The full tabs for YouGov’s weekly poll for the Sunday Times are up here.

On the strikes, 50% opposed headteachers taking stike action (38% supported it), 49% opposed teachers taking strike action (41% supported), 51% opposed civil servants taking strike action (39% supported). The YouGov poll had a cross break by public sector and private sector employment – as one might expect, public sector workers are more likely to support strike action, private sector employees are more likely to oppose it though the difference is less black and white as one might expect. For example, public sector employees support the civil servants’ strike action by 53% to 39%, private sector employees oppose it by 56% to 34%.

On the subject of public and private sector workers, note the main voting intention question. Public sector workers are more likely to support Labour than private sector workers… but not monolithically so. Amongst public sector workers this week’s voting intention was CON 30%, LAB 46%, LDEM 10%. The sample size was only 404, so give it due scepticism, I mention it solely to knock down the lazy assumption I occassionally see that all public sector workers are Labour voters.

Going back to the issue of the strikes, YouGov asked how well people thought David Cameron and the government had handled the issue of public sector pensions and negotiations – only 23% though he had handled them well, with 59% thinking it had been done badly. Turning to Ed Miliband, YouGov asked if people thought he should support or oppose the strikes – 23% think he should support them, 33% oppose them, 27% neither. Amongst Labour supporters 41% think the strikes should be supported, 14% opposed and 34% neither.

YouGov then asked about various policies and whether people would support or oppose them. Most of these were largely as you would expect – 83% supported cancelling the rise in fuel prices, 64% would support spending more on big infrastructure projects, 54% support building a high speed rail link to the Midlands and North, 48% oppose a new airport in the Thames Estuary, 53% support underwriting mortgages for new build houses.

The full tabs are here, and also have some questions on energy and Rugby.

I also said I’d have a look at the new (presumably Populus) polling for Lord Ashcroft. The poll found Cameron & Osborne were more trusted on the economy than Miliband & Balls (they did some interesting split sample tests, seeing if the answers were different if you asked just Osborne or Balls, or Cameron, Osborne & Clegg. None of it made that much difference though).

There were also some interesting questions on whether people trusted Labour or the Conservatives more on specific aspects of economic policy. The Conservatives were significantly more trusted to cut borrowing and debt, to steer the economy through tough times and to stop Britain getting into the same problems as Greece and Italy. Labour were significantly more trusted on creating jobs. The two parties were pretty much neck and neck on helping business and making banks behave responsibly.

Asked about what aspects of the economy most worried people rising prices easily came top, though I’m slightly sceptical about how much the options in the question led to this. For example, low pay rises wasn’t on the list, and while there were some wider issues like national debt and the Eurozone crisis, low growth in the British economy wasn’t there. It is probably not a co-incidence that the three top issues on the question (rising prices, national debt and the Eurozone crisis) were the only three that affected everyone – the other options on the list were things that were largely dependent on people’s circumstances (job insecurity is not a direct issue for the retired, making mortgage payments only for homeowners, finding somewhere to live only for non-homeowners, etc).

Ashcroft also asked people if they thought the economic situation would be better or worse if we had a Labour government, or Conservative government without the Lib Dems. 21% thought the economy would be better with Labour in charge, but 39% thought it would be worse (41% thought it would be much the same). 19% thought the economy would be better if the Conservatives were governing alone, 24% thought it would be worse, 57% thought it would be much the same.

107 Responses to “Full report on YouGov/ST and new Ashcroft polling”

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  1. Yay! First to comment for the first time :)

    Sorry for the useless waste of time and space, but it is a major achievement.

  2. Wonder if the strike figures are affected by the unusually high Labour/low Tory figure (with no corresponding high UKIP figure) – as they seem a slight reversal of the trend of incremental lower support for the strikes. If it were a case of slightly disproportionate Labour sample, it makes Milliband’s Clegg-ite ratings all the more serious.

  3. Press release from the item club reported in Reuters including:

    “The ITEM Club — an economics research team sponsored by accountants E&Y — said the OBR was likely to pencil in 500,000 public sector job cuts between 2010/11 and 2015/16 for the government still to be able to meet its borrowing targets. This is up from a 400,000 estimate in March.”

    “Given that the worst of the spending cuts are still to come …

    …we would expect to see the OBR increase its estimates of general government job losses between 2010/11 and 2015/16 from around 400,000 to closer to 500,000,” it continued.”

    Each one of these half a million people to be sacked over the coming three years is likely to have a family and friends- so several million people are going to be either directly affected by this or will understand how harsh it is.

    Not very good for confidence- which is a greater problem at this point of the business cycle than debt-to-GDP is (let alone the deficit): particularly as this ratio will not fall unless you create growth and that does not come with under confident firm and household sectors..

    I can see this pivot- to try and address the consequences of a series of economic policy/ management errors mistakes made in the first 18 months- as something that will cause severe problems amongst the Huhne-Cable component of the Lib Dems- they bought into Osborne’s rather fanciful vision. Plus what about the beleaguered foot soldiers? The 2012 locals are beginning to look even more dodgy for the Lib Dems now (exception the sunny eyed optimists like @Robert C- BTW my reading of the LA BE results is very different from yours).

    This tightening of the screw over and above the CSR will have negative consequence for confidence AND demand.

    Though I am not sure it will outweigh the stimulus effects of the government U turns in trying to support private firm and private household spending announced this weekend.

    But only if these U turns are of a sufficient quantum in *practice*- and not just Brownite rhetoric/ polemic to get George through a difficult week of commons speeches, Q&A and TV interviews..

    Oh and for those that complain that the government is not muscular enough (from a new classical macroeconomic perspective) they also reported THIS:

    “…”The OBR had forecast that only 20,000 general government jobs would be lost in 2011/12 but, just one quarter into the financial year, the number of job losses already stands at 147,000,” the ITEM Club said”


    @”This tightening of the screw over and above the CSR ”

    Insofar as you intended that to refer to Public Sector employment reduction, , the figure of 500,000 postulated by E&Y actually compares with a CSR estimate of 490,000 (1)

    I can only presume -though have not checked- that this was downgraded to 400,000 in the March 2011 forecast. If E&Y are correct , OBR will be returning to the CSR forecast.

    (1) CSR. Octiber 2010. Page 39. Para 1.95

  5. ROB

    Found it :-

    “…..a reduction in general government employment of
    around 400,000 between 2010-11 and 2015-16”

    Economic & Fiscal Outlook
    Mar. 2011
    Page 79
    Para 3.101

  6. @Rob Sheffield
    “BTW my reading of the LA BE results is very different from yours” etc

    I agree with you. Based on the available records (dating back to 1996) the LDs have never yet had a year when they lost more seats in by-elections than they gained, even in 2010. But with a month to go in 2011, they’re down a net 3.

  7. Oh, and on the point of financials, just had a look over the financial reports from the three major parties…

    As to be expected, they’re all below water, but that’s no major thing since a lot of the money donated to the parties is declared as a loan for reporting reasons.

    The Conservatives had a total deficit over the year of £6503k, which of course includes their massive campaign spend. This leaves the Conservatives in the red to the amount of £9282k. The LibDems, as a smaller party, have a smaller deficit of £459k, and are in debt to the tune of £349k.

    But just in case you think it’s automatic that a party would have a deficit in an election year, Labour produced a surplus of £3118. But because of aforementioned donations masquerading as loans that all parties have, this still leaves them in debt to the amount of 9282k.

    Now considering that the debt is mainly in the form of interest free loans from donors, I would have to say that despite the accepted wisdom being that no party is in a financial state to campaign for a snap election… On the contrary, Labour does look very able to fight a snap election.

  8. colin


    Found it :-

    “…..a reduction in general government employment of
    around 400,000 between 2010-11 and 2015-16?

    Economic & Fiscal Outlook
    Mar. 2011
    Page 79
    Para 3.101”

    My point was a deteriorating context and a tightening of the fiscal consolidation based on sacking public sector employees.

    Which will impact spending power and confidence within those households and those that they know who won’t feel that ‘its working’ or ‘things are getting better’.

    Notwithstanding the impact on the front line of services losing so many employees. This will have political implications and is why Dave and George will have problems with their Lib Dem left flank.

    As the E&Y report states their economic model (which is the same as HMT) now says that- in order to hit deficit reduction targets several years later in this parliament- a further 100,000 public sector job losses have to be implemented. This is a change from March 2011.

    It is also the same kind of economic policy that has arguably undermined (‘choked off’) the late A Darling period recovery- the one that gave ConLib a little hope in late 2010.

    So its basically treating the symptoms with the illness.

    But E&Y, item club, OBR and HMT all use the same model of course.

    Could it be time for some modifications to that model ?

  9. The derivatives market has passed a milestone, for the first time the value of all outstanding derivatives has passed the 700 trillion mark. It now stands at roughly 708 trillion dollars

    Does any one know what comes after trillion, what is 1000 trillion called. We will probably find out next year if this market doesn’t blow up before then


    THanks-I was just making a rather narrow response to your post-that 500k is not going further than CSR-but returning to it.

    Listening to GO on Marr this morning . his clear central & overiding concern is to avoid loss of confidence in UK sovereign debt.
    He made the point that if we faced the gilt yield hike seen elsewhere it wouldn’t just be a public finances impact, but a significant impact on citizens-because of our high level of home ownership & high personal debt levels.

    His second priority seemed to be filling the bank credit gap for SMEs.

    I gues you would have other priorities-but those seem to be his.

    We will find out on Tuesday

  11. RiN,

    Quadrillion or a billiard if you’re old fashioned.

    1,000,000,000,000,000 = 1 quadrillion.

    Next after that is a quintillion and then a sextillion.

  12. REports from EZ indicate Merkel & Sarkozy desperately trying to find a quick route to a new Stability Pact , central EZ fiscal governance & oversight of national budgets.

    Talk of fixing it within the 17, because the 27 will take too long………..or even a caucus with the 17!!

    This would then provide the moral hazard cover for Eurobonds and/or persuade ECB to be more active.

    This looks more & more like an inner EZ club-the very “caucus” which GO said “we” needed to avoid.

    I don’t think UK can stop it-and once it’s done we have a new kind of governance in EU.

    I think DC’s hopes of repatriated powers are disappearing fast-EZ has other things on it’s mind-and helping UK become more competitive isn’t one of them.

    Fertile ground for UKIP.

  13. @Colin

    Sadly all too predictable a response to the UK’s ‘negotiation’ tactic of demanding special concessions *and* withholding fiscal support *and* publicly talking down the EU… If we’re not going to help the EU out, why should we get to be a core part of it.

    DC and GO have probably ensured that the UK will now be in the slow-lane of two-speed Europe. Woe betide us should we ever need something from them in the future…


    @”DC and GO have probably ensured that the UK will now be in the slow-lane of two-speed Europe”

    I think that credit goes to the administration which kept us out of the Euro.

    What was not foreseen by anyone, was the priority which EZ matters have now assumed over Single Market matters & the whole debate on “competancies”

    How do you think it is now possible to persue UK interests , without being a member of EZ?

    Perhaps you think we should join?

  15. There has been an update to Electoral Calculus published on 27 November 2011 at

    Labour continued to gain some ground over the Conservatives during November. Three out of five pollsters recorded gains for Labour, though ICM saw a Conservative gain instead. The Liberal Democrats ended the month with gains of two percent.

    The most recent polls from the five pollsters who published polls in November are:

    ComRes (Independent on Sunday, S. Mirror) has Con 35, Lab 39, Lib 11
    ICM (Guardian) has Con 36, Lab 38, Lib 14
    Populus (Times) has Con 33, Lab 41, Lib 13
    Ipsos-MORI (Reuters) has Con 34, Lab 41, Lib 12
    YouGov (Sunday Times) has Con 34, Lab 43, Lib 11

    Overall the average is

    Con 34 (-1)
    Lab 40 (no change)
    Lib 12 (+2).

    The new national prediction is that:

    Labour will have a majority of 36 seats, winning 343 seats (up 6 seats since 30 October).


  16. “Pursue”


  17. Colin,

    “How do you think it is now possible to persue UK interests , without being a member of EZ?”

    Good question. I’m sure Gordon Brown, who kept us out of the house, would have an answer.

  18. colin

    “Listening to GO on Marr this morning . his clear central & overiding concern is to avoid loss of confidence in UK sovereign debt.
    He made the point that if we faced the gilt yield hike seen elsewhere it wouldn’t just be a public finances impact, but a significant impact on citizens-because of our high level of home ownership & high personal debt levels.”

    I think that’s a good point but I am not- nor ever have been really- convinced that rating agency and gilt market sentiment is impacted too centrally by the plan A.

    If we were following the very same Plan A- but the EZ had good growth, income and profits levels (irrespective of their deficits)- it would be us who would be the target. The EZ would be seen as the better all round medium term economic bet given the rising jobs, incomes and profits.

    To put it another way you can apply the grizzly bear survival analogy.

    You can both be two very unfit overweight guys tramping through the forest: but you only need to be that slightly less unfit/ overweight to survive whilst the other guy is Big Bears latest meal.

    We are- currently- way down the list of EU countries who the CRA’s and the gilts markets have their eyes upon: but it does not necessarily follow that we are actually following the correct path. Nor that- even with Plan A- we never will be in their cross-hairs.

    I guess we won’t know how much the CRA’s and GM really actually do like our Plan A until the EZ crisis is solved.

    But by then the pro-Growth agenda U turn (which I note all weekend Nick Clegg has been taking credit for!) may have diluted the Plan A- if it is genuine and significant enough and not just Brown ‘esqe rhetoric to get George through a difficult week.

  19. ROB

    THanks-I guess GO has decided that it really is worth being the one the Grizzly ignores-even if you are a touch overweight!

    It also gives you time to get the hell out ( and become fitter :-) ) of it whilst the other guy gets eaten

  20. BILL

    @”I’m sure Gordon Brown, who kept us out of the house, would have an answer.”

    If he came to the place of his employment once in a while , perhaps we might find out what it is.

  21. Rob

    I’m not surprised that nick is trying to take credit for the about face, most of the new plan does sound quite demish, but the numbers are minuscule. It’s not plan b its plan 0.25, when the amounts ploughed into the financial sector were in the hundreds of billions, the amounts to be holed out to the. Real economy are in the tens. Pathetic!! Mind you I would be criticizing if they were going in all guns blazing cos it too soon but their lack of ambition is depressing and does not bode well for the future. It seems more like window dressing “look we are doing something”

  22. Isn’t it amazing how just a week ago, staying out of the Euro was the “only good thing Brown ever did”, now it’s the worst thing ever… Of course, the Euro’s problems due to fiscal disparity between European states would still have been there. On the other hand, the UK’s presence would have improved Euro Zone figures quite a bit and cushioned the fall out. And we would likely not have been so quick to leave Germany and France to foot the bailout bill…

    The EZ’s problems have been caused entirely by the 17 having divergent fiscal policies, and a lack of a common European government backed bond. Lessons were not learned from the ERM, differential of fiscal policies could not be fixed just by a common currency. But with a common European Bond, the EZ’s economy becomes much like the US’s, where US states maintain their own finances and state issued bonds but the Dollar is linked to a single Federal bond. And that’s much more stable.

    After the creation of a EZ Bond, the decision to stay out of the EZ becomes more and more problematic, and will continue to push us out of Europe.

  23. Colin,


    Anyway, the Europhiles were right on one thing: you can’t have much influence from the outside. Britain had a choice between power with the Euro and independence with the pound. Brown chose the latter. I’m frankly relieved that he did.

  24. Jayblanc,

    Who is arguing that staying out of the Euro was a bad idea?

  25. Jayblanc
    “On the other hand, the UK’s presence would have improved Euro Zone figures quite a bit and cushioned the fall out. And we would likely not have been so quick to leave Germany and France to foot the bailout bill…”

    In other words, we would have had to pay more, and we haven’t got any real money left.

    On a general point – perhaps John Major’s idea of having national currency circulating alongside the Euro would have given more flexibility. Major was very underrated IMHO.

  26. It is interesting the way the bookmakers still think the Tories will pull it out the bag before the next GE notwithstanding the polling we have seen over the last year.

    The Tories are slight favourites in the market for largest number seats (4/6 and for overall majority (6/4 (odds against)).

    Having said that, given the dire economic situation, I would have thought that there is some value in betting on Labour for an OM now. That is 12/5 against. So, you could more than triple your money in 3.5 years or less. It’s a much better rate of interest than you’ll get in any bank and if another credit crunch is in the offing perhaps a safer investment!

  27. @Pete B

    Well, we would have had to ‘pay’ more, but the crisis probably wouldn’t have been as deep so we would have lost less growth and had less pressure on the bond markets… So we would probably have ended up with more money to spare.

    Some of the things we’ve done in response to economic issues, have been like not paying a £60 electricity bill, then having to throw out £120 of frozen food that defrosted when the power got cut off… There isn’t a whole lot of consideration being made to second order effects.

  28. @ Jay

    You’ve posted exactly the same debt figures for Labour as the Conservatives… are you sure? I’m not saying you are wrong but it’s unusual for 2 numbers to be the same.

  29. @AmberStar

    Well spotted… The correct figure is $7467k.

  30. One of the questions YouGov asked was about views in favour or against HS2 with a 2:1 majority in favour.

    It was a pretty meaningless question though, in the absence of a price tag.

    The way to measure priorities on this sort of thing is to give people a list of spending options and tax cuts costed over the lifetime of the project and ask them to put together a bundle which adds up to say £50bn. I’d wager that blowing £32bn* of that on a train set that few will really need to use and even fewer will be able to afford to use will be pretty low on any such list of priorities.

    (*Or whatever figure it can be expected to escalate to, on all past form of equivalent projects)


    @” Britain had a choice between power with the Euro and independence with the pound. Brown chose the latter. I’m frankly relieved that he did.”

    I agree.

    At least we can approve our own Budget.

    Just wait till they all get told by the Germans what their Budgets will say.

  32. Good Evening from Bournemouth after a very busy and good weekend.

    In the local shop an hour ago, I saw the Sunday Express Headline- not a left wing rage:

    Reports on front page of hungry families relying on food bank charity and road kill.

    It has come to this.

  33. @Colin
    It’s a pleasant change to be in agreement with you.


    @”so we would have lost less growth and had less pressure on the bond markets… So we would probably have ended up with more money to spare.”

    That isn’t how the markets saw it at the time :-

    “Gilts investors say the government has given the market support with their strong commitment to cutting the deficit.

    In the currency markets, there was also optimism. David Bloom at HSBC, said: “We would think that lower gilt issuance, increased budget credibility and reduced risk to the UK’s credit rating should ultimately prove more helpful to sterling than not.”

    Mark Deans, a Moneycorp dealing manager, agreed, saying currency investors had been concerned about whether the UK’s AAA sovereign credit rating would be downgraded.

    He said the spending cuts showed the new UK government was taking decisive action, reassuring investor confidence in the pound.

    “In the medium term, this should allay investors’ fears and prevent them from tarring the UK with the same brush as some other European countries,” he said.”

    extract from “Markets welcome deficit reduction plan”
    David Oakley
    22 June 2010


  35. PHIL

    :-) :-)

  36. Bill

    I had ring round friends and family and they all agree on what the problem is. Now these folks aren’t economists most of them left school at 16 but they do live in the real world. Anyhow what they all agree is the problem is……


    now I know this isn’t a fancy answer and I’m not sure if you could describe it as a demand or a supply problem, or maybe both but that’s what the problem is

  37. RiN
    I’m so sorry that you only know poor people. I mainly know people who do have a little put aside, but only the minimum is being spent because of the uncertainty. Having money in the bank and other places at least gives you some flexibility when bad things happen.

    I have heard somewhere that this applies to business too. There are some who want to borrow but can’t, but there are many who are sitting on cash because the current climate is too uncertain to invest.

    Basically, everyone’s waiting for the other shoe to drop, which will probably be the collapse of the Euro.

  38. @Colin
    Then you went and spoilt it by changing the subject.

  39. richard in norway

    actually some people have a lot of money, it’s just that they are also owed a lot of money and insist on being paid in full.

    All the western Governments want them paid in full too, since they are funded by these wealthy people. And as it would be silly to simply take the money from the wealthy to give to themselves, they are selling of all public assets, sladhing welfare and sacking the private sector in a effort to both save money and give the assets to those few rich people.

    Soon those rich people will own everything at which point everybody else will be much poorer and the whole system will collapse because those who profited most got so greedy that they refused to let anybody else have anything.

  40. Nickp
    That’s insane. Most of the debt owed by governments is to institutions like pension funds or to other governments.

  41. pete b

    So, what’s our soveriegn debt crisis?

    When we need to raise money we sell gilts. If nobody wants them we can print money and buy them ourselves. That is what we do with QE.

    So far we have printed money to the tune of £125 billion pounds. That’s over 2 grand per head of 62 million population. How many of those 62 million are taxpayers? How many are standard rate taxpayers (i.e. not earning enough to pay the 40 or 50%?

    Let’s say 25 nillion of them. That’s £5000 per person.

    Well, I ask you…economically speaking, democratically speaking or any other way you want it, would it make more economic sense to rebate £5000 each to all the standard rate taxpayers in the Uk, or give it to the banks to ease liquidity? Which is more likely to be both popular and get money circulating?

    So why give it to the banks?

    Answer: because the banks told them to.

  42. “On the strikes, 50% opposed headteachers taking strike action (38% supported it), 49% opposed teachers taking strike action (41% supported), 51% supported civil servants taking strike action (39% supported). ”

    Sorry, I can’t connect to the full tabs. May I just clarify, is it 51% OPPOSED to civil servants taking strike action?

  43. Nickp
    I agree. I can’t see any reason why they don’t give it to the people. Just give it to everyone regardless of if they are taxpayers. I’d rather subsidize a poor person than the government.

    I suppose there’d be an upward blip in inflation, but we’re getting that anyway.

  44. @Bill Patrick – just caught up on the last thread and posted a fairly lengthy reply. Essentially it looks like you’re assuming trend growth of NGDP, whereas we’re getting nothing of the sort – 1.9% in the latest figures.

    The ONS is clearly signalling that we have a demand problem if their figures are anything to go by.

  45. @Colin – “He [Osborne] made the point that if we faced the gilt yield hike seen elsewhere it wouldn’t just be a public finances impact, but a significant impact on citizens-because of our high level of home ownership & high personal debt levels.”

    Indeed. But this is the man who is encouraging sub prime 95% mortgages and whose entire economic strategy relies upon a huge expansion of personal household debt.


  46. NickP,

    The Bank of England cannot legally give money to anyone, and since 1985 the government has not used funding policies as a tool because of its associations with monetarism and because most politicians don’t understand it at all.

    (I could go into a technical point about primary dealers, banks and QE, but it’s of questionable importance.)

    While £5,000 rebates* (if expected to be permanent) would be effective (at least insofar as it was given to people on low incomes) there is a symmetry problem with such interventions. Giving money away is indeed popular. Taking it away (taxation) if you want to reduce demand is not popular.

    In contrast, buying and selling bonds is politically neutral insofar as the BoE does it and the BoE can quickly free itself of assets if it needs to do so.

    * £300,000,000,000 is too much, especially when it would be politically impossible to reverse.

    Pete B,

    “I agree. I can’t see any reason why they don’t give it to the people. Just give it to everyone regardless of if they are taxpayers. I’d rather subsidize a poor person than the government.”

    “We are all the government.” – Ed Balls. Therefore subsidising the government is subsidising the poor, and therefore the choice is a false one.

  47. @RiN (8.13pm) Re the relatively small sums involved in the boost measures (apparently) – much as I said yesterday. Very disappointing.

    I’ve had a lengthy debate with @Bill Patrick on the last thread regarding demand, and I’m very firmly in the camp (with you) that confidence is shot and demand is the issue. [@Colin – you posted an old quote from an FT story suggesting the markets were happy with the deficit reduction plan. At the time I warned about ‘coordinated austerity’. Now we can all produce endless quotes from the FT about the markets getting very frightened about zero growth. That’s the thing about markets. They consistently get it wrong.]

    We are now in the position where we need some shock and awe to get things moving again, yet Rob Peston was quoted on BBC news tonight saying that the governments infrastructure program was only going to add £5b spend next year, with this coming from cuts elsewhere. The £20b boost from pension funds isn’t expected to kick in for another 2 – 3 years.

    My biggest sense of disappointment is that last weeks Express headline suggesting an £8b raid on pension tax relief to fund immediate investment doesn’t appear to form part of the briefings. I really would welcome this, but I’m not now expecting it.

  48. Don’t know if anybody’s seen this
    BBC/Comres poll –
    61% are sympathetic with the public sector strikes. 67% of women, 55% of men.

    What’s interesting here, it seems – is the probable wording of the question (I’m going from the BBC News blurb about the poll) – it seems to be asking whether people are sympathetic (or perhaps if the strikes are justified, the site isn’t completely clear) but not whether they support the strikes.

    So people may support the strikes *in theory* but be against them because of the disruption they cause.

    I’m sure somebody else has pointed out (perhaps AW himself) at how the different wording sympathise/support gives broadly different answers.

  49. @ Alec

    I agree that the government needs to boost demand within the next few months or risk the economy sliding into a deep depression with the rest of Europe (possibly US) over the next 2/3 years. Taking £5bn out of the economy by removing tax credits and than spending it on policies which would not show much return for 2+ years, is in my opinion daft.

    Giving more money to banks or a guarantee on loans, will not work. There is little confidence due to lack of demand and worries over the economy for businesses to expand. The banks just won’t turn on the taps and start lending, even if the loan is guaranteed by government. I hear reports that businesses approaching banks for loans are met with so many barriers and delays, that they just give up. Some of the banks have just one business advisor covering 1000 businesses. They are just not geared up to start adminstering a large loan scheme. Plus I expect that the banks will no doubt still be very cautious about lending, as they will have concerns that the government guarantee may not be risk free i.e. government will look to avoid claims on the guarantee if the loan is subject to default.

    In regard to infrastructure projects, these take some time to get off the ground, so may not help the economy for many years. The government might as well provide very generous grants to homeoweners to install solar panels and install energy saving products. Perhaps this might save some of the jobs lost, due to the reduction in the feed in tarrifs.

    I can understand the government not wishing to increase borrowing or if the believe that they could not obtain more borrowing, due to the state of the bond markets. But if they push the economy off a cliff by dampening demand to a such a poor level, they will end up with a large deficit anyway. It would surely have been better to take short term measures to boost demand and not to have pushed for the austerity measures at the rate they did. With the increasing cost of raw materials and energy, if households suffer many years of reduced real term income, they just won’t have the money to spend in the economy, beyond the basics.

  50. Briefings this morning on the budget announcements are suggesting that the £5b switch from existing committments to infrastructure projects will take effect over three years, which will be a similar time frame for the other parts of the planned funding to kick in.

    The real shame of this is that in many ways it really is a good plan – I’ve been calling for a switch from current spending to growth orientated spending, and infrastructure investment fits the bill, and Osborne does seem to have hit upon a good idea to access non government cash via the pension scheme assets.

    The shame of this is that it’s a total reversal of what he did when he came into power. Back in 2010, he slashed capital spending budgets. Many new school builds were cancelled – now he is anouncing new school building. The intervening months have seen economic confidence collapse, in large part through this dramatic shrinking of investment, and while it’s to be hoped that these new investments might be managed more efficiently than some others in the past, the time lag is going to mean there won’t be much benefit for a year or more, when 2012 is when we really needed the boost.

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