“What’s needed, in short, are socialist solutions to the crisis. That means we need not only to oppose the rhetoric of austerity, but also its substance – the economic project of funnelling cash upwards to the richest.”
Labour Outlook’s Sam Browse warns that more austerity will further deepen the cost-of-living emergency for millions.
Were you tempted to run through the streets, darting from person to person like a confused and demented time traveller, grabbing them by the shoulders and barking “what year is it?”, you could be forgiven. After a fall in sterling, bringing it to a 14-month low against the dollar, and a surge in the cost of borrowing, attributed by some to the US bond market’s reaction to a looming Trump Presidency 2.0 and others, the UK’s flatlining economy, it looks like a return to the austerity debate of the 2010s is back on the political agenda.
The Prime Minister is promising tough decisions, while Ministers mull over swingeing cuts to social security (what greater indicator that austerity is back than the word “swingeing”, which is only ever used in that context). And, of course, the Chancellor, Rachael Reeves, is giving cosy interviews to Nick Robinson with a shtick about her frugal mum’s handling of the household budget and her own pilfering of the work breakfast pastries for lunch later. It’s as if the BBC never published a report saying it should avoid such misleading household comparisons to explain economic affairs.
Although the justifying rhetoric has transformed over the last 15 years, the economic and political project behind the “belt-tightening” austerity narrative never went away. Whatever the talk – whether it was Cameron’s austerity, May’s rather half-hearted repudiation of it, Johnson’s “levelling up” agenda, or the seeming largesse of Sunak’s pandemic spending package – the transfer of incomes upwards persisted, and the devastating cuts continued. The period saw private profits soar as the bones of public services were picked and the economy continued to languish.
For a brief period, the Tories were forced to drop the discourse of austerity in terms of how they presented their economic plans – though not the project itself – due to concerted opposition from the Labour Party, led by Jeremy Corbyn. Indeed, even the new Labour leadership – and now Government – until recently insisted there would be “no return” to it in interviews.
But as Zarah Sultana said at a Left event at this year’s Labour Conference, if it walks like austerity, talks like austerity and sounds like austerity, then it is austerity. And on this score, the proof of the pudding is in the eating – namely a maintenance of the two-child benefit cap, the cut to universal winter fuel allowance, and, now, the refusal to compensate WASPI women.
Perhaps the main catalysts for its ‘rehabilitation’ – in the discourse of the Establishment, if not public opinion – has been the infamous 2022 Truss-Kwarteng budget.
But it’s important to learn the right lessons from the Truss debacle. The problem wasn’t the borrowing (witness the covid spend) – it was why the money was borrowed. The budget was supposed to be a plan for turbo-charging the UK economy. But it turns out that bond markets have very little faith in a strategy for growth which turns on cutting taxes for the richest and the corporations. This has, fundamentally, been the neoliberal strategy to get the economy moving since the 2008 crisis (although it was hitherto also paired with cuts). No wonder, then, that when Truss asked them to bet on her plan by buying government debt to fund it, they answered with an emphatic “no”. The whole affair should dispel the myth at the heart of neoliberal economic policy that you only need to cut taxes and red tape to unleash the “animal spirits” of the capitalist class and they will invest. The 2022 budget shows that even the capitalist class don’t buy it.
While the episode should have totally debunked the puritanical ideologues of the right, it is now being used to bolster their more pragmatic – and technocratic – cousins. Truss’s mistake was that she thought during an economic crisis you could have a policy that gave to capital with one hand without taking equally from labour with the other.
Now, the “sensible” establishment right is clear that with the crisis deepening, their solution is more of the same, hammering the many, to maintain the profits of the few.
We need the opposite. Instead of the doom loop of more austerity, ever higher profits, and blind faith in a neoliberal nostrum that’s been debunked by 15 years of stagnation and a mortgage-destroying economic crisis, it’s time for a real strategy for growth – investment in clean, green energy, infrastructure, and supply chains, developing skills, and creating good, well-paid trade union jobs – alongside a plan to defend living standards in the here-and-now, funded by taxing the people who can afford it – the bosses, bankers, and big corporations.
That won’t happen on its own. To do it also means taking control of the key levers of the economy – massively expanding public ownership, and using public money to plan and develop key parts of Britain’s ailing economy.
What’s needed, in short, are socialist solutions to the crisis. That means we need not only to oppose the rhetoric of austerity, but also its substance – the economic project of funnelling cash upwards to the richest, which has remained basically unchanged in 15 years. It means resisting every cut and amplifying every act of resistance to them. And it means organising for a socialist economy based on the needs of people and planet, not profits.
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