Tomorrow Jeremy Hunt will give the Autumn spending review. The trailing of spending cuts and talk of a black hole in government spending has led to the suggestion that the UK is about to enter an era of “austerity 2.0.”
bbc.co.uk/news/uk-politics-63622032
Without getting into the rights & wrongs of austerity/balancing the budget as economic policy, I wanted to reflect on an article I wrote a few years ago in Political Studies on the politics & rhetoric that surrounded the Osborne era of austerity.
journals.sagepub.com/doi/full/10.1177/0032321717720376
Over the course of the Cameron government, use of the term austerity underwent a fundamental shift.
The first person to use the term was Cameron himself, arguing that the UK was entering "an age of austerity" in 2009.
theguardian.com/politics/2009/apr/26/david-cameron-conservative-economic-policy1
Cameron was clearly trying to link his policies with the earlier, famous period of austerity in post-war Britain. The claim here was that a national effort was required where everyone would do their bit.
However, the policy mix that Cameron/Osborne offered was incompatible with this kind of rhetoric. Recent discussion has suggested that their version of austerity was 80% spending cuts/ 20% tax increases.
This created a situation where negative impacts of those policies were falling heavily on the most vulnerable. In these circumstances, the term austerity was rapidly re-invented, shifting from a shared sacrifice, and becoming an attack line for the government’s opponents.
This time it looks as if the policy mix is going to be different. Hunt & Treasury have trailed the idea of a 50/50 split between spending cuts & tax increases. Some of the measures being hinted (e.g. lowering the top income tax band from £150k to £125k) hit higher earners.
It is interesting to ask what the politics of this version of austerity will be? Maybe a greater focus on tax increases will make the overall policy more palatable, and it will seem fairer? Maybe the political errors of the Osborne era will be avoided?
I am skeptical as to whether it will work, for a number of reasons though. Britain is in a far worse state than it was in the 2010-2015 period. Infrastructure is creaking. This raises the very serious question of where cuts can actually occur.
In addition, many of the economic indicators are far worse than they were in 2010. If you didn't need regular or emergency access to public services during the Cameron years, you might not have even really noticed austerity was happening.
Now public spending cuts come on top of high inflation, increased mortgage rates and following a decade of stagnant wages. Therefore, this isn't going to be so much austerity 2.0, but austerity+, and could be felt more widely.
This is therefore a long way of saying that while Hunt's instincts may be right and that - if your goal is to balance the books - it is smarter politics to go for a more even mix of tax rises and spending cuts than occurred in the coalition years.
However, the fundamental political and economic context remains terrible for the Conservative Party, and it is hard to see how they can spin Thursday in a way that helps them much.
Nick Anstead
@NickAnstead
Assoc Prof working on political communication & political ideas @MediaLSE. Also 🧵 nickanstead.
