March 3, 2021
Bad News Budget Postponed – But For How Long?
Extending furlough through until September, though, may be seen as an early indication that the PM’s roadmap was too ambitious...
With the Chancellor set to announce an extension of the job support scheme in today’s Budget, potentially putting off making tough fiscal decisions for a little while longer, Chris Hopkins examines where the public appetite for the Budget comes from.
The headline briefing from the Treasury overnight is that the furlough scheme is to be extended until September in today’s Budget, likely costing an extra £10bn, with the government paying 80% of wages for furloughed workers up to £2,500 until the end of June, 70% up to £2,187.50 through July, and then 60% up to £1,875 through August.
In a recent Savanta ComRes poll for the Independent, with fieldwork conducted before the Prime Minister announced his ambitious roadmap, we found that just one in six (17%) thought that the furlough scheme should end as soon as possible, with more than a third (36%) saying it should be extended through to the end of the summer and a quarter (26%) saying it should be extended until the end of the year.
Extending furlough through until September, though, may be seen as an early indication that the PM’s roadmap was too ambitious, and may raise eyebrows amongst those in the Conversative party who have been calling for an earlier easing of restrictions. In a snap poll we conducted straight after the roadmap announcement, a quarter (27%) of the public said that they thought the restrictions will actually be lifted later than planned, and the cushion the Chancellor has given to the furlough scheme potentially implies such a fear is shared in the higher echelons of government.
Other mooted extensions to coronavirus support in today’s Budget include extending the Universal Credit uplift (just one in five (20%) say this should end as soon as possible), extending business rates holidays for struggling industries (12% say this should end asap), and extending the emergency 5% VAT rate for the hospitality and tourism sector (also 12% say this should end asap). With between two thirds and three quarters saying that these schemes should be extended in some form (with differing views on how long for), any news of extension from the Chancellor today is sure to be greeted well by the public.
Positive public opinion is not exactly something the Chancellor is lacking. In two distinct measures, one mapping approval regarding his handling of the pandemic, and the other mapping general favourability, Rishi Sunak has consistently been the top performer among his cabinet colleagues. In our coronavirus tracker, which tracks approval and disapproval of pandemic performance, the Chancellor currently has a net approval rating of +16, some 21pts ahead of the Prime Minister, although that is Sunak’s highest net approval score since September last year. In February’s political tracker, Sunak’s net favourability was +17, again a huge 19pts ahead of the Prime Minister.
But surely this cannot last forever? A number of tax rises have been speculated ahead of the Budget, but with growing dissent from Sunak’s own party over the prospect of them, it will be interesting to see how long, if at all, he can put them off. Naturally, public opinion on tax rises paraphrases the gingerbread man – “you can’t tax me!” – with higher public support for raising corporation tax (55% support vs 16% oppose) and a wealth tax on assets and shares (55% vs 18%), although there is some appetite for freezing the personal allowance (47% vs 22%) and raising income tax by a penny in the pound (43% vs 28%).
Ultimately, though, none of the decisions that Sunak will make in the future will be universally popular, and as he tries to not only “balance the books” he’ll have to balance public opinion, even if that indirectly is through the constituency mailbags of his backbenchers, with the best interests of the economy. While he’ll be hoping for a quick economic recovery once lockdown is lifted, there is still likely to be a need for some unpopular policies later down the line, and the problem for the Conservatives and the Chancellor this time, as opposed to their introduction of austerity in 2010, is that they can’t blame Labour for the tough decisions they have to take this time.
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