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Editorial: Austerity economics is a cross-party phenomenon

THE way some politicians have responded to the Johnson government’s Budget you would think that the ghost of John Maynard Keynes had risen from the grave and wrapped Rishi Sunak in a cloak of social democratic virtue.

Aside from the improbability that this new Chancellor — Johnson’s place man who made his personal fortune as a banker capitalising on the 2008 financial crisis — suddenly awakening to the profound misery and impoverishment that George Osborne and Philip Hammond imposed upon Britain’s working people it is worth remembering that austerity economics is a cross-party phenomena and Keynes was a lifelong member of the Liberal Party.

Two of Sunak’s predecessors as chief secretary to the Treasury were deeply reactionary Lib Dems, the disgraced David Laws and the instantly forgettable Danny Alexander.

Austerity has not been ended by this Budget. Departmental spending needs to be ramped if the depredations visited upon education, housing, health and social care are to be ended.

In particular, the cuts imposed upon local authorities by successive Tory and Tory/Lib Dem governments are at the root of a real crisis.

The Local Government Association (LGA) spelt out the scale of the problem: “Our own analysis published ahead of this week’s Budget shows that adult social care services face a funding gap of almost £4 billion by 2025, just to cover basic inflationary and demographic pressures.

“This makes up almost two-thirds of the overall funding gap which councils face by the middle of the decade to pay for local services, due to rising cost pressures and unprecedented demand.”

On housing the LGA is equally forthright: “Homelessness services, which face a funding gap of more than £400m by 2025, are under extreme pressure as a result of rising demand driven by a severe shortage of social housing.”

In the midst of a public health emergency posed by the coronavirus epidemic the LGA reports that: “Public health services have seen funding reduced by £700m in real terms over the past five years and are still in the dark about the amount of funding they will have from April.”

Rebecca Long Bailey’s comment: “By ducking the bold measures needed to tackle the climate emergency, the Chancellor has blown the biggest opportunity for national renewal since the post-war era, betraying current and future generations,” illustrates just how limited is the government’s strategic vision and in doing so shows just how narrowly political this Budget is.

The coronavirus epidemic will pass — the collateral damage depends on the government’s willingness to take the necessary measures — but climate change is a crisis of a different order and if not tackled by a Green New Deal of unprecedented magnitude will inflict greater damage that may well be irreversible.

Keir Starmer argues: “The real message of this Budget is that austerity was an unnecessary and failed experiment.”

In saying that it was a political choice “and a wrong one” he is both right and wrong. It was a political choice and from the standpoint of our ruling class the right one.

The slogan “Austerity isn’t working” always missed the point. Austerity was working. Its function was to make the working class pay for the 2008 financial crisis.

And it wasn’t an experiment. Austerity is the stock-in-trade of capitalist governments of all political hues and if it was an experiment in the 19th century it wasn’t in the 20th and isn’t in the 21st.

The scale of the problems facing Britain and the world are not amenable to piecemeal reform and half-hearted measures.

There is no effective policy that does not challenge the wealth and the power of the capitalist class.


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