The shattering of a mythical consensus?

I hate it when a Think Tank announces itself to the world with an opinion poll.

It's like turning up to philosophy seminar with a megaphone. Yes, you're going to get heard, but it increases the likelihood you're going to say something noisy and simplistic.

So when the new "Class" think tank introduced itself by commissioning a poll which assured us that the British people "support radical anti-Austerity polices" I admit I rolled my eyes.*

This ocular cyclicality continued when the poll turned out to be a fine example of what I like to call "would you like a pony" polling, where the questions effectively amount to:

1. Would you like a pony?

2. Would you like someone else to pay for your pony?

It is not hard to get an impressively high level of assent to pony polling.

So I wasn't much surprised when YouGov discovered lopsided majorities in favour of a whole series of apparently very left of centre propositions. Here's a handy chart of the support YouGov uncovered:

Yet these aren't the only issue the British people give a hearty assent to.

They also support some other things very strongly. For example, when asked, they strongly support a cut in fuel duty, a cut in the personal tax allowance, a cut in corporation tax and a benefit cap. (The figures below are from various YG polls in Spring 2012)

So what can we conclude from this?

That all a political party needs to do is support a position of cutting fuel duty and corporation tax, increasing tax allowances, capping benefits, building houses, setting up a state investment bank, cutting the state pension age and giving more money to low income students, all to be paid for by a financial transaction tax, a tax on houses and income of over £1 million?

Well, kind of. I'm pretty sure that if you could convince people that such a programme could work, it would be popular. Unfortunately, (or perhaps fortunately) you can't, because such a programme would soon collapse under the weight of its own contradictions. 

The costs of the various tax cuts and spending pledges would massively outweigh the funds raised. If you then tried to make the sums add up by cuts elsewhere, you'd suffer unpopularity (the only things big enough are Health, education, welfare and defence spending). If you didn't try to make the sums add up, then hello, Mr Peron, I thought you were dead.

So are the great British people screwing with us? Well, kind of.

Duncan Weldon, noting a similar attachment to both deficit reduction and job creation/growth in the Class poll, suggests that people recognise that this is a false choice. Naturally, in a short term demand deficit situation, it is a false choice. Perhaps people have an intuitive understanding of counter-cyclical economic policy. They'd like Tax cuts, and they like growth programmes.

This might also explain why another pollster, ComRes today finds overwhelming support for Growth over Deficit reduction. this is nothing new though – they found the same thing back in January.

But I'd like to suggest another explanation. People are complicated. If you ask me whether I want lower taxes, I'm tempted to agree. If you ask me whether I want to cut the NHS, I'm tempted to say no. If you ask me whether I want a low deficit to help keep interests stable, I'm again tempted to agree.

Here's a telling graph, again from a YouGov poll. It asks what people want the government to do about spending cuts and tax rises. This is a much more binary question than the oft polled trade off between 'Austerity' and 'Growth'.

You will note that a large plurality of voters seek a reduction of cuts and a large plurality seek a reduction of taxes. 

Yet at the same time, we know a large plurality of voters want to see the deficit reduced.

Sure, a corporation tax cut sounds good. It'll help create jobs, right?

So does Council house building. That'll create jobs and provide houses. So just asking me if I like the sound of either doesn't really reveal much.

Of course, this doesn't make for a particularly good headline for Class or for the Taxpayers Alliance. Much easier to just ask people if they'd like a pony, then wave the huge pro-pony majority in the face of a friendly and/or gullible journalist.

That way, you can confidently state things like Steve Hart's press release quote that

"The consensus behind austerity-focused economic policy has well and truly collapsed. Across Britain and Europe there is now an unmistakable demand for a radical economic alternative to austerity and British people are now searching for new and braver ideas from politicians"

Or, as Owen Jones puts it,

"is poll is yet more compelling evidence that the mood is definitely changing. The forces of austerity have had a kicking in France and Greece; in the Netherlands, for example, the anti cuts Socialist Party is doing well in the polls. The backlash against austerity has arrived in Britain, too. Space has opened for a radical departure from the consensus: it now needs to be tapped into"

So the claim is not just that the British people reject "austerity", but that the views they express represent a shift in opinion, a challenge to the consensus.

But here Class have been ill-served by their pollsters. YouGov have been asking a whole series of good questions about public attitudes to deficits, cuts and the economy for nearly two years, and they tell a detailed, and much more interesting, story about the public attitude to cuts.

Class didn't need to pay for a poll to find out if there was a consensus behind austerity focused economic policy, and if it had collapsed. They just needed Adobe Acrobat.

First, the only public consensus about austerity is that some cuts are needed.

Here the polling has been remarkably consistent. Below is a chart showing the public view on whether government cuts are necessary or not, going back to February last year.

(The precise question asked is "Thinking about the way the government is cutting spending to reduce the government's deficit, do you think this is necessary or unnecessary")

As you can see, the public mood on this issue is almost exactly the same as it was at the start of last year – a strong majority for the cuts being needed. 

Indeed, the lead for cuts being necessary is a single point higher today than it was in Feb 2011. There did appear to be a trend towards a greater necessity for cuts, with the figure heading over 60% in a few polls at the turn of the year, but that has abated in the last couple of months. That might be the start of a trend, or it might just be regression.

But hold on, whether the cuts are needed is only part of the story.

Labour's critique of the government is not, after all, that there should be no cuts, but that they are "too far, too fast" and this view is widely supported.

Here's the YouGov polling on whether the cuts are too deep, too shallow, or about right.

Again, we see remarkable stability in the public view.

That said, when you look at the detail a couple of interesting points arise. First, there has been a slight, but consistent decline in the number saying the cuts are "too deep".

As a result, the lead of "Too Deep" over "Too Shallow/About right" combined dropped to almost nothing at the start of this year, before a turnaround after the budget, which took the public view roughly back to where it was at the middle of last year. You can see this here:

Next, not only do the public think the cuts are too deep, they also think they're being done too quickly. Again, same YouGov polling.

Two interesting things here.

Again, there's the consistent strong polling for "too quick", but with a similar general slight decline.

The other notable shift is a doubling (from a very small start) in the numbers who think the cuts are not quick enough. This means that the lead for "too quick" over not quick enough/about right has shrunk significantly, even though the numbers saying the government is getting it right have stayed static.

Again, we see a steady decline in the "Too quick" lead until March this year, when there's been a return to the picture of the autumn of last year. That trend could continue, or it could revert, of course.

This poses an interesting question. If the public consensus on the cuts (needed, but done too quickly and too deeply) has been static, or even moved slightly toward the government position, with the post budget "slump" only returning the numbers to the position six months back, is there anything which explains why the government is doing so much worse than it was then?

One possible suggestion jumps out.

 

The above is the data for whether the cuts are being done fairly or unfairly. (The data has an earlier start point for the other polls, so note the different dates)

Here, there's no perceptible shift toward the government position over the last 18 months. What's more, after the budget, the numbers who think the cuts are being done unfairly has surged to record heights.

Now, one should be careful to read too much into a single poll question, but this seems like a potential explanation for the government plight.  An ever smaller number of people feel that cuts are being done fairly, even as they feel they are still needed, and are perhaps slightly less sure they're being done too quickly..

So what can we conclude? First, that if there is "an Austerity consensus" it lies fairly close to Labour's stated position. That cuts are needed, but that they have been done too far, too fast, – and crucially – in an unfair way.

There is however, little or no evidence that the fundamental necessity of cuts is becoming increasing unpopular, or that there has been a a significant shift away from the publics previous view on the speed and depth of the cuts, though some trends are suggestive.

What is clear though is that the government has lost significant ground on the fairness of their cuts, especially after the budget.

If I were in the Labour leader's office, I would not be listening to those who are saluting the end of an "austerity consensus" (which never existed in the public mind in the first place) but instead examining the significance of the publics apparently settled view that cuts are needed, but are being done in the wrong way.

Who might I need to persuade that Labour would make needed cuts in a better, fairer* way?

From my own perspective, I'd also suggest that in two or three years time the too far/too fast issues will be moot.

After four or five years of osbornomics, it's likely the cuts will not be feeling particularly fast, and if we are right (as I think we are) that they are a policy mistake, nor will they have proved sufficient to reduce the deficit enough. We will be where we will be, and in all likelihood that will be running a significant deficit in a sluggish, but probably sluggishly growing, economy.

In that case, perhaps an emphasis on delivering deficit reduction through a shared burden for national renewal, which will include tax increases on the wealthy, (even if these are, a la Hollande, largely symbolic) alongside the transfer of resources to support productivity is where Labour needs it, and spending restraint in services/welfare. Both of the latter imply a significant contribution of cuts to overall deficit reduction.

However, what I wouldn't do is declare that there was a consensus for austerity (there wasn't) or that it has shattered (it hasn't).

Nor would I conclude, from the willingness of people to assent to policies as varied as increasing the tax allowance, cutting fuel duty,capping benefits, taxing millionaires,  increasing home building or offering more money to students, that public objection to austerity is a specifically left wing belief.

I would also perhaps worry for a future political moment where the temptation, on both right and left, will be to promise the impossible, the incredible or the unworkable, because a medium term project to increase some taxes and shift resources from services and welfare to production and consumption, while simultaenously ensuring we are not exposed to fiscal crisis through long term high deficits is thought to be politically unpalatable.

Right now, the left can resolve this tension by pointing, correctly, at the demand deficit. We will not be able to do so forever. At some point, reality will bite.

 

* I wasn't intending to focus only on the polling question, but it is only today that a fuller policy position has been published by Professor Malcolm Sawyer. I'm grateful to him, not least because an intital read-through of his paper reminds me to re-read Kalecki on Full Employment.

*I hate the word fairer in this context. In polling 'Fairer' usually really means: 'better for me'.

19 Responses to “The shattering of a mythical consensus?”

  1. John D Clare

    This is brilliant, Hopi – and it carries the answer to Labour's 'credibility' problem.  Labour's 5-point plan for growth and jobs is hugely forgettable.  'Too far too fast' is running out of steam.  Nobody really accepts a borrow-and-spend agenda.
    But a 'fairness' agenda will sweep the board politically.
    It will also free the Shadow Cabinet to come out and oppose the Tory cuts more aggressively, which all the rank-and-file left are screaming for.
    I accept that there *is* a debate to be had about *how far* we can rebalance the impact away from the poor and vulnerable and onto the rich before we begin to drive wealth-and-therefore-investment away, but that is merely a matter of 'how' we do it, not 'what' we should do.

    You have put your finger on 'the answer for Labour' Hopi, and I hope you will bring it to the attention of the people who matter.

    Reply
    • hopisen

      thanks- but see reply to 3 below. Fairness can be abit of a smokescreen…

      Reply
  2. Andreas Paterson

    Much as I would like to add some kind of snarky/dissenting comment , there's not an awful lot I can find to disagree with here. Spot on Hopi.

    Reply
  3. John McSorley

    Hello – first post to your blog so bear with me.
    I am a genuine floating voter though drift to tory more often than labour. Always intrested in what you write but dont always agree.
    In this case how would you respond to the challenge that 'fair cuts' and 'unfair cuts' would just be taken as a smokescreen for people arguing that there slice of the dwindling pie should be made larger?
    Mind you as a political strategy trying to force someone to argue against the word 'fair' is always good for a laugh.

    Reply
    • hopisen

      I think there's a huge danger of doing just that, which is why I think any political party who tried it would also have to set out clearly a) how they would reduce deficit over long haul b) what measures they change to give definition to term "fairer".

      I suspect there would be huge temptation to be artfully vague about what "fairness" meant. After all, things like the pension tax change are both fair and unfair, depending on how you look at it (unfair to those who've saved in expectation on untaxed income, fair because why should people's income be treated differently due to age)..

      Reply
  4. Tom P

    Great post. Only thing I would query is whether increase in the "cuts happening too slow" . Given that overall it remains pretty low, isn't this likely just that section of the Right that has fairly recently started moaning that the Tories aren't really cutting? They may have been willing to be quiet initially but are now urging govt to press on. More comment pieces like this have been appearing so not that surprising to see the view gain ground in polling. Could just be more actively pro-cuts Tories plus Ukippers.

    Reply
    • hopisen

      I think that's right, (tht it marks an increase in "disatisfaction from the right") – but whats interesting is that until March or so the increase in too slow wasn't matched by an decrease in "about right" so the combined total gradually increased from 32 to 39. 

      After the budget/recession "about right" went down (people who'd come to think things OK moving back to them being too much?), but "too quick' didn't  – but the combined score still higher than start of last year, about the same as last summer.

      Reply
  5. donpaskini

    Good analysis, though your summary of the public mood is surely deeply problematic for fiscal conservatism?
     
    The public think that the cuts are being done in the wrong (unfair) way.  Part of the government's woes post-Budget were a backlash against the "granny tax", and yet you/the SMF want to fund your support for productivity by cutting services for pensioners.  Similarly, the opinion polling on whether or not Londoners backed a cut in fares or investment in upgrading transport infrastructure showed substantial majorities for cuts over investment.  As for cuts in services/welfare – once you spell out what these mean in practice, then they don't sound very 'fair' (particularly if, unlike the benefits cap, you want to raise some serious sums to invest in infrastructure, rather than about 13p).
     
    Now I have some sympathy for the argument that a fiscal conservative approach could overcome these problems – that better off pensioners could be persuaded to give up their winter fuel allowance and pay for their bus passes as their contribution to a wider programme of shared sacrifice; that voters will admire leaders who refuse to make promises to cut their cost of living (because who believes politician's promises anyway); and that there are ways of reducing spending on welfare and services while getting better outcomes.
     
    But this is an argument which doesn't have any polling evidence to support it, and I can just as easily imagine that if Labour adopted your approach, then the most likely outcome would be 'there Labour goes again, taking from the pensioners who have worked hard all their lives', plus a civil war about our plans to spend less on welfare and the NHS than George Osborne, plus voters deciding that after these years of austerity, they would rather have a tax cut and pass less in fuel duty than take part in a programme of shared sacrifice to improve the nation's productivity.

    Reply
    • hopisen

      It's definitely troubling for fiscal conservatism, no question. I suspect your analysis there is spot on.

      I'd argue further that it should be troubling for anyone not willing to tell the public easy lies (whether unfounded tax cutters or constant spenders) .  My hope is that there is the more serious the crisis the better a politics of addressing problems, not evading them, becomes more attractive. That doesn't require my brand of fiscal conservatism, but it does require a recognition that the days of easy promises are long since fled, and those that pitch them are charlatans.

      Reply
  6. aragon

    The trouble with the pony, is no one expects to get the pony.

    I’m in the ideas business and fiscal conservatives are just clinging to the self evidently failed ideas (Neo-liberalism has clearly failed).

    Stop calling people who have a different world view quacks. Look at the beam in your own eye. You have a very simplistic model of economics.

    Even the economist is loosing faith in your argument, they just don’t have the right solution.

    http://www.economist.com/blogs/freeexchange/2012/06/monetary-policy

    Paul Krugman (End this depression now!) has more idea than you.

    http://www.tutor2u.net/blog/index.php/economics/comments/end-depression-now-paul-krugman-at-the-lse

    Stop pretending you have anything useful to contribute to the debate, and get out of the way…

    Reply
  7. Tom Freeman

    Great work. I think you're right about the fairness thing (even though it can be a bit of a weasel word) – the 50p rate cut sent out a very powerful message.
    But it's also worth looking at what people think of the effectiveness of government economic policy – and there, since March, there's been a sharp drop to record lows. Perceived incompetence is surely part of the story.

    Reply
  8. Alan Ji

    An interesting line of comments. The point that struck me was that you had done an excellent job of demolishing a line of argument that is simple-minded rubbish. It oculd be that everybody else took that for granted.
     
    I think the way to limit costs, whilst still delivering results for pensioners, is to insist on home energy efficiency surveys and works at the time of retirement and for every new claim for Council Tax benefit for persons older than 60. Once the works are done, the winter fuel payment would be linked to the certified energy efficincy of the home.
    Age related benefits, other than the NI pension would be conditional on this assesssment and work. This passes the two great tests of
    1) investing to save
    2) a hand-up, not a hand out.
    and could be phased in over a few years, with the compulsory element coming once it was well-established.
     

    Reply
  9. Raju

    Hundreds of thousands of erldely people have had their social care cut in the past decade.Seven in 10 councils in England have been forced to ration services . . .In theory we’re moving towards integrated healthcare with NHS and Social Services staff and budgets pooled/working together. Integrated teams or seemless services and all that malarky.At present (in our locality) Social Services are very much their own empire and won’t merge with the NHS. Loss of star ratings all round, here.Consultant colleagues tell me this is the case in many regions.Since NHS funding is therefore stuck in the NHS, the extra cash we’ve received can’t go in to councils to support social care. A subtle point, but just the way councils can’t snaffle NHS cash to improve roads or public transport (and then justify this as reducing isolation in the erldely or whatever) our council can’t readily snaffle NHS cash for social care. Local PCTs have been sympathetic and given a dowry for a handful of named patients.My point : the mismatch of capacity and demand within provision of social care for the erldely often is not within the gift of central government to address if local councils resist change/reconfiguartion and consequent financial flexibility.

    Reply

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