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19/03/2014

VAT cut would be most popular Budget policy with British public – R3

  • 43% of British adults often or sometimes struggle to make it to payday, according to latest Personal Debt Snapshot 
  • 51% of British adults currently worried about their level of debts

31% of British adults would most like to see a cut of VAT to 17.5% announced by George Osborne at the Budget, according to a new report by R3, the insolvency trade body.

An R3/ComRes poll of more than 2,000 British adults found that a return to 17.5% VAT was the most popular option for helping their personal finances, ahead of cuts to the green taxes that contribute to energy bills (15%), a recommendation for an above-inflation rise in the minimum wage (12%), and a 1p cut in the basic rate of income tax or fuel duty (both 10%).

Giles Frampton, vice-president of R3, says: “It is the policies that would cut the cost of living – rather than those that boost incomes – that would go down best with the British public were they to be announced at the Budget.”

 “Inflation may be falling, but the cost of living is still too high for some. Our Personal Debt Snapshot series regularly finds around two fifths of British adults struggling to make it from one payday to the next, with food and energy bills topping the list of reasons for financial difficulty.”

Giles Frampton adds: “The Office for National Statistics attributed the latest fall in inflation to falling prices for ‘recreational and cultural activities’. This is little comfort for those British adults struggling to payday.”

The R3 report also found that 25% of British adults expected their personal finances to worsen in the next six months, while 24% expected them to improve (up from 21% expecting improvement in February 2013 and 18% expecting their finances to worsen).

Half (51%) of British adults say they are worried about their current level of debts – the highest share of people that have felt this way since September 2012.

Giles Frampton comments: “The good news for the Chancellor is that, with the economic recovery gaining ground, the share of British adults that feel optimistic about their personal finances is growing slightly. The bad news is that the share of British adults who are pessimistic about their personal finances is growing faster.”

“The most optimistic are the younger age groups and professionals, perhaps encouraged by the prospects of an improving economy and falling inflation: some may feel that real wage rises are on the horizon.”

“On the other hand, we have the older age groups and unskilled workers who are decidedly gloomy about the prospects for their personal finances. Inflation may be falling, but the cost of living is still too high for those on low or fixed incomes; low interest rates may be helping businesses and young borrowers, but they aren’t helping those approaching, or in, retirement who rely on their savings to get by.”

Notes to editors:

  • R3 is the trade body for Insolvency Professionals and represents the UK’s Insolvency Practitioners.

  • R3 comments on a wide variety of personal and corporate insolvency issues. Contact the press office, or see www.r3.org.uk for further information.

  • R3 promotes best practice for professionals working with financially troubled individuals and businesses; all R3 members are regulated by recognised professional bodies
     
  • R3 stands for 'Rescue, Recovery, and Renewal' and is also known as the Association of Business Recovery Professionals.