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20 June 2023

Austerity on trial

At the Covid-19 inquiry, David Cameron and George Osborne were unrepentant over their spending cuts.

By Anoosh Chakelian

The first full week of the Covid-19 public inquiry had a retro feel. Protagonists of past governments – David Cameron, Oliver Letwin, George Osborne, Oliver Dowden and Jeremy Hunt (the latter two still lingering as Deputy Prime Minister and Chancellor, respectively) – took their turns at the witness stand.

Like a flashback montage, memories of a faraway pre-Brexit era were prompted by their exchanges with the inquiry’s lawyers: terrorism, Ebola, fuel tankers, fluey winters and coalition-pact springs. But one thing Cameron and Osborne were in the dock for was still grimly current: austerity. The public spending cuts they imposed from 2010 onwards are still behind today’s news, from ambulance delays to unsolved crime, polluted water to public sector strikes. These were time bombs for future governments, set ticking by “two posh boys who don’t know the price of milk” – as Nadine Dorries once called them – but who knew to manage the public finances like the weekly shop.

[See also: Martin Wolf interview: “Austerity and Brexit made everything worse”]

Outside the grand colonnaded porch of the inquiry’s home on Westbourne Terrace, a central London street of white stucco, were two queues: the public, holding photos of their lost loved ones, and, opposite, a trail of clammy journalists and glossy lawyers.

One woman, holding photos of her father, who died of Covid-19, had set up a camping chair. Sioux Vosper, waiting for a place in the public gallery, told me, blinking back tears, that she had inherited her father’s extensive vinyl collection. Everything from Vera Lynn to the Sex Pistols. He died in April 2020. “We should have locked down sooner,” she said. “We should have shut the borders.”

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By the time the pandemic began, any slack in the British state had been removed by the men being questioned. At the time the New Statesman data journalism team and I found that almost every part of the faltering government response – health, education, community services, key-worker pay, welfare – had a link to the past decade of cuts.

Public sector pay was frozen for two years in Osborne’s emergency Budget of 2010 and stagnated over the ensuing decade. Doctors, nurses, teachers and social workers had been running on goodwill, even before Covid. NHS spending rose, yes, but at the slowest rate since the service was founded 75 years ago; by 2020 available overnight hospital beds had fallen 11 per cent in ten years. In November 2019, for the first time, every major A&E department in England missed its four-hour waiting time target; this is now a familiar failing.

Education spending, too, was supposedly a priority. But underfunding here meant teacher shortages and class sizes rising during the austerity decade (making social distancing in classrooms even harder). More than £30bn was cut from the welfare budget between 2010 and 2020, rendering Universal Credit – which had a surge in applicants as people lost work overnight – even harder to live on.

Perhaps the most devastating assault of all was on councils, which cover social care and public health. By 2020, local authorities had lost an average of 60p in every pound of their government grants. The average council’s spending on adult social care per person fell 9 per cent from 2010 to 2019, as demand from an ageing population rose. Public health reserves fell 30 per cent from 2015 to 2019.

Cameron and Osborne have never before had to answer for this economic illiteracy, despite a number of ministers from the time since expressing regret. Even Hunt, who was health secretary from 2012 to 2018, told me last year that social care cuts were a “silent killer”.

Aside from a brief lap of dishonour when lobbying for the beleaguered Australian financier Lex Greensill, Cameron has kept a low profile since he resigned in 2016 – whistling into the sunlit uplands after losing the Brexit vote. Osborne, after a cleansing dip in the worlds of Fleet Street and venture capital, has now been fully laundered into cosy pundit status.

[See also: Austerity regret – the new Tory gambit]

Compared to the tumult at Westminster as the Tories grappled with Boris Johnson’s aftershocks, this Cameroon reunion tour felt as polished as ever. Its members’ automaton navy suits and ambient condescension recalled an age where the Sensible People were in charge and everything they did was Reasonable. The senior executives of UK Inc.

Cameron, who appeared before the inquiry on the morning of 19 June, still performed the anxious-aggressive hand gesture that he perfected as prime minister – spreading his fingers and pressing down firmly on an invisible beach ball. Twiddling his glasses and sitting on the edge of his chair, he listened to the charge that his cuts hindered the UK’s “preparedness and resilience for a pandemic”, the theme of the first phase of the inquiry.

A report by the epidemiologist Michael Marmot and the public health professor Clare Bambra for the inquiry found that the UK “entered the pandemic with its public services depleted, health improvements stalled, health inequalities increased and health among the poorest people in a state of decline”.

Cameron, a signature ruddiness returning to his jowls, rejected this. “There is no resilience without economic resilience, without financial resilience, without fiscal resilience,” he said. “And so that was absolutely line one of our plan of dealing with any unexpected crises. Our whole economic strategy was about safeguarding and strengthening the economy and the nation’s finances so that we could cope with whatever crisis hit us next.”

He never thought to elaborate on why – when it came to it – we couldn’t.

Everything was couched in those arbitrary metrics of “reason” and “responsibility”. It was vital to have a “reasonable debt-to-GDP ratio”, whatever that was; it was a “responsible approach to repairing the UK’s public finances”. According to who?

Calm but firm, the barrister questioning him, Kate Blackwell KC – in live-stream lawyer-wear of winged tortoiseshell glasses and ruffle-fronted white shirt – elicited an admission that his government had failed to prepare properly. It had succumbed to “groupthink” by focusing solely on the threat of a flu pandemic, Cameron admitted. But even Blackwell’s sharp questioning failed to inspire any soul-searching over austerity.

Around 15 members of the public – in hoodies, suits, jeans and summer dresses – watched from the public gallery, quietly scribbling notes and holding up laminated pictures of loved ones killed by Covid for marathon stretches. With its low ceilings, galaxy blue walls and geometric grey carpet, the hearing room felt both sleepy and tense.

Osborne, hands clasped and face egg-white, was even less contrite than Cameron. He rejected the idea that his Treasury could have prepared for lockdown (its only nod towards pandemic planning was funding a call centre and buying some antibiotics in 2012). Even if he’d been advised to prime the UK for staying at home, he questioned whether “we would have thought that was a plausible plan” at all.

Report after report from prestigious organisations (including the Office for Budget Responsibility, Osborne’s own invention) on how cuts to public health and social care weakened the UK glowed on a screen in front of him. This wasn’t Sunday night banter with Ed Balls on Channel 4 any more. Under pressure, the former chancellor retreated to his old metaphor – discredited by so many economists and now banned at the BBC – comparing public finances to personal debt. “The central calculation, which every household has to make, is what can we actually afford? What’s the revenue that’s coming in?”

Osborne’s case, like Cameron’s, was that reducing spending had made the economy more resilient to sudden crises such as Covid-19. How shrinking the state, which so many suddenly came to rely on during the pandemic, was in any way akin to “fixing the roof” (another classic line recycled by Osborne) never quite made it onto public record.

“They’re not going to accept responsibility for anything,” Sioux Vosper said afterwards as she walked out of the hearing. “They’re making it all about the money, and not people’s lives. I didn’t know about austerity when it was happening, I wasn’t political before this. But now I know that their failures go way back.”

[See also: Escaping the austerity trap]

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This article appears in the 21 Jun 2023 issue of the New Statesman, The AI wars