Today, the Resolution Foundation launches our open memo to the next government. In it, we propose five key priorities which we believe will improve outcomes for the UK’s 9.4 million working-age ‘low earners’ – those people living on an average household income of £15,800 while remaining broadly independent of state support.
These are families who may not be the poorest in society, and they are not in crisis. Nevertheless their economic independence is fragile and they are living at the very edge of their means. 56 per cent have experienced a drop in income since the start of the recession – and at the same time, on average, low earning households have nothing left over in their budgets after covering monthly expenditure, bills and debt repayments.
Low earners tell us they feel alienated and ignored by politicians, and our analysis of previous elections shows that this frustration has translated into two key trends in recent years. Firstly, low earners are less likely to vote at all than their better-off neighbours. And secondly, those who do vote are more likely than other groups to vote for minority parties.
In the run up to this year’s General Election we have undertaken some further polling of low earners. The data from March suggests that the low earner intention to vote is creeping up, and also that it is coalescing around the main parties, reversing these earlier voting patterns. This could be good news for the Liberal Democrats.
That said, our polling also shows that within this trend, low earners are gravitating towards the Labour Party and the Conservative Party, and that this is at the expense of the Liberal Democrats. Our latest data shows that Liberal Democrat support from low earners dropped by 8 percentage points between February and March this year. It is likely that many of these voters have switched allegiance to Labour given that over the same period, Labour has experienced a notable upswing in support among these groups.
Low earners comprise a third of the electorate, so what can the Liberal Democrats do to attract the votes of this significant constituency? Our research shows that policies which emphasise fairness and which recognise the hard work people put into maintaining their economic independence are popular with low earners. They want to feel that it pays to work, and that it’s worth the effort to save.
Similarly, any messages about reconnecting politics with ordinary people’s lives are likely to play well with this group, so emphasising the Liberal Democrat role in holding the other parties to account could be an important part of an electoral strategy.
Analysis aside, the key insight from our polling is that the low earner vote is still up for grabs. Their votes may be coalescing around Labour and the Conservatives, but the fluctuations in low earner voting preferences are notably higher, with movements of 11 percentage points compared to no change beyond the margin of error across all other groups. The question now is whether the Liberal Democrats can reclaim some of its earlier support from this key constituency in time for the General Election.
The latest Low Earners Audit can be downloaded here.
The Resolution Foundation is an independent research and policy organisation seeking to improve outcomes for low earners. ‘The Independent View‘ is a slot on Lib Dem Voice which allows those from beyond the party to contribute to debates we believe are of interest to LDV’s readers. Please email [email protected] if you are interested in contributing.
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11 Comments
I’d say it was extremely concerning that we aren’t pulling in these kind of people – our tax policy should be the benchmark for all parties and rewards those that don’t earn huge amounts while encouraging the unemployed that there is a real benefit to becoming employed. Why isn’t this message being shouted loud enough for these people to hear because it really should be!
Sorry – been at work all day and out to a meeting spreading one of our previously well promoted but now more or less abandoned (to Grant Shapps no less) policies on affordable housing – probably a key issue for this constituency (though I’ll find out when I read the report no doubt).
However, this is a key constituency also for the essential message of economic liberalism – this is a group who sees very little special benefit from the state. They pay their taxes which get spent on groups only slightly less well off than they are yet are well below the median household income – the poor paying for the help we give the poorest. And they see very little of the benefits of state privilege handed out to businesses, property owners and similar vastly more wealthy groups.
Their costs of living – so much more significant a part of their incomes than for higher earning groups, are artificially inflated by corporate cronyism, for many, the possibility of bettering themselves by self-employment is made more difficult by regulatory burdens intended to keep competition out. They are going to be the worst affected by the impending bankruptcy of the current systems we have to provide for our retirement.
All i all this is the real “forgotten” group who get less out of the state than most and probably in many cases less than they actually put in. This is the group for whom a radical excision of state privilege would most help. Rigorous Liberalism is just right for them.
“Our research shows that policies which emphasise fairness and which recognise the hard work people put into maintaining their economic independence are popular with low earners.”
Yeah, that’s basically our tax policy. Which is hardly new. My dismay is similar to Dale’s.
Is any other party offering anything which will benefit this group of people as directly as lifting the threshold for paying tax up to £10K?
Yeah, but what I’m talking about would be worth an order of magnitude more to people at this level of income (and in many more ways than just the household “bottom line” at that) than £700 off their tax bill.
I’d be interested to know whether Sophia does, in fact, know about the Lib Dems’ tax policy, as summarised by Jeremy, and if so, why she thinks it might not be getting through to the people it will benefit. I presume the Resolution Foundation is aware of/has contact with the Low Income Tax Reform Group? I’m pretty sure they’ve noticed the Lib Dem policy.
It’s incredibly important that we actually communicate our tax policy to voters! Every Focus should have it on the front page from now until the election – clearly what limited TV and newspaper coverage we get is not enough.
Historically the low paid have voted Labour, despite the reputation of the party in the past as being a high tax party.
A lot of low paid people do not pay tax. Some rely on benefits instead. The low paid are more likely to use the public services; the police, state funded education, the NHS, pubic transport – which has declined since it was privatised. No doubt the taxation policy will be popular amongst some, but it is an issue I never hear raised on the doorstep in council estates.
If the aim is to reduce poverty, then cutting taxes and raising benefits will have more effect, as well as being hugely expensive. But cutting taxes in any case is hugely expensive, and certainly amongst richer people will have to go up to pay off the budget deficit, once the time is right to do that.
I really do not see it as a big vote winner amongst the low paid, but we will know 1 way or the other in 6 weeks time.
I think that low paid people do respond to community politics and I think we stand to do well in places like Newcastle and Sheffield.
And I have to admit that when I go canvassing I am constantly reminded how low paid people in particular are angry about immigration, with ethnic minorities being scapegoated for crime and taking their jobs. As I Liberal I can listen and respond with a different way at looking at it but it is a hard sell sometimes and in the end some people are simply not Liberals. However the complaint about immigration is usually a symptom of a grievence about something else, whilst at the same time indicating a dislike of foreigners (perceived or actual).
I doubt if many low earners know about the party policy and I’m not convinced it would greatly help if they did.
Firstly, I recon that not much more than a third of the UK get any Lib Dem leaflets. (roughly our councillor base and key seats). so not much hope of gettinga national message accross, especially when so much FOCUS is entirely local.
Secondly, the policy was 4p of income tax (plus 4p put back as local income tax), which was estiamted as £1000 of your tax bill. Even party members struggle to keep up, the less interested public more so.
Thirdly, people on the whole aren’t policy driven. They don’t sit there totting up policy commitments with a spread sheet and calculator working out which partys pledges would make them x £ a week better off.
This is where the Lib Dems repeatedly fail on narrative. Instead of policy we need messages.
for example, Lib Dem would
Abolish the benefits trap
No one would be worse off in work
Incentives for all – work towards 50% being the top marginal rate of tax for everyone
Reform the benefits system
Only then do you need to provide the details – I suggest it needs to go a lot further than £10,000 tax threshold.
What about abolishing National Insurance and reforming all tax bands. 20% on the next £10k, 30% on the next £10k – as aspirations not current calculations.
Give the public the shares in the banks that the taxpayers own. Get serious about “capitalising the poor”
Talk about the billions spent on Housing Benefit which could be bettered used on council housing
Talk about the billions given as tax breaks to 2nd home owners and buy to let landlords at the taxpayers expense.
@Geoff Payne: the writer of the post is talking about “the UK’s 9.4 million working-age ‘low earners’ – those people living on an average household income of £15,800 while remaining broadly independent of state support” (my italics), so the people she says she has surveyed are not dependent on benefits. Also, raising the income tax threshold helps people on benefits as well, not least by reducing the effective marginal tax imposed by the tapering of most benefits together with 20% income tax and 11% NICs.
Tax was an issue that I heard raised on a council estate in Cambridge (King’s Hedges) when I was canvassing there, and I think our tax policy pleased the person who asked me (he was complaining about how much he had to pay in tax given that he didn’t earn much to start with). I think we need to raise the policy with people, not just wait for them to ask us.
Mark Pack has written and interesting piece taking up the issue here: https://www.libdemvoice.org/the-low-earner-liberal-democrats-18463.html
A really interesting set of comments. To pick up on Alix’s question about Lib Dem policy around tax for low earning households. I think you’re right, the issue isn’t that the policy is unpopular – it’s that it’s not yet even getting through to the people who stand to benefit from it. As part of our research we’ve held a number of low earner ‘select committees’ in marginal constituencies where we’ve invited the sitting MP and the PPCs along. In both instances where a Lib Dem attended, their stance on tax was news to the group, but it’s also true that it played well with them. In this context, as Mouse says, hitting the right media, and getting the tone/message around detailed policy proposals right will be key.
So from what we can see, the problem isn’t with the Lib Dem policy itself, but the fact it’s not getting out there in the first place. And in that context I think it’s fantastic that Nick Clegg has an equal billing in the TV debates. Without wanting to pile the pressure on, how he uses those debates to reach out to low earners could make all the difference.