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Britain sees an end to Tory cuts dogma


Lord Peter Hain is a former British Cabinet Minister and anti-apartheid campaigner whose memoir, ‘A Pretoria Boy: South Africa’s ‘Public Enemy Number One’, is published by Jonathan Ball.

By spending an extra £350-bn to deal with the dire consequences of the Coronavirus – and promising even more – Britain’s new Chancellor Rishi Sunak has blown a hole in all the dogma of the past 10 years of Tory austerity.

Boris Johnson had been hailing Britain’s recent budget as a cheerleader for the common citizen, targeted on left-behind towns in the midlands and the north, making a clean break with the Cameron/May years of harsh austerity. But in reality, the budget fell well short of the great Tory turnaround that his fan club believed it to be. 

First, the budget failed to undo 90% of the damage done nationwide by a decade during which previous Tory Chancellors George Osborne and Philip Hammond squeezed more than £150-billion of spending power out of the economy.

Second, the big increases in public sector capital spending that Chancellor Rishi Sunak announced caused many people to miss what is happening to the current public spending that pays for our public services.

George Osborne’s first budget in 2010 set the pattern for the next 10 years. He cut Labour’s public investment capital plans by £10-billion over five years, but he cut Labour’s plans for current spending by more than £80-billion, and that’s the reason why 20,000 police jobs disappeared, why the health service in England is 40,000 nurses short today, and why today’s social care budgets are £12-billion lower than that needed to bring service standards back up to their 2010 levels, with elderly numbers needing care rocketing in the meantime as the Tories have created a countrywide calamity of misery.

The Institute for Fiscal Studies reckons that, outside of health, day-to-day spending on the other public services is now only three-quarters of what it was under Labour in 2007, and current spending per person for most public services will still be well below 2010 levels in 2024.

Third, Osborne chose an 80% public spending cuts, 20% tax rises split, meaning that Tory austerity fell overwhelmingly on our most vulnerable citizens and on vital social infrastructure. 

The new Chancellor blithely ignored that UK growth, which had been slowing in each of the past five years, had come to a complete halt in the final quarter of 2019. It did the same in January of 2020. UK GDP did not grow at all for four months.

That is the reason why the Institute for Fiscal Studies describes the forecast growth rates for the British economy for the next five years as “feeble”, why the IFS deny that the UK is in a robust position to cope with shocks like the coronavirus catastrophe, and why it says that a failure to agree an orderly move to a free trade agreement with the European Union would badly weaken an already weak economy. 

The budget speech cheered by Tory hooray Henrys included:

  • A long overdue, desperately needed increase in public investment that they have spent the past ten years resisting. 
  • An expanding budget deficit that they spent a decade promising to cut, and a national debt today that is double what it was before the global financial crisis (80% of GDP in 2020 under the Tories against 36% in 2007 under Labour).  
  • Some crumbs of comfort for the neediest to whom they have shown only a cold shoulder and frozen or cut benefits for years.

Bailing out Britain’s banks to avert financial collapse and ruin after the global credit crunch cost UK taxpayers cash outlays alone peaking at £133 billion, according to a June 2013 Parliamentary Banking report.

But, allowing for cash outlays, government guarantees, and Bank of England support, the potential cost to UK taxpayers of saving Britain’s banks had reached £1,162-billion by July 2012, or 10 times the annual costs of the NHS, according to the UK National Audit Office.  

In 2008 Gordon Brown’s Labour government had to act within hours to save the economy from a collapsing banking system. In 2020 Boris Johnson had to act within days to save the economy from the virus crisis.

The small-government cheerleaders for his premiership have been forced to concede that urgent action to stave off disaster demands big decisions that only government can take because only the state can provide the resources required in a national emergency.

Which is why Chancellor Sunak was right to reject 10 years of Osborne austerity and to throw the power of the state at the gravest crisis Britain has faced for 80 years. It has been an unexpected learning experience for him and his party, and it has been 10 years overdue.

But if his sudden extra £350-billion to beat the coronavirus pandemic could be produced like a rabbit out of a hat, then the question is why appropriate extra public spending was not found from the very start of Tory rule in 2010 to deal with the aftermath of the global financial crisis instead of plunging the country into 10 years of savage cuts – driven by neoliberal dogma, not necessity – and which have gravely damaged the country’s capacity, including to fight this terrifying pandemic? DM


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