The first snapshot budget poll - done on Wednesday afternoon and evening by Populus - is up on the Times website. Only 596 respondents and no voting intention, but it is our first straw in the wind and it’s a mixed picture for the government.
The ’showroom tax’ on the most polluting new cars was indeed popular - 68% backed it - but more surprisingly there was also support for the increase in tax on alcohol; 55% backed the rise in alcohol duties. Respondents overwhelmingly (71% to 24%) supported higher child benefit and winter fuel allowances.
Despite positive reactions to the two main tax rises, overall opinion on the budget seems to be negative. 38% think they’ll pay more tax, with only 4% thinking they’ll gain. 42% of people think they’ll be worse off from the budget. 26% think it will be bad for business, with only 9% thinking it will help. 23% think it will increase the threat of recession, only 6% think it help reduce one.
So - the things the government did in the budget are popular…but people think they’ll lose out and it won’t improve things for the economy or for business. It isn’t clear from that whether this budget will improve or damage the government’s popularity or make no difference at all - there will no doubt be plenty more polling on the budget in the next few days which will give us a better idea.
We probably won’t get any actually polling evidence on the budget until tonight at the very earliest. If the two biggest changes in the budget were taxes on alcohol and cars, what can we expect to see?
The Wine and Spirit Trade Association commissioned an ICM poll on the public’s reaction to potential rises in alcohol taxation back in January, and unsurprisingly it doesn’t look like they’ll be positively received. Asked whether they were in favour of the Government raising taxes on all alcoholic drinks in order to “tackle problem drinking”, only 33% of people said they were in favour, with 65% opposed. 61% of respondents agreed with the statement “Only a tiny minority of people actually abuse alcohol so adding more regulations for the drinks industry and raising the prices of alcoholic drinks by raising taxes will unfairly penalise the majority who drink sensibly”
Interestingly enough, there was a noticable difference between the attitudes of middle class and working class respondents. Opposition to tax rises on alcohol was overwhelming amongst ABs - 71% were opposed with only 28% in support. Amongst DEs, where perhaps problem drinking is more visible, opinion was more balanced - 54% were opposed, but 44% were against.
On the new ’showroom tax’ things look more positive. Polls on possible environmental taxes normally show relatively positive reactions towards taxes that are directly linked to more polluting cars - my guess has always been that the reason is people always imagine that the tax will fall upon cars more polluting than the car they own. Anyway, there is a general tend in such questions that taxes that people can avoid - like taxes on large cars - are more popular than blanket taxes like road charging or fuel tax hikes which will effect everyone.
I’m not aware of any polls that have asked a direct question about a ’showroom tax’ that only applies to brand new cars, but my guess, given that it is a tax that will only affect people when they buy a new car and one that is directly linked to the most polluting cars, that the polls in the next few days will show that it is relatively popular compared to other announcements.
ICM’s monthly poll for the Guardian has topline figures of CON 37%, LAB 34%, LDEM 21%. The changes from the last ICM poll are Labour up 2, with the other two parties unchanged. The poll was conducted between the 15th and 17th of February.
The poll continues the pattern we’ve seen since September last year of Labour doing comparatively better compared to the Conservatives in ICM polls done for the Guardian than in polls done for other clients. As I said when I first commented on this apparent pattern, I can find no obvious explanation for it, but as the months go past the patten seems to be consistent. The shift in voting intention from the last ICM/Guardian poll, which may be the better comparison, is Labour down 1 and the Lib Dems up 1.
The rest of the poll concentrated on attitudes towards taxataion. Forced to chose between tax cuts and reduced services or sustained spending, 51% said they would chose sustained spending with 36% backing tax cuts. What to make of this question depends largely on the wording - it is implied in the Guardian’s coverage that people were presented with the choice of existing spending or tax cuts even if it meant cuts in spending for services like the NHS. In practice no party will ever go into an election promising tax cuts at the expense of the NHS: parties promising tax reductions will present them as being funded in more acceptable ways, while judging from past election campaigns their opponents will try to paint any promised cuts as being funding out of whatever public spending is most popular. How popular tax cuts actually are will depend upon which of these various claims the public actually believe.
The Conservatives big announcement at the start of their conference was a pledge to cut inheritance tax. A lot of the discussion over this has been about how few (or how many) people will actually benefit from it. That’s a discussion for somewhere else - here on UK Polling Report we don’t care whether something is intrinsically a good or bad idea, we only care what the public think about it and how it’s likely to affect public opinion.
Polls consistently show that inheritance tax is surprisingly unpopular even when compared to other taxes - I’ve posted before about it and it never fails to surprise me. Firstly it is seen as unfair. A Populus poll for the BBC back in 2006 found only 25% of people thought “having an inheritance tax on the value of the assets people leave when they die” was fair. A MORI poll in 2004 fund 69% of people thought it was unfair to tax property after death.
So what, you may say, most people don’t like taxes anyway, what matters is whether it is seen as more unfair than other taxes. A YouGov poll for the Taxpayers Alliance earlier this year asked people to say whether they thought particular taxes were fair or unfair on a scale of 1 to 5 - 1 being very fair, 5 being very unfair.
Inheritance tax came out very near the top - 65% of people thought inheritance tax was unfair, just behind council tax on 67% and ahead of the BBC licence fee on 63%. Compare this to Air passenger duty 45%, income tax 41%, national insurance 34% and taxes on cigarettes and beer 29%. In other words, no one likes taxes, but people think it is fair to tax people based on their income, and based on doing things that are bad for them or the environment. They don’t think taxes like the inheritance tax or council tax are fair.
Does that mean people would like to see it go? In Populus’s 2006 poll they asked if people would prefer inheritance tax to be replaced by an extra penny on income tax, 59% of people said yes. 76% said if there must be inheritance tax, it should affect only the very rich. A YouGov poll last November asked people what they would about various suggested tax cuts - 70% approved of the abolition of inheritance tax.
Once again, it’s easy to tell a pollster you want to see a tax repealed or cut - would they prefer to see inheritance tax cut rather than other taxes? An ICM poll for the Taxpayers Alliance last summer asked people to rate different taxes on how much they’d like to see them cut - again, unsurprisingly people wanted them all cut, butthe interesting bit is how they compare to each other. The tax people wanted to see cut most strongly was council tax (also the one they see as most unfair). It was followed by inheritance tax - a cut in inheritance tax being more popular than an basic rate income tax cut or an increase in personal allowances.
It’s strange that a tax that affects so few people each year seems to be so resented. I suspect it is unpopular not because people actually pay it, but because they imagine they might have to pay it one day. People hope they might receive a great big inheritance one day or, less morbidly, that they’ll be in a position to leave their children financially secure when they leave, they look at house prices now, think how high house prices might actually be when the day finally comes when the lawyers are looking at the value of their estate (or their parents’ estate), and they don’t like the thought of giving lots of it to the government.
So - that’s answered the first part. An increase in the threshhold of inheritance tax is likely to be popular. On the second part of the question - will it change public opinion? - I should add the caveat that just because something is popular, doesn’t mean it is an important issue for people. Inheritance tax is unpopular yes, but is it the sort of issue that really decides elections? Nope.
Ahead of their normal monthly poll later in the week, YouGov have separate poll in today’s Telegraph asking about taxation (presumably commissioned in response to the Conservatives’ policy commission on tax). Asked which party would handle taxation the best, the Conservatives lead Labour slightly, 25% to 20%. This is lower than at the last election, but the difference is mostly because of a huge leap in don’t knows, from 22% in 2005 to 45% now, mostly at the expense of the Liberal Democrats who are down to 8% from 19% last time. Obviously this could be lots of disillusionned supporters of a 50p top rate who are spurning the Lib Dems, but I expect the explanation is rather less exciting and rather more straight forward. The Tories haven’t put forward any plans and the Lib Dems no longer have an easily communicated plan, so most people genuinely don’t know.
Overall slightly more people (43%) agree with the statement “large scale tax cuts would make little difference to the rate of economic growth and would benefit those who are already well off at the expense of everyone else” than agree with the statement “large scale tax cuts would provide incentives for individuals and businesses and increase the rate of economic growth, thereby helping everyone” (36%). Given the choice 25% of people say they would like to see taxes cut, even if it did mean a reduction in government services, 23% of people are happy as things are and 34% would like to see government services extended even if it meant tax rises. Interestingly, even a plurality of Conservative voters (43%) would like to see the level of tax and spending stay the same or rise, with 41% of Tory voters saying they would rather both tax and spending fell.
People being positive about high taxes does not, of course, mean they are positive about paying more taxes themselves. Opinion polls invariably show that people would like people richer than themselves to pay more taxes so they can pay less. 69% of people told YouGov they thought the present tax system was unfair and 61% though they personally paid too much in tax (only 1% thought they paid too little). 65% thought that poor people paid too much in tax, 51% thought that people on middle incomes paid too much, and 54% thought that “rich people” paid too little.
Looking specifically at the Conservative party’s position on tax, more people do say they would more likely to vote Conservative if they committed themselves to cutting taxes (28%) than say it would make them less likely (14%). (As any long time readers will know, I’m not a fan of questions like this. I think people know full well the context of the question and how it will be presented in the press and use it to say whether they approve or disapprove of a policy, even if they are actually a hardcore voter who it will make no difference to. Normally YouGov minimise this problem by giving options of “no difference, would vote Tory anyway” and “no difference, wouldn’t vote Tory anyway” but this question hasn’t even got that).
The mantra of the present party leadership in saying they will put economic stability before tax cuts seems to resonate with voters - 69% of people say they would put economic stability first, as would 73% of Tory voters (though it begs the question of how many people would actally think “to hell with economic stability, give me tax cuts!” I suspect many of the 17% of people who did say that did so because they thought that there was no dichotomy, and tax cuts would not endanger economic stability).
However, the vulnerable position the party would put themselves in if they moved towards adopting Lord Forsyth’s recommends is very clear. Last weeks announcement was followed by accusations from Labour that the figures did not add up and cuts would have to be made. Asked if £21 billion could be cut from taxes without damaging the quality of public services only 36% agreed, with 45% disagreeing. Whether or not the savings could be made, it is obvious that a large proportion of the electorate would be very receptive to accusations from other parties that tax cuts would automatically mean damaging public services.
YouGov also asked about some specific tax cuts and rises. The most popular tax cut was a reduction in the basic rate of income tax, followed by stamp duty on houses and inheritance tax. There was very little support for a cut in corporation tax and the abolition of stamp duty on share transactions - cuts which would either not directly benefit individuals to a noticable extent. On transport tax there was strong opposition to increasing fuel duty for cars…but support for increased taxation of flights. 51% of people supported tax on short haul flights and 52% supported it on long-haul flights.
Apart from the airline taxes, which are an unusual case of people supporting a tax rise they themselves might have to pay, the overall picture is the same one that nearly always turns up in surveys on taxation. Most people do not think tax cuts can be made without spending cuts, people tend to favour more spending, funded by higher taxes on people richer than they themselves are, asked about themselves personally, people would like to pay less tax, presumably, since they don’t favour spending cuts, funded by higher taxes on people who are richer than themselves.
Lots of media attention over the Taxpayers Alliance’s new poll by ICM over the weekend (the full tables are here, but are 224 pages and 5 MB, so be warned. A shorter presentation is here). As one might expect, the poll concentrated upon taxation but also addressed crime, education and health. For the record most of the questions were asked using a 0 to 10 scale, with 0 being total disagreement and 10 being total agreement. The topline figures presented by the TA are based on all those saying 6-10 as being yes, and all those saying 0-4 being no, with 5 being neutral. For some other questions I (like the Taxpayers Alliance) have used the average score on the scale of 0-10.
56% gave a positive response to the statement that “if Britain reformed public services and cut waste it could lower taxes without having to cut spending on vital services?”, with only 17% disagreeing. This is actually nothing new - past polls have found even more support for such statements (this ICM poll for Reform in 2003, for example, found 81% agreed that “if the government reformed public services and cut waste it could make services better and reduce tax at the same time”). The polling evidence is very strong that people think it is possible to cut taxes without damaging public services. The question is firstly whether they would actually think such a thing was desirable, and secondly whether they think any of the present political parties could or would do it.
The ICM/Taxpayers Alliance poll asked people about a series of taxes and asked them to say if they would like to have them cut. Unsurprisingly every tax listed had a majority of people in favour of cutting it - obviously taxes are unpopular. What is more interesting, and more surprising, is which potential tax cuts met with the most support. On a scale of 0-10, with 10 being definitely would like to see it cut and 0 being definitely not, the tax that people most supported a cut in was council tax with an average score of 8.13. It was followed by, somewhat surprisingly, inheritance tax with an average of 7.83 and an increase in threshold where people start paying 40% tax. Raising the personal allowance to take some people out of tax entirely had an average rating of 7.67, lowering the basic rate of income tax a rating of 7.51, lowering VAT 7.37 and lowering business taxation 6.91.
While it comes as no surprise to find council tax at the top of the taxes that people want to see cut, inheritance tax and the higher rate threshold are somewhat more surprising. These are taxes that impact the relatively wealthy (in assets or in income respectively), yet cuts in them are more popular than cuts that would benefit the less well-off, such as increasing the personal allowance. It seems as though targeting tax cuts at the least well off doesn’t suddenly make them politically acceptable (though, of course, it may have wider ramifications in terms of a party’s political image. Even if a policy is itself popular, if it makes a party look like it is only concerned for the wealthy it could potential be an electoral negative.)
ICM also asked people whether they agreed or disagreed with a list of arguments in favour of lower taxation. The most agreed with argument was “Lower taxes would allow you to spend more of your hard-earned money on your own priorities”. This was followed by arguments in favour of increasing the treshhold for the top level of taxation and the personal allowance, which both specifically related the cuts to how they would affect individuals. Finally, there was high agreement with two ‘anti-politician’ arguments, which promoted tax cuts as a way of controlling politicians, e.g. “It’s morally wrong that politicians take so much of our money then waste it. We should cut taxes to force them to budget better.” ICM’s focus groups revealed the same message “Tax cuts have to be presented in specific terms that make sense to individuals, and from the anti-politician rather than the ideological perspective.”
The arguments with the lowest levels of support are also instructive. Arguments that cited the positive effects of free markets and involving private business in providing services rated poorly. The argument that we should “stop subsidising Scotland so much so the English can have a tax cut” also rated poorly. The bottom rating argument was “Labour’s tax rises have damaged Britain’s economy and they’ve managed services badly. The Conservatives would manage things better which would provide savings for tax cuts” - my suspicion is that part of the reason that this argument rated lower than all the others is the mention of the word Conservative.
Looking briefly at the other subjects addressed in the poll, the focus groups suggested that people had very little idea of how the NHS worked or the fundementals of policy. They thought that money had been wasted on a grand scale, but that the service would probably have been even worse without it. There was no faith in politicians being able to improve it, but no confidence in private companies to do so either. On education arguments about exams getting easier went down very badly in focus groups (as being “unfair on the kids”), but people did agree that standards of literacy and numeracy had got worse. Concepts like competition raising standards in schools did not chime with the groups. On the issue of crime, when asked to rate several possible explanations for crime “weak sentencing” was seen as the worst cause of crime, followed by poor education and poor rehabilitation. Immigration and family breakdown were the explanations seen as least convincing by the public. In every area TA/ICM found that privatisation was very negatively perceived, concluding that the term is probably tarnished beyond the point of rescue.
The Taxpayer’s Alliance’s conclusion is not that the Conservative party should immediately adopt a low tax agenda. Past polling has shown that people do not believe that the Conservatives would cut taxes whatever they promise and the TA/ICM’s focus groups support this finding - people do not believe they would be any different. Rather the Taxpayers Alliance conclude that a tax cutting agenda would have to be promoted from an anti-politician angle and, while the Conservative party could in theory present itself as an anti-establishment, anti-Westminster party, it would require such a change that the better course of action would probably be for third party groups to campaign on the low tax agenda independently of parties (such as, of course, the Taxpayers Alliance).
I would add one caveat to the poll. For all of the taxes listed ICM found a majority of people said they would like it to be cut - however, this question was asked directly after a list of 16 arguments in favour of tax cuts. Taxes are inherently unpopular anyway, so it should come as no surprise that in a direct question people say cut them. In reality though tax cuts are paid for in some way, shape or form which may make them less popular. There can be little doubt from this poll and from previous polls that people do think it is perfectly possible for taxes to be cut without damaging public services, but that doesn’t mean that they necessarily think that money raised in such a fashion should be spent on tax cuts when put alongside alternatives. Prior to the last election a couple of polls asked the question of, if the government did manage to save lots of money through efficency savings, would they rather it was spent on tax cuts or ploughed back into public services. In both cases, two-thirds of people said they would prefer the money to be spent on public services rather than tax cuts.
It will probably still be a day or two before there are any polls to gauge reaction to the budget, but there was a rather surprising Populus poll commissioned for the BBC’s run-up to the budget.
The poll covered the subject of inheritance tax. While this is a highly emotive subject for a small section of society, my own assumption had always been that the tax was only really a concern for that minority of people wealthy enough to fall into the clutches of inheritance tax, but not wealthy enough to afford to dodge it. Populus’s poll reveal far wider opposition to the tax than I for one had suspected.
Only 25% of people thought that “having an inheritance tax on the value of the assets people leave when they die” was a fair way of raising government revenue. 73% thought that the very principle of inheritance tax was unfair.
Of course, if you ask people if they like paying a tax you should expect to get no as an answer, since few people enjoy paying taxes. Questions on whether a particular tax should be cut or removed are of dubious worth unless there is some sort of indication of how or if the revenue lost would be made up. Populus’s second question therefore asked if people would support abolishing inheritance tax and making up the lost revenue by putting a penny on income tax - 59% of people said they would support such a move, with only 37% opposed.
Sadly Populus didn’t publish the breakdowns by income or tenure (whether people owned a house or not), but certainly there did not seem to be any sigificant difference between the opinions of different social classes. Older people, whose assets are most likely to be subject to inheritance tax in the near future (though, of course, are presumably less likely to inherit money from more elderly relatives), were slightly more likely to support the scrapping of inheritance tax.
76% of people also agreed that, if there is to be an inheritance tax, it should affect “only affect very rich people so the starting level should be much higher than £275,000″. 22% disagreed.
While this does suggest that there is very wide opposition to inheritance tax, it’s worth remembering that it doesn’t indicate how deep that opposition is. People’s assets are only subject to inheritance tax only once, and they are not around to notice it, and recieving large, taxables inheritances should also be a rare occassion in most peoples’ lives. People have to pay most other forms of taxation far more often. While people say they don’t like inheritance tax, there’s nothing in this poll to suggest it is a particularly salient issue for most people.
ICM’s website has a new poll on taxation, carried out on behalf of Reform. As part of a wider study looking at flat tax schemes they asked about taxation in general, and about where people think the tax bands should be drawn.
The first batch of questions concentrated on the top rate of income tax, and found that people were broadly receptive to economic arguments for lowering it. About 50% of people agreed that a lower top rate of taxation would lead to people working harder and earning more money (43% disagreed), asked if a low top rate of taxation would make the economy grow faster 51% agreed (35% disagreed) and asked if a low top rate of income tax would help keep British business competitive a large majority agreed (60% to 28%).
In all these question Conservative supporters were more likely to agree than supporters of other parties, but almost every case supporters of other parties also agreed with the statements (the exception was that a majority of Lib Dem voters didn’t think that a lower top rate of tax would make people work harder).
ICM then asked at what point it was fair for people to start paying income tax. Only about 8% of people chose a figure below £5,000 (the current tax allowance is £4,895). The median answer was £10,000-£10,999 which, interestingly enough, is the level proposed by the various flat tax plans that think tanks have been toying with in recent months.
The median answer for the point when people thought it fair for people to pay the higher rate of taxation wasn’t far off the actual level - the median answer was £40,000-£44,999, as compared to the actual level, which is presently £37,296. 29% of people said £35,000-£39,999 or lower.
So, while people would be perfectly happy with the increased personal allowance that flat tax plans include, and seem to be fairly receptive to the arguments in favour of a lower top rate of taxation, they also seem to be perfectly happy with a top rate of taxation at around the current point. The actual plans for flat tax that have been presented by groups like the Adam Smith Institute have included cuts in public expenditure which might be rather less easy to sell, although ICM did also ask if respondents thought it was possible to cut taxes while making public servives better through reforming public services (64% agreed).
While the survey danced around issues connected to flat tax, but never actually addressed it, Reform apparently also commissioned some focus groups which dealt directly with the question of flat tax, and found that people were either unaware of it or downright puzzled by the idea.