AUSTERITY is the wrong policy on every count.

Overspending was not the cause of the financial crash, so austerity is not the right policy for dealing with what did cause it — which was the bankers’ arrogance and irresponsibility triggering the global recession.

When the massive bank bailouts led to huge budget deficits, austerity was the wrong policy to cut the deficits because prolonged contraction of the economy makes deficit reduction far harder to achieve than systematic growth and expansion.

And all that still leaves aside the cruel torture of impoverishment and hopelessness which endless austerity imposes on the innocent victims of the crash while letting the guilty perpetrators go free.

In the Labour decade before the crash the average budget deficit was 1.4 per cent of GDP, half the average under Thatcher and Major.

Moreover, Labour inherited a national debt from the Tories in 1997 which stood at fractionally under 40 per cent, but reduced it to 36 per cent by 2007.

So there was no Labour overspend, though there certainly was substantial Tory overspend.

In neither case, however, was austerity justified as a counter-measure when the true cause was external and the real motive for its imposition was, and still is, George Osborne’s desire to shrink the state, rather than primarily to cut the deficit.

The bailouts did produce a peak budget deficit of £157 billion in 2009-10.

The stimulus of Alastair Darling’s last two expansionary budgets cut this by £40bn by the end of 2011, but the Osborne austerity budgets then kicked in which slowed deficit reduction by two-thirds.

That’s because continuous contraction of the economy flattens growth, which then enforces a slowdown in deficit reduction, which is exactly what happened in 2012-13 and which now seems likely to recur if Osborne imposes his £12bn further cuts in benefits plus another £29bn cuts in public expenditure.

Most wicked of all is the Tory indifference to the merciless battering inflicted on the squeezed middle and the helpless 20 per cent at the bottom of society.

Over 150,000 elderly and disabled people no longer receive help with washing and dressing because councils are now so cash-strapped that they can only afford help to those with the most extreme needs.

Because they cannot fund alternative accommodation councils now regularly (every day at 700 different locations) break the legal requirement that children should not be forced to stay in bed-and-breakfasts or shared hostels for more than six weeks at a time.

And to sidestep the opprobrium arising from austerity increasing child poverty, the Tories have cynically changed the definition of poverty to avoid any measure based on lack of money and instead to focus on “life chances.”