Brits want growth and back less red tape, cheaper energy and lower taxes to get it, finds landmark IEA research

 

Brits want growth and back less red tape, cheaper energy and lower taxes to get it, finds landmark IEA research  Most Britons (87%) want the UK to focus more on economic growth, and would back free market reforms to deliver it, including: reducing energy costs (77%), cutting taxes on workers (72%) and businesses (66%), and easing planning restrictions (59%)  Two-thirds (67%) think Britain is going in the wrong direction and rate the economy as poor (65%), with agreement for both market-orientated and state-orientated explanations for the UK's stagnation  However, people still overestimate Britain’s incomes when compared internationally, placing it 7th among US states when it really ranks last – behind all 50 states  There is confusion about what GDP growth means and scepticism about who will really benefit, with more likely to say ‘the government’ (81%) than ‘me personally’ (52%)  Communicating how far Britain has fallen internationally, and explaining how growth can benefit individuals and their families, creates a powerful platform for pro-growth reform  Landmark new public opinion research published by the Institute of Economic Affairs has found that the British public overwhelmingly supports economic growth. Eighty-seven per cent say the country should focus more on growth, with just 9% saying the country is already wealthy enough. This consensus holds across all age groups, income levels, regions, and political affiliations - demonstrating a lack of appetite for “degrowth” narratives among the public.  After an average growth of just 1.5% since 2008, Brits are extremely pessimistic about the state of the UK economy. Two-thirds think Britain is going in the wrong direction and rate the economy as poor, while two-fifths don’t think Britain’s economy has any major strengths. One respondent asked “Why is everything getting more expensive when my pay isn’t going up?”.  The new polling and focus groups, conducted by Freshwater Strategy for the IEA, is one of the largest and most comprehensive research projects on British attitudes to economic growth. It found strong support for many market-led explanations of Britain’s lack of growth, including high energy costs (85%), high taxes (75%), trade barriers (74%), too much red tape (74%), employment laws (64%) and strict planning laws (55%).   But there is also agreement among voters on alternative explanations, such as wages being too low (78%), lack of investment in public services (77%), companies prioritising profit (73%) and the political system being rigged in favour of the wealthy (72%).  To fix the problem, there is strong underlying support for market-oriented reform, including reducing energy costs (77%), cutting taxes on workers (72%), and 66% support cutting taxes on businesses.   However, the study found that understanding of growth is weak and people are sceptical about who will benefit. When asked what GDP growth means, one-third (32%) of respondents said they were unsure or did not know, and more thought that the government and big business were likely to benefit from growth than they or their families would. One young respondent said “I don’t think I’ve ever seen real economic growth to know what it actually feels like or looks like”.  There is also a striking gap between perception and reality when comparing the UK internationally. A majority of Brits wrongly believe that the average person in the UK is as rich, or richer, than those in Singapore, Germany, Australia, and much of Western Europe, when the opposite is true.  Britons place the UK 7th among US states, on average, in terms of GDP per capita, believing it is richer than 43 of them. In reality, the UK ranks last, behind every single US state. When told this, 27% of respondents said they felt shocked, with a further 15% expressing disappointment or embarrassment. Focus group participants similarly responded with anger and frustration - “it suggests that there needs to be change in the UK because we can’t be fifty-first, there’s no way” said one focus group participant.   The research highlights that when growth is linked to tangible personal benefits – higher wages, lower bills, more homes, better public services – support for pro-growth policies strengthens further.  The research also found:  When faced with a direct choice, 57% of Britons say economic growth should be prioritised even if it means accepting some environmental harm, and 78% want energy kept affordable even if it slows progress towards Net Zero — just 19% would prioritise reaching Net Zero if it means higher energy bills  Voters massively overestimate business profit margins, believing energy companies earn 57%, supermarkets 50%, and water companies 51% — fuelling the perception that corporations are extractive rather than operating on tight margins  Young voters who expressed some sympathy for "socialism" in focus groups in theory, but in practice wanted lower personal taxes, less government waste, the freedom to start businesses, and the ability to get on the housing ladder  Labour voters are significantly more likely to rate the economy positively (46% "good") than Conservative voters (12%), Reform voters (10%), or the public as a whole (18%)  80% of Britons consider it important that it is easier to start and grow a business in the UK  The report identifies six distinct "growth segments" of the British public:   Affluent Progressives (32%), who are the most pro-growth and willing to accept trade-offs  Squeezed Sceptics (22%), who back growth but demand evidence that it will benefit them personally  Uncertain Renters (17%), who are open to growth but uncertain and wary of sacrificing employment protections  Comfortable Retirees (16%), who support growth primarily to sustain public services and stability  Aggrieved Left Behind (7%), who are strongly pro-growth and anti-state but deeply disillusioned  Precarious Populists (6%), the most sceptical group, who will only support growth if it visibly lowers the cost of living  Younger Reform voters were the most open to pro-growth trade-offs in focus groups, supporting cuts to business taxes, reduced workplace regulation and lower public spending — while young women were the least willing, particularly on environmental protections and workplace rights  The report concludes that the case for growth must be practical, rather than abstract. Voters will support far-reaching reform, but only when they can see how it improves their lives, and when they are shown that state intervention – not market forces – is responsible for Britain’s stagnation.  This project was made possible through the support of grant [#63661] from the John Templeton Foundation. The opinions expressed in this publication are those of the author(s) and do not necessarily reflect the views of the John Templeton Foundation.    The Rt Hon Lord Frost, Director General of the Institute of Economic Affairs, said:  "Britain's economy has barely grown per head in nearly two decades. This research makes clear that the public knows something is deeply wrong — and they feel it. People overwhelmingly want growth, and they are ready if necessary to back the reforms to get it: lower taxes, cheaper energy, less red tape. The obstacle to growth isn't public opinion. It is a political class that refuses to act. "Our work shows that there are votes to be won by being unapologetically pro-growth. The main risk is people's scepticism that they will be the ones to benefit. Politicians have talked up growth for years, but people haven't felt it. Our political leaders need to stand up and communicate how growth will benefit everyday families, then back the reform necessary to deliver it. To the victor will go the electoral spoils." Dr Kristian Niemietz, Editorial Director of the Institute of Economic Affairs said:  "Britain is barely any richer today than it was 18 years ago. Compared to the previous century and a half or so of British economic history, this period constitutes an anomaly. The lack of economic progress should be the No. 1 public policy issue of our time: the issue that keeps policymakers and opinion formers from across the ideological spectrum awake at night.   “This landmark study shows that while political discourse in Britain may not always reflect it, Britain is clearly not a country that is comfortable with economic stagnation and relative decline. We still have the social expectations associated with a growing economy. What we do not have is the economic performance to match those expectations."  Matthew Lesh, Country Manager at Freshwater Strategy and Public Policy Fellow of the Institute of Economic Affairs said:  “A nation in economic stagnation isn’t just some statistical artefact. It’s colouring every day. Across our focus groups, we heard the same story again and again: rising costs, stagnant wages, and a sense that the system is no longer delivering. When economic growth disappears, so too does the feeling of progress. In its place comes frustration, pessimism, and a growing loss of faith in institutions.   “But this research has not found a country that has given up on growth. The overwhelming majority of Britons want the economy to grow, and when growth is linked to real, tangible outcomes, such as higher wages, lower bills, and more affordable homes, support becomes near universal. The problem is that, after many false promises, people no longer trust that growth will benefit them. Rebuilding that link between economic growth and everyday life is now the central challenge for policymakers, and the key to delivering pro-growth policies that restore prosperity and public confidence.”

ENDS