Support for higher public spending rises after Osborne's cuts

The number who want higher spending, even with higher taxes, has risen for the first time in nine years.

The majority of George Osborne's cuts are still to come but support for higher public spending, even if it means higher taxes, has already increased. Last year, according to the 2012 British Social Attitudes report, thirty six per cent of people said they wanted to see the government "increase taxes and spend more on health, education and social benefits", up from 31% in 2010 and the first increase for nearly a decade (see graph below). The majority (55%) said they would like to see spending levels remain the same, while just six per cent favoured lower taxes and lower spending.

Since around 88% of the coalition's cuts have yet to be made, this is likely to be the beginning of a shift back towards support for a larger state. In 1991, for instance, after the Thatcher government's comparatively minor cuts, 65 per cent said they wanted to see taxes and spending rise but this figure fell in response to Labour's spending increases.

Public support for higher spending rose from 31% in 2010 to 36% last year.

With some Conservatives arguing that the ring-fence on NHS spending should be removed, it's also worth noting that 68 per cent chose health as their first or second priority for extra government spending, with education in second place on 61 per cent, followed by police and prisons (15 per cent) and housing (14 per cent). Expect Tory MPs, angered by the coalition's decision to increase spending on international development by 35 per cent, to highlight the fact that overseas aid finished bottom, with just one per cent citing it as a spending priority. By contrast, 10 per cent favoured higher spending on defence, the one budget many Conservatives would like to see protected.

The right will also draw comfort from clear support for a more restrictive welfare system. During the early-1990s recession, 58 per cent wanted to see more spending on welfare benefits but now just 28 per cent do. Only 59 per cent agree that the government should be the main provider of support to the unemployed, down from 88 per cent a decade ago. Support for spending more on the disabled, traditionally viewed as the most deserving group, has also declined, although given the media's demonisation of welfare receipients this is perhaps unsurprising. Since 2008, the proportion saying that spending on disabled benefits should be increased has declined significantly from 63 per cent to 53 per cent. As the report notes, "This trend is not just a cyclical response to the ups and downs of economic activity; it suggests a fundamental long-term change in attitudes towards welfare and benefit recipients."

On immigration, while 51 per cent would like to see levels reduced "a lot" (up from 39 per cent in 1995) and a further 24 per cent would like to see levels reduced "a little", there is strong support for skilled migration. In total, 63 per cent say that skilled migration from eastern Europe is "good" or "very good" for Britain, while 61 per cent say the same about skilled migration "from Muslim countries like Pakistan".

Ed Miliband has been criticised by some on the left for responding to public concern about welfare and immigration but these findings suggest he is right to argue that Labour cannot be seen to accept the status quo. In the case of welfare, that means support for a more contributory system, and in the case of immigration, that means tighter regulation of the labour market to ensure that bosses cannot use foreign workers to undercut domestic wages.

Support for higher public spending has risen since George Osborne's cuts programme began. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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How austere will Philip Hammond be?

The Chancellor must choose between softening or abandoning George Osborne's approach in his Autumn Statement. 

After becoming Chancellor, Philip Hammond was swift to confirm that George Osborne's budget surplus target would be abandoned. The move was hailed by some as the beginning of a new era of fiscal policy - but it was more modest than it appeared. Rather than a statement of principle, the abandonment of the 2019-20 target was merely an acceptance of reality. In the absence of additional spending cuts or tax rises, it would inevitably be missed (as Osborne himself recognised following the EU referendum). The decision did not represent, as some suggested, "the end of austerity".

Ahead of his first Autumn Statement on 23 November, the defining choice facing Hammond is whether to make a more radical break. As a new Resolution Foundation report notes, the Chancellor could either delay the surplus target (the conservative option) or embrace an alternative goal. Were he to seek a current budget suplus, rather than an overall one (as Labour pledged at the last general election), Hammond would avoid the need for further austerity and give himself up to £17bn of headroom. This would allow him to borrow for investment and to provide support for the "just managing" families (as Theresa May calls them) who will be squeezed by the continuing benefits freeze.

Alternatively, should Hammond merely delay Osborne's surplus target by a year (to 2020-21), he would be forced to impose an additional £9bn of tax rises or spending cuts. Were he to reject any further fiscal tightening, a surplus would not be achieved until 2023-24 - too late to be politically relevant. 

The most logical option, as the Resolution Foundation concludes, is for Hammond to target a current surplus. But since entering office, both he and May have emphasised their continuing commitment to fiscal conservatism ("He talks about austerity – I call it living within our means," the latter told Jeremy Corbyn at her first PMQs). For Hammond to abandon the goal of the UK's first budget surplus since 2001-02 would be a defining moment. 

George Eaton is political editor of the New Statesman.