Dr Patrick English is the Director of Political Analytics at YouGov.
This month, the Conservatives announced their second cut to Employee National Insurance Contributions in six months. The rate that workers pay in contributions has rapidly fallen from 12 per cent to 8 per cent. This, Rishi Sunak and Jeremy Hunt argue, fulfilled their pledge to lead a government which ‘will cut taxes’ (setting aside the increasing tax burden created by what is known as ‘fiscal drag’).
Job done. Sit back, and watch the polling tick back up as voters got more money in their pockets and thanked their government for it. Or, not – as it turned out.
Despite positive press and some positive polling on the measure itself, this now 4p-in-the-pound tax cut for workers has not delivered the Conservatives any sort of meaningful boost in the polls. Sunak and his party remain over 20 points behind – and the gap between them and Labour appears to be getting larger, not smaller.
How can this be, when YouGov data suggested that the public supported the measure as announced in the 2024 Spring Budget by 54 per cent to 30 per cent?
The answer is that while the policy enjoys support in the abstract (or, in isolation), tax cuts are simply not a public priority right now.
The general story that British voters are telling pollsters is quite simple; they want their government to prioritise both support for the cost of living and then improve public services before they use any fiscal headroom on tax cuts.
For instance, YouGov asked the public whether they would rather the money brought into the Treasury by abolishing the ‘nom-dom’ tax status would be better spent on ‘reducing national insurance and increasing the maximum amount of money families can earn before losing child benefit’ (the Hunt/Sunak plan), or ‘expanding staff numbers in the NHS and providing free breakfast clubs in primary schools’ (Labour’s plan).
The public told us they would rather the money be spent on the NHS and breakfast clubs by 52 per cent to 21 per cent.
Keen observers of public opinion data will know that if the Government’s aim was to get on the right side of public opinion with their tax-cutting measures (as it surely was), they chose the wrong tax to cut. On March 6th, YouGov data revealed that by 55 per cent to 10 per cent, the British public would have liked to have seen income tax be reduced over national insurance.
The reason for this is that national insurance is seen by the public as a broadly fair tax. By a margin of 51 per cent to 23 per cent, the public told us in September 2023 that national insurance was ‘fair’ (vs ‘unfair’). No doubt its association (real or not in contemporary national budgeting) with health, public services, and retirement is coming through here. This compares to a margin of 44 per cent to 33 per cent for income tax, and 22 per cent to 61 per cent for inheritance tax.
Now, it may well be argued that cutting taxes is the Government showing responsiveness to public demands regarding the cost of living. Some may say: What better way to help with rising prices than to give workers more from their paycheque?
But polling released in advance of the budget by Stop the Squeeze, carried out by YouGov, suggested that while 29 per cent of the public wanted support for the cost of living via tax cuts on wages over double that number (61 per cent) wanted direct support for ‘bringing down the cost of energy for everyone’. Again, this is an example of the Government not hitting the mark in terms of public priorities.
But what happens when the Government does achieve something that the public are demanding of them?
Back in January 2023, Sunak made it one of his five ‘key pledges’ to halve inflation. This was achieved in the autumn of last year, when inflation dropped from its 10.4 per cent high in February 2023 the start of the year to 4.6 per cent in October.
And public opinion responded. Inflation and the cost of living are of course the key issue voters tell us they want to see the government address, and in January 2024 the government enjoyed their ‘best’ net rating (the proportion of the public believing they are handling the issue “well” minus the proportion for “badly”) on handling inflation (-34) since January 2022 (when it was -31).
News of a technical recession for the British economy, and inflation now refusing to drop below 4 per cent, have correlated with these numbers back in the wrong direction of late, however. The net handling score is now back out to -42.
Nonetheless, Sunak and his allies will be hoping that symbolic photos of planes taking off for Rwanda with asylum seekers on board will may kickstart a similar process of improvement on their immigration ratings – a topic of keen interest to many, with 46 per cent putting it in their top three most important issues facing the country last week.
But, as ever, without some serious and fast work on the cost of living – the British public’s number one priority – a wholesale polling turnaround looks far, far off.
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Author: Dr Patrick English
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