James Frayne is Director of Public First and author of Meet the People, a guide to moving public opinion.
A few weeks ago, opinion polls showed three to one support for a national insurance rise to pay for social care. It’s hard to say for sure where the numbers on this question are now, but the evidence is they’ve moved considerably against the Government (although not irretrievably).
Some suggest that the mess in the media flipped the polls against the Conservatives and put Labour ahead; I think there’s much more to it than this but it clearly didn’t help.
So what went wrong? What were the alternatives that the Government should have considered? And what are the medium-term implications for the Conservatives?
Admittedly, I haven’t tested my sense in detail yet, but it is that three reasons help explain the the shift against the national insurance announcement.
First, and most importantly, it became clear that revenue raised by this higher tax won’t be ringfenced for social care. After a day or two of briefing that higher taxes would pay for care, the Government clarified that revenue raised would also pay for the hole in the NHS finances created by Covid.
Ordinarily, adding the letters “NHS” to a political message adds several points to a political message (ask Vote Leave). Here, it simply made people think (rightly) that pretty much all revenue raised would go into the great bottomless pit of NHS finances. It’s not that people don’t love the NHS; nor that they want to change the way the NHS is funded. It’s just that they quickly realised the Government wasn’t making a social care announcement but a debt repayment announcement.
Second, people got out their calculators quicker than I can ever recall – with the extra they’d pay pushed around widely by the likes of the Taxpayers’ Alliance. Politicians have long liked using national insurance as a tax-raising device; not only does it have perfect branding for health and social care announcements, but even people on PAYE – who see the national insurance line on their payslip each week – inexplicably find it less offensive than income tax. This time, a combination of media and social media scrutiny showed people what they’d be paying, and its transparency felt like a council tax rise.
Third, the announcement was too detached from the policy conversation on social care. People care deeply about it, as the Conservatives discovered to their cost during the 2017 election; social care is regularly raised as an issue in focus groups without prompting.
But it’s a complex area, and the Government would have done well to have reheated the policy conversation on social care for several weeks before springing this announcement on the public. Ordinarily, for a policy announcement of this magnitude, you’d expect (some) cross-party support, endorsements by experts from the sector, a formal announcement with the Health Secretary flanked by care workers and all the rest. This time, there was nothing.
Two alternatives would have been better.
The Government could have announced that the country was going to have to cope with a few years of financial pain via higher taxes to pay off Covid debts – and not to have beamed in on social care at all.
I don’t understand why they didn’t do this. Polls have consistently showed the public supported the massive crisis payments to the NHS and furloughed workers. They’re well aware this led to massive debt and they’re also aware debt must be paid off – at least in part with higher taxes.
They would have completely accepted a straightforward explanation that taxes were going to rise – for everyone – to deal with this. Sunset clauses would have made this all go down better, but there’s something in the English psychology that revels in harsh, shared sacrifice. It was a huge, missed opportunity; it’s possible that the Government would even have secured a bounce from it (assuming they said they were going to tackle waste at the same time).
The alternative option would have simply been to have announced a smaller national insurance rise and explained it was going to be strictly ringfenced for social care. This would have given them the option to raise taxes again later. Wrapping social care, the NHS and Covid debt repayment looked shifty and ill-thought-through.
What are the implications for the Conservatives? It’s been said all this undermines the Party’s reputation as a low-tax party. I don’t think this is quite right; most of the public have rightly not viewed the Conservatives as a low-tax party for many, many years, but rather as a lower tax party than Labour.
There are worse things to be: in 2019, this contrast certainly made lower middle voters even more wary of Jeremy Corbyn. But it means that the sort of messages the Conservatives pump out at the annual party conference – around low tax, free enterprise, a small state etc – have zero traction with the public. (It’s weird to think that until a few years ago the party’s logo was a torch of freedom; the rainbow associated with the NHS would be more appropriate.)
If Corbyn were still Labour leader, it’s possible that the Conservatives would have retained this lower-tax advantage regardless of national insurance. Under Starmer, I think it’s reasonable to assume this advantage will no longer be there.
In turn, all there will be to choose between the Conservatives and Labour on the economy will be competence and stability – in the Conservatives’ case, because they’re in Government, this will be defined entirely by delivery. In other words, if the economy appears stable and grows, they’ll be fine; if not, they’ll be in a mess.
It also means that the party’s freedom on other issues is dramatically reduced. There’s no way now the Government can introduce any new tax rises; at that point, their polling numbers really would go off a cliff; everything now needs to be revenue neutral, with taxes raised balanced out by taxes cut. Most obviously, this somewhat complicates their Net Zero strategy; you would have expected fiscal policy increasingly to have rebalanced towards green taxes.