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26 February 2020updated 09 Sep 2021 3:58pm

Leader: The long shadow of austerity

For the first time in more than 100 years, life expectancy in the UK has stalled, while food bank usage has surged, and rough sleeping has increased by 165 per cent since 2010. 

By New Statesman

When George Osborne delivered his first austerity Budget in 2010 he declared: “when we say that we are all in this together, we mean it”. There have been few more eloquent rebuttals of this claim than the Marmot Review published by the Institute of Health Equity on 25 February 2020. 

The report, which examined health inequalities in England over the past decade, is unremittingly grim in its conclusions. For the first time in more than 100 years, life expectancy has stalled and has even declined for women in the poorest 10 per cent of areas. During the past ten years, the seven-year gap in life expectancy between the richest and poorest parts of England has increased to more than nine years for men and nearly eight years for women. The north-south divide has also widened: life expectancy in a deprived area of the north-east is nearly five years lower than in a comparable part of London.

“England has lost a decade,” lamented University College London professor Michael Marmot, who led the review, as he presented his findings. Austerity had not merely coincided with such outcomes but caused them. “If you ask me if [austerity] is the reason for the worsening health picture, I’d say it is highly likely.” 

The report’s conclusions may shock but they should not surprise. Over the past decade, including in our recent Crumbling Britain series, we have charted the effects of austerity on living standards and the public realm. Social ills that were once thought to have been largely eradicated are recrudescing. More than 1.6 million emergency parcels were distributed by Trussell Trust food banks across the UK in the year leading up to March 2019. Rough sleeping in England has increased by 165 per cent since 2010. In the UK, the proportion of people living in poverty who are in a working family has reached a record high (56 per cent), while child poverty has risen to 4.5 million, having increased for four consecutive years. “Austerity will cast a long shadow over the lives of the children born and growing up under its effects,” Mr Marmot warned. 

Alternative paths were available. Though Britain’s budget deficit peaked at £153bn (9.9 per cent of GDP) in 2009-10, the degree of austerity imposed was a matter of choice, rather than necessity. Unlike eurozone members, the UK retained its own currency and central bank – no foreign institution compelled it to pursue punitive cuts. Rather than stimulating growth, as some predicted, austerity has depressed it. The UK has endured its slowest economic recovery in recorded history and average wages have only recently exceeded their 2008 peak. Even the International Monetary Fund, once a cheerleader for austerity, concluded that the policy did more harm than good. 

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Government borrowing, it is said, will “burden” younger generations, but austerity has enfeebled the collective institutions that young people depend on. In England, 963 GP practices and 1,292 Sure Start children’s centres have closed since 2010. 

Boris Johnson’s government has vowed to end austerity. In last year’s spending review, the then chancellor Sajid Javid announced a 4 per cent rise in public spending, the largest increase for 15 years. But even his approach was deemed excessively frugal by No 10 and Mr Javid was replaced by Rishi Sunak, who is charged with pursuing investment. 

Mr Osborne’s cherished ambition of a budget surplus has been abandoned (government borrowing has risen by 15 per cent this financial year) and his former colleagues now cite ultra-low interest rates as proof that the state can afford to invest. In so doing, they have tacitly accepted the very arguments levelled by Keynesians against austerity since 2010. 

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The Conservatives’ belated – and tactical – shift should be welcomed. But it should not be overstated. Even by 2023-24, day-to-day spending on public services outside of health will still be almost 15 per cent lower in real terms than it was at the start of the 2010s. And no amount of spending can compensate for the unnecessary harm austerity inflicted on individuals and society over the past decade.

This article appears in the 26 Feb 2020 issue of the New Statesman, The death of privacy