Opinion

Austerity doesn't add up and hits those in need hardest

To measure the cost of cuts, John Bird says we need to follow the money

George Osborne

George Osborne delivers the June 2010 emergency budget that ushered in an age of austerity. Photo: Guy Corbishley

For 31 years I have been going on about how coping with emergencies was not enough and that we have to try and prevent poverty and need. Of late I have been going on about getting the government to test its safety nets, and to spend its way out of the inflationary crisis. Borrow more money to get us out of the abysmal reality that millions cannot afford to eat, pay rent and heat themselves.

The new administration that Rishi Sunak has brought in is looking carefully at balancing the books. In other words, we are going to be ‘Osborned’ again; taken back to the early days of the coalition of 2010, when the poorest and least able to absorb austerity were given the rough job of paying for the bankers’ crisis of 2008. 

Hence when Covid hit in 2020 our hospitals were 85 per cent full, and many of the patients were people who had been made ill by the austerity-induced withdrawal of support for them. With 50 per cent of people using the health service suffering from food poverty, it’s obvious that another bout of austerity will come at a catastrophic cost.

But added to the ‘eejit’ thinking, as my Irish mother would say, the savings from all that cutting back in coalition days was only two per cent, well under their intended nine per cent savings. They made draconian cuts that screwed lives and kept more people in and around poverty, but the arses at the Treasury couldn’t get anywhere near their intended savings! 

The Treasury and its thinking has to be reinvented because they don’t seem to be able to actually find out the true costs of their cuts and policies. For example, in 2020 we began a campaign to stop mass homelessness, with nearly 300,000 facing eviction through job losses and arrears. We campaigned constantly in and out of parliament and eventually they came up with about £650 million to prevent people falling into homelessness through evictions. This was a brilliant response, roughly the amount of money we were campaigning for. 

But the money went out, or didn’t; the problem is, we have found it virtually impossible to follow the money. The Treasury does not keep track of the money it gives out. And measuring the negative impact of their cuts is not, in their hands, a science. Everything is reduced to the realm of political claims; like Osborne saying that the reason we did so well in Covid in giving out money is that post-austerity public finances were in good nick. 

Well, why were our hospitals full of people suffering from the disease of poverty? A poverty exacerbated by austerity. That’s the true cost of cuts – cuts leach and bleed the society we live in much more than the calculators in their Whitehall offices ever understand or worse, ever measure! They don’t take into account the fact that we now have more people unable to withstand the vicissitudes of inflation because the Treasury doesn’t look at the cost of cost-cutting. Or if they do, they come out with perfunctory, arbitrary crap that only seems to tell them exactly what they want to hear.

We have to make a stand to stop this crisis making it even harder for our poorest to survive. The government was elected to do the difficult job of squaring the circle of inflation-inducing poverty. If they didn’t want this poison chalice, then they should have not campaigned for the job so assiduously. They should not have spent the summer campaigning to get their hands on the tiller, only then to go for half-arsed solutions that will kill many and reduce many to a worsening world of poverty. 

We need a government that wises up to the TRUE COST of cuts. Not perform a sleight of hand, as we have seen since the coalition days of austerity.   

We need to insist that the Treasury does a proper job of measuring the effects of their cuts. And it must implement a true paper trail so that if they give money out it can be traced and monitored. And its impact measured. I still don’t know where the £650m they supposedly threw on the table to stop mass evictions went. Evictions continued, so where did the money go?

Spending our way out of the crisis will be costly for future generations to repay. But the cost of letting poverty rot the fabric of society will be even greater. 

 What about issuing a development bond? What about doing what we did in the Second World War, which was to borrow from 60 years into the future to pay for it. What about investing in ending poverty now rather than allowing it to outstrip us and undermine us? 

 For 31 years I have known that an emergency response is not the answer to poverty. It doesn’t get people out of poverty. It delays their collapse. It is, however, essential when so many things have come together to undermine the stability of so many people. 

 Those safety nets need looking at. We need more of them while the ship of the economy ploughs through rough waters. More and better safety nets; until the crisis is over. Until then we need to insist that we spend to save the countless from falling.

John Bird is the founder and editor in chief of The Big Issue. Read more of his words here.

This article is taken from The Big Issue magazine. If you cannot reach your local vendor, you can still click HERE to subscribe to The Big Issue today or give a gift subscription to a friend or family member. You can also purchase one-off issues from The Big Issue Shop or The Big Issue app, available now from the App Store or Google Play.

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