Austerity in the UK after 2010

1. A definition

Austerity is a form of voluntary deflation in which the economy adjusts to restore competitiveness through the reduction of wages prices and public spending, which is supposedly  best achieved by cutting the state’s budget debt and deficit. Doing so its advocates believe will inspire ‘business confidence’ since the government will be neither crowding out the market for investment by sucking up all the available capital through the issuance of debt nor adding to the nation’s already ‘too big debt’

Mark Blyth

1. The theoretical justification
2. An account of where austerity has been tried in the last 100 years
   1. 1930s    
      1. Germany
      1. UK
      1. France
      1. Sweden
      1. Japan   
   1. 2000

Eurozone

Greece

Portugal

Ireland

Latvia

…

• How and why austerity was introduced by Osborne
• The results of austerity

The key economic results are

UN Special Rapporteur on extreme poverty and human rights

https://www.ohchr.org/EN/NewsEvents/Pages/DisplayNews.aspx?NewsID=23881&LangID=E

the growth in the economy seen in 2010- was snuffed out

Recovery to the pre-crisis levels of GDP was the slowest in 314 years.

Real wages are still lower than they were 10 years ago

Productivity has flatlined since the recession, and stands at 19% below trend

There is employment but much is the wrong kind – insecure, zero hrs contracts, self employed with insufficient employment

Work poverty is common,  60% of those in poverty in the UK are in families where someone works (UN report)

The costs of austerity have fallen disproportionately upon the poor, women, racial and ethnic minorities, children, single parents, and people with disabilities

14 million live in poverty

There are now   2,000 food banks in the UK, up from just 29 at the height of the financial crisis due primarily to low income and benefit delays

Benefits have been frozen since 2016

Child poverty will rise by 7% from 2015 to 2022 (IFS UN report) to perhaps 40%

Local governments in England have seen a 49% reduction in Government funding

500 children’s centres and 340 libraries have closed

homelessness is up 60%, rough sleeping 134%.

There are 1.2 million people on the social housing waiting list, but less than 6,000 homes were built last year.

• Take each section of the economy
  • Health
  • Justice – courts, legal aid, prisons, police
  • Local authorities
  • Care
  • Welfare benefits
  • Education
  • Defence
  • Flood prevention
  • The overall loss of output , GDP  and per household
  • The Brexit vote

• What must be done to reverse austerity
• A national budget to overcome the effects of austerity and put the economy back on the road to prosperity
• Further reading
• PEF austerity blogs