Budget preview: The polling that explains why George Osborne is cutting the 50p rate of tax

by Atul Hatwal

When George Osborne steps up to the despatch box later he will publicly launch his campaign to be leader of the Conservative party.

David Cameron can breathe easy though. It will not be a throwback to the TB-GBs. Osborne’s real target will likely be shuffling about his city hall office, watching the TV coverage, thinking that he could do it all so much better.

Until now, Boris Johnson has been the darling of the Tory faithful. He shone at last year’s party conference, has repeatedly tweaked the prime minister’s nose on issues like cuts to policing and has been the king over the water to true blue believers who see too much yellow in the government.

In contrast, his rival to succeed David Cameron, has been conducting his campaign in stealth mode. But away from the bright lights of media scrutiny, in the corridors of Westminster, George Osborne has been very active.

If any evidence were needed, just speak to any first term Tory MP: Osborne has been almost indecent in courting the new intake into the parliamentary party.

The chancellor has deployed the full range blandishments: from hand written notes in the pigeon hole to invitations to select dinners, each and every member of the class of 2010 has had unbelievable amounts of personal attention lavished on them.

Team Osborne is confident that two years into government, they have the parliamentary vote locked up. For all of Boris’s grandstanding and media profile, few in the parliamentary party view him as a serious alternative to either David Cameron or George Osborne.

Recently, at a private dinner, one member of the 2010-ers went so far as to suggest that Osborne might even defeat Cameron in a vote amongst his contemporaries.

But that still leaves the blue rinse legions swooning for their blonde mop-topped heir apparent.

George Osborne knows that he will never beat Boris on charm or media manner. His method is best summed up in one of the nicknames the chancellor himself delights in: “the submarine”, lurking in the deep, surfacing in public only to make substantive policy interventions.

This budget is such a moment.  Two critical criteria have come into alignment for him to make his move: – the political position of the Labour party, and a defining red meat Conservative issue.

First, Labour. The polls show the party is trailing disastrously on economic competence and dropping ever further back.  Yesterday’s Guardian ICM poll found that 42% preferred Cameron and Osborne on the economy compared to 25% backing Miliband and Balls, a 17 point gap.

In comparison, last October, the gap was 11 points, with 37% opting for Cameron and Osborne with 26% choosing Miliband and Balls.

All of the polling evidence is telling George Osborne that this isn’t even a contest as far as the public are concerned.  Next year, or the year after, Labour might have a new leader or a new shadow chancellor and the room for manoeuvre could suddenly disappear.

If ever George Osborne wanted to take a political chance, this is the opportunity.

Second, he has the issue.

The bar chart below looks at the various budget policy options available to Osborne and highlights which are “wedge” issues for Tory voters. These are the issues where the gap between Conservative opinion and that of the general public’s is greatest.

Abolishing the 50p rate has by far the greatest salience to Conservative voters.

As a policy it is not necessarily the most popular individual option among Tories. That accolade goes to cutting fuel duty which is backed by 78%. But this is a policy where Conservatives and the general public are almost at one. 77% of the public back cuts to fuel duty, giving a Tory salience of +1%.

In contrast, Conservative voters back abolition of the 50p rate by 18% more than public opinion – 45% to 27%.

This salience gives George Osborne his prize.

In the leadership stakes, he will forever be able to point to a major, distinctive Conservative policy that he implemented – regardless of the media, or Labour attacks, or even general public opinion.

In comparison Boris Johnson’s boast of a landmark mayoral achievement will be spending £11m on 9 prototypes to replace the bendy bus. Truly the new Thatcherite frontier.

This is why George Osborne is cutting the 50p rate of tax.

Despite what he will say in the chamber about raising more revenue through lower rates and clamping down on tax avoidance, the overall fiscal impact of the budget will be neutral. There is no abiding economic reason to abolish the 50p rate this year.

Nor is there a party political imperative to cut the rate. Voters on annual salaries of over £150,000 are unlikely to be the critical swing voters in marginal constituencies.

And the deleterious impact on the “we’re all in it together” narrative could not be more obvious if Osborne delivered his budget dressed as powdered French aristocrat singing “je ne regrette rien”.

Labour MPs in private have been dumbfounded. The tone of much of the media coverage has been quizzical. Westminster heads have been scratched so hard, it’s looked like the political classes have caught fleas.

But the reason has been in front of everyone all along. Shambling along, quoting Latin poetry, talking about wiff waff, goading George Osborne to react.

This year, the polls have given the chancellor the chance he has been waiting for.

Atul Hatwal is associate editor at Uncut

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4 Responses to “Budget preview: The polling that explains why George Osborne is cutting the 50p rate of tax”

  1. swatantra says:

    Osborne is not a natural Leader; he does not inspire affection even amongst his Tories, even though they may respect what he is doing to the economy; and he has absolutley no empathy with the ordinary members of the public, so Osborne will never be leader of their Party.

  2. Nick says:

    Increase taxes on smoking and drinking to discourage smoking and drinking.

    Increase taxes on working, like the 50p, to discourage people from taking risks and making money.

    Simple logic. I don’t know why you aren’t making that case for the 50p tax.

  3. Alan Williams says:

    So Osborne is hoping that this will go down well with his own MPs? But with so much public opposition to it (even the majority of Conservative voters oppose it) won’t they be angry that he has put their seats in danger?

  4. Norman O'Brien says:

    AW – no, because by the time of the next general election the heat will have gone out of it. And Osborne will have a handy stick to wave at Labour: “will you reinstate the 50p tax?” he will ask. If Labour says yes that gives him a weapon to use in the campaign; if no, he’ll accuse them of not knowing their own mind or playing politics with the economy. Which of course he is doing, just not drawing attention to it.

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