Pre-Budget Briefing

Pre-Budget Briefing

In advance of this week’s budget, Anthony Wells looks at recent polls on the big budget issues

This week's budget comes under a background of deep public pessimism about the state of the economy, with very few Britons who believe the economy is in a good state, and just 1 in 10 expecting improvement in their financial position over the next year

  • Only 4% of British people think the economy is in a good state, compared to 75% who think it is in a bad condition
  • Only 10% expect their financial position to get better over the next year

The government's cuts are unpopular, are still seem as unfair by 60% of people, too deep by 45%, too fast by 50% and bad for the economy by 49%. However, the majority of the public have largely accepted the government's argument that they are necessary and that they are largely the fault of the last Labour government

  • 55% agree the cuts are necessary
  • 63% blame the last Labour government compared to 51% for the current government
  • 27% blame both Labour and the coalition

The coalition are still trusted more than Labour on the economy by 32% to 26%, and the public are fairly evenly split on the government's economic strategy

  • 38% think they should stick to their present strategy of prioritising deficit reduction, even if this means growth is low
  • 34% would prefer them to prioritise growth, even if this means the deficit stays longer or gets worse

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

50p tax rate and taxing the wealthy

Our polling has consistently shown widespread opposition to the abolition of the 50p rate, with only around a quarter supporting the abolition of the 50p tax rate

Support for the 50p rate would not be much diminished even if it was shown that it was not raising much money; one of the arguments that have been made for its abolition.

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

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

Personal tax allowance

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

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

Fuel duty

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

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

Child benefit

There have been some suggestions that George Osborne will take measures to soften the planned withdrawal of child benefit from households with a higher rate taxpayer.

Our polling shows 61% support the existing plans to withdraw child benefit, compared to 27% who oppose the move. However, there is a widespread perception that the proposed arrangements, whereby a family with a single higher rate taxpayer could lose the benefit despite earning less than a family with two basic rate taxpayers that would keep the benefit. Only 24% of respondents think this is fair.



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