austerity
Conservatives Branded ‘Nasty Party’ as Voters Reject Plan to Target Sick and Disabled
The Conservative Party are now seen as the ‘nasty party’, according to exclusive new polling which suggests a large majority of voters reject the Government’s plans to target welfare payments to the disabled and long-term sick.
Rishi Sunak’s Government last week set out plans to end what it described as the UK’s “sick note culture”, while suggesting that welfare payments to some disabled people would be replaced with alternative schemes designed to get them into work.
The plan does not appear to be going down well with voters according to new polling by pollsters We Think this week which found that three quarters (75%) of those surveyed would oppose any further cuts to welfare payments for the long-term sick and disabled.
In fact, far from wanting payments to these groups cut, a majority of those surveyed (54%) said that there is currently “too little” government support for the disabled and sick, compared to just 16% who said there was too much.
A further 29% said that current levels of payments to these groups should be maintained.
The policy may be contributing to broader opinions about the Conservative party. Asked which of the major political parties would be best described as the "nasty party", 46% of those surveyed picked the Conservatives, compared to just 23% who picked Labour. Reform UK came in third place on 17%.
The findings come as the Conservative Party suffer one of their worst set of local election results in the past 40 years.
Early results show the party losing councils right across the country, while narrowly avoiding slipping into third place behind Labour and Reform UK in the Blackpool by-election, which was triggered by a lobbying scandal involving the former Conservative MP Scott Benton.
According to Britain’s leading pollster John Curtice, the numbers point to Rishi Sunak’s party suffering “one of the worst, if not the worst, Conservative performances in local government elections in the last 40 years”, with the party doing at least as badly as the current national opinion polls suggest.
The party's campaigning focus on niche culture war issues also appears to be merely alienating voters far more concerned with other issues, such as the economy and the NHS, according to research by the pollster Luke Tryl, who found this week that such rhetoric about “woke” issues “significantly reduces the likelihood to vote Conservative”.
Asked how likely they were to back the Conservative party at the next general election, just 13% of those surveyed by pollsters We Think said they would be "very likely" to do so compared to 47% who said they would be very unlikely to do so.
Overall 26% of voters said they would be either very or quite likely to back Rishi Sunak's party at the general election, compared to 42% who said they would be either quite or very likely to back Keir Starmer's Labour party.
Read more local elections coverage:
Labour’s ‘Punishment’ of Jamie Driscoll May Hand Him Victory in the North-East
Ex-Army Officer Who Served in Afghanistan ‘Blocked from Ballot Box’ After Veteran ID Rejected
Labour email reveals panic as London mayoral ‘closer than we thought’
Plea for doorknockers betrays fears about outcome
‘Red Tory’ Labour appears to be worried about the outcome of today’s London mayoral election. The party has sent out an email to members in London asking them to come out and knock on doors to get voters out, because ‘it’s closer than we thought’ – close enough that ‘the number of people who volunteer could decide who wins’:
The emails have even been sent to non-members who left the party years ago.
The email doesn’t say which party Labour thinks is running it close. With the election now run on a first-past-the-post basis, unless there has been a huge surge for another party, Londoners have been left with an choice between a racist, pro-genocide, pro-austerity party and another racist, pro-genocide, pro-austerity party – and many who might usually have held their nose to vote Labour may simply be staying home to follow Keir Starmer’s example by abstaining.
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How Rishi Sunak Cooked the Books With his Defence Spending Pledge
Rishi Sunak gathered lots of approving front pages in the Conservative-supporting newspapers on Wednesday, after pledging to increase defence spending by £75 billion and pay for it by scrapping 70,000 civil servant jobs.
The £75 billion figure features prominently on the front page of the Telegraph, the Times and Daily Mail. The only problem is that it isn’t really true.
As the Prime Minister’s own spokesperson confirmed on Wednesday, the £75 billion increase is actually based on comparing the total projected defence spend in six years time, with the cash figure spent by the Government today. In other words it is based on stripping out any inflation-based increases that would otherwise have happened anyway.
As the Institute for Fiscal Studies have pointed out today, this is a deeply misleading way of presenting the increase, which is in reality closer to just £20-£25 billion in real terms.
And even once you remove this sleight of hand, the pledged increase is still significantly lower than what was promised in the Conservative Party’s own 2019 manifesto, which stated that defence spending would be “at least 0.5 per cent above inflation every year of the new Parliament.” With inflation currently at 3.2%, the Government’s new pledge to raise it to 2.5% of GDP by the end of the decade still falls a long way short.
Cooking the Books
Sunak’s book-cooking doesn’t stop there.
Talking about his plans on Wednesday, Sunak claimed that his pledge had been “fully costed”.
In order to justify this, he claimed that the policy would be paid for by reducing the size of the civil service by 70,000 jobs, which he suggested would save an estimated £4.5 billion a year over six years.
Now the eagle-eyed among you will notice at this point that £4.5 billion times six does not equal £75 billion.
Asked about this today, Sunak’s spokesperson confirmed yet another piece of jiggery-pokery, which is that unlike the £75 billion figure he claims to be increasing defence spending by, the £4.5 billion figure is based on real-terms figures, not cash figures.
In this way he is attempting to use two entirely different methodologies and baselines to estimate the increase in defence spending, versus the amount of money that he will need to save in order to pay for it.
In other words the Prime Minister is massively overstating the size of the increase to defence spending he plans to make, while relatively downplaying the size of the public sector cuts that he would have to make in order to pay for it.
Obviously the use of such dishonest sleights of hands should cause anyone to question how seriously we should take the PM's entire pledge. If Sunak and his team are so willing to blatantly cook the books about the real-terms costs of their policy, then any claims they make about it all being paid for just by sacking some civil servants should not be taken particularly seriously either.
And with the polls suggesting that the Prime Minister is highly unlikely to be in a position to ever actually implement, let alone pay for his announcement, the unquestioning coverage it received in today's newspapers now looks incredibly misjudged.
‘With his Poll Ratings Sinking, Sunak Goes For One More Attempt at Scapegoating the Vulnerable: The “Skivers” Revisited’
With a general election looming, it once again appears to be open season on benefits claimants and disabled people.
During a weekend welfare policy blitz, the Prime Minister pledged a new slew of curbs on benefits for disabled and chronically ill people if the Conservatives win power again. He also doubled-down on retaining the controversial two-child benefit cap, a key driver of child poverty.
The opening salvo came courtesy of a speech on Friday when Rishi Sunak decried what he called the country’s “sick note culture”, declaring that he was on a “moral mission” to reform the benefits system and tackle the “spiralling” £69 billion disability welfare costs.
Something had to be done, he said, about the growing numbers of economically inactive people who are long-term sick – in particular those deemed to have mental health problems and especially young people, too many of whom were “parked on welfare”.
If the specific language around disability and welfare sounds familiar, that’s because it is.
With terms like "sick note culture" and "parked on welfare", Sunak was operating straight from the benefits-bashing playbook wielded with great effect by consecutive Conservative administrations to demonise benefits claimants.
Since the onset of austerity 14 years ago, variations on the same toxic rhetoric have been deployed to justify years of savage cuts to social security and public services. The same rhetoric has been repeatedly leveraged to pit so-called 'hard-working’ people against anyone in need of state assistance.
The Joseph Rowntree Foundation described Sunak's speech as “an irresponsible war of words on people who already aren’t getting enough support”.
As he faces record low polling numbers, the Prime Minister appears intent on giving the ‘skivers versus strivers’ trope one last whirl. In one section of his speech referring to mental health, he warned against "over-medicalising the everyday challenges and worries of life".
Among the proposals put forward – which were immediately slammed by disability charities and labelled by one as “a full-on assault on disabled people” – was a possible withdrawal of major ongoing benefits.
Sunak announced a review of Personal Independence Payments (PIP), whereby some payments might be changed to one-off rather than ongoing. As a non-means-tested benefit to help people with extra living costs due to disability or ill health, the possibility of the removal of regular essential payments sparked an understandable outcry from disabled people’s organisations.
Other proposed measures included closing benefits claims for individuals still out of work after 12 months who fail to comply with conditions for accepting available work. Another would make it harder to obtain a sick note. Sunak also asserted that the Government would look at shifting responsibility for classifying individuals as not fit for work away from GPs to other "work and health professionals".
According to the Prime Minister, too many GPs have been signing people off work by default. Yet, as many have pointed out, such an assessment belies reality.
James Taylor, director of strategy at disability charity Scope, noted for example that “much of the current levels of [economic] inactivity are because our public services are crumbling, the quality of jobs is poor, and the rate of poverty among disabled households is growing”.
However, not only did Sunak's speech represent another assault on an already ungenerous and punitive benefits system, it was also nuclear-level gaslighting.
After a decade-and-a-half of the Conservatives in power, actively shredding the social safety net, it was with profound cognitive dissonance that Sunak declared that “the values of our welfare state are timeless. They’re part of our national character” and that “we’re proud to ensure a safety net that is generous for those who genuinely need it – and fair to the taxpayers who fund it".
As concerning as the speech was, it was soon followed by an article in The Sun on Sunday, penned by Sunak, in which he reiterated some of its key tenets while also aiming fire at families in poverty. Despite calls for it to be abolished, he vowed to keep the controversial two-child benefit cap.
The two-child limit, introduced in 2017, restricts means-tested benefits to families with fewer than three children. According to the Resolution Foundation think tank, the policy leaves larger families £3,200 a year worse off, per additional child, making it a factor in rising child poverty. In 2013-2014, 34% of children in larger families were in poverty. By 2028-29 the foundation estimates that this will soar to a staggering 51%.
Abolishing the two-child limit would cost the Government in the area of £3.6 billion for 2024-25 (if at full coverage). If the policy was abandoned, it could mean as many as half a million fewer children in poverty. It should be a no-brainer politically to lift that many kids out of poverty, yet Sunak seems determined not to act.
A protestor in a wheelchair and police during a demonstration in which a group chained themselves together across Regent Street, London, in protest against the Government's welfare reforms. Photo: John Stillwell/PA
Responding to The Sun on Sunday article, Alison Garnham, chief executive of the Child Poverty Action Group, observed: “With child poverty at a record high, the Prime Minister has now clearly decided that making kids poor is his political priority. The two-child limit makes it harder for kids, punishing them for having brothers and sisters. It’s time to scrap this nasty policy.”
The kind of demonising, divisive rhetoric used by Sunak and others in his party to justify budget cuts and welfare reforms has tended in the past to find fertile ground with a significant portion of the electorate. This latest attempt at scapegoating, however, stinks of desperation.
The Prime Minister is clearly grasping at straws. What’s less clear is whether Labour will finally commit to abolishing cruel and unnecessary policies like the two-child limit if the party forms the next government. If nothing else, Rishi Sunak has thrown down a gauntlet.
Mary O’Hara is the author of 'The Shame Game: Overturning the Toxic Poverty Narrative’. The 10th anniversary edition of her book, 'Austerity Bites: A Journey to the Sharp End of Cuts’ in the UK will be published in September by Policy Press
Rishi Sunak Will Leave a Long List of ‘Big Nasties’ for the Next Government to Clear Up
The next Government will inherit a long list of 'big nasties' from the Conservatives which will cost hundreds of billions of pounds to clear up, a report by the House of Commons Public Accounts Committee, warns today.
After a year when her committee examined projects across Whitehall, the NHS and schools the chair of the Commons Public Accounts Committee, Dame Meg Hillier, lists what she calls a catalogue of “big nasties – essential spending which cannot be put off”.
The list includes failed projects to tackle crumbling schools, hospitals, public health laboratories, outdated IT and renewing and refurbishing Parliament.
She warns: "All too often, we have seen money misdirected or squandered, not because of corruption, but because of group-think, intransigence, inertia, and cultures which discourage whistle-blowing. On occasion, the scale of failure has been seismic, such as HS2 or Horizon in the Post Office, or the procurement of PPE during Covid. Other times, there has been a systemic failure to be agile and adaptable as events unfolded.”
Unless this is tackled she warns: “my successors as chair of the PAC will be doomed to a cycle of broken promises and wasted cash in perpetuity.”
The report produces eye-watering shortfalls of money showing where short-termism by the present Government has worsened the state of public services.
In schools instead of spending £5.3 billion a year to refurbish or replace crumbling schools attended by 700,000 pupils, the Treasury cut this to £3.1 billion a year increasing the backlog.
In the NHS the backlog of crumbling hospitals has jumped from £4.7 billion to £10.2 billion after the NHS raided the capital programme to keep patient services going. Despite spending £178.3 billion a year patient services are worse, waiting lists longer, particularly for cancer patients who need urgent treatment.
A delayed £530 million programme to modernise public health laboratories which handle the most dangerous diseases such as Ebola and Lassa fever will now cost £3.2 million. Failure to implement it “would present a significant risk to public health,” says the report.
The report says a decision not to decommission 20 nuclear submarines which have been withdrawn from service since 1980 has left the ministry of defence with a £500m maintenance bill and it has run out of space of where to store them. The ministry now has a £7.5 billion future liability to dispose of them.
The Ministry of Justice now has a £900 million maintenance backlog on the prison estate and plans to create 10,000 new prison places have only seen 206 new places.
Some £100 billion of spending by local councils remains unaccountable because of a shortage of auditors and councils like Birmingham, Nottingham, Slough and Thurrock have gone effectively bankrupt.
The country’s main animal health laboratory in Weybridge, Surrey, has “deteriorated at an alarming extent". It has a £2.8 billion piecemeal redevelopment plan over 15 years but if it fails, “the UK will have no capacity to react to new and emerging animal disease threats”.
There are a large number of failures among IT systems across Whitehall -some of them impacting on the general public – notably the DWP underpaying pensioners.
The report says: “DWP has underpaid pensioners £2.5 billion,138 with errors dating back to 1985, and many more pensioners may still be under-claiming. 90% of these underpaid pensioners are women. The errors were due to outdated systems dating back to 1988.”
Former MP Smith quits Labour after suspension for refusing to vote for cuts
Labour under control freak Starmer has no respect or inclusivity, says former Crewe and Nantwich MP Laura Smith, who also cites Starmer’s Gaza stance as a driver for her decision
Former Crewe and Nantwich MP Laura Smith has quit the Labour party with a blistering attack on Labour’s lack of standards and inclusivity under Keir Starmer, after being suspended from the Cheshire East council Labour group for refusing to vote in support of a package of swingeing Tory cuts.
In a public statement about her decision to resign, Smith said that she:
entered mainstream politics back in 2017 after years of activism in social justice
movements after growing up in a family of trade union and socialist values. I stuffed
leaflets In the Labour Party envelopes and served tea and biscuits at the meetings of the local group as a child, and some of my earliest memories were of Saturdays spent In the car with my dad as he drove Gwyneth Dunwoody, the MP at the time around the constituency. I knew my core values from a very early age and I knew from the feeling in the pit of my stomach that my fight was always going to be equality and social justice. I experienced many things growing up that further shaped my beliefs and that feeling only grew as I became an adult.Being supported by my local Labour party and then becoming an MP representing my home towns was something that I couldn’t ever have Imagined. As someone from a challenging background and always struggling to make ends meet, it wasn’t a future that I felt was possible. But it did happen In a whirlwind of political change and hope for an alternative in the snap general election of 2017. I was elevated into a position where I felt that I could make a difference and my motivation was always the same. Those same values that I had harboured since being a little girl.
That two and half years in Parliament was an experience that I will always cherish and struggle with, in equal measures. The stark reality of our political system is one that I cannot pretend hasn’t made me more cynical, less hopeful for a real alternative and unfortunately more worried for the future. When I was elected, I hoped that I could prove to young girls and women who had been just like me that their voices could be heard, that they could make a difference and that they could be the changemakers and creators of a better world. The sad reality is that the system itself hampers the opportunity for real progress.
I would love to say that politics is a safe space for women. It isn’t. I would desperately like to say that debate and conflict is healthy and respectful. It’s not. I wish I could say that the old tropes that politics is a dirty corrupt business were untrue. But sadly it is. And that is from the top of our system all the way down to local politics.
More than anything I would like to say that the Labour Party itself sets a standard of
inclusivity and respect but that would be untruthful in my experience. It has become a place where to have a thought in your head that differs to the Labour leadership and the officials behind the scenes is an offence that can lead to suspension or even expulsion. At a local level it is a space where judgment is felt because as a full-time working mother juggling multiple caring responsibilities as well as often working Saturdays, you can’t sit in meeting after meeting or knock on doors in your rare free hours. I have heard the tutting and watched the finger wagging and listened to the comments and I think that it unfortunately remains the case that to be valued in the party you need to have lots and lots of free time. Naturally that means being either retired, not have caring responsibilities, being healthy both physically and mentally, and more often then not financially secure. Equality right? This Is before even
touching on the factional aspects that rage through the party, manifesting Itself through bullying, belittling, a culture of fear and a general lack of respect.I am not perfect. I don’t have all of the answers. But one thing I am not is a hypocrite. It is for that reason, and after much consideration, I have decided to resign my membership of the UK Labour Party, rather than appeal my recent suspension letter by the local labour group at Cheshire East Council. I was suspended for not voting In line with the whip, but as I stated at the council meeting on the 27th of February I cannot support an austerity budget that places local councillors as the punching bag tor a Tory Government determined to destroy public services. This has not been an easy decision, but it is on balance the right one for me.
The reasons that I have stated combined with the position the Labour Party leadership is taking on international policy as well as domestic issues is now completely at odds with my personal beliefs and unfortunately, I feel that an alternative voice is no longer respected within the party structures. I would like to thank the great many friends that I have within the party who I hope will continue to value and respect me as I value and respect them. I will continue to serve my ward of Crewe South as an independent socialist councillor on the political values that I have always openly and honestly shared and was elected on.
I remain dedicated to fighting for true equality and Justice for the people in this country who quite simply are not receiving anywhere near the service and quality of life that they deserve. There is a complete void of honesty, decency, ambition and leadership from those with the true power to change things. Talk is cheap and the dishonesty that I have encountered on a daily basis in politics is something that I simply could not have imagined.
Bravery is required in desperate times, and democracy can only really work when fear and desire for power is not the driving force behind people’s motivations. It is our actions that define who we are and we owe it to ourselves to be true. I will be true to the little girl I once was and not allow my voice to be erased and my opinions silenced.
Smith was re-elected last year as councillor for Crewe South and will continue to serve, but as an independent.
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English Councils on the Brink of Meltdown: A Crisis Fourteen Years in the Making
Over half of local councils in England could go ‘bankrupt’ over the next 5 years, according to a Local Government Information Unit (LGIU) survey revealed last week. The crisis threatens to devastate our local public services. Libraries, parks, theatres, public toilets, street cleaning services, youth provision and highway maintenance are just some of the many vital local public services affected by this unfolding crisis.
This is a catastrophe for communities, fourteen years in the making. Councils across England have been grappling with unprecedented real-world cuts to their spending power for well over a decade.
In 2010 political choices were made at the national level to reduce government grants and transition to a very different funding system. Councils would be expected to raise more of their income locally via Council Tax, business rates and local charges. Councils serving some of the poorest parts of the country have seen the biggest overall cut to their spending power, leaving a growing number unable to balance the books.
A recent report published by the Special Interest Group of Municipal Authorities (SIGOMA) showed that Government policy has led to a £13.9 billion cumulative cut to local authority budgets since 2010.
The core spending power of English councils is 18% lower now than it was back in 2010/11, in real terms. For councils serving the poorest populations that figure jumps to 26%.
There are stark examples that expose the grim reality and gross unfairness of government policy. According to the latest data the City of Bradford Council has suffered a £955 funding cut per dwelling, whereas Cambridgeshire is £166 worse off per household.
Another comparison shows that while Nottingham City Council has been trying to cope with a £950 reduction in spending power per dwelling, on the same measure Oxfordshire County Council is just £96 worse off per residential property.
Despite years and years of tough choices, service reductions and closures, asset sales, increasing Council Taxes and desperate pleas to central government to reform the funding system, many councils are left having to make the most unpalatable decisions to remain legally compliant.
The Perfect but Predictable Storm
This crisis was not only entirely predictable, it was clearly predicted. In 2010, Barnet Council published a budget chart which showed that without government reform of the social care system, their entire annual budget would be used up by adult and children’s care services by 2023.
For a growing number of councils that is exactly what is now happening, with statutory care services for the elderly and for vulnerable children taking up the vast bulk of financial resources, leaving too little left for everything else.
Not only have councils been hit by growing demand in these service areas they are also now seeing huge increases in people being made homeless. As the higher cost of living takes a toll on households they ultimately present to their local Town Hall in need of emergency or temporary accommodation.
The most recent Department for Levelling Up, Housing and Communities data shows a record 109,000 households living in temporary accommodation.
What Will this Mean for People?
On the ground in our towns, cities and villages, the political choices of national government, the funding technicalities and formulas have real-world impacts on communities.
For Councils facing a bleak financial outlook and attempting to remain legally compliant with a balanced budget, a range of ever-more-awful actions become necessary: the closure of facilities and public buildings, fewer libraries, streets not adequately maintained or cleansed, growing backlogs of cases in council departments such as planning and children’s services, less action on anti-social behaviour and generally an inability for Councils to be the effective lead organisation of their ‘place.’
The Government announced exceptional financial support for a number of the most distressed councils this week, but the list of councils on the brink is set to accelerate. The growing costs of care services for the elderly cannot be met by council taxes. Structural reform and change at the national level is desperately and urgently needed to stop a cycle of decline in our communities.
Austerity. The Past That Doesn’t Pass
[As usual lately, this is a slightly edited AI translation of a piece written for the Italian Daily Domani]
The European Commission recently revised downwards its forecasts for both growth and inflation, which continues to fall faster than expected. In contrast to the United States, there is no “soft landing” here. As argued by many, monetary tightening has not played a major role in bringing inflation under control (even as of today, price dynamics are mainly determined by energy and transportation costs). Instead, according to what the literature tells us on the subject, it is starting, 18 months after the beginning of the rate hike cycle, to bite on the cost of credit, therefore on consumption, investment and growth.
This slowdown in the economy is taking place in a different context from that of the pandemic. Back then, central bankers and finance ministers all agreed that business should be supported by any means, a fiscal “whatever it takes”. Today, the climate is very different, and public discourse is dominated by an obsession with reducing public debt, as evidenced by the recent positions taken by German Finance Minister Lindner and the disappointing reform of the Stability Pact. The risk for Europe of repeating the mistakes of the past, in particular the calamitous austerity season of 2010-2014, is therefore particularly high.
In this context, we can only look with concern at what is happening in France, where the government also announced a downward revision of the growth forecast for 2024, from 1.4% to 1%. At the same time, the Finance Minister Bruno Le Maire announced a cut in public spending of ten billion euros (about 0.4% of GDP), to maintain the previously announced deficit and debt targets. This choice is wicked for at least two reasons. The first is that it the government plans making the correction exclusively by cutting public expenditure, focusing in particular on “spending for the future”. €2 billion will be taken from the budget for the ecological transition, €1.1 billion for work and employment, €900 million for research and higher education, and so on. In short, it has been chosen, once again, not to increase taxes on the wealthier classes but to cut investment in future capital (tangible or intangible).
But regardless of the composition, the choice to pursue public finance objectives by reducing spending at a time when the economy slows, down goes against what economic theory teaches us; even more problematic, for a political class at the helm of a large economy, it goes against recent lessons from European history.
The ratio of public debt to GDP is usually taken an indicator (actually, a very imperfect one, but we can overlook this here) of the sustainability of public finances. When the denominator of the ration, GDP, falls or grows less than expected, it would seem at first glance logical to bring the ratio back to the desired value by reducing the debt that is in the numerator, i.e. by raising taxes or reducing government spending. But things are not so simple, because in fact the two variables, GDP and debt, are linked to each other. The reduction of government expenditure or the increase of taxes, and the ensuing reduction of the disposable income for households and businesses, will negatively affect aggregate demand for goods and services and therefore growth. Let’s leave aside here a rather outlandish theory, which nevertheless periodically re-emerges, according to which austerity could be “expansionary” if the reduction in public spending triggers the expectation of future reductions in the tax burden, thus pushing up private consumption and investment. The data do not support this fairy tale: guess what? Austerity turns out to be contractionary!
In short, a decline in the nominator, the debt, brings with it a decline in the denominator, GDP. Whether the ratio between the two decreases or increases, therefore, ends up depending on how much the former influences the latter, what economists call the multiplier. If austerity has a limited impact on growth, then debt reduction will be greater than GDP reduction and the ratio will shrink: albeit at the price of an economic slowdown, austerity can bring public finances back under control. The recovery plans imposed by the troika on the Eurozone countries in the early 2010s were based on this assumption and all international institutions projected a limited impact of austerity on growth. History has shown that this assumption was wrong and that the multiplier is very high, especially during a recession. A public mea culpa from the International Monetary Fund caused a sensation at the time (economists are not known for admitting mistakes!), explaining how a correct calculation gave multipliers up to four times higher than previously believed. In the name of discipline, fiscal policy in those years was pro-cyclical, holding back the economy when it should have pushed it forward. The many assistance packages conditioning the troika support to fiscal consolidation did not secure public finances; on the contrary, by plunging those countries into recession, they made them more fragile. Not only was austerity not expansive, but it was self-defeating. It is no coincidence that, in those years, speculative attacks against countries that adopted austerity multiplied and that, had it not been for the intervention of the ECB, with Draghi’s whatever it takes in 2012, Italy and Spain would have had to default and the euro would probably not have survived.
Since then, empirical work has multiplied, with very interesting results. For example, multipliers are higher for public investment (especially for green investment) and social expenditure has an important impact on long-term growth. And these are precisely the items of expenditure most cut by the French government in reaction to deteriorating economic conditions.
While President Roosevelt in 1937 prematurely sought to reduce the government deficit by plunging the American economy into recession, John Maynard Keynes famously stated that “the boom, not the recession, is the right time for austerity.” The eurozone crisis was a colossal and very painful (Greece has not yet recovered to 2008 GDP levels), a natural experiment that proved Keynes right.
Bruno Le Maire and the many standard-bearers of fiscal discipline can perhaps be forgiven for their ignorance of the academic literature on multipliers in good and bad times. Perhaps they can also be forgiven for their lack of knowledge of economic history and of the debates that inflamed the twentieth century. But the compulsion to repeat mistakes that only ten years ago triggered a financial crisis, and threatened to derail the single currency, is unforgivable even for a political class without culture and without memory.
Rishi Sunak Says His ‘Plan is Working’ But Voters Don’t Believe Him
Three quarters of voters do not believe Rishi Sunak's claim that his "plan is working" for fixing the UK economy, findings from a damning new poll for Byline Times suggest.
The British economy entered recession at the end of last year, according to official figures published earlier this week.
The figures revealed that the UK has gone through its longest period without economic growth per capita since the 1950s.
In the wake of two massive by-election defeats on Friday morning, the Prime Minister again insisted to reporters that “our plan is working” and he can “give everyone the peace of mind that there is a better future for them and their families”.
However, a new poll conducted this week for this paper by pollsters We Think found that 73% of all those surveyed do not agree that the Prime Minister's plan is working, with even one-in-three Conservative voters disagreeing with his claim.
The poll also suggests that voters have little faith in the ability of the Prime Minister to provide the “better future” for them and their families that he promised this morning.
Asked which of the two main parties would be most likely to make them personally financially better off, just 26% of those surveyed picked the Conservatives, compared to 48% who picked Labour instead.
Both Sunak and Starmer Seen as Flip-Floppers
The findings come after a tumultuous week for the Labour Party following revelations about antisemitic comments made by its candidate in the upcoming Rochdale by-election. Keir Starmer was accused of failing to act quickly enough in the wake of the revelations, before ultimately disowning his candidate.
However, while the Conservatives have sought to use the row as further evidence that Starmer is a “flip-flopper”, our poll reveals that voters are actually marginally more likely to see the Prime Minister in these terms than the Labour leader.
Asked whether they saw Sunak as more of a flip-flopper that decisive, 64% of voters picked the former over the latter. This is actually slightly more than the 61% who said the same of the Labour leader.
Voters were more split on the subject of Starmer’s decision to abandon his £28 billion green growth plan, with 54% saying it was the right decision compared to 46% who disagreed.
Three Worst Prime Minister of Modern Times
We Think also asked for the public’s overall view of recent Prime Ministers since Margaret Thatcher and the findings suggest that voters’ are least enamoured with the most recent occupants of Downing Street.
Among all those surveyed Liz Truss came top with 34% saying she was the worst PM of all those listed, followed by Boris Johnson on 22% and Rishi Sunak on 13%. The three most recent PMs were followed by Thatcher on 10%, Tony Blair on 8%, Theresa May on 6%, Gordon Brown on 4% and David Cameron on 3%.
Asked which was the best of the listed Prime Ministers, Thatcher came top with 24%, followed by Tony Blair on 21%. However, despite being picked as the second worst prime minister, Boris Johnson was also listed as the overall third best by those surveyed, showing how polarised opinions are about the former PM.
Rishi Sunak’s ‘Austerity Bombshell’ That Westminster Won’t Talk About
Today’s news that the UK went into recession at the end of last year is even worse than the headline figures suggest.
Although the UK economy officially shrank by just 0.3% in the last quarter, that figure fails to take into account the big increase in the country’s population over that period, due to high levels of immigration.
Once you take that into account the UK’s performance is far worse. According to today’s figures, GDP per person - which shows the real impact of the economy on individuals - actually fell by 0.6% over the last three months of 2023.
It gets even worse when you look beyond the last quarter. According to today’s data, the British economy has not grown at all, per person, for almost two years. This is the longest period without per capita growth in the UK since 1955.
The longer term picture is even worse than this, with the UK’s economic growth a huge 24% lower than it would have been had we remained on the same growth trend we were on before the financial crisis.
There are good reasons for this extended period of stagnation. A decade of austerity, Brexit and the coronavirus pandemic have all contributed to what has been the biggest real-terms fall in living standards in the UK since records began.
So given this grim outlook, you might expect that the Chancellor would be talking about bold plans to finally kickstart the British economy after 14 years in Government.
This is not what’s happening. Instead the Financial Times today reports that Jeremy Hunt is considering plans to make even bigger cuts to public spending after the next general election than those he has already set out.
According to the paper, "economists have warned that current plans for a 1 percentage point increase in public spending until 2029 are a “fiction”, as they would imply serious real-term cuts to some stretched public services.
"But people close to Hunt said Treasury officials were considering going further and reducing projected spending rises to about 0.75 percentage points a year, releasing £5bn-£6bn for Budget tax cuts."
This plan, which is predicated on the political desire to offer voters a series of pre-election tax cuts, would leave many of Britain’s already crumbling public services under the threat of complete collapse.
Now you might expect that such plans would trigger big public debate about the future of the economy and public services.
Yet despite Hunt’s slash and burn agenda already being signalled months ago in his Autumn Statement, these plans for a big new wave of austerity have so far received next to no coverage in the British press, outside of the FT, with most papers instead focusing on an endless debate about taxes and borrowing.
This focus, which has culminated in the Labour Party last week rowing back on its own plans to kickstart growth in the UK, is wildly out of step with what the economy needs and what the public actually wants. According to recent polling for Byline, voters in all parties now prioritise investment in public services over tax cuts.
Yet instead of having a big debate about actually investing in the UK’s stagnant economy, while restoring Britain’s failing public services, both major parties in Westminster remain focused on the same sterile debate about ‘balancing the books’ and ‘fiscal rules’ which helped lodge the British economy into its current slump in the first place.
The truth is that unless this changes, Britain's lost decade of stagnant growth and low productivity will only continue well into the future.