Daily Podcast: Budget – are tax cuts the vote winner they seem?

As the country gears up for the general election, Wednesday’s budget may be the last before the voters go to the polls. Hailed as “a budget to save the Tory party”, speculation has been mounting that the chancellor will cut taxes as a last-ditch attempt to boost the Conservatives’ plunging support.

To afford the move, funding to public services could be slashed – but Jeremy Hunt has insisted any cuts will be done “responsibly”.

On today’s episode, Sophy Ridge looks ahead to the budget. She’s joined by deputy political editor Sam Coates and pollster Scarlett Maguire to unpack whether cutting taxes really is the way to a Conservative election win.

Read more: https://news.sky.com/topic/daily-podcast-7580

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Hello this is Sophie Ridge at Westminster with this Sky News Daily it’s been quite the day here at the start of quite the week George Galloway the uh new MP the newest MP in Parliament for the first time we’ve seen the Rwanda Bill hitting some sticky

Areas in the House of Lords plus if you’ve been living under a rock for the last few days it’s the beginning of budget week Jeremy Hunt’s second and possibly final spring budget there’s definitely an election in the air it’s all eyes on what that is going to be so

A budget to save the conservative party rather than save the economy is one assessment which is probably why so much of the budget noise is around tax cuts will it be National Insurance will it be income tax how much will it be and what will be the cost to public

Services and also on the podcast today we are going to be exploring this question are tax cuts the Holy Grail to win over votes or actually is their potency a bit erected well we’re joined I’m very pleased to say by Sam coats our Deputy political editor and also Scarlet

McGuire who is the director of JL Partners pollsters great to have you both here H it’s always that horrible time isn’t a couple of days before a budget when we feel like we have a bit of an idea about what it’s going to be

But we don’t want to put our eggs all in one basket just in case they end up on our face in a couple of days time when actually our predictions are completely wrong so I thought I’d start with Sam who’s used to making prediction all the time some of which more successful than

Others but you got a decent track record haven’t you Sam what is your prediction then income tax n Insurance there’s an interesting Trend with budgets that actually they’ve been more and more open about how they work and you know the amount of money that the chancellor has

Got to play with five years ago we didn’t have anything like the level of detail that we do about this budget and while there’ll be some rabbits I’m sure some things that they’ve held back so we know that at the start of this process the chancer thought he had around3

Billion pound to play with in this budget and every week he gets updates on how much that money is changing and it and it and it’s gone down dramatically it’s now somewhere just shy of 13 billion pounds now listeners might wonder what is that 13 billion pound well chancellors set themselves

Self-imposed constraints on the amount that they can borrow and Jeremy Hunt’s rules fiscal rules as they’re known mean that he has to ensure that net debt as a proportion of GDP is declin in 5 years time in other words the amount of money he needs to borrow in 5 years time must

Be going down and that you can calculate what that means and it means he’s got a buffer and he can spend that buffer up to about 6 s billion so he has 13 billion of Headroom he can’t go below six s billion pounds of Headroom does

That mean he’s only got 7 billion to play with in this budget no because what they’re going to do is raise some money through a series of minor tax increases and also um they’re going to play a little trick on us all they’re going to cut the theoretical future amount of

Public spending over the next few years at the moment public spending is due to grow at 1% above inflation that that could be reduced to something like 0.75% and that’ll generate 56 billion pounds which will kind of give you the money for the 2p Nation Insurance cut we know

All of that because we’re getting a lot of Clues and you can see it around in the newspapers and that’s a bit different to how it has been before okay we’ve got one prediction from you I’m quite happy with that one I have to say

Um you want more we’ll have lots more po goes on you’ve touched on something which does actually really irritate me though these kind of fantasy public spending plans I mean they’re already completely ridiculous let’s be honest they’re so tight that you can’t imagine anyone being able to stick to them after

The election um even though labor and the conservatives are still playing this kind of weird dance pretending that they maybe are in any way achievable so we have these kind of already crazy tightened um public spending projections and yet they’re still talking about tax cuts now Scarlet tax cuts have

Historically been a people pleaser and of course what’s not to like about a tax cut right you get more money in your pocket at the end of each paycheck but do you think they are as popular now as I guess some of the conservative party

Would like to think I think it’s quite a complicated picture and I think they’re more popular to some people than they are to others I think the first thing to say is that we’ve got a sort of indication about how popular they are because they did already announce a 2%

National Insurance they got no credit for it in the polls whatsoever the polls remain sort completely static in fact if anything things have got worse for the conservatives we saw that was some new polling out today that showed them on uh sort of just 20% of the vote which is

Really really sort of existential territory for them but I do think it’s interesting when you ask people would they prefer tax cuts for them or more uh spending on public services they do say by about a 2 to one margin spending on public services I think there’s a couple

Of things to note here the first is that that’s quite different um for a couple of groups of Voters which I think the conservatives will particularly have their eyes on at the moment so the first is those who are saying they’re going to vote reform they would prefer tax cuts

And the second is this group that they really are desperate to win back which have probably their easiest ones to win back which are the people who are currently saying they don’t like what the government is doing they’re dissatisfied with it but do not want to labor government so they’re unlike

They’re very unlikely to switch to lab I think the other thing I would say about that sort of first statistic about people favoring public spending over tax cuts I think there’s a little bit of performativity there I think people feel like they’re they’re obliged especially when you see some of these questions

Their phrase like would you like more money for schools and hospitals or in your own pet and people say yeah exactly they want to say um schools and hospitals but I think you get a sort Sly better pictures I think first of all I think people always slightly imagine

That they will be uh sort of fairer tax cuts on people who are richer than them people don’t think I think necessarily because people no one’s feeling particularly well off that it will happen for them I you get a sense of that when you start looking into how

Fair or unfair people think certain taxes are interestingly even any sort of tax on people who earn less than 50,000 people actually are sort of split on whether that’s even so good luck trying to raise any of that for public spending either I think some of that appetite is

Sort of um if people say oh no there’s an appetite actually amongst public for increased taxation to fund Public Services not quite sure that’s true either but I think the final thing is that people are very nervous about public spending cuts so especially you get this from focus groups where people

Are very upset about the state of the country everyone seems to have their own story about a part of it not working for them especially around the NHS and so I think if they hear anything which they think is less money into these sorts of things that will worry quite a lot of

People really interesting hear you talking about how on the whole people are very worried about the state of Public Services which I guess ches with what you know you you get in focus groups and everything as well but actually that there are these key groups of Voters that the conservatives really

Need to shore up ahead of the next election and it is important isn’t it to view this whole budget through the lens of that election I mean it could be the last budget before an election maybe there might be another one who knows but I guess it’s all gearing up to it isn’t

It I mean it’ll be pivotal whether it’s the last one or not for it Scott is so right to highlight the kind of difference in views between the population as a whole and key voter groups we’ve been looking at exactly the same thing to ever slightly different

Prism with the voters panel which guys’s running at the moment we’re looking at conservative 2019 voters you know some of whom will vote Tor some of whom won’t uh will go reforms you know some of whom aren’t sure which is not a dissimilar group and we haven’t forced them to

Choose between tax C and spending cuts or Rises the shin number of them that that put tax cuts quite high up and so if your question was about like looking through the the prism of an election I think two things come come to the four first of all this group is different to

To other voters and secondly if a Chancellor stands up in a budget just before an election and says I’m cutting taxes people can see that happening and and the consequences of that they can notice that pretty much immediately if a Chancellor stands up and says well over

The next 5 years I’m going to spend more on public service Services the chances are that between that moment of the words coming out of the Chan’s mouth and the moment and the day that the voter goes to The Ballot Box they won’t see the consequences of that and that’s the

Kind of raw electoral politics that’s at play I think at this budget look as you said the polling for the conservatives is pretty existential at the minute it’s it’s pretty bad and they’re going to be looking at how many levers they’ll have to pull to try and change that between

Now and polling day and I guess budget is one of them do you think it could actually make much difference um I no not particularly I mean we’ve had lots of things that are meant to be these big events that will shift the polls so a conference um King speech budget um

Autumn statement rather none of them have moved things at all if fact if anything I said as I said before I think things getting worse there’s a couple of things I think public have stopped listening so um everyone if you mention a government announcement quite a lot of

People roll their eyes the sort of exhaustion actually of of announcements and resets and changes whilst this you know fundamental sense that they’re not actually able to sort of govern with the basics right that’s something that we hear a lot then the sort of other thing

To say about it is that actually a lot of this stuff doesn’t have cut through from my experience anyway the public are sort of um less aware of day-to-day things and announcements and things like this than people think they are but also much more astute than people think they

Are and when we were talking uh to fotus about the National Insurance cut that we saw in the Autumn a lot of people were saying okay like you know a couple things firstly this barely touched as the sides my bills have gone up by so much more than then I’m getting back

Here but fine and then the secondly is they’re just doing it to BU my vote anyway aren’t they um and you could say well they’ll take that and vote for them but there is actually a real even if people are quite tuned out from the new cycle people are very skeptical about

Politicians and their motives and I think especially now this government and so the bait in cynicism in the racis panel I mean they absolutely know they’ve they’ve preadjusted their expectations knowing that it’s election year and that just makes it incredibly hard for I mean for anybody anybody

Who’s party has been in 14 years that’s exactly it and then I think then you add this thing on top of it which is something that we have seen from the Prime Minister before which is this sense that saying no the economy is getting better they’re not so much able

To say that after they sort of went into recession but you know the economy is getting better and we’re giving you these tax cuts and then we’ve had you know heard I think people feel slightly sort of gassed by that saying well you know you can’t just like give us a tax

Cut and expect us to stop complaining about things because I’m still feeling worse off than I did a few years ago so I think there’s actually also a danger for them if they sound too happy about it but I mean we’ll see and I guess particularly people feel that it’s tax

Cuts for well-off people at a time when they’re not giving money for public services that they really worried about how closely is labor going to be watching this cuz it’s going to impact on them isn’t it like they’re going to be drawing up the plans spending plans

The years ahead if there’s tax cuts then labor has to decide whether they’re going to reverse them or keep them if they do win the next election oh labor are totally on it but but that doesn’t necessarily mean it’s it’s that easy for them the first line of most of their

Responses will be the same as the first line of the responses to the Autumn statement which is yes he may have given you CHS cuts the the chancer may have given you a reduction to National Insurance or whatever but do you feel better or worse off after 14 years of a

Conservative leg government and that they think is a a winning line and to a certain extent it it might be because of course one of the things that’s happening is as they potentially you know restore more of your pay packet through a reduction Nation Insurance the change in income tax thresholds means

That the the actual picture as people get dragged into higher and higher tax brackets is much more complicated than that and in our voters panel people know that but your question was about Labor this is a pre-election budget so of course of course Jeremy Hunt will be

Laying traps for labor and one of them that’s pretty widely identified is they’re going to abolish the Nom system or massively Cil it which will generate two or three billion pounds which can go into tax cuts uh but labor were already going to do that and have already

Announced many many many plans of um how to spend that money how to spend that money there’s a big desire in the conservative party to shift the debate about how Labor’s going to fund things and spend things in an environment that actually to be completely Fair Rachel Reeves has shut down differences between

Labor and T spending plans in everything but a tiny tiny number of almost just simply symbolic spending areas you’ve got the private school tax breaks that are being removed you’ve got something called carried interest which helps some financiers that might go but you know again that might go in the budget to

Remove another bit of spending so they want to get the debate onto how is labor going to pay for stuff will it be by raising taxes I actually think the challenge for labor is is almost is almost on the other end of the spectrum labor have become so desperate to mirror

Everything that the conservatives are doing and for instance would I think purport to take those public spending plans if they are cut more seriously than I suspect they would those in in in the Tory party would if they won the election that you you end up with a

Labor party s struggling to do that thing that does tickle their core vote which is offer offer what they would characterize as hope greater spending and and a little bit of optimism that the sort of that sense of public sector austerity and you know it it’s not a

Clean picture I’m really fascinated by labor at this moment obviously they’re going to come into more scrutiny because we expect them to be in government potentially by the end of the year right and it feels to me like they are so nervous about getting there still that

They as Sam was saying they just want to mirror almost everything that the conservatives are doing and effectively just saying we’ll basically do the same thing just more competently so V for us is does the polling suggest that that is a good idea that you know they’re trying

To I guess cut off any suggestion that the magic Monet Tre is going to be back and you can’t trust a labor government which is what the conservatives are doing or actually do you think there is a bit more space for them to lay out a different path for than the common

Government in a way it’s sort of difficult for me to sit here and say it’s not working for them because they’re still you they’re still on leads of sort of trench points sometimes you know some places have them as more and again nothing much has dented that they

Also U most people have them clearly leading on who’ be best to handle the economy whether it’s their um you know combination of K STA and Rachel Reed seen as preferable to richy cak and Jeremy Hunt and all these metrics they have sort of neutralized these areas that voters were historically concerned

About Labor handling specifically the economy and immigration so in that sense yes they they’ve sort of been able I guess to do that and to laay people’s fears and make them seem safe after to Jeremy Corbin 2019 I think there is a different thing though and this is more

Of a longer term point I think again for sort of trust in politics and politicians generally and I think that goes back to the point about voters being skeptical and also quite astute like I think people get a sense of when politicians are triangulating and actually something you hear in focus

Groups quite a lot which is always funny if you’re sitting in them is saying the problem with politicians these days is they’re listening to too many focus groups and that will come up in a focus group and you sort think well yeah you know you might be right but I think

There is a real sense that and we got this around the 28 billion and again even though that sort of U-turn didn’t damage their standing in the headline polls I think it did actually it reinforced people’s sense that all politicians are sort of the same in that

They will say one thing and then do another and they don’t have much quals about doing that and they’re doing it all to get your vote and I think that’s something that’s a little bit more um pentious can be quite destructive long term I mean Rochdale was incredibly

Unique with a very you know unusual constituency and even more unusual of circumstances but I think there’s a sort of warning about sort of anti-politics even if you can’t read on it in that big a level even if it means the LA labor will still get a majority potentially

Very big majority there are warning signs there about uh the British Public’s relationship with uh politicians and democracy that I think you actually do without wanting to sound too overblown which that sort of thing I think can undermine I couldn’t agree more the story of the labor abandonment

Of the 28 billion bending on green investment was not a story of of of the a changeing the relationship between voters and the labor party cuz clearly that didn’t happen it was was a story about my understanding of what the hell is going on inside the labor party

Because at its heart what was going on was Labor had spent months and months and months with the leader defending that policy and that figure on the Telly when they never actually intended to spend they didn’t know how they were going to spend that money they hadn’t

Worked out 28 billion pounds of spending a year it was a fiction yet they were you know basically using up political credits defending this thing that they didn’t know how to spend the money of because they were sort of too scared and not good enough to get off the hook of

It and and they weren’t internally agile enough and they were all roaring amongst themselves about how to do it and so that is a warning symbol for you know if label win the election you know they’ve got to improve how they make decisions how they communicate what they’re doing

And understand that the job of winning over the electorate doesn’t stop the day after polling day right Sam you almost miss a prediction right you make them each week in politics at Jack and Sam podcast any other predictions you want to stick your neck out here and give us

Ahead of next week well you don’t ask if you don’t get Sophie so here are a few more I think the 5p a liter fuel Duty cut uh which was due to expire later this month will be rolled over at it’s an astronomical amount of money that it

Probably be the second biggest amount of money that the chancellor spends after the tax cut but that’ll be rolled over to Cheers in the sun I think there’ll be a British iser uh to Spur investment um they’ll change the rules around Pension funds um basically making funds disclose how much British investment they’re

Doing every change to pension fund rules worries me there’s such large amounts of money be careful what you Tinker with they’re not going to please business by changing vat thresholds they’re not going to help families who would lose out who if they’re earning between 50,000 and 60,000 and have kids the

Withdrawal rate of child benefit means they pay an enormously complicated marginal rate high marginal rate of tax they’re not going to tackle that it’s low down the priority list and tax cut despite that being in the budget at one point and that’s enough that will that

Do am that off the hook that’ll do a lot you got any scarlet no absolutely n do you know what my prediction is my prediction is that after the budget we’re going to know when the election’s going to be you yeah because I think it’s going to be our first proper clue

If they’re going to do a May election if they’re going to go early and do a May election it’s going to have to be a big feel-good budget and if it’s not then I think we will then get perhaps the best sense that we can ever hope to have that

It’s going to be a longer time so I’m going to play this back to you on the evening of the budget safy to find out what the answer to the question is that you’ve just boldly boldly predicted do the day the day after the budget I need

I need 24 hours to I’m going to be on air all day during the budget so I’m not going to have any time for Big Picture thoughts the day after the budget I will um will rise that challenge deal world’s tiniest violin for how much you got to

Work but yes deal Thursday night I’ll ask you the question okay deal well you’ve been listening to the Sky News Daily Neil Patterson will be back on the next episode and also covering budget day on Wednesday plus if you haven’t heard sky has a Brand New Politics podcast electoral dysfunction I can’t

Believe I’m having to say that on a I’m not as uh you know cool as Beth about these things it’s with a political editor Beth Ry the labor MP Jess Phillips and the conservative peer Ruth Davidson you can listen now wherever you found this one thank you very much to

Sam thank you very much to Scala and thank you to listening