The soaring costs of energy and food have diminished the value of incomes for millions, leaving the majority of Britons significantly poorer. Wages have failed to recover since the 2008 financial crash and public services have suffered in availability and quality.
We might expect this to amplify calls for the government to spend more to help the less well off, particularly as increasing numbers of people are affected. But public opinion about redistribution, shifting resources from society’s richer to support its poorer, doesn’t always follow an immediately obvious logic.
Evidence suggests that broadly redistributive policies, like increasing general taxation to fund public services, are not always more popular among poorer people. However, they are often supported by many of the wealthier individuals who stand to lose out financially.
In a new systematic review from the Nuffield Politics Research Centre, we draw upon more than 100 pieces of academic research to make sense of this conundrum. We suggest that both material changes to household finances, alongside more long-lasting psychological factors, are central to understanding why economic crises have nuanced effects on support for redistribution. They affect people in different ways, and our review explains how and why.
Material and non-material factors
There is reason to think people support redistribution when they stand to personally benefit from it. In their most simple form, these arguments suggest that those at the lower end of the wage scale will want the government to increase taxes to fund more public spending.
These arguments are powerful because many Britons rely on a regular income, absent significant savings or housing assets. When people do have access to such wealth, it also drives their social attitudes. As house prices rise, for instance, homeowners feel less reliant on the welfare state and become less supportive of government spending. When house prices fall, support for such spending rebounds.
But these accounts focus only on people’s present day circumstances, and so fail to capture the whole story. Long-term expectations are one example. A university student cleaning tables might not support higher taxes if they have a graduate job lined up at an investment bank. A low-income family might think differently about government spending if they stand to inherit property from their parents. Some of today’s poor stand to be tomorrow’s rich, and they know it.
We think eligibility and accessibility of government support are also key parts of the puzzle. Many poorer people in the UK find it difficult to access the support to which they are entitled, with some analysts estimating that up to £15 billion of means-tested benefits remain unclaimed each year. The barriers put in place to make claiming benefits harder might shake people’s faith that the welfare system offers them a safety net, and question how much it contributes to society as a whole.
A lot of government spending also helps middle-income Britons more than their poorer counterparts. The best healthcare and state schools are usually found in the country’s wealthiest areas, while many services and subsidies, like tax-free savings allowances, cannot be fully exploited by those on low incomes. Poorer individuals might support redistribution in principle, but in practice it is not always clear that they are the ones benefiting.
Who deserves help?
Away from cost-benefit style thinking, we consider how non-material factors might shape people’s attitudes. In public opinion surveys, a significant proportion of well-off people say they support greater government spending and would be willing to pay more tax to fund it. This circle is difficult to square in terms of self-interest alone.
In some circumstances, and at personal cost, richer individuals feel genuine concern for the wellbeing of others and are willing to redistribute resources to them.
But the extent of this generosity is often limited and depends on someone’s definition of “others”. Altruism can be higher in countries that are less ethnically diverse and support for redistribution is lower when the recipient is from a minority ethnic group. The same is sometimes true when the recipient is seen to be a member of a lower social class.
Richer people might also adopt self-interested beliefs in meritocracy, with the poverty of others written off as stemming from a lack of effort rather than a lack of luck. Generosity only extends to certain groups of people. Altruism is not dead, but it is ‘parochial’.
Richer people might also adopt self-interested beliefs in meritocracy, with the poverty of others written off as stemming from lack of effort rather than lack of luck. Generosity only extends to certain groups of people. Altruism is not dead, but it is limited.
Upbringing is also a part of the story. Being raised in a poorer household increases baseline support for redistribution, and this can colour the way that income shocks, or indeed financial comfort, are perceived in future. Some wealthy individuals might be comfortable with redistribution because of their childhood experiences, while those born into wealth might remain averse even if they get poorer over time.
Some think that only large shocks can truly shift the dial on people’s beliefs, and perhaps Britain’s cost of living crisis – which has affected people across the income and upbringing distribution – represents such a case. But if those from wealthier backgrounds see the quickest financial recovery, any immediate changes in attitudes could be more short-lived.
All in all, despite seeing one of the deepest and most widespread shocks to household incomes in decades, it is not obvious that everyone will want more redistribution than they did before. This variability is essential for campaigners, policymakers, and politicians to understand, in order to devise policies that will remain sustainable over the long term.