“Tantalisingly close”

Over the last 48 hours, senior Conservatives have pushed back against recent calls in and outside government to relax the strict rules mandating no greater than 1% pay rises for public sector staff. Inflation is currently running at 2.9% and forecast to increase.

Chancellor Philip Hammond claimed that “After seven long and tough years, the high-wage, high-growth economy for which we strive is tantalisingly close to being within our grasp. . . But instead we must hold our nerve”

Nigel Lawson, Chancellor under Thatcher, called into the Today programme on Radio 4 to insist that “It’s not easy but it is necessary”.

Former Prime Minister David Cameron, making a speech in South Korea, tried to argue that contrary to popular argumentation, austerity is generous and compassionate and those who oppose it are selfish and uncaring.

But we know it’s just a fresh, shiny carrot on the end of a stick, and we’re stuck on a treadmill.

Dangling the cherry

Lord Lawson oversaw the devastating atrophy of public service provision over the course of the ’80s and Conservatives continued to grossly underinvest all the way until they were removed in 1997. Even after Lawson repaid the deficit and led the UK to budget surplus he still refused to increase public service spending.

Under Cameron, even as official government statistics told us that by far and away the biggest contributor to cutting the deficit was growing out of it (2) (3) (4), his government doubled down on austerity. Every year the goalposts moved further and further away, always in sight but out of reach. First 2015, then 2018, then only if we voted to stay in the EU, today it’s 2025.

When Philip Hammond announced in the budget in March that annual borrowing had come in £16.4bn less than forecast, he vowed to keep it safely tucked away for the ‘stormy waters’ ahead.

The “high-wage, high-growth economy” will never come. The pay freeze will never end, because as I’ve shown, the wealthy and powerful have excluded themselves from it. Austerity isn’t a temporary policy for specific ends. It’s a permanent, Conservative, Thatcherite, neo-liberal attitude about the divinity of competition in free markets, a self-delusion that ‘efficiency savings’ come without costs, and a wilful blindness to the economic near-consensus that Keynesian countercyclical financial policies work (2).

This will only end when we vote them out.

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