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The lies of Osbornomics

Britain's deeper-than-predicted debt makes a mockery of austerity

NEWS that Britain is £10.7 billion deeper in debt than the Office for Budget Responsibility predicted just a month ago makes a mockery of Chancellor George Osborne’s claim to be motivated by deficit reduction.

When the bankers crashed the economy in 2008 — prompting a £1.3 trillion handout to keep Britain’s biggest financial institutions afloat — the Tory Party quickly seized on an opportunity to claim our country was mired in debt and needed urgent and sweeping cuts to public spending to “balance the books.”

The idea that public spending caused the financial crisis has been repeatedly debunked by economists, but the Conservatives have got away with it.

Partly this reflects the old adage that a lie repeated often enough becomes the truth. As the political wing of the City of London — itself the dominant section of Britain’s ruling capitalist class — the

Tories have had no shortage of media pals willing to parrot misinformation about the causes and nature of the recession.

And partly it reflects the fact that Labour’s leadership too has been captured by the same class interests.

Then chancellor Alistair Darling’s March 2010 promise to make cuts “worse than Thatcher” showed the political consensus around making working people pay for a crisis they did not cause — as well as sending a clear message to millions of ordinary Labour supporters not to bother voting.

But if the £81bn Osborne vowed to cut from public spending in 2010 — a dry statistic hiding a reality of lost jobs, wrecked services and mounting poverty — were about balancing books he isn’t doing very well.

Tory allies in the media were quick to point out yesterday that borrowing in the financial year to April was £107.7bn, about £7bn less than it had to borrow last year.

How accurate this figure is unclear.

The government may have raised a few billion in the short term by flogging off public assets such as Royal Mail, though considerably less than if it hadn’t sold it on the cheap and yesterday’s calculation excludes the cost of transferring the service’s pensions liabilities to the state.

In any case selling public services to the private sector is not an economic strategy. It gives Osborne a one-off windfall but will cost us in the long run.

And back when the Chancellor set out his grand deficit reduction plan in 2010 borrowing was supposed to be down at £89bn by now. He’s missed his targets big time.

The Tories seem strangely unconcerned by the dismal failure of their fiscal husbandry — because saving public money was never their real priority in the first place.

The soaring cost of appeals against Atos’s callous assessments of thousands of disabled people as “fit to work” didn’t slow them down.

Nor did the confused, repeatedly delayed and colossally expensive mess known as “universal credit.”

The hit to the public purse from chucking hundreds of thousands on the dole, from sponsoring poverty pay in the private sector rather than legislating for a living wage and from cutting taxes for the richest hasn’t caused these penny-pinchers any doubts about what Prime Minister David Cameron revealingly called his “moral mission” to smash welfare earlier this year.

Talking heads in the media will argue over the significance of Britain’s borrowing figures in coming days.

But few will mention the government’s real project — an unprecedented transfer of wealth from the poor to the rich and from the public to its private-sector chums.

Austerity doesn’t save us money. It just takes it away.

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