The End of Austerity
It was on 26th April, 2009, in the politically volatile aftermath of the Financial Crash that David Cameron first announced that “the age of irresponsibility is giving way to the age of austerity”, and established the Conservative Age of Austerity 2010-2019. The first Conservative Coalition Government objective, sustained for ten years, was to eliminate the structural budget deficit, and by direct implication, at least cap if not reduce, the National Debt. By 2012 George Osborne already realised, from the bitter experience of poor decisions, that the consequences of austerity were serious for the underlying health of the economy, and the Government responded from 2012 by shifting the burden of austerity from ‘we are all in this together’; principally to the shoulders of the welfare state. Those with least would proportionally pay the most. Now that is Austerity.
On 7th June, 2019 Theresa May resigned as PM. She announced the Conservative legacy of ten years austerity: “We have completed the work that David Cameron and George Osborne started: the deficit is almost eliminated, our national debt is falling and we are bringing an end to austerity.” Boris Johnson has reaffirmed the triumph: ‘Austerity’ has ended. In September this year Sajid Javid, Conservative Chancellor of the Exchequer made this statement to the House of Commons: “Next year I will add £13.4 billion to the plans for total public spending, including £1.7 billion added to capital spending.These extra funds take the real increase in day-to-day spending to £13.8 billion, or 4.1%. That means I’m delivering the fastest increase in day-to-day spending for 15 years. That funding allows us to start a new chapter for our public services and fund the people’s priorities.”
Since announcing the General Election the Conservative Party has clearly established that it intends to increase public spending substantially (we may suspect beyond the levels announced by Javid, at least as an election promise nobody can ever cash), without announcing substantial tax increases. It is clear that the Conservatives are prepared to increase the deficit, and increase the national debt.
The problem with this is quite simple. I will not bother to challenge the credibility of the Conservative economic strategy. I seek only to establish whether the Conservatives actually believe their own rhetoric; at least sufficient to use it. Clearly not. The Conservatives have abandoned the dogma: ’the Government is just like a Household Budget’: no votes in that any more: ergo, dump it. The problem is that economic reality does not fit with the whole economic proposition that has sustained the Conservative Party: Austerity can now be abandoned, although the national debt has increased by £600Bn+ since 2011, increased in 2018 and there is still a deficit. Nothing has changed. The reductions in deficit achieved have not eliminated the deficit, nor has the impact on the national debt (only reduced when transcribed to a percentage of GDP figure, which then invites economists to arbitrarily select ‘acceptable’ statistical abstractions according to their political predilections), and not sufficient even there to give headroom to increase it, if the Conservative Party actually believes the neo-liberal economics it assiduously claims to follow and to propagandise.
How can we say this?
Here are the ONS statistics below (Table 1 and Table 2: Deficit and Debt). In ten years Austerity all that pain and self-denial has achieved very little to eliminate the Deficit or cap the Debt, according to the standards of economic prudence religiously followed by orthodox Conservative Party economic piety. Austerity has decisively failed to achieve its targets, by its own standards.
The deficit is not eliminated, nor decisively reduced to levels of insignificance. The National Debt is not dented. These statistics are not my chosen figures. I use them because these are the key statistics that have been used and insisted on by Government for over ten years to justify Austerity. They are now being comprehensively dumped by the Conservative Party because they are politically inconvenient in this general election. What happens after the election, I leave to your imagination.