The thing about budgets by Chancellors of the Exchequer these days is that the devil is in the detail. So when our fresh-faced new Chancellor says his first emergency budget will be carnage and then delivers something that doesn’t seem to be too bad after all, it’s wise to wait. Over the next few days, we learn the details and start to feel the pain.
We judiciously waited a bit before asking our readers what they felt about aspects of George Osborne’s first effort, and, as becomes apparent from some of the answers, there’s still quite a lot of Don’t Know about the answers, which came from 411 PE readers.
But there’s not much doubt at all about the need for drastic action. We asked readers whether they thought the government was right to make an early start on tackling the public sector borrowing deficit, and 94% said Yes. This is, you will recall, only a couple of months after the general election in which less than 40% voted for the party that was advocating quick action.
One of the reasons Osborne gave as to why he was doing it sooner and deeper was a desire to eliminate the deficit within five years. Was this too ambitious, we asked? Readers are fairly split: 44% felt Yes, this was impracticable, but 48% thought No, it was reasonable or at least right to try. Several readers noted that if we were in for some years of pain, it’d be good to get it over and done with.
But will the pain be collective and universal? Do our readers expect personally to be significantly worse off after the budget?
There’s an absolute split here, with 27 Don’t Knows and 192 each in the Yes and No camps. The important word here may well be “significantly”, with several people apparently quite blasé about a degree of shared minor discomfort.
One of the areas where the government has been – in its own view at least – strong has been in trying to protect the wealth-creating value-adding bits of the economy such as engineering and manufacturing from the wider effects of cutback and retrenchment.
We asked readers whether, in their view, the government had done enough to safeguard these areas.
There is a lot of uncertainty in the answers, with 31% saying they didn’t know. But the balance is not favourable: only 17% said Yes, the government had done enough so far, while 52% believe No, the cuts leave wealth-creation at risk.
Specifically, do cuts in investment in power and transport infrastructure leave our readers’ companies and organisations at risk? There is a close split here: 45% see their employers as potentially vulnerable, while 50% think No, it won’t matter that much. There were interesting views from those fairly closely connected to public sector work: some felt cuts would affect them directly for the worse but others, more optimistically, felt that they might benefit from civil service reductions as tasks were offloaded to consultants and contractors.
One of the direct policies that has “dribbled” out over the days after the budget statement has been that the regional development agencies (RDAs) in England, set up to channel business support schemes at a semi-local level through to businesses, are to be disbanded and replaced by a more selective “local” set of bodies. Did this sound like a good idea to our readers?
There’s an interesting set of answers here, and perhaps the most interesting bit is that 44% said they didn’t know: RDAs are, of course, not exactly relevant to people in Scotland, Northern Ireland and Wales, but they don’t seem necessarily to be well-known even in parts of England. The idea of taking things more locally appealed to 34% and didn’t appeal to 22%. So on the whole, engineers think the move is marginally for the better, but don’t care much either way.
They care more about the effect on manufacturing. So far this year there’s been a somewhat surprising but nonetheless welcome return to growth for many in manufacturing sectors: do our readers expect this to be sustained across the rest of 2010? Yes, they do, with 62% saying so and almost equal numbers uncertain or saying No. There were a few comments about this year’s growth being the climb out of an awfully deep hole, mind.
Aside from cuts, the government is also seeking to raise its revenues too, and one way of doing that is to put up the standard VAT rate from 17.5% to 20% from next January. Do our readers think taxes on consumption like this are the best way to raise money? It’s again a Yes to this with 60% agreeing, though several of the 29% No contingent felt that VAT rises impacted most heavily on poorer people.
And then we get into the cuts. Do our readers believe that the public sector can make 25% across-the-board savings without important services being jeopardised? The answer is No, by 58% to 37%, but on both sides there were people who thought there was considerable scope for cutting waste within public services and the civil service. But maybe not 25%.
Our final question was a multiple choice effort: we asked readers which, of a list of publicly funded services, were the ones they felt should be “ring-fenced” or protected at least to some degree from the full force of cuts. The government has already said that international development commitments, health and frontline defence will not be touched “as much”, although there is some wobble about defence bits. The graph here shows what readers think: the longer the bar, the more our readers see it as valuable and worth protecting.
Two points: one is that the education side of things is very important to our engineering readers and they are reluctant to see cuts there; the second is that they see the overseas aid budget and defence spending on items such as nuclear weapons capability as the least sacrosanct.
That’s an interesting message from the engineering profession.