Polling shows that the public do not agree with the Government’s economic approach
Recent economic debate in the UK can sometimes seem to be dominated by deficit reduction. But while there is plenty of polling showing that the public recognise that the public finances need to be put into better shape, there has been little recent coverage of wider public concerns about the direction of travel our economy is taking. Although falling living standards and rising unemployment dominate the domestic news agenda the political debate on still centres on the public finances rather than, whatever the fiscal constraints, how to secure the best outcomes for UK households.
So recently published You Gov polling (commissioned by the Fabian Society and the TUC, and covered in today’s Independent) has sought to look in some more detail at public views on the direction that recent economic policy approaches are taking us in.
The results are interesting. Firstly, perhaps unsurprisingly, a majority are worried about the future. But this isn’t just the next few years. When asked to think about their own financial situation 51 per cent agreed with the statement that ‘I am worried about the future – in ten years time I fear that people like me will be worse off than I am now’. Women were slightly more concerned than men (with 54 per cent and 48 per cent agreeing respectively), older people more than those who are younger and those on lower incomes more than those who are better off. But still, 44 per cent of those in You Gov’s ‘ABC1’ classification did not anticipate that people like themselves would be better off in a decade’s time.
We also asked people about living standards in general, and again 53 per cent agreed that ‘things are getting worse – I fear that future generations will have worse jobs and living standards than mine’. While more of those in lower income brackets agreed than whose who are better off, the difference was smaller than might have been expected (49 per cent of ABC1s agreeing compared to 57 per cent of C2DEs).
These responses indicate public anxiety, no doubt partly attributable to the ongoing economic situation, about life chances of younger people as well as a sense that whatever the future holds it will struggle to lead to improvements in living standards of the sort we have seen in the past. When we consider that over recent decades many on middle incomes did not benefit as much as the growth figures could have led us to expect, concern that things are likely to further worsen is significant. We have no way to tell how much change there has been in the level of worry about the future over the last few years, or how much change a more rosy short-term economic picture could bring to these figures, but such high levels of public worry about the future direction of their own and their families lives should be a major matter for policy concern.
The polling also reveals concerns about the scale of inequality in the UK, with 70 per cent agreeing that ‘the gap between those at the top and everyone else is now too wide and is bad for ordinary people’. This percentage rises to 81 per cent and 82 per cent respectively among Labour and Lib Dem voters, and remains above 50 per cent (53 per cent) for Conservatives. A large number of people, not just those at the very bottom, also think that inequality is affecting them. 44 per cent (41 per cent among those classified as ‘ABC1’ and 47 per cent of those classified as ‘C2DE’) say that the gap between rich and poor is affecting their living standards and that it is not just a problem for the poorest. British Social Attitudes data has shown public concern about inequality for years. But it is interesting in our poll to see how many people believe that inequality is now impacting upon their own lives.
There are also some signs that, while the public accept that deficit reduction is important (although as other recent polling shows, there is also significant support for a slower timetable that would better support growth) a majority are not in full agreement with the wider decisions the Government are making on economic management. Only 26 per cent believe that businesses have too much red tape to deal with and that companies should have more freedom to hire and fire, while 64 per cent agree that workplace rights are essential and don’t mean fewer jobs. 80 per cent would like to see businesses taking a longer-term approach, even if this means less money is paid out to shareholders, and 70 per cent believe that the government should actively seek to help manufacturing companies.
But the case for progressive policy solutions to the problems of jobs and living standards does not yet seem to have been fully made. Support for state intervention in the economy is relatively low (only 31 per cent agree that the government should play a more active role in supporting the best businesses, while 41 per cent agree that ‘in the past, government intervention has usually ended in tears’) and the sectoral balance of the economy is not a huge matter of public concern: 58 per cent say that it doesn’t matter what we do as long as successful companies make profits. Of particular interest given the recent ‘black labour’ debate, only 48 per cent agree that the government should ‘spend more on transport and infrastructure, even if it means raising taxes or spending less on other services’. Overall, 37 per cent think that before the recession we were heading in the right direction, 31 per cent disagree and 32 per cent don’t know.
Perhaps this is no surprise, as the BSA data shows – with persistent lack of support for progressive taxation and redistribution despite ongoing worries about wealth inequalities – it would be naive to assume majority public support for evidence based solutions to widely held economic concerns. But the high level of ‘don’t know’ responses may also indicate an opportunity for those who want to make the case for a new approach to managing the UK’s economy as the means to address public anxieties and persistently poor economic data.
But it also provides a warning: with public concern about living standards so high, and understanding about the impact that direct government intervention can have for the economy low, this polling would seem to suggest that an appealing electoral strategy will have to find ways to provide short-term boosts to jobs and living standards (rather than, for example, choosing to prioritise medium term growth by funding greater state investment in industry on the back of tax credit cuts) as well as setting a strategy in place for longer-term economic change. As I have recently argued in an article in Fabian Review, key to achieving public support for a new growth agenda is showing that such a policy will make a real difference to people’s lives. Perhaps I should also have added that the medium term nature of many of the changes that progressives believe could lead to economic renewal means that we also need more creative thinking about how shorter-term improvements to jobs and living standards could possibly be achieved in a constrained fiscal environment, as well as focusing on how we can move to both higher and better growth in the longer-term.
2012 will start with economic growth slowing to a near standstill, unemployment rising and inflation still high. The Government are hoping that they can continue to present the alternative as even worse – but with high public anxiety about jobs, living standards and rising inequality this is an increasingly risky approach. Of course we have to recognise the importance of rebalancing the public finances. But economic management is about more than the balance sheet . Even when spending is constrained there are real choices to be made about how available resources are prioritised, and how the proceeds of what growth we have are distributed, as well as how current policy can shape the long-term economic direction of the country. And on this agenda, our polling suggests that there may be public appetite for a more ambitious agenda than the Government is proposing.