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So much for Dave’s Big Society as the gap between the rich and poor widens

PRESS RELEASE

UK consumers react to the budget
So much for Dave’s Big Society as the gap between the rich and poor widens

- 8% say that the recession is building a community spirit and a “we’re all in it together attitude”
- 52% of consumers agree that division in society between the haves and have-nots is getting wider
- Only 9% feel they will be better off and 38% are worried about their finances
- 58% say that they are negatively affected by the decision not to reduce petrol prices
- 54% feel negatively affected by road tax increase
- 31% cutting back on charitable donations

LONDON, 23 March 2012: UK consumers are feeling more worried about their finances as a result of Wednesday’s budget, with cutting back on charity giving, eating out and turning to the Black Market among the measures they are considering to help ease their financial situation.

Restaurants and food outlets will be hit hard, as the most popular cutback is on buying takeaways (41%) followed by eating out (34%). Charities will also lose out as 31% plan to cut back on charitable donations.

Magazines and newspapers are also under fire with 33% of the population saying they will consider giving up buying them.

However, there is still some optimism in the air as playing the lottery remains a part of life that almost two thirds of UK consumers (59%) are unwilling to give up, while 3% said they will increase their spend on lottery tickets.

When thinking about their financial situation and about how they manage their money between pay or pension days, UK consumers appear to be quite a sensible bunch with more than two thirds (69%) saying that they would never be tempted to use payday loans such as Wonga.com and Quickquid. However, 8% say they are already using these facilities and 10% say that they are considering this option.

More than half (52%) agree that the cuts as outlined in Wednesday's Budget are creating great divisions in society between the haves and have-nots, with only 8% saying that a silver lining of the recession is that it is building community spirit with a “we’re all in it together” attitude.

However, this sentiment increases among lower income earners with 63% thinking it’s causing a divide compared to 47% of middle income earners.

When asked to think about their financial situation and whether the Budget will make it harder to stretch their money further, we asked consumers if they would be tempted to buy certain products on the black market, buy fake brands, or go over their duty limit on things like alcohol or cigarettes when travelling back from abroad.

More than a quarter of the UK population said they would consider purchasing in this way for clothing and accessories (27%), closely followed by perfume and cosmetics, household items such as washing powder and alcohol (all 22%).

Surprisingly only 18% said they would consider buying cigarettes by any of these means and 20% for petrol. However, it is important to note that the majority of consumers are a pretty moral crowd with most saying they were not likely to go down this route in order to save money.

Among smokers, however, there is a greater tendency to search out the black market or stretch the duty limits in order to get cheap booze and fags.

And those that are worried about their finances in light of the budget are also more likely to search out alternative routes to getting their hands on products including the black market, stretching duty limits or buying fake products.

Half of those worried about the budget (49%) also said they planned to cut back on holidays.

“These figures provide interesting insight into the way the general population is feeling as a result of the Budget,” said Marco Scognamiglio, CEO of RAPP UK.

“While reports have suggested that some people will be better off, there are large numbers of people who will be worse off or who at least feel they will be worse off.

“It is critical to listen to consumer conversations and sentiment following the budget and to respond in relevant ways as the power and influence they can have on brands and society is not to be underestimated.”

Of the issues that affected them most, the table below shows the number of UK consumers who felt they would be negatively affected by each one:

Issue / % of population who felt a negative impact

Petrol / 58%
Road Tax Increase / 54%
Flight Tax / 41%
Alcohol / 40%
Lunch time hot snacks tax increase / 30%
Granny tax / 22%

[RAPP Proprietary Research using Toluna. Sample: 500 UK consumers.]

- Ends -

Media Contacts:

Rapp: Claire Billings, 0208 735 8243 / 07715 895483, Claire.Billings@uk.rapp.com

About RAPP: RAPP is part of the global RAPP network. UK clients include Bacardi, Barclaycard, Guide Dogs for the Blind Association, Mercedes-Benz, NSPCC, Skype, Virgin Atlantic and Virgin Media.

www.uk.rapp.com

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