Confidence in economy at lowest since 2008 crash – poll
Guardian/ICM poll finds 57% of voters not confident about state of economy, though many still point finger at opposition
Tom Clark and Nicholas Watt
guardian.co.uk, Monday 21 November 2011 23.23 GMT
Economic confidence has fallen to its lowest level since the eve of the financial crash in 2008, though Labour is still losing out in the blame game, according to a Guardian/ICM poll.
The poll found that 57% of voters are not confident about the state of the economy. This compares with 42% of voters who report confidence in the economy, their own finances and their ability to meet living costs. The gap between these two figures produces a net confidence index of -15 points – the lowest since July 2008, two months before the collapse of Lehman Brothers triggered the global financial crisis. ICM has measured financial confidence 25 times since 2001, and that July 2008 poll was the only other time confidence was lower.
But Labour is struggling to capitalise on the economic unease. When asked what explains the latest slowdown 30% continue to blame debts racked up by the last Labour government; only 24% blame the coalition’s spending cuts.
More respondents blamed Labour’s debts than the coalition’s cuts. Photograph: guardian.co.uk
On Monday David Cameron admitted he had underestimated the scale of Britain’s debt crisis and said the recovery would take longer than the chancellor had predicted last year. In a speech to the CBI’s annual conference, the prime minister said: “Getting debt under control is proving harder than anyone envisaged. High levels of public and private debt are proving to be a drag on growth, which in turn makes it more difficult to deal with those debts but this also undermines further the case for adding to the national burden of debt with even more borrowing.”
The Office for Budget Responsibility (OBR) is expected to downgrade its forecast again next week when George Osborne delivers his autumn statement. The OBR is also expected to say that the recession was caused by such a serious financial crisis that some of the slow growth over the past year is “structural” – that the slowdown has created a bigger dent in the economy than had been feared. Cameron indicated he expects the OBR to say that Britain’s structural deficit has grown, possibly by as much as £12bn, when he spoke of the challenge of recovering from a financial crisis. “We are recovering from a debt crisis, not a traditional recession.”
ICM economy tracker. Photograph: Guardian
He later chaired a meeting of the “quad” – the senior group of ministers including George Osborne, Nick Clegg and Danny Alexander – before next Tuesday’s autumn statement.
The meeting is understood to have broken up without reaching agreement on liberalising unfair-dismissal laws, leading to a delay in an announcement that was expected on Wednesday. Cameron signalled there would be a change, though he indicated that the government was not accepting proposals by the venture capitalist Adrian Beecroft to make it easier for employers to sack workers.
Voting intentions. Photograph: Guardian
In the monthly Guardian/ICM state of the parties poll, Labour remains ahead on 38%, but has slipped back by one point. The Conservatives are up one point to 36% and the Liberal Democrats up one point to 14%.
In July 2008, the last time economic confidence was so low, the FTSE dipped into bear territory, America’s mortgage giants Fannie Mae and Freddie Mac tottered, while the British Chambers of Commerce warned of imminent UK recession. A deep slump was soon confirmed, but as the banks were bailed out and interest rates were slashed, the confidence index recovered quickly to register several positive scores during 2009 and 2010.
Over 2011 confidence has once again ebbed away, and during the last month – as the Bank of England cut growth forecasts and unemployment hit a 17-year high – the ICM index declined by another two points. This suggests a “double dip” in economic confidence. The new gloom afflicts all parts of the country, but there are signs that it is afflicting the vulnerable more. Fully 60% of pensioners say they are not confident, and this figure rises to 68% for respondents of all age groups in the least affluent DE social class.
The polling suggests the Tories have made little headway in trying to point the finger of economic blame towards Europe – only 18% of the public blame the new slowdown on chill winds from the eurozone, as against 19% who say banks that refuse to lend are the biggest problem.
Most look to Westminster as the source of the problem – 54% blame either Labour’s debts or the coalition’s cuts. The 30%-24% split against Labour among these respondents will encourage Vince Cable, who has parted company with the Tories by attributing the new slowdown to the coalition’s domestic inheritance, as opposed to the debt crisis gripping the continent.
Voters are split on whether the chancellor should stick with his plan A to eliminate the structural deficit over the course of this parliament or instead to slow the pace. While 46% of respondents suggest “George Osborne needs to slow the course of cuts which are coming too thick and too fast”, in the face of joblessness and stagnation, some 44% say that with the eurozone crisis it is more important than ever that he sticks to his plan to cut the deficit.
Osborne will be pleased to learn that freezing or reducing fuel duties is the most popular option he could pursue, identified by 41% of respondents as a good way to “help families and boost the economy”. Close behind is a programme of public works to create jobs, preferred by 35%. An emergency VAT cut, the alternative most energetically promoted by Labour, is some way behind being preferred by just 24%, underlining the opposition’s difficulties in cutting through on the economy.
ICM Research interviewed a random sample of 1005 adults aged 18+ by telephone on 18-20th November 2011. Interviews were conducted across the country and the results have been weighted to the profile of all adults. ICM is a member of the British Polling Council and abides by its rules.