Osborne’s two-stage Budget gamble

Peter KellnerPresident
March 23, 2015, 12:46 PM GMT+0

The Chancellor appears to be playing a long game, and it's a game he has a good chance of winning

Take your pick: George Osborne’s Budget last week laid the foundations for a Conservative victory in May; or it was a wasted opportunity to give his party a vital pre-election boost. We cannot yet be certain which statement is true, and it’s possible we won’t know until May 8.

For the moment, YouGov’s first two post-Budget polls, for the Sun and Sunday Times, leave us all dangling between the positive and negative interpretations of the Chancellor’s measures.

Here is the positive assessment (positive, that is, from a Tory viewpoint). Osborne’s rating is up. 44% now say he is doing well as Chancellor, up five points from a week ago. The proportion saying he is doing badly is down two points to 41%.

Moreover, Osborne now enjoys a two-to-one lead over Ed Balls (40-20%) when people are asked who would make the better Chancellor – our biggest ever margin between the two men. Last week’s Budget was broadly considered fair (Sun survey); and 31% now think Britain’s economy is doing well (Sunday Times) – the highest since the coalition came to power. And some of the specific Budget measures are unquestionably popular, above all the rise in tax allowances and the scrapping of tax on most people’s savings. These figures provide the foundations for the Conservatives to gain ground in the run-up to the coming election.

Now for the negative version. These figures might have been expected to translate into extra support for the Tories. But they haven’t. Our two polls show Labour and the Conservatives still neck-and-neck, with the Tories two points ahead in the Sun survey and Labour two points ahead in the Sunday Times survey.

Those differences can be put down to sampling fluctuations. The likely truth is that there has been no decisive shift since early October, with the two main parties within a point or two of each other. There was a slight shift to the Tories in late February and early March, but this trend has not been sustained, and there are no signs that the Budget has revived it. Tory hopes of moving into a lasting lead over Labour have not materialised.

At least, not yet. And that’s the point. The impact of Budgets can take some days to be felt. Three years ago, Osborne’s ‘omnishambles’ Budget did not dent Tory support until a week later. Perhaps the Budget’s popularity will start to convert to rising Tory support later this week. Then again, perhaps it won’t. One of the reasons for measuring voting intentions daily is to find these things out.

For what it’s worth, my guess is that the Chancellor is playing, in election terms, a long game, which he has a good chance of winning. He knows that a pre-election giveaway might have won him short-term glory, but at the expense of undermining his hard-earned reputation for prudence and exposing him to the charge of cynically bribing voters with their own money. Instead, he has given his party room to offer conditional goodies in its election manifesto – tax cuts that will come voters’ way if the Tories remain in office and the economy continues to revive.

In short, Osborne last week unveiled part one of a two-part Conservative budget. The manifesto will contain part two. And, to continue the guessing game, part two will be designed to help middle Britain: people paying standard rate tax, not the top rate. This will be designed to counter the Tories’ greatest image problem: its continuing reputation for being a party of the rich, which doesn’t understand the lives of normal folk.

Hence yesterday’s reports that the Conservative manifesto will give housing association tenants the right to buy their homes. Whatever the broader case for or against this idea, it is shrewdly targeted – and could win broader approval if this generates more money to build new homes: surely one of today’s greatest needs.

Labour’s challenge is to prevent the Conservatives repositioning their brand. Although pessimism about the economy is gradually giving way to cautious optimism, millions of people feel that they are not seeing the benefits of recovery. When people are asked how Britain’s economy has fared over the past five years, 46% say it is better, while 25% say it has got worse. But when the same people are asked what has happened to their own living standards, the figures a reversed: just 27% say better, while 43% say worse.

On balance, the Conservatives have slightly more reason than Labour to be pleased by our post-Budget polls. But the key word is ‘slightly’. Osborne has delivered no knock-out blow. He probably knew he wouldn’t. He is gambling that he has paved the way for an upbeat manifesto and a successful election campaign. In 46 days’ time we shall find out if his gamble has paid off.

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See the full Sun results

See the full Sunday Times results