How unpopular are the cuts now?

Voters think the cuts are unfair and bad for the economy. But they still blame Labour.

Tomorrow's anti-cuts demonstration in London, which is likely to be the largest protest in the capital since the anti-war march in 2003, is an important political moment. George Osborne won't be blown off course by one demonstration, but the march, provided it's peaceful, should reinforce the sense that the government is losing the argument.

So, ahead of tomorrow's demonstration, here's a summary of where the public stands on the cuts.

The public thinks the cuts are unfair

Despite Osborne's attempts to present his programme as "progressive", the government lost the fairness argument almost immediately. In June, 37 per cent thought the cuts were fair and 33 per cent thought they weren't.

But by September, just 30 per cent thought they were fair and 50 per cent thought they were unfair. Now, only 26 per cent think the cuts are fair and 60 per cent think they are unfair.

The voters are, of course, entirely right to think that the cuts are unfair. As the Institute for Fiscal Studies has repeatedly demonstrated, the coalition's austerity measures hit the poorest hardest.

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Source: YouGov

And bad for the economy

It's a similar story on the economy. At the time of Osborne's emergency Budget in June, 47 per cent thought the cuts would be good for the economy and 30 per cent thought they would be bad. By September, public opinion had switched sides and hasn't changed since. Following January's VAT rise and the grim news that the economy shrank by 0.6 per cent in the final quarter of 2010, the gap widened significantly.

For now, a toxic combination of lower growth, higher inflation and higher unemployment means the coalition has little hope of winning this argument.

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Source: YouGov

But they still think (some) cuts are necessary

YouGov has only recently started asking its panel if they think the cuts are necessary and the results are revealing. The majority of voters – 55 per cent – believe that the cuts are necessary, against 32 per cent who they think they are unnecessary.

Unfortunately for the coalition, this shouldn't be interpreted as an endorsement of their approach. Polling by YouGov also shows that the public opposes both the speed and the scale of the cuts. The most recent poll (20-21 March) found that 49 per cent think the cuts are too deep (6 per cent think they are too shallow and 27 per cent think they are "about right") and that 57 per cent think they are too fast (5 per cent think they are too slow and 27 per cent think they are "about right).

So while it's clear that the public, like Labour, agrees that some cuts are necessary to reduce Britain's £146bn deficit, people also believe that the coalition is going "too far and too fast".

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Source: YouGov

And they still blame Labour

Too fast, too steep, unfair and bad for the economy. It might look like the coalition has lost the argument on every front. But Osborne continues to derive comfort from the fact that more people blame Labour for the cuts than the government.

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Source: YouGov

The most recent YouGov poll showed that 38 per cent blame Labour, 23 per cent blame the coalition and 26 per cent blame both (surely the most sensible answer). Labour has made up some ground since June, when 49 per cent blamed them for the cuts, and public opinion is moving in the right direction for it.

But when Ed Balls recently admitted that his party was "behind on the argument on the deficit" this was undoubtedly the rating he had in mind. Labour might have led in every voting intention poll since January, but so long as voters continue to blame Labour, rather than the coalition, for the cuts, the Tories have every reason to remain hopeful.

George Eaton is political editor of the New Statesman.

Photo: Getty Images
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There are risks as well as opportunities ahead for George Osborne

The Chancellor is in a tight spot, but expect his political wiles to be on full display, says Spencer Thompson.

The most significant fiscal event of this parliament will take place in late November, when the Chancellor presents the spending review setting out his plans for funding government departments over the next four years. This week, across Whitehall and up and down the country, ministers, lobbyists, advocacy groups and town halls are busily finalising their pitches ahead of Friday’s deadline for submissions to the review

It is difficult to overstate the challenge faced by the Chancellor. Under his current spending forecast and planned protections for the NHS, schools, defence and international aid spending, other areas of government will need to be cut by 16.4 per cent in real terms between 2015/16 and 2019/20. Focusing on services spending outside of protected areas, the cumulative cut will reach 26.5 per cent. Despite this, the Chancellor nonetheless has significant room for manoeuvre.

Firstly, under plans unveiled at the budget, the government intends to expand capital investment significantly in both 2018-19 and 2019-20. Over the last parliament capital spending was cut by around a quarter, but between now and 2019-20 it will grow by almost 20 per cent. How this growth in spending should be distributed across departments and between investment projects should be at the heart of the spending review.

In a paper published on Monday, we highlighted three urgent priorities for any additional capital spending: re-balancing transport investment away from London and the greater South East towards the North of England, a £2bn per year boost in public spending on housebuilding, and £1bn of extra investment per year in energy efficiency improvements for fuel-poor households.

Secondly, despite the tough fiscal environment, the Chancellor has the scope to fund a range of areas of policy in dire need of extra resources. These include social care, where rising costs at a time of falling resources are set to generate a severe funding squeeze for local government, 16-19 education, where many 6th-form and FE colleges are at risk of great financial difficulty, and funding a guaranteed paid job for young people in long-term unemployment. Our paper suggests a range of options for how to put these and other areas of policy on a sustainable funding footing.

There is a political angle to this as well. The Conservatives are keen to be seen as a party representing all working people, as shown by the "blue-collar Conservatism" agenda. In addition, the spending review offers the Conservative party the opportunity to return to ‘Compassionate Conservatism’ as a going concern.  If they are truly serious about being seen in this light, this should be reflected in a social investment agenda pursued through the spending review that promotes employment and secures a future for public services outside the NHS and schools.

This will come at a cost, however. In our paper, we show how the Chancellor could fund our package of proposed policies without increasing the pain on other areas of government, while remaining consistent with the government’s fiscal rules that require him to reach a surplus on overall government borrowing by 2019-20. We do not agree that the Government needs to reach a surplus in that year. But given this target wont be scrapped ahead of the spending review, we suggest that he should target a slightly lower surplus in 2019/20 of £7bn, with the deficit the year before being £2bn higher. In addition, we propose several revenue-raising measures in line with recent government tax policy that together would unlock an additional £5bn of resource for government departments.

Make no mistake, this will be a tough settlement for government departments and for public services. But the Chancellor does have a range of options open as he plans the upcoming spending review. Expect his reputation as a highly political Chancellor to be on full display.

Spencer Thompson is economic analyst at IPPR