Brits back spending cuts over tax rises
Voters prefer spending cuts over tax rises, fresh polling has found, putting Chancellor Rachel Reeves at odds with an electorate that has become frustrated with her economic policies.
Rachel Reeves set spending pledges in stone in June when she confirmed Labour would boost day-to-day departmental and capital spending, with the NHS receiving a fresh three-year £30bn cash injection while £14bn in government investment would go towards nuclear plant Sizewell C.
She also faces having to fill a black hole in public finances following U-turns on welfare reforms through eliminating winter fuel payments and cutting personal independence payments (Pips).
A new CityAM/Freshwater Strategy poll has now suggested that voters are more fearful of tax rises coming in to fill budget shortfalls, with more Brits calling for expenditure to be scaled back in other areas to save cash.
The poll of some 1,250 eligible voters found that 59 per cent said the government should reduce government spending while fewer than one in five voters (17 per cent) said the government should increase taxes.
Around one in eight voters (12 per cent) suggested the government should borrow more to fund public services while another 12 per cent said they were unsure about what the government should do.
Fresh £30bn tax raid expected
Cutting taxes from their current level are a voter priority for just 13 per cent of the electorate, despite projections showing the tax burden is set to rise to the highest level as a share of GDP in the post-war period.
But voters said they trusted the Conservatives more than Labour to cut taxes and make “government changes”, though Labour leads when it comes to public trust on improving healthcare, building more houses and improving education.
The Office for Budget Responsibility (OBR), the fiscal watchdog, warned the government had to peg back spending to prevent a scenario where public debt rises to 270 per cent as a share of GDP and borrowing levels spiral.
It suggested the triple lock pensions had become unaffordable for the government, with public finances already “vulnerable” to shocks from conflicts or erratic policymaking.
In its “daunting” assessment of the UK economy, the OBR suggested that unfunded commitments on welfare had put finances in shaky territory.
Top economists believe Rachel Reeves is heading for another historic budget of tax rises, with as much as £30bn needed to restore her small headroom.
Taxes on pensions and wealth?
The government has refused to rule out introducing a wealth tax in recent days after an intervention from former Labour Party leader Neil Kinnock while City analysts fear extra taxes on investors and banks could be added as the government hopes to avoid adding costs on “working people”.
Speculation ahead of previous budgets has suggested that the chancellor could introduce a flat rate of pension tax relief regardless of individual earnings.
AJ Bell wrote in a note ahead of last year’s Autumn Budget that reforms would add to “administrative complexity” and reduce pension savings for higher earners, while public sector workers may be opposed to changes.
The CityAM/Freshwater Strategy poll found that under half of brits (49 per cent) say they could now cover an unexpected £500 bill from their savings, a drop of four percentage points in June, pointing to the relative difficulty many voters face in dealing with their own finances.
Method note: Freshwater Strategy interviewed n=1,259 eligible voters in the UK, aged 18+ online, between 4-6 July 2025. Margin of Error +/- 2.8%. Data are weighted to be representative of UK voters. Freshwater Strategy are members of the British Polling Council and abide by their rules.