Members of the public believe that Labour has squandered tens of billions of pounds of taxpayers’ money and is now hitting them with higher taxes and rising bills just as the economy is entering a downturn, a Sunday Times poll shows.

Their concerns have been crystallised by Alistair Darling’s budget, which they see as raising taxes while doing little to tackle concerns such as climate change and binge-drinking.

The result, according to the poll of 2,300 people, is that Labour has fallen further behind the Tories than at any time for more than two decades.

By 78% to 12%, voters think that the government wastes large amounts of money and is not trying to do anything about it. They also think that David Cameron hit the target last week when he said Labour had squandered money in the good times, forcing it to raise taxes when the economy was slowing. By 66% to 15%, people agree with Cameron’s criticism.

Rose-tinted specs fail to offer hope

The obvious justification for Mr Darling’s relatively upbeat scenario is that the outlook is fraught with uncertainty

BACKGROUND

• Darling's first Budget: the main points

• The Chancellor's speech in full

• Darlings first Budget: the reaction

• Chancellor hits the home budget as his debts soar

• Need to know: Budget 2008

The Chancellor delivers a modest Budget

As so often is the case, virtue, in terms of improving public finances, is not now, but at least a year away

Multimedia

• Video sketch: Matthew Parris and Ann Treneman

• Eco-worrier: should we be pleased?

• Green Central: round-up of the green Budget measures

Related Links

• Labour support hits 25-year low

• Over half of adults on benefits in 60 areas

• Be bold, Gordon, trust the people

The tax squeeze is compounded by the fact that people do not believe official inflation figures. By 86% to 7%, they say everything they buy, including food, petrol and domestic energy, is rising faster than the government admits.

They also think, by 84% to 8%, that energy companies rip off consumers and should have been hit with a windfall tax in the budget.

Green taxes, such as those on “gas guzzling” cars, are seen by nearly three-quarters of people as a cloak for raising the overall tax burden. Higher taxes on alcohol are seen by 85% as irrelevant to the problem of binge-drinking but as a source of revenue.

The result of the squeeze is that people are spending less. By 53% to 8% they say they are buying clothes less often; by 38% to 9% they are eating out less often in restaurants; and by 65% to 3% they are checking prices more frequently in shops.

Darling’s discomfort is reinforced by the fact that only 22% of people think he is up to the job, while 47% say he is not. But Darling does not face a strong rival among his fellow cabinet ministers. From a list of alternative chancellors, voters chose Sir Alan Sugar, followed by Sir Philip Green, the billionaire retailer, in preference to other politicians.

Confidence in the government’s management of the economy is slipping. Pollsters regard “pocketbook” factors – who people trust to run the economy – as a key measure of how they are likely to vote in an election.

The latest poll suggests that the Tories have opened up a 12-point lead, 33% to 21%, on economic competence, double what it was a month ago.

Whether Labour can get that back depends on the economic outlook as much as on policy. Almost half of those polled think Britain will either not grow at all this year (24%) or will go into recession (23%). Gloom about the housing market is not yet widespread – by 35% to 30% people think house prices will fall – but almost a fifth are more worried about losing their job.

YouGov also asked about ideas on “Britishness”. On balance, by 51% to 42%, people agree with the idea of a citizenship ceremony for school leavers, one of the ideas proposed by Lord Goldsmith, the former attorney-general. They are split on whether it should include an oath of allegiance to the Queen. While 15% think it should, 36% say school-leavers should pledge allegiance to the country but not the monarch.

A proposal for a points-based system for foreigners applying for citizenship, under which those in skilled jobs would be given priority, is strongly supported, by 81% to 12%.

By almost three to one, 51% to 18%, people backed the break-up of BAA to allow more competition between Heathrow, Gatwick and Stansted airports. They also thought, by 48% to 14%, that BAA is too close to the government and has too much influence on its airport policies.

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