be resolved, etc
    Take the context out of each election and it’s easy to formulate these sort of electoral ‘rules’.

    Again – correlation does not imply causation.

  13. (For the above post, I’m counting 1974-1979 as ‘one term’, rather than 74-74 and then 74-79 as two – that’d be a little bit silly)

  14. I’ve been vaguely trying to find a dranatic analogy to highlight how astonishing it is for a Chancelor, in times of apparently dramatic debt and austerity, knocking one p off a pint of beer.

    But the best one I’ve come up with is of a Chancellor, in times of apparently……. etc etc etc etc…………

    It is really quite bizarre.

  15. The Economist has joined the New Statesman & The Spectator in rejecting the state regulation.

  16. Comment on the 1p reduction in Beer Duty misses the point entirely.

    There are 18 pubs closing every week in the UK. The number of ‘locals’ has shrunk in the last 30 years from around 70,000 to 50,000. In London, over 1,300 pubs have closed in the last decade – including 400 that have been demolished. A high number of these pubs are demolished or converted to other uses which radically alters community spaces and high street.

    As Laszlo pointed out here , the Industry has been screaming for help. GO acknowledged the MP for Burton on Trent as a key lobbyist.

    The first concession GO announced was the cancellation of the 6p beer duty rise which would have occurred under Labour’s Duty Escalator.

    The second announcement was to scrap the Duty Escalator.

    The third announcement was to reduce Beer Duty by 1p

    THe first two were taxation policy responses to help save a traditional industry under stress, and were well received (1)

    THe third was to get a laugh in the HoC ( which it did) , and a catchy headline ( which it did).

    (1)
    “In abolishing the Beer Tax escalator, the chancellor has ended a hugely damaging policy that would have made Britain’s beer the most heavily taxed in Europe,” Brigid Simmonds, CEO of the British Beer and Pub Association.

    “I would like to congratulate the chancellor on this initiative. It will be excellent news for British manufacturing, British farming, British pubs and British jobs.”
    Michael Turner, chairman of Fuller’s brewery.

  17. News reports this evening show economic activity in gridlock as cash is demanded to transact business-but no cash is available.

    Monday-the ECB pull the plug on temporary liquidity.

  18. ——-er ——on Cyprus.
    Not in UK !

  19. The coalition have two more years to make that happen here Col!!!

  20. PAULCROFT
    “I’ve been vaguely trying to find a dranatic analogy to highlight how astonishing it is for a Chancelor, in times of apparently dramatic debt and austerity, knocking one p off a pint of beer.”

    ———–

    Ooh I dunno Paul, seems like you get a whole lot more from this budget if you’re thinking of buying a second home. …

  21. @ Tinged

    “Correlation does not imply causation.” etc

    My point was not to say Lab couldn’t win in 2015 because of it only being 1 term in opposition. Rather it might win in spite of this fact. I am very much of the view that EM will almost certainly end up as PM under almost any likely election scenario.

    Either way constituency incumbency bonus is a very real phenomenon and will play to the advantage of Con and not Lab because they have only been in opposition for 1 term.

  22. Colin
    Haven’t you learnt by now that there’s a huge disconnect between what a politician intends to reasonably achieve and how the public perceive that policy?

  23. PAULCROFT,

    “I’ve been vaguely trying to find a dranatic analogy to highlight how astonishing it is for a Chancelor, in times of apparently dramatic debt and austerity, knocking one p off a pint of beer.”

    Try Nero and Rome!!!

    Peter.

  24. Thats because there tends to be a huge disconnect between what a politician intends to achieve and what they actually achieve. ..

  25. GRHINPORTS
    I agree that the incumbency bonus is real – but that doesn’t necessarily imply that it’s much more likely a government will get more than one term.

    Whether a government gets another term is dependent almost entirely on the context of that election – there have only been 3 post-war elections with a lead of less than 1% – one that resulted in a hung parliament (74) and one that resulted in the incumbent party, which improved their vote share *and* won the popular vote losing the election (51).

    1979 and 1992 saw leads of only 7 and 7.5 and saw huge Tory victories – 2010 saw a lead of 7.1 and yet resulted in a hung parliament due to factors contextual only to that election.

    But rules based upon prior elections will probably not apply, because the context of the election will change.

  26. Colin

    Yes, there is a huge problem when folk lose faith in electronic money because there isn’t enough paper to go round.

  27. @ Tony Dean
    ‘However, the consequences for the middling and poor in the rest of the UK would then look very bleak electorally, trapped in a Southern English dominated Thatcheresque ‘Aspirational’ wonderland.’

    I think that is being a bit unduly pessimistic about the likely electoral outlook in the unlikely event of a Yes vote in Scotland next year. The Tories failed to win in England & Wales combined in 1945, 1966, Oct 1974, 1997, 2001 and 2005.
    In the very longterm, particularly if Wales went down the independence road too, there would be a distinct possibility of England breaking up into its component parts – Northumbria – Anglia – Mercia – Cornwall – Wessex etc.. I find it difficult to imagine people outside the Tory south putting up with a right- wing agenda indefinitely.. At the end of the day, it is far from clear that people in the NorthEast or Merseyside -say – have a great deal in common – culturally or anything else – with those living in the South or the Home Counties. In reality, they probably have more in common with the Scots and Welsh – and IF an independent Scotland or Wales were to flourish the attractions of separation to particular English regions would be likely to grow over time.

  28. RiN

    In Cyprus at present it is less esoteric than that:-

    The Banks are teetering on the edge of insolvency on monday, absent ECB liquidity + IMF/EZ bailout.

    So confidence in credit/cheques/credit cards has evaporated.

    So people are asking for cash.

    But ATMs are closed or restricted.

  29. Tinged

    The Brewing INdustry understood & was happy-its what they wanted ( more than actually)

    Pub Beer drinkers are presumably being told by landlords to drink up because it’s 7p a pint cheaper than it would have been.

    I should think GO is happy with that .

  30. Colin

    Comment on the 1p reduction in Beer Duty misses the point entirely.

    There are 18 pubs closing every week in the UK. The number of ‘locals’ has shrunk in the last 30 years from around 70,000 to 50,000. In London, over 1,300 pubs have closed in the last decade – including 400 that have been demolished. A high number of these pubs are demolished or converted to other uses which radically alters community spaces and high street.

    But as you yourself illustrate, one of the main reasons for the closure of so many pubs is the price of property. They have become worth far more as housing than as businesses, unless they are really thriving. So no matter how much the Chancellor knocks off the price of beer, if he’s also trying to prop up over-inflated house prices, then he’s just throwing away the money.

  31. Roger

    I assume he just thought twice about responding to the brewing & pub trade with two fingers & a shrug of the shoulders.

    If folk like British Beer and Pub Association.& Fullers Brewery think it will help their industry, I have no reason to disbelieve them.

  32. Colin
    But whether it resonates with the rest of the public is an entirely different question.
    We’ll probably find out by the weekend, when YouGov/STimes ask it – I suspect it’ll be a very popular idea despite negative comments from some quarters.

    My own view is that he should have brought all alcohol taxes in the same way he did for beer (to avoid the potential legal problems he might face) – I don’t support this for the same reasons, but do think it’s a good idea – but ultimately if his goal is to save pubs then he’s barking up the wrong tree.
    The reason that pubs are dying has nothing to do with the price of beer and everything to do with the fact that there just isn’t a market for their widespread use.
    He’s attempting to save an antiquated industry from the wrath of market economics and it’s doomed to fail.

    It’s strange being the one arguing for the invisible hand but just let them fail.

  33. Graham,

    @ Tony Dean’s comment doesn’t actually require the Tories to win, it only needs there to be a shift of the centre to the right.

    For Labour to get elected they would need to move right with it and therefore the logic is that even a Labour government would be to the right of where it is now?

    Peter

  34. tingedfringe

    1979 and 1992 saw leads of only 7 and 7.5 and saw huge Tory victories – 2010 saw a lead of 7.1 and yet resulted in a hung parliament due to factors contextual only to that election

    Majorities of 43 and 21 respectively, not particularly “huge” – the 1992 one had been lost completely by the end of the Parliament. Please don’t get them started on the “We wuz robbed by the electoral system” thing again, it always ends in tears.

  35. ‘For Labour to get elected they would need to move right with it and therefore the logic is that even a Labour government would be to the right of where it is now?’

    Peter,
    But that wasn’t the case in the election years I cited in my earlier comment. Indeed , I strongly hold the view that Labour shifted significantly further to the right in 1997 – and later – than was necessary to secure a comfortable victory. I have little doubt tha John Smith would have won easily enough in 97 – if not on the Blair scale – and we would be better off today on account of it.

  36. @ Tinged Fringe

    “GRHINPORTS
    I agree that the incumbency bonus is real – but that doesn’t necessarily imply that it’s much more likely a government will get more than one term.
    Whether a government gets another term is dependent almost entirely on the context of that election – there have only been 3 post-war elections with a lead of less than 1% – one that resulted in a hung parliament (74) and one that resulted in the incumbent party, which improved their vote share *and* won the popular vote losing the election (51).
    1979 and 1992 saw leads of only 7 and 7.5 and saw huge Tory victories – 2010 saw a lead of 7.1 and yet resulted in a hung parliament due to factors contextual only to that election.
    But rules based upon prior elections will probably not apply, because the context of the election will change.”

    I think we are probably arguing different things here because basically I agree with everything you are saying.

    I am not a believer in there being these “golden rules” about how the election cycle pans out. I used clumsy language to say “its very unusual” about the chances of a 1 term government (although I note that over 70% this does not happen) which was more to emphasise the challenge for Lab to over incumbency bonus.

    Of course the 2015 GE will be determined by the circumstances at that time…One of the circumstances that will feed in to a greater or lesser extent is incumbency. And because it lost 100 MPs at the last GE it is Lab which are starting from a lower point in this equation.

    They can counter this IMO by having a clear vision spelt out to the voting public as to where they would be taking things going forward both in relation to the Coalition government and their own 97-10 period.

  37. @Tingedfringe,
    You mention 3 postwar elections when the margin was less than 1%. 1951 and Feb 74 come to mind but am not aware of any other. In 1964 the Labour lead – on a GB basis – was about 2%..
    I suppose it is arguable that the UK figure was more relevant then than today simply because the 12 Ulster Unionists took the Tory Whip. On the UK basis the 1964 lead was 0.8 %.

  38. George’s penny off a pint reminds me of ole Nero going through his violin repertoire as Rome burned.

    {with grateful thanks to PeterCairns for suggesting this great analogy.]

  39. @ GRHINPORTS
    ‘Finally, back in 2008, we saw the then Con opposition employ exactly the same opposition tactics of playing it safe, and not spelling out your message, and enjoying the problems faced by an unpopular incumbent government. Its the easiest and safest thing to do, but as an election approaches the public will want to know what it is they are backing if they are going to take a punt on the unknown. Cameron and Osborne really did not do this as the 2010 GE came around, and suffered for not having said what they stood for, their enemies portrayed it for them. It is this IMO that scared off just enough potential voters to deny Con a majority in 2010. So the lesson is there for Lab to learn when we get to 2015. ‘

    I don’t disagree with your basic point there , but I thing you are probably placing too much weight on it.. In my view what denied the Tories a majority in 2010 was a split in the anti – Labour vote that simply was not there a few months earlier.. Cameron’s decision to agree to the Leaders’ debates and the surge of Cleggmania proved disastrous. Had they never taken place I believe a Tory majority would have resulted.

  40. Paul Croft and Peter Cairns

    or possibly MA ‘let them sup ale’.

  41. In the Dutch press it is reported that S and P grading of Cyprus is CCC. I would have thought ZZZ more realistic.

    I suspect Vladimir is none too happy as there may be a few people of dubious morality knocking on his door.

  42. @ Graham

    “I don’t disagree with your basic point there , but I thing you are probably placing too much weight on it.. In my view what denied the Tories a majority in 2010 was a split in the anti – Labour vote that simply was not there a few months earlier.. Cameron’s decision to agree to the Leaders’ debates and the surge of Cleggmania proved disastrous. Had they never taken place I believe a Tory majority would have resulted.”

    Its a reasonable theory but not sure there is much evidence to support it.

    The LDs didn’t particularly gain many seats against the Cons and in fact still lost a few to them as well.

    You could argue Con would have taken more from LD but what little polling we had of these seats prior to the 2010 GE suggested that LD were holding up better than Lab even before Cleggmania.

    Also I guess if you had polling of Lab/Con marginals where LD was third and a number of potential Lab-Con switchers changed to LD because of the TV debates then you could argue that might have enabled Lab to hold those seats instead of lose them.

    My own view is that Cleggmania was probably one giant red herring. It saw a huge LD VI surge during the campaign but come polling day everything settled down to where it probably would have ended up anyway even without the TV debates. However in saying that I would concede that Cleggmania did not the Cons off their game plan and that may have been a factor.

  43. Colin – “If folk like British Beer and Pub Association.& Fullers Brewery think it will help their industry, I have no reason to disbelieve them.”

    I’m sure that the 1p duty fall will do some good for the pub industry and the brewing industry. Of course, as most pubs nowadays price to the nearest 5p, I doubt many real pints will go down by a penny, so the difference will likely be felt more by brewers (and hopefully landlords who need it more) than by us punters.

    For years CAMRA have been lobbying MPs, and a great many have been supportive. However, until recently the escalator was being defended by the government and Tory MPs (I have a response from mine from a year ago on the very topic). When a government inherits a policy and maintains it, having had the power to reverse or change it, it cannot keep blaming it’s predecessor for it.

  44. I get a bit confused with the TNS-BRMB polls but this one was tweeted 12 hours ago (for 18th March- pre budget):

    CON 26% (+1), LAB 39% (+1), LD 13% (+2), UKIP 13% (-2), OTHER 8% (-2)

    Apologies if this has already been posted but can’t see that it has.

  45. @Grhinports
    I fully accept that the Clegg balloon had burst by polling day as reflected in the final result.. Nevertheless, I still believe the ‘surge’ made the difference between the LibDems polling 16 – 18 % and the 23 – 24% actually received.I am not at all sure it made much difference to the final Tory lead over Labour – though as you suggest Laboll have held on to some marginals because of the anti – Labour split.. In the absence of the debates we might have ended up wit a result of the order Con 40 – Lab 33 – LD 17. Had that been the case the LibDems would have lost quite a few additional seats to the Tories as well as taking very few from Labour.

  46. GRHINPORTS

    The LD 2010 surge began before the leader debates.

    The Con ‘launch’ was none too clever either.

  47. @Graham

    The Tories failed to achieve an OM due to unreasonable expectations. The Cons won over 90 seats (most from Labour). That was a good performance. They also beat the second placed party by 7%, which is a reasonable margin. What they failed to do was match ACLB’s landslide, or breadth of coalition of 1997.

  48. I would love to hear the conversations in the Treasury about how to climb out of the hole. I mean, analysis follows analysis, ‘If we cut benefits by a significant amount, won’t that deflate growth? I mean, the ne’er-do-wells spend it all don’t they, so good for growth? Well, only on drugs but… Yes, but if we compensate those savings a bit, by giving the ‘ever-want-more’ CDs something, then they *will* spend it rather than pay off their credit card debts won’t they’? ‘Possibly, but they tend to spend it abroad on booze cruises and stag and hen trips, so not much benefit here at home’. ‘Well, could we not give our AB’s incentive to buy into those businesses?’ ‘Possibly, but they will just salt any of such income from time shares, etc, in Australian copper mine shares’.

    All fantasy of course but it’s the magic angle I would be searching for, were I Chancellor.

  49. @Carfrew – “£30 Bn, wisely spent, can do quite a lot and soon pays for itself. It’s 2% of GDP, with a multiplier of 2 that’s 4%…”

    And @Charles – “Why is it that people don’t go along with Labour’s economics?”

    To answer Charles’ question,I think it’s because they, as much as anyone else, are framing the debate in rather unimaginative bipolar terms of more spending and growth or austerity and recession.

    The truth is, there are other options, involving switching of spending, rather than cutting spending or increasing borrowing.

    @Carfrew’s point caught my eye, as £30b is about the annual expenditure on pension contributions relief. I’ve argued before for something like an emergency 2 year measure where we abolish entirely this relief, and place the money entirely into immediate building schemes (social housing would be could) but mainly into vastly enhanced tax reliefs on investment.

    Do this with massive firepower in a deliberate ‘shock and awe’ manner, and you stand a very good chance of sucking in a good part of the £70B net reserves held by companies, as well as bringing in additional inward investment. You get the immediate economic boost from the investment activity, but on top of this, you get a long term increase in productivity and therefore growth.

    There are big downsides to this. It would be a serious emergency measure, and could collapse the remaining final salary schemes, cause problems for public sector pensions, and generally be highly unpopular. I suspect some legislation might be required to allow final salary schemes to reduce pensions for the years in question, but it would allow a government to get the private pension industry sorted out as a condition of returning the reliefs, so could also engineer other long term benefits.

    In truth, while it sounds reasonable to me, I’ve actually got no real idea if such a plan is advisable or possible.
    What I am certain of is that there is scope (and need) for some fantastically imaginative ways to switch spending and boost the economy, but we’re stuck with a government and opposition still reading from a conventional play book.

  50. @Nicp,
    Socialism as a political concept in recent times in the uk hasn’t attracted anything like a fraction of what would be requires for a majority. People don’t want it, which is why it won’t ever come to pass. What you might get if you are lucky is an ever so slightly left of centre Labour Party, which in truth under Blair was nearer right of centre. The irony of socialism is that in practice, because oft he inevitable economic failure, it often relies on totalitarian and oppressive state control to survive. People like to be aspirational to do the best they can for their families and self worth, that is the one reason socialism will continue to be rejected here.
    Rich

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