Will the Portuguese bail-out boost support for cuts?

George Osborne today finds himself under pressure to detail how much the UK will have to contribute towards the third bail-out of a European country in the last 12 months, knowing that it is not particularly popular to be giving money out to other countries – especially when austerity measures are beginning to bite at home.  

After Ireland’s request for financial help at the end of last year, half of the public were hostile to the idea of loaning money to another country. Fifty-one percent thought that “Britain should not loan money to another country, even if it is on the verge of bankruptcy, because Britain should concentrate on sorting out its own economic problems”. However, a very sizeable minority felt that “it is in Britain’s best interests to loan money to another country if it is on the verge of bankruptcy because our own economy relies heavily on others” (43%). It will be interesting to see if public opinion starts to harden as George Osborne puts a figure on the latest cost to the public purse.

Osborne hopes that Portugal’s fate will convince voters that the government was right to prioritise cutting the UK’s deficit. He said that Britain’s approach to tackling its deficit was supported internationally, and this is certainly an angle that will resonate: last June, a large majority of the public agreed that it is important for Britain to show the world that it can live within its means (85%). But slightly fewer agreed with this ‘even if that means big cuts to our public services’ (63%). This is an important nuance that the government should heed; a reminder that it will be crucial for the government to balance Britain’s international responsibilities and reputation with growing domestic concern about cuts.

We have recently seen a fall in public acceptance of the need for spending cuts, amid worry about the impact of cuts on people’s everyday lives. It is their personal, domestic circumstances that people will vote on, and Osborne should ignore these as his peril.