Repairing Britain: How voters view Labour's policy challenge

Labour came to power a year ago against a difficult backdrop. During the 2019-24 Parliament, the COVID-19 pandemic and the subsequent cost-of-living crisis damaged the economy and undermined living standards, caused government debt to spiral, occasioned a significant hike in both taxation and spending, and adversely affected the performance of public services. The government was presented with the challenge of turning around a weak economy and improving public services while seemingly being significantly constrained in the fiscal firepower it could bring to bear to help solve these problems.

 The government’s response has been three-fold. First, it has committed itself to not raising the rates of the main forms of taxation paid by individuals. Second, while it has made reducing NHS waiting lists and waiting times a priority, in other areas it has sought to constrain day-to-day public spending. Third, it is seeking to break out of the fiscal bind in which it finds itself by increasing spending on infrastructure in the belief this will promote economic growth and thus improve the nation’s finances.

A chapter in the latest British Social Attitudes (BSA) report released today, suggests that while voters share the government’s concerns about living standards and the state of the public services, they are not necessarily as ready to embrace the policy stance the government has adopted in pursuance of its strategy. Despite the growth in public spending in the last Parliament, voters often seem reluctant to accept reductions in public spending while they can appear cautious in their attitudes towards more spending on infrastructure.

Voters are certainly now much more likely to be concerned about their finances. In our latest BSA survey, conducted shortly after the election, a record low of 35% say they were living ‘comfortably’ on their current income. At the same time, 26% say they are ‘struggling’ financially, equalling the record high first recorded in 2023. Meanwhile, two-thirds (67%) say their income is failing to keep up with prices, well above the previous high of 55% recorded at any time before the pandemic.

Few – a record low of just 21% – are satisfied with the state of the health service. Even fewer, 13%, are satisfied with the provision of social care, equalling the record low first recorded in 2023.

Such figures might be expected to lead voters to question whether the government should be spending so much of their money on services that are not working. Indeed, the proportion who think the NHS should not be funded primarily through taxes has edged up from 13% in 2021 to 19% now.

Nevertheless, far more, 69%, say the government is still spending ‘too little’ on the health service.

Labour have postponed proposed changes to the funding of social care. Yet a majority of voters back policies that would see the government pay more. 38% believe it should be paying the full cost while 36% feel there should be a lifetime limit on how much an individual has to pay, with the government paying the rest thereafter.

The government have also sought to reduce a welfare bill that has grown in the wake of a post-pandemic increase in disability and long-term health conditions. Indeed, support for spending more on benefits for disabled people has fallen to 45%, by far its lowest level in 25 years. Even so, still only 11% believe that spending should be cut. And while 29% believe it is ‘too easy’ to claim disability benefit, just as many, 29%, feel it is too hard.

Still, the public have seemingly noticed the rise in taxation. 61% now feel that taxes on those on low incomes are ‘too high’, up from 52% in 2016. Similarly, 44% say the same about taxes on those on middle incomes, whereas only 31% felt that way in 2016. Nevertheless, 44% believe that taxes on those on high incomes are too low, ten points up on the equivalent figure in 2016.

Meanwhile, whereas immediately prior to the pandemic as many as 53% said that if the government had to choose, it should increase taxes and spend more on ‘health, education and social benefits’ – and indeed 48% still felt that way in the wake of last year’s election – now the figure has fallen to 40%.

Even so, this latest figure is still higher than the 31% BSA recorded in 2010 after the increase in taxes under the New Labour government to levels that were still lower than they are now. In short, the reaction among voters against the increase in taxation and spending may be thought to be rather less than we might have anticipated.  Meanwhile, as many as 58% of those who voted Labour in 2024 would prefer more tax and spend.

Building infrastructure can seem a good idea – until it happens in someone’s own back yard. So while 41% support the building of more houses in their own area, as many as 32% are opposed. In contrast, the equivalent figures in 2018 were 57% and 23% respectively. The pandemic seems to have made people more sensitive to the quality of their local environment.

The public’s outlook towards the infrastructure needed to promote the government’s ‘green agenda’ is not dissimilar. Only 44% believe it should be easier to build pylons that carry electricity wires across the countryside, while 22% are opposed. Equally, well under half, 43%, believe it should be easier, to build new nuclear power stations, with 27% saying they are opposed. That said, as many as 70% support building more wind farms on land.

The public are well aware of Britain’s problems – not least those of a failing health service and an economy in which many are struggling to make ends meet. Yet rather than turning their back on the state, for the most part the public are still inclined to look to government to provide solutions. And while they feel that most people on low and middle incomes are already paying enough tax, many suspect that some of the better off could pay more. As a result, while voters have perhaps now begun to react against the marked increase in the size of the state during the last Parliament, that reaction is still, it seems, relatively muted – and especially so among those who voted Labour.

Yet this does not mean voters are necessarily ready to back the various remedies Labour have been offering to overcome the country’s difficulties. They are not necessarily prepared to embrace a dash for more infrastructure building, including perhaps not least anything that appears in their own back yard.  Tightening up on disability benefits is potentially controversial too, as the government has already discovered. The political difficulty with these policies is there are potentially identifiable winners and losers, and it is often the losers who shout the loudest. Pursuing economic growth rather than tax rises as the route out of fiscal constraint will not necessarily be the politically easier path for Labour to tread.