Campaigners arguing for action on tax avoidance yesterday. Photo: Getty.
Show Hide image

The scariest bit of the budget — the one graph you need to know

Today's headlines hide the most important, and least reassuring, fact in yesterday’s Budget.

Read this piece on our election site, May2015.com.

“Sun shines on savers”, “UK booming…Jobs at record high”, “The comeback king”, “End of tax on savings”. The four papers likely to back the Tories in May – the Mail, the Sun, the Times and the Telegraph – have delivered their verdict on the Budget, and they paint a pleasant picture.

But the headlines hide the most important, and least reassuring, fact in yesterday’s Budget: to eliminate the deficit, Osborne is going to cut spending more severely in the next two years than the coalition has in any year so far.

Here’s the key graph. It’s as trustworthy as they come. It was made by the Office for Budget Responsibility – an independent body that exists to analyse the public finances.

The Tories are planning to cut spending by 5.1 per cent in 2016-17 and 4.6 per cent in 2017-18. That’s greater than in any year since austerity began in 2010, and nearly twice as much as the average cut over the past five years (2.8 per cent).

The cuts scheduled for next year are more than four times greater than the cuts Britain is facing over the next twelve months.

Next year's cuts will be four times greater than those Britain is facing this year.

After two years of deep cuts (2016-17 and 2017-18), Osborne plans to return to this year’s more moderate levels of austerity in 2018-19, before increasing spending dramatically in 2019-20 (by 4.3 per cent). [1]

This is purely political. By cutting spending sharply at first, Osborne can deliver a final dose of medicine and then suddenly start spending just before the 2020 election.

There is no economic basis for this. As the FT put it, an “ever more annoyed” Robert Chote, chair of the OBR, tersely described Osborne’s plan as a “rollercoaster”. The Times, in contrast to their front-page, concurred, with a double page spread on how “Experts warn of a rollercoaster ride in row over public spending”.


FullSizeRender (1)

Instead of this “bonkers” approach (the Guardian’s Patrick Wintour), Osborne could balance the cuts across all four years. The austerity in each year would be lower than the average over the past five years, and far more manageable for the services set to be slashed.

Government spending isn’t abstract. Osborne can’t just take a few pennies of one year, add them back in the next, and easily replace the services he’s crippled.

[1] These figures are on p.129 of the report.

Explore May2015.com.

May2015 is the New Statesman's new elections site. Explore it for data, interviews and ideas on the general election.

Photo: Getty
Show Hide image

The rise of the green mayor – Sadiq Khan and the politics of clean energy

At an event at Tate Modern, Sadiq Khan pledged to clean up London's act.

On Thursday night, deep in the bowls of Tate Modern’s turbine hall, London Mayor Sadiq Khan renewed his promise to make the capital a world leader in clean energy and air. Yet his focus was as much on people as power plants – in particular, the need for local authorities to lead where central governments will not.

Khan was there to introduce the screening of a new documentary, From the Ashes, about the demise of the American coal industry. As he noted, Britain continues to battle against the legacy of fossil fuels: “In London today we burn very little coal but we are facing new air pollution challenges brought about for different reasons." 

At a time when the world's leaders are struggling to keep international agreements on climate change afloat, what can mayors do? Khan has pledged to buy only hybrid and zero-emissions buses from next year, and is working towards London becoming a zero carbon city.

Khan has, of course, also gained heroic status for being a bête noire of climate-change-denier-in-chief Donald Trump. On the US president's withdrawal from the Paris Agreement, Khan quipped: “If only he had withdrawn from Twitter.” He had more favourable things to say about the former mayor of New York and climate change activist Michael Bloomberg, who Khan said hailed from “the second greatest city in the world.”

Yet behind his humour was a serious point. Local authorities are having to pick up where both countries' central governments are leaving a void – in improving our air and supporting renewable technology and jobs. Most concerning of all, perhaps, is the way that interest groups representing business are slashing away at the regulations which protect public health, and claiming it as a virtue.

In the UK, documents leaked to Greenpeace’s energy desk show that a government-backed initiative considered proposals for reducing EU rules on fire-safety on the very day of the Grenfell Tower fire. The director of this Red Tape Initiative, Nick Tyrone, told the Guardian that these proposals were rejected. Yet government attempts to water down other EU regulations, such as the energy efficiency directive, still stand.

In America, this blame-game is even more highly charged. Republicans have sworn to replace what they describe as Obama’s “war on coal” with a war on regulation. “I am taking historic steps to lift the restrictions on American energy, to reverse government intrusion, and to cancel job-killing regulations,” Trump announced in March. While he has vowed “to promote clean air and clear water,” he has almost simultaneously signed an order to unravel the Clean Water Rule.

This rhetoric is hurting the very people it claims to protect: miners. From the Ashes shows the many ways that the industry harms wider public health, from water contamination, to air pollution. It also makes a strong case that the American coal industry is in terminal decline, regardless of possibile interventions from government or carbon capture.

Charities like Bloomberg can only do so much to pick up the pieces. The foundation, which helped fund the film, now not only helps support job training programs in coal communities after the Trump administration pulled their funding, but in recent weeks it also promised $15m to UN efforts to tackle climate change – again to help cover Trump's withdrawal from Paris Agreement. “I'm a bit worried about how many cards we're going to have to keep adding to the end of the film”, joked Antha Williams, a Bloomberg representative at the screening, with gallows humour.

Hope also lies with local governments and mayors. The publication of the mayor’s own environment strategy is coming “soon”. Speaking in panel discussion after the film, his deputy mayor for environment and energy, Shirley Rodrigues, described the move to a cleaner future as "an inevitable transition".

Confronting the troubled legacies of our fossil fuel past will not be easy. "We have our own experiences here of our coal mining communities being devastated by the closure of their mines," said Khan. But clean air begins with clean politics; maintaining old ways at the price of health is not one any government must pay. 

'From The Ashes' will premiere on National Geograhpic in the United Kingdom at 9pm on Tuesday, June 27th.

India Bourke is an environment writer and editorial assistant at the New Statesman.

0800 7318496