Failure of ‘austerity’

Interesting to see that David Renard has signed a joint letter to the Observer with other Council leaders from all three main parties. It’s a shot across the bows of George Osborne in the run up to the autumn statement. It says that “further reductions (in local government funding) without radical reform will have a detrimental impact on people’s quality of life and will lead to vital services being scaled back or lost altogether”. “More of the same” in the autumn statement “cannot be an option”, they say.

They express their concern that the rising cost of care for the elderly “will not only jeopardise our services but will push costs onto the NHS which will have to pick up the pieces if we cannot protect adult social care or provide the services that will keep people healthy.”

The purpose of the letter is to raise the need for powers to be devolved from Westminster. To that end it says that

It is vital that the autumn statement sets out a new settlement for England which puts powers beyond Westminster and shares out tax and spending across the UK on a fair basis.”

Implicit in the letter is a recognition that the austerity measures that Osborne is proposing for the next Parliament are unsustainable and would constitute a social disaster. This is recognised even by traditional supporters of the Tories. The Financial Times has denounced Osborne’s proposal to introduce a law which would oblige the next government to end the ‘structural deficit’ by 2017-18 as “pointless machismo” which “would turn a difficult fiscal situation into an impossible one”.

Meanwhile the Economist has accused Cameron and Osborne of “fiddling the figures by comparing different measures of spending and inexplicably excluding cuts at either end of the parliament”. The government has deliberately underestimated the level of cuts which would be required to hit its targets. Osborn’e projected further austerity measures “would needlessly put the recovery at risk when global growth is slowing and interest rates are pinned to zero, and would further damage departments that have already suffered damage”. It says that the scale of cuts Osborne is proposing would add up to “massacring services or welfare”.

A recent report by the National Audit Office made a similar point to the letter from Council leaders:

The impact on services caused by the funding reductions is more difficult to discern. A lack of services affects users and can be poor value for money. This increases costs in the long run or pushes costs onto other service providers (my emphasis).”

That’s exactly what the disastrous ‘austerity’ measures have done; increased the costs of the social consequences of central government cuts. The problem is not too much public sector spending but too little revenue which has been depressed by the replacement of secure and well paid jobs by low paid and precarious work, and the failure of the government to tackle the tax avoidance and evasion by big business. Osborne has ‘succeeded’ in adding added around £500 billion extra to the national debt and depressed government revenues. In the first seven months of this year the current account deficit was over £64 billion. This is what Cameron calls “paying down the debt!”

Martin Wicks

This is a letter to the Swindon Advertiser

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