The long, handsome high street that drops into the heart of Stroud is busy for a Friday, and two days on from the budget there are few admirers of the chancellor’s much talked about cut to national insurance.
“People are still going to be worse off. Real [disposable income] has gone down in this parliament for the first time ever,” says Richard Styles, 65, a retired estate agent, who is out with his grandson Rupert in the early spring sunshine.
“Living standards are getting worse. I don’t think it’s done anything for people at the bottom end of the scale. Granted [the government] haven’t got much money to play with, but that is self-induced.”
Stroud has become a bellwether constituency. Since 1997 voters in the market towns and rural villages of this part of Gloucestershire have in all but one election chosen MPs from the party that went on to form a government. In 2019, the Conservative candidate, Siobhan Baillie, beat Labour by 3,840 votes, with the Greens picking up nearly 5,000 votes.
Jeremy Hunt’s budget last week was widely seen as this government’s last throw of the dice, its final chance to shift the mood of the country – and the opinion polls – ahead of a general election that has to be held before the end of January.
The chancellor’s gambit was to reduce the national insurance rate paid by employees for the second time in a few months – this time from 10% to 8%. The move will be worth around £450 a year to an employee on an average salary of £35,000. Hunt had cut the rate from 12% to 10% in January. The move will boost wages again from next month.
But if the people of Stroud are anything to go by, it won’t change many minds, or votes. “[The January cut] added an extra £20 to my pay packet, which is better than a kick in the teeth. But everything else is going up,” says Juliet Farrington, 50, an independent shop manager. “We haven’t had a holiday since before Covid. We don’t go out very much.”
In a refurbished 1970s shopping centre nearby, voters blamed the government for falling incomes.
“I’ll be worse off because my wages are not going up with inflation,” says Jackie Burnett, 56, a nurse, who intends to vote Lib Dem. “I’m just living from day to day. People are working really hard to make ends meet. Everybody I know is in the same boat. There is nothing to look forward to.”
When Hunt rose to his feet in the Commons at 12.32pm last Wednesday with what he hoped would be seen as a budget of green shoots that would put more money in working people’s pockets, the Labour benches were prepared with jibes and put-downs. “Order!” snapped the deputy speaker Eleanor Laing just two minutes in. “The chancellor has hardly said anything. Order!”
Inevitably, with an election approaching, Hunt’s speech was heavily political. “A Conservative government, working with the Bank of England, will always put sound money first,” he said.
From the Labour benches Toby Perkins, the shadow minister for nature and rural affairs, refused to let that go unchallenged. “What about Kwarteng?” he barked, referring to the kamikaze budget of Hunt’s predecessor, Kwasi Kwarteng.
Throughout, Labour ridiculed Hunt’s attempts to portray himself as a tax cutter in the tradition of Nigel Lawson and his party as one of sound economic management as desperate. The chancellor painted the Tories as trusty stewards of the economy who had ridden out “a pandemic and an energy shock caused by war in Europe … the most challenging economic headwinds in modern history”.
But he made no mention of Brexit (which the Office for Budget Responsibility said had caused a 15% fall in both UK imports and exports), nor of the economic trauma caused to millions of voters by the former prime minister Liz Truss and her chancellor Kwarteng not even 18 months ago.
Even Conservative MPs were not convinced on the day. One senior backbencher remarked afterwards: “I thought Jeremy put on a good show. But my voters are not stupid. They have just lost confidence in things getting better, and in us. Simple as that.”
Many Tory MPs had wanted income tax cuts, since they would have helped more people, including pensioners. As it was, pensioners – like most others – were hammered by Hunt’s decision to freeze tax thresholds again, which more than cancelled out the benefits from the NI cut.
The overall effect of Hunt’s pre-election budget was not, therefore, to bring taxes down but to put them up. Paul Johnson, director of the Institute for Fiscal Studies, spelled it out clearly afterwards. “Come the election, tax revenues will be 3.9% of national income, or around £100bn higher than at the time of the last election. This remains a parliament of record tax rises.”
The Treasury’s own figures made clear that the cut would have to be paid for by years of austerity affecting government departments and already overstretched public services.
The latest polling for the Observer by Opinium this weekend shows the wider public was not impressed either. Twice as many people (31%) think the effect of last week’s budget was to put up taxes, as those who thought it had reduced them (17%). Only 23% think Hunt’s measures will have a positive effect on their personal finances, against 25% who say the effect will be negative; 42% say it would not make any difference.
In some corners of Stroud, there is sympathy for Hunt, and signs of residual support for the Tories.
Cath Padgham, 65, a company owner who voted Conservative in the last election, backed cutting taxes on work. “I think it was good to focus on younger people,” she says. “I don’t think it’s a problem to let pensioners get less as they are on the fat end of the wedge.”
She believes Stroud hasn’t done badly over the past 14 years of Conservative rule. “It’s been looked after. The hospital is still here. The schools are pretty good on the whole. [Siobhan Baillie] has been good at protecting the good stuff. We were lucky with the MP.”
But others seemed desperate for a change of government. Cathy Brown, 58, is waiting for her son to have an autism assessment, which could take years. She thinks Hunt made the wrong choice by attempting to buy votes with tax cuts.
“Rather than giving a few quid back, it would have been better to invest in the health service and children’s services,” says Brown, who is a teaching assistant. “[The government] think it is a vote winner, but [money spent on the NI cut] is not going to make much difference.”
