EXCLUSIVE: What Lib Dem members think of the Coalition Budget measures and that VAT increase

by Stephen Tall on July 5, 2010

Lib Dem Voice has been polling our members-only forum this past weekend to discover what Lib Dem members think of the Coalition Government’s budget, and what you make of the Lib Dems’ and Government’s performance to date. Almost 350 party members responded, and we’ll be publishing the full results of our survey this week.

First, we asked what Lib Dem members: Do you support or oppose the following budget changes announced by the coalition government?

Here’s what you told us:

Increasing VAT from 17.5% to 20% from January 4, 2011
Strongly Support: 6%
Support: 42%
Total support = 48%
Oppose: 28%
Strongly Oppose: 14%
Total oppose = 42%
No View: 11%

Increasing the personal income tax allowance by £1,000 in April to £7,475:
Strongly Support: 74%
Support: 24%
Total support = 98%
Oppose: 1%%
Strongly Oppose: 0%
Total oppose = 1%
No View: 1%

Freezing Council Tax for one year from April 2011 in England:

Strongly Support: 17%
Support: 34%
Total support = 51%
Oppose: 21%
Strongly Oppose: 5%
Total oppose = 26%
No View: 24%

Increasing Capital Gains Tax from 18% to 28% for higher rate taxpayers:

Strongly Support: 57%
Support: 35%
Total support = 92%
Oppose: 2%
Strongly Oppose: 1%
Total oppose = 3%
No View: 4%

Freezing child benefit for the next three years:
Strongly Support: 14%
Support: 38%
Total support = 52%
Oppose: 22%
Strongly Oppose: 5%
Total oppose = 27%
No View: 21%

Reducing tax credits for families earning over £40,000 from 2011:
Strongly Support: 53%
Support: 38%
Total support = 91%
Oppose: 2%
Strongly Oppose: 1%
Total oppose = 3%
No View: 6%

Lone parents expected to look for work when their youngest child goes to school:
Strongly Support: 15%
Support: 45%
Total support = 60%
Oppose: 15%
Strongly Oppose: 5%
Total oppose = 20%
No View: 20%

Restoring the basic state pension link to earnings from April 2011, with the pension guaranteed to rise in line with earnings, prices or 2.5%, whichever is the greater:
Strongly Support: 57%
Support: 33%
Total support = 90%
Oppose: 4%
Strongly Oppose: 2%
Total oppose = 6%
No View: 5%

Accelerating the increase in state pension age to 66:
Strongly Support: 28%
Support: 49%
Total support = 77%
Oppose: 10%
Strongly Oppose: 3%
Total oppose = 13%
No View: 11%

Cutting Corporation Tax next year to 27%, and by 1% annually for the next three years, until it reaches 24%:
Strongly Support: 12%
Support: 35%
Total support = 47%
Oppose: 18%
Strongly Oppose: 10%
Total oppose = 28%
No View: 26%

Cutting small companies’ tax rate to 20%:
Strongly Support: 25%
Support: 47%
Total support = 72%
Oppose: 10%
Strongly Oppose: 2%
Total oppose = 12%
No View: 16%

New bank levy to apply to the balance sheets of UK banks and building societies and the UK operations of foreign banks from January 2011:
Strongly Support: 58%
Support: 32%
Total support = 90%
Oppose: 2%
Strongly Oppose: 1%
Total oppose = 3%
No View: 8%

Two-year freeze in public sector workers pay if they earn over £21,000; flat £250 increase in both years for public sector workers earning less than £21,000:
Strongly Support : 27%
Support: 42%
Total support = 69%
Oppose: 14%
Strongly Oppose: 6%
Total oppose = 20%
No View: 11%

According to our survey, therefore, every single one of the Coalition Government budget measures announced attracted more support than opposition among Lib Dem members. Indeed, only two of the measures recorded less than 50% approval in total: the cut in corporation tax, and the increase in VAT.

The VAT increase was the most controversial Budget announcment, and the one proposal that two Lib Dem MPs voted against in the Commons. So we asked party members, Which of these statements comes closest to your view of the coalition government’s decision to increase VAT:

Here’s what you told us:

    29% – I support the increase. It was essential to tackle the deficit.
    44% – I am unhappy with the VAT increase. However, I accept there were no easy choices in this budget.
    26% – I oppose the increase. I think alternative tax increases should have been found instead.
    2% – Other
    0% – Don’t know

It’s an interesting breakdown, especially when compared with the survey’s earlier finding that Lib Dem members supported the VAT increase by a narrow margin of 48% to 42%. What it shows is that, while roughly two-thirds of those we surveyed have their reservations about the increase, only one-quarter of Lib Dem members are outright opposed. And, indeed, outright support is slightly higher than outright opposition.

For the moment, then, it seems that Lib Dem members – like much of the public – are prepared to give the new Coalition Government the benefit of the doubt as they tackle the UK’s financial mess.

Here are a selection of comments those who responded to the survey submitted:

  • There is only one thing worse than being in coalition with the Tories and that is appearing split while being in coalition with the Tories.
  • More should be clawed back from the banks who were the cause of the problem in the first place.
  • I earn less than 10,000. I value the raising of the income tax threshold, but feel that the advantage of this is wiped out by the increase in VAT.
  • I think every party would have looked at VAT as an area to raise more…no-one ruled it out.
  • VAT increases disproportionately hurt the poor. The focus should be on stopping tax avoidance by the rich.
  • Unfortunately there was no choice but to increase VAT given the severity of the economic crisis. Labour would have had to do the same.
  • It is better that we give people more money in their pocket and tax what they, as individuals, choose to spend it on. As Nick Clegg said, this is a liberal move that taxes consumption rather than income.