Reeves’ budget calms markets and party but leaves Britons unhappy

BRITONS reacted overwhelmingly negatively to Chancellor of the Exchequer Rachel Reeves’ budget, the first opinion poll since it took place has found, suggesting little relief for the Labour government’s slumping popularity.

Respondents to a YouGov survey conducted after Wednesday’s statement said they saw it as unfair rather than fair by a margin of 48 per cent to 21 per cent.

That’s the second-worst score recorded by YouGov for a budget since it began tracking sentiment in 2010. Only the infamous market-roiling mini-budget held under former Conservative premier Liz Truss in 2022 fared worse.

Half of those surveyed by YouGov said Reeves’ budget would leave them and their family worse off, compared to 3 per cent who said they would be better off.

Only 3% said the economy was in a “quite good” state, with 0 per cent saying it was in a “very good” state. Two-thirds said they expected it to get worse in the next 12 months.

The dire numbers show the scale of the challenge faced by Reeves and Prime Minister Keir Starmer to turn around their fortunes.

Just 16 months into power, voters have turned on the Labour government after a series of mis-steps and policy u-turns that have left Starmer’s position in question.

YouGov found some individual measures were popular, such as reductions in energy bills, a freeze on rail fares and new taxes on mansions and gambling. However, a tax rise on workers and the expansion of family benefits were considered by a majority of voters the wrong thing to do at this time.

Another pollster, Luke Tryl of More in Common, said voters would be unimpressed by the chaotic run-up to the budget, and noted that Starmer and Reeves appeared to have prioritized the interests of their governing Labour Party and financial markets over voters.

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“If they had three audiences, the public, the markets and the parliamentary Labour Party, they chose the last two because they matter most for short term-survival and they think they’ve got longer with the public,” Tryl said in an interview with Bloomberg.

Markets rallied after Reeves expanded her buffer against her fiscal rules though declined on Thursday in something of a reality check. Labour members of parliament, especially those on the left of the party, expressed support for measures such lifting the two-child cap on benefits and higher taxes on the wealthy.

“Measures to help with the cost of living such as lowering energy bills are likely to be well received. Some Labour voters will also like scrapping the two child benefit cap,” said Ipsos’ Keiran Pedley. However, he cautioned that “tax rises are likely to be controversial, as we are already seeing a gradual increase in sentiment that taxes should be cut.”

“The wider issue for the government is that public negativity about the state of the economy and performance of the government is at such a level that it is very hard for them to get the benefit of the doubt,” Pedley said.

Leading economists also criticized the lack of a plan to boost economic growth in Reeves’ statement and warned that her proposals to repair the public finances may not be credible.

“It was a bits-and-pieces budget. There was no sense of reform or direction, I think is the most worrying part of this,” Paul Johnson, former director of the Institute for Fiscal Studies, told Bloomberg Radio. “You look at what they’ve actually done so far, and net, it’s clearly had a negative impact on growth.”

“Most of the fiscal repair job has been put on hold for three years,” said Ruth Curtice from the Resolution Foundation, a left-of-centre think tank with close links to the Labour government. “Appearances can be deceiving,” she added, warning the country faced “plenty more bracing budgets.” BLOOMBERG