Dear friend,

In the run up to the Spring Statement delivered this week, we’ve been asking the public how they feel about the economy - what they think it means for them, their worries and priorities, how they feel about the battery of fiscal measures announced by the Chancellor, and how much faith they have in our politicians to get us out of troubled waters. In this newsletter, we’d like to share some insights from this research:

• Doom Loop Deepens. In our latest report, we outlined the political backdrop of the spring statement, and identified three major challenges facing the Government.
  
• A view from the focus groups. Following the statement, I spent Wednesday evening talking to people in Peterborough to find out how they felt about the Government’s approach to the economy. 

Doom Loop Deepens

In October 2024, we published Doom Loop, a study into Britain’s perceptions of the economy on the eve of the Autumn Budget. We called it Doom Loop because of the pervasive sense of gloom among the public - not just that the economy was in a bad place, but that people struggled to see a way out. 

This week, we checked in with Britons again to see whether the public mood had shifted. We found that, while some Britons have noticed an improvement in public services, the wider sense the economy is on the wrong track has, if anything, only deepened.

Our polling revealed three political challenges facing the Government as they aim to restore economic confidence: a challenge of tiredness, a challenge of trust, and a challenge of toughness.

The tiredness challenge - At the beginning of March, we found that four in ten Britons thought the UK was in a recession, while half (49 per cent) worry that the cost of living crisis may never end. Having had to endure ‘tough fiscal decisions’ since the financial crash, the public is increasingly tired of economic bad news.

What’s more, many see the statement itself as confirmation that austerity is back. 31 per cent of Britons think the country is returning to austerity; 23 per cent think that austerity never ended - a view particularly widespread among older Britons

The trust challenge. Few Britons have confidence in the Government to deliver tangible changes for the economy, public services or their lives.

For some Britons, this erosion of trust began before Labour even entered Government: 53 per cent believe that Labour misrepresented their plans for the economy in order to get elected, and that they ‘always knew’ they weren’t going to keep their promises. Only 13 per cent think that their economic policies are in line with what they promised while in opposition.

Sixty-two per cent of Britons think that it is unlikely that Labour will improve public services, while 69 per cent doubt that they will improve public finances. Most strikingly, only 29 per cent of Britons think that Labour will improve the lives of people like them, down from 54 per cent at the time of the election. 

The toughness challenge. Our research found that Britons credit both the Prime Minister and the Chancellor for doing what they believe is right, even if it is politically unpopular.

The challenge is ensuring that this perceived toughness is not seen as a lack of care or compassion toward vulnerable groups. Only 31 per cent of Britons feel that the Government is trying to limit the impact of their spending cuts on vulnerable groups. 20 per cent think that they are not trying to mitigate the impact, and 36 per cent think they are actively targeting vulnerable people.

One such area concerns the debate around eligibility criteria for Personal Independence Payments. There is no doubt that the public believe we need to support more people back into work, and that there are people on benefits who could work who are not working. But some of the proposed changes risk ending up on the wrong side of the public’s view of compassion and support for those in need.

Forty-four per cent of Britons (including 42 per cent of Labour voters) think that the Government's welfare reforms are too harsh, while 28 per cent say that they are the right level of severity. Only 10 per cent say they are too soft.

Part of this comes down to messaging: so far, the Government has struggled to communicate the mission behind the changes. Most Britons (54 per cent) think the changes to disability-related benefits are to save money, while fewer than a third (32 per cent) believe that the aim is to get more people into work.

Thirty-four per cent of Britons say they know somebody who receives disability-related benefits, and these changes are likely to be felt and seen across the country. If the Government cannot balance their tough stance on welfare with caution and compassion, they may evoke a similar reaction to the decision to means-test the Winter Fuel Allowance.

You can read the full report below:

A view from the focus groups

Hours after the spring statement, I spent Wednesday evening talking to a group of people from Peterborough who had voted for this Government, about the statement and their wider economic perceptions. What I heard confirmed those numbers above: a deep sense of economic malaise, with the feeling that the Governments of all stripes have not done enough to support people.

“Everything seems to be going up. It seems like I've been watching the stuff around benefits and the cuts and PIP and all those kind of things. And it seems to me that people are going to struggle more than what they were before. And I think everybody's struggling, even the ones that are working, they're also struggling because we've all got to pay the bills. So I do think it's a bit of chaos at the moment.“

Ferzana, employment advisor, Peterborough

“I think I've lost hope. Really. Everything's so expensive now. I dunno what we're expecting. I dunno what's going to happen in the future. There's a lot of uncertainty for me with everything, especially the shopping, the bills and what's going to happen to my children.”

Eishrat, teaching assistant, Peterborough

Many recognised the need to encourage and support benefit claimants into work. However, as reflected in our polling, the group were deeply concerned by changes to PIP eligibility. In the same way that people have always discussed changes to Winter Fuel Allowance by expressing their concern for older relatives, these voters referred to friends and family members who receive disability-related benefits. 

Beyond this, there was a sense that politicians across parties are out-of-touch, and don’t understand what the economic situation is like for ordinary people - they wanted politicians to have more empathy for the struggles of people’s everyday lives. 

“They have good salaries, they have big houses and they don’t know what life is like for us.”

Rob, product demonstrator, Peterborough

“They don't know what real life is. They don't know having to prioritise heating and eating, which obviously a lot of people do. They're not people that have lived lives that us normal people have lived.”

Natalie, admin assistant, Peterborough

It was great to see our report covered on the front page of Wednesday's Daily Mail (here), as well as a mention in the Guardian here on Thursday.

I also appeared on Newsnight last night, and shared a few insights from our research. You can watch the full clip here.

Thanks and all the best,

Luke

Luke Tryl
Executive Director
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