People are confused about the coalition government’s economic aims, with almost half believing ministers plan to reduce the national debt rather than the structural deficit, according to a think-tank survey.
The poll of 2,000 British adults, conducted by ComRes on behalf of the Right-wing Centre for Policy Studies, tested the public’s understanding of the coalition’s fiscal objectives and achievements. The government intends to eliminate the current structural deficit within five years and for debt to be falling as a proportion of gross domestic product by the end of the Parliament. On current projections, debt is set to rise from 53% of GDP to 76%.
Only 10% of respondents correctly observed that the government would have increased the national debt by £600bn by the end of the Parliament. Almost a third (32%) said they didn’t know, while 47% said debt would be cut by £600bn.
Conservative supporters were the most ill-informed, with 61% of those who voted Conservative in the last general election and 66% who intend to vote Tory mistakenly believing that the party plans to reduce the national debt.
The poll also highlighted confusion about what has been achieved so far. Only 39% of those surveyed were able to correctly identify that the budget deficit has been reduced since 2010, compared with 28% who believed this to be untrue.
The CPS drew attention to the widespread confusion between the terms ‘debt’ and ‘deficit’ and said the media was partly to blame as it too often mixed up the terms, giving the impression that the coalition had set out to cut debt rather than the structural deficit.
Commenting on the findings, Ryan Bourne, head of economic research at the CPS, said: ‘The polling results show two things: that the public is unclear about what the coalition’s ambitions are and about what the coalition has achieved in terms of the public finances since 2010.
‘Despite what many people think, it was never the coalition’s ambition to reduce the national debt within this Parliament. What’s more, it’s becoming increasingly probable that, on current policy, neither of the coalition’s original fiscal mandates are gong to be met.’
Bourne called on the government to restate the extent of the country’s fiscal problems and set out how it plans to address them in order to give the electorate an ‘informed choice’ at the next election.
COMMENTS
This news item from Public Finance is unclear - so no wonder everyone is unclear.
It is completely wrong to say that the present government does not plan to reduce debt, but to reduce the structural deficit.
The whole purpose of reducing the structural deficit is to reduce debt - but, as you say, not in the present parliament.
So your article should define (national) debt and the structural deficit and the budget deficit and then say. "The government's aim is to reduce debt through a reduction in the structural deficit. As part of this they have already achieved a reduction in the budget deficit. But debt will not start to fall until after the present parliament. Indeed, because of the 2008 crisis and its consequences, national debt will continue to rise during this parliament, and will peak in 2015 (??) It is then planned to fall by £xbn over y years to £zbn"
You do not explain this, but add to the confusion.
From your article, I should be able to understand the matter quite clearly, shouldn't I? So if what I have drafted above is not correct, then it's because your article is confusing. What hope is there even for Cipfa members, in that case?!
Philip Morgan, 28/08/2012
