James Crouch is Head of Policy and Public Affairs at Opinium.
While Jeremy Hunt declared a “Budget for long-term growth”, it appears to not be providing even short-term growth in the Conservatives’ polling numbers.
Cruelly, the Government was right to believe that this month’s Budget could have sparked the beginning of a recovery in Tory fortunes. Yet the policy platform they have pursued has robbed them of the last opportunity to get back on the front foot before the general election.
It is worth reflecting that the Conservatives are currently sitting on only 25 per cent of the vote. This is the Government’s lowest share since the fallout from the last seriously misjudged fiscal event, known to posterity as the Mini-Budget. Opinium’s post-Budget poll suggests the Tories are losing almost a fifth of their vote to Reform, and a further fifth of their vote to Labour and the Lib Dems.
Confronted with this ongoing nightmare of losing votes to different parties for a variety of reasons, it’s not surprising Number 10 is struggling to settle on a successful electoral strategy.
The first question to ask is “can they win the next election?”, and that feels like a tall order; the problems facing the Government – some of their own making, some not – seem gargantuan in scale.
But that does not mean that a landslide defeat should be inevitable. There are a few key issues that the Conservatives’ 2019 coalition want this Government to deal with: illegal immigration reduced (58 per cent), NHS backlogs dealt with (56 per cent), and help with the cost-of-living (46 per cent).
Ministers have put great store on Rwanda, but 58 per cent of Conservatives think cutting illegal immigration is unachievable and most assume that (small) boat has sailed. The Government has argued it is working hard to respond to the crisis in the NHS, but a whopping 61 per cent of Conservatives think little will improve before the election.
That means the spotlight turns to the Chancellor. Economic and fiscal policy is the only thing the party really have left.
Admittedly, I understand why some will be sceptical of me for saying that the Government’s best chance of recovery in the polls sits here when it is widely assumed their credentials have been heavily damaged by Liz Truss and Kwasi Kwarteng. The damage to the party’s economic credibility is undeniable.
But out of all the big issues it is still what the Conservatives poll best on: 53 per cent of Conservative voters think cutting inflation and reducing the cost of living is achievable before the election, and the same proportion (53 per cent) think improving economic growth is also achievable.
These numbers are not barnstorming, but in the context of a dashboard flashing bright red, the party should jump at anything voters are relatively receptive to hearing.
There have been some in government who have recognised this. On one hand, the message is that the plan is working: inflation is falling and growth is returning. This is reasonably good and aligns with what their voters want to hear about.
Yet when it comes to manifesting this message into tangible policies, the strategy somehow results in a platform of tax cuts. As Hunt said from the dispatch box last week: “Conservatives know lower tax means higher growth and higher growth means more opportunity”.
This is all very motherhood and apple pie when it comes to Tory philosophy – unfortunately, it is just not where their voters are.
Over the last six months the Chancellor has cut billions of pounds of taxes for working people. But they are getting no credit because it is, quite simply, not what they asked for. It cannot be stressed enough how much this line from Hunt is falling on deaf ears, even amongst Conservative voters.
The total tax burden is at a near all-time high, but that problem has to be seen in the wider context: the UK is in a bind when it comes to the huge demands on the public purse. Thus, neither the public at large nor Conservative voters think tax cuts are appropriate.
When we ask Conservative voters to think about the amount of money the government raises in taxes and then spends on public services, only a fifth (21 per cent) want to reduce taxes and spend less. This is, problematically, where No 10 and No 11 are currently positioning the party.
Two in five (40 per cent) want to see things roughly kept the way they are and a quarter – yes, 25 per cent of Conservative voters – want to see taxes go up to pay for more spending. (It is not as if the Government doesn’t have things all of their voters would be happy spending more on, such as defence, which aligns with Conservative values and is one of the things the public still respects the party for.)
Even if the Government got past this problem, and we assume Conservative voters won’t say ‘no’ to a tax cut, it really should be emphasized that it is not their priority.
When we look at the economic and fiscal priorities of Conservative voters, 46 per cent want the cost-of-living and inflation tackled, 36 per cent want the UK’s energy security improved, 30 per cent want economic growth to return, and only 14 per cent want taxes cut for them and their family. It’s just not top of the voters’ shopping list, or even halfway down it.
What really cemented last week as a missed opportunity is that, even if some form of pre-election tax giveaway was politically wise, National Insurance is not where you would start.
A week before the Budget, Opinium polled a question we have returned to regularly: which taxes are too low, which are too high, and which are probably about right. Half (49 per cent) of 2019 Conservative voters thought National Insurance was probably at about the right level, less than a third (31 per cent) thought it was too high.
That’s not to say that there are not a whole raft of taxes Tory voters think are eyewatering – just that NI is not one of them. But once you take out the ones that don’t fit with the cost-of-living narrative (Inheritance Tax), are too messy to wade into (Council Tax), or just simply not where the Conservative Party is (VAT), you are left with Fuel Duty.
While Hunt left himself with space to delay a planned rise, actually slashing fuel duty would have been a much more exciting, and electorally smart, rabbit out of the hat. It targets drivers, it helps with cost-of-living, it fits into a wider energy narrative, it benefits businesses, older people, and workers commuting in from Tory suburbs. It’s even a responsible tax cut, as fewer and fewer people will pay it in future anyway.
Unfortunately for the Conservatives, the Budget offered a tax giveaway that will end up being emblematic of a missed opportunity.
We all accept it is unrealistic to expect the Chancellor to have clawed back 16 points in the polls with one speech from the dispatch box. Nonetheless, fiscal events hold some of the few levers left to pull that will impact voters, and it is one of the rare policy areas where voters were listening. It is unfortunate that the Government was not.
The post James Crouch: Why the National Insurance giveaway will prove this Government’s biggest missed opportunity appeared first on Conservative Home.
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Author: James Crouch
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