Tax And Spend

Now the dust has settled from the Chancellor's tax-raising budget, let us take the opportunity for a wider view of what we know about public attitudes to "tax and spend".

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  • Dr. Roger Mortimore Public Affairs
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Now the dust has settled from the Chancellor's tax-raising budget, let us take the opportunity for a wider view of what we know about public attitudes to "tax and spend".

Polls of the British public in recent years have generally found high levels of declared support for tax increases, provided they are intended to fund improvements in public services. MORI polls during the last parliament found between three-fifths and three-quarters of the public supporting tax increases.

Q People have different views about whether it is more important to reduce taxes or keep up government spending. How about you? Which of these statements comes closest to your own view?


160 25-28 April 1997 2-3 Nov 2000
160 % %
Taxes being cut, even if it means some reduction in government services, such as health, education and welfare 7 12
Things should be left as they are 14 20
Government services such as health, education and welfare should be extended, even if it means some increases in taxes 76 61
Don't know 3 7

Source: MORI/Economist/Mail on Sunday Base: c. 1,000 British adults aged 18+ on each survey

The British Social Attitudes survey, using a slightly different question, found a smaller majority for tax rises, but it was still the most popular option. The figures for the most recent BSA poll are little changed from those as long ago as 1987 - but there was a distinct change in the mid-eighties. In the early Thatcher years, there was a definite majority against tax rises.

Q Suppose the government had to choose between the three options on this card. Which do you think it should choose?


160 1983 1987 1990 Jun-Nov 2000
160 % % % %
Reduce taxes and spend less on health, education and social benefits 9 3 3 5
Keep taxes and spending on these services at the same level as now 54 42 37 40
Increase taxes and spend more on health, education and social benefits 32 50 54 50
None of these/don't know 6 4 6 5

Source: NCSR British Social Attitudes survey

It is possible that difference in the figures between the BSA and MORI surveys depends on the fact that one question mentions only increased spending, while the other promises delivery in the form of extended services in return for the tax rises. Other polls emphasise that increased taxation and increased spending are not necessarily synonymous, and that the public does not always equate one with the other. In November 2001, ICM found that 54% of the public said they would be willing to pay more in income tax to "fund the recovery of the National Health Service", but 82% thought that "the government should consider options other than raising income tax to improve the NHS". A MORI poll for the BMA in 2000 found funding from the national lottery was the most popular means of raising NHS funding, with diversion of funds from other areas of government expenditure also preferred by considerably more than increased taxation, which was only favoured by just over a quarter of the public.

The public have not uniformly supported high taxes; but the circumstances in which surveys have found majority support against taxation are instructive. Much the most dramatic break in the pattern came during and after the "petrol crisis" in September 2000. In a MORI/News of the World poll, 85% said the government should reduce the current level of petrol tax; on the other hand 59% also thought the Tories were wrong to promise a 3p in the litre tax reduction - the public were unsympathetic to party political exploitation of the issue. But the real explanation was uncovered in a subsequent poll: the public didn't believe that the government needed the revenue from the petrol tax. In a MORI/Mail on Sunday poll at the start of November 2000, 73% said they thought that "The Government can afford to cut petrol taxes as it has enough money in reserve to maintain spending on public services, such as schools and hospitals", while only 19% took the contrary view that "The Government cannot afford to cut petrol taxes as this would mean reducing the amount of money that goes into public services, such as schools and hospitals". Consequently, the vast majority (82%) still believed that the government should reduce the level of taxes on petrol. This percentage, incidentally, far exceeds the proportion of the public that drives or even that has access to a car in their household.

Yet at the same time, even with widespread condemnation of one aspect of government tax policy so that it was briefly socially acceptable and not politically incorrect to question the utility of taxes, the public adhered to the principle of higher spending to improve public services. The same MORI/Mail on Sunday poll found a slight lessening of the tax and spend mentality since the 1997 election, but still majority support for it. (See table above.)

The lessons of this incident seen two-fold. First, that the public's tolerance of taxation is strictly dependent upon their recognising the necessity for it, and believing that the money raised will be properly and efficiently used; and second, that they distinguish between various forms of taxation, perhaps assuming a sort of hypothecation in their own minds, and will simultaneously support an increase of income tax to fund the NHS yet oppose an increase of petrol duties to raise the same sum for the same purpose.

More recently, Gordon Brown's 2002 budget was well-received, despite involving a substantial rise in taxation (levied through increased national insurance contributions). MORI's post-budget survey for the Financial Times found almost two-thirds (65%) saying they thought the budget proposals were "good for the country as a whole", while only one in five (20%) thought they were bad for the country, the best figures in MORI's post-budget surveys since Denis Healey was at Number 11. In ICM's poll for the Guardian, almost three-quarters of the public (72%) of all voters said they approved of the budget proposals; even among Conservative voters, 54% were in favour.

Support for the budget was not because the public was unaware that the Chancellor had finally increased tax - three in five (59%) said they felt it marked a change in direction rather than being in line with the policies the government had so far pursued.

But it is surprising and intriguing that 45% said they thought the proposals were a good thing for them personally and only 33% that they were a bad thing. While this may represent simple misunderstanding of the financial consequences of the tax proposals, it is also possible that respondents interpreted the question in a wider and more-sophisticated sense than simple calculations of short-term tax advantage, viewing the budget as personally beneficial because it was good for the health of the economy or because it was providing for public services - specifically the NHS - which they valued and relied upon.

There is an obvious temptation to dismiss any survey evidence claiming support for higher taxes, especially among taxpayers, as representing the reactions of those ashamed to admit that they would prefer lower taxes to better public services, but who nevertheless are privately opposed and would vote against tax rises given the chance in the secrecy of the polling booth.

This myth seems to be a hangover from the 1980s, when Conservative governments were elected on tax-cutting manifestos, and from Neil Kinnock's defeat in the 1992 election. It draws strength from the myth that Neil Kinnock lost the 1992 election because he promised to raise taxes, and that Tony Blair won the 1997 one because he promised not to. The flaw in this argument is that although Tony Blair pledged not to increase income tax rates in 1997, the key voters didn't believe him anyway: in MORI's 1997 final pre-election poll for The Times, 63% said they expected that a Labour government, if elected, would increase income tax, only 3% lower than the 66% who had expected a Kinnock government to do so in 1992.

This point was reinforced at the 2001 general election. As early as December 1999, the public were convinced that taxes had risen under Labour: 28% thought that since it had been elected the government had kept taxes down while 57% thought it had not. By January 2001, "thinking about all forms of taxation", 48% thought taxes had gone up since 1997 "for most people" and 41% that their own personal taxes had increased. Furthermore, few expected a re-elected Labour government to have a better record keeping its tax promises: at the end of May, 74% said they thought that if Labour was re-elected it would increase taxes, and only 16% that it would not. (MORI survey for The Times, 29 May 2001.)

The voters elected Tony Blair with a landslide in 1997, expecting him to increase taxes, and re-elected him in 2001 believing that his government had done so, and would do so again. Some, at least of the public's stated enthusiasm for tax and spend is borne out in their general election voting habits. Evidence from the British Election Survey suggests that Labour's defeat in 1992 resulted not from opposition to the idea of tax rises but from distrust of a Kinnock government's ability to spend the money raised wisely and efficiently.

As further evidence that the public is broadly comfortable with current levels of taxation, it might be noted that tax rarely scores highly in MORI's monthly survey of the most important issues facing the country. In this survey, which uses an open-ended and unprompted question to elicit the public's top-of-the-mind political concerns, the National Health Service has been the most frequently mentioned issue in almost every survey since the mid-nineties. In April 2002, 66% of the public named the NHS as an important issue, while only 5% named taxation in general and 2% specifically mentioned council tax or other local government issues.

Although there is usually overwhelming support for increased spending on health, going hand in hand with a perception that the NHS is under-funded, this is by no means the only area of public service provision where the public feels more spending might be beneficial. A MORI survey for the Mail on Sunday in July 2000, indeed, found more of the public feeling that spending on pensions was too low than felt the same about health, though this probably reflected controversy over the recent announcement of a low annual pension increase.

Q The Government announced this week that it will be spending an additional 16343 billion on public services. I am going to read out some different areas of Government spending and I would like you to tell whether you think the Government plans to spend too much, too little, or about the right amount on each area.


160 Too much Too little About right Don't know
160 % % % %
Pensions 2 72 15 11
Health 1 67 25 7
Crime 3 67 23 7
Education 3 51 37 9
Transport 9 46 33 12
Environment 7 41 34 18
Employment 6 37 41 16
Defence 17 27 35 21

Source: MORI/Mail on Sunday Base: 610 British adults 18+, 20-22 July 2000

An ICM poll for the Guardian in March 2000, positing the position of a Chancellor with money "to give away", similarly found overwhelming support for spending on core public services, less for tax cuts or helping business.

Q If the Chancellor has money to give away would you approve or disapprove of him giving money to provide...?


160 Approve Disapprove Don't know
160 % % %
...more money for the health service? 96 3 1
...more money for Schools? 94 5 1
...extra money for Pensioners? 90 7 2 to give tax breaks for people starting new companies? 66 22 12 to reduce income tax for everyone 59 32 9

Source: ICM/Guardian Base: 1,207 British adults 18+, 17-19 March 2000

The overall picture seems clear: the public is prepared to tolerate tax rises and, indeed, to some extent welcomes then. But, in return they will demand visible improvement in public services. They are, at best, sceptical about the government's capacity to deliver. Mr Blair and Mr Brown will fail them at their peril.

The author(s)
  • Dr. Roger Mortimore Public Affairs

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