As the nation awaits Rishi Sunak’s delivery of the 2021 Budget on 3 March, those who voted Conservative in 2019 are split on what they want to see. The Budget will outline how Rishi Sunak intends to address the economic challenges posed by the coronavirus pandemic, including a considerable increase in Government spending in the last year, while maintaining promises of fiscal responsibility made in the 2019 Conservative Election Manifesto, which guaranteed the Party would keep debt under control, maintain the ‘Triple Lock’ pledge, and not raise income tax, National Insurance, or VAT.
Last week, we at Redfield and Wilton Strategies conducted a poll of those who voted Conservative in December 2019 and found no clear agreement on what the Budget should entail. Respondents generally affirmed that the Conservative Party should be just as committed (41%) or even more committed (22%) to their 2019 Manifesto’s pledges, suggesting that the extraordinary circumstances of the coronavirus pandemic has quite not negated the Party’s prior commitments.
Conservative voters are evenly divided on whether the Government has spent too much money throughout the pandemic, with 52% responding ‘no’ and 48% responding ‘yes.’ This split is also present regarding the current level of spending: 44% of Conservative voters believe the Government is spending about the right amount, 28% believe it is spending too much, and 10% believe it is spending too little. This latest result indicates lower support for Government spending than existed earlier in the pandemic, as a July 2020 poll found that 64% of Conservative voters thought the Government was then spending the right amount. Whereas only 15% of Conservative voters said the Government was spending too much in July, this proportion has now nearly doubled to 28%.
The greatest support for the Government’s expenditure both presently and looking back on the past year comes from those aged 65 and older. However, this group was also most likely to find current spending levels unsustainable, a view shared by 76% of this age group but only by 52% of those aged 18-24. Overall, 67% of 2019 Conservative voters say no, the current level of spending is not sustainable. Thus, while the Government might have found initial support among its voters for its high levels of spending, many also appear readily willing to accept that this level of expenditure is unsustainable.
Regarding how much the government should spend in the coming year and how it should be funded, the lack of widespread Conservative consensus is apparent, suggesting the Budget is not likely to satisfy all Conservative voters. When asked what Rishi Sunak should prioritize in the Budget, 43% responded ‘balancing the public finances,’ while 39% responded ‘providing more economic support.’
One of the biggest questions that the Budget will aim to answer is how the Government intends to offset the high financial costs the pandemic has imposed upon the country. For Conservative voters, a plurality of 44% believe that public finances should be balanced mainly through spending cuts rather than tax increases, though a considerable 36% would favour tax increases. These responses are similar to those of Labour voters, 49% of whom prefer spending cuts while 37% favour tax increases.
If Boris Johnson’s Government does choose to increase its revenue through tax increases, the decision of which taxes to raise will undoubtedly be closely watched by the public. Rishi Sunak is expected to announce a rise in corporation tax, a move which a clear majority (58%) of Conservative voters appear willing to support, with only 13% saying they would disapprove. Labour voters again conveyed similar views, with an identical 58% saying they would support such a policy, demonstrating a major area of common ground between voters of both parties.
The appetite for other tax increases is more diminished, with smaller numbers of Conservative voters suggesting they would support an increase in capital gains (34%), inheritance (20%), and income (28%) taxes. Instead, a majority or plurality of participants responded that such taxes should ‘remain the same.’ Reducing these various categories of taxes attracts little support from Conservative voters despite the Party’s traditional endorsement of tax cuts whenever possible, suggesting that many Conservative voters acknowledge that this occasion is not one for tax reduction.
Acknowledging the profound change in circumstances ushered by the pandemic, 50% of Conservative voters think that the Government should rethink rather than reaffirm its Election Manifesto promise to not raise income tax, National Insurance, or VAT.
While Conservative voters who say they would support personally paying more in taxes (37%) do not form a majority, they do represent a larger proportion than those opposed to the idea (32%), with opinions on the matter remaining fairly consistent among age groups.
One important pledge by the Conservative Party in the last decade has been the ‘Triple Lock,’ a guarantee to raise the state pension by whichever is higher: annual growth in average earnings, inflation, or 2.5%. 49% of Conservative voters said they would support the Government foregoing the ‘triple lock’ in light of the pandemic, while 29% say they would oppose such a decision, including 45% of those aged 65 or older.
Yet, when presented with the alternative possibility of the Government reaffirming the ‘triple lock’ and instead raising corporation tax, 13% said they would oppose such a decision, while 55% said they would support upholding the ‘triple lock’ pledge.
The poll also found a majority (52%) of Conservative voters support the continuation of the current stamp duty holiday, with 19% in opposition. The policy, which suspended the duty on the first £500,000 of all property sales in an effort to stimulate the housing market, commenced last June and is scheduled to end in March 2021, though reports suggest it will be extended. Of those who support its extension, most want to see it last another six months (35%) or a year (29%), with minor support for its indefinite continuation (16%).
While it is evident that variation exists in what Conservative voters think the Budget should contain, there is considerable agreement that Rishi Sunak is up to the task: 74% agree with a statement suggesting that Sunak has made sound financial decisions for the UK economy since the start of the pandemic, a solid sign of approval that has remained consistent in recent months. Indeed, the Chancellor has seen strong approval ratings among the broader public since the beginning of the pandemic.
Whatever its details, it appears important to 2019 Conservative voters that the 2021 Budget attempts to uphold the Party’s Election Manifesto pledges. Opinions are nevertheless divided on how the Government can best keep its promises. The introduction of a higher corporation tax is one revenue-increasing method that appears unlikely to be met with strong opposition among these voters.