Monday, 6 September 2010

BBC poll on reducing the deficit

Bad news for supporters of the better way, but bad news for the Government too, in the poll conducted by the BBC, showing that most voters (60%) believe that the Government is right to raise taxes and cut spending, to bring down Britain's state deficit.

At one level this is a fairly clear endorsement of their strategy - though I haven’t yet seen whether those questioned were aware of the current plans to cut by 80% raise taxes by 20% (with the worse off disproportionately affected). In broad terms cuts in public spending were favoured by 49% of those taking part in the poll for the BBC World Service, compared to 36% who preferred tax rises.

We clearly have a distance to go before we convince a majority of our view – shared by many, many mainstream economists – and all of the very best – (see blog below) that cutting the deficit through cutting spending too early and too quickly is potentially disastrous.

But there are two reasons that this poll is also bad news for the Government.

Firstly, the poll is taken at a time when the country is still feeling a little of benefit of the previous government’s inadequate, but nevertheless helpful, fiscal stimulus. All of the key economic indicators suggest the economy will worsen as the impact of the June budget kicks in. At the very least, the recovery will stall. People may feel less certain about early deficit reduction when they see the emerging numbers.

Secondly, whilst 49% support cuts, 80% plus want a ring fenced NHS, Education and to maintain support for pensioners. And so say all of us. Except, this is effectively impossible for the Government to deliver given the overall cuts it proposes. Even taking into account the expected attacks on welfare (where the government will try to convince the public it is removing benefits from ‘wasters’ when it will in fact reduce benefits for nearly all) and the DWP and HMRC (where it will try to convince the public that you need less Job Centre Plus employees to deal with higher unemployment and fewer revenue staff to collect more tax) the sums will not add up.

Meanwhile, on the back of this poll, the BBC is to run a series of news features - on where the cuts should fall. Keeping alive the debate over whether they should come at all is the key priority over the coming months.

Dave Moxham - STUC

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