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Investor support for Tory austerity tumbles

Investor support for Tory austerity tumbles

Investor support for higher taxation and public spending - essentially an end to the Conservative Party's age of austerity - has jumped since the general election.

By contrast, confidence in Theresa May's ability to make a success of Brexit has fallen dramatically, after she failed to secure the large majority that she sought in the general election, according to investors polled by The Share Centre.

In a survey reflecting the views of nearly 1,000 of The Share Centre’s customers, around one in five (22 per cent) said they were confident Theresa May would be able to secure a positive Brexit outcome for the UK.

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This is compared to 55 per cent in a similar survey conducted before the election.

Despite this sinking confidence in the PM, most investors polled believe Ms May is best placed to ‘get the government out of the mess’ as she put it, with 54 per cent saying she is right to remain in Number 10.

Investors overwhelmingly (80 per cent) believe a government led by Jeremy Corbyn would cause the stock market and economic growth to fall.

But perhaps surprisingly given The Share Centre’s customer demographic - with previous polls showing most vote for the Conservatives - there was strong support for higher taxation and higher public spending.

Against a backdrop of mounting criticism of the impact of government cuts, and with a Labour manifesto at the general election promising substantial increases in public spending, it seems personal investors now support a shift in the balance of state intervention.

When asked how they view the balance of government tax and spending, the highest proportion – 47 per cent – are in favour of higher taxation and higher spending.

This is double the percentage (23 per cent) who believe taxes and spending should come down, with the remaining 30 per cent feeling the balance is currently about right.

When asked what the new government should be doing to support personal investors, the responses reflect broader concerns about the next generation and the broader wealth divide within society.

Investors would like to see the government use the taxation system to further incentivise young people to invest and save for the future (48 per cent) and to improve financial education (49 per cent).  

More than half (53 per cent) of those polled said they want the tax-free dividend allowance to be protected. Chancellor Philip Hammond proposed to reduce this allowance in the Spring budget, before postponing the measure indefinitely.

Commenting on the findings Richard Stone, chief executive of The Share Centre, said: “The most telling of the findings in terms of the future direction of government policy is the clear support that now exists for government to increase taxation and spending.

"Nearly half of the personal investors who responded to our survey thought that the government should tax and spend more as compared to the current balance.

"This is striking given that, before the election, our customer base told us they were strongly Conservative supporters and as personal investors they arguably have more wealth and investment assets which may be subject to any increased taxation.