Austerity: is it really a Tory blind spot?

A joke frequently told against Gordon Brown, when he was Chancellor of the Exchequer in the Labour governments led by Tony Blair, that he was having an extramarital affair. The object of his affections was a mystery woman known as Prudence. He simply couldn’t stop himself mentioning her whenever he spoke, so that the catchword for everything he did in dealing with the country’s finances was that it was down, he claimed, to Prudence.

“Mock on, mock on”, he might be saying today. And “what side of your face are you laughing out of now?”

After David Cameron brought the Conservatives to power, Prudence was unceremoniously dumped for a much less attractive siren known as Austerity. Far from seducing the Chancellor alone, Austerity seems to have bedded most of the senior figures of the Tory Party. Which isn’t to say they weren’t warned. Anyone at all familiar with the ideas of Maynard Keynes pointed out that there was a paradox at the core of the notion Austerity: when a government puts the brakes on spending the result isn’t necessarily a saving, but often the exact contrary. Reduced spending leads to reduced economic activity, and therefore reduced taxation, and far from emerging from indebtedness, the government merely sinks further into debt.

UK Debt as % of GDP: steadily growing under austerity
Source: BBC

Seven years on, it’s clear that this is exactly what has happened. Back in 2010, Cameron made a great deal of the supposedly unbearable cost of debt Labour had amassed, a toxic burden being passed on to the future generations. It was approaching the trillion-pound level at that time. Seven years on, it is now projected to reach £1.8 trillion by next March, but curiously the Tories have stopped talking about it.

Despite years of austerity, with constant cuts to essential public services, even the government’s deficit – the amount by which spending exceeds income – is rising again. In June, it was nearly 50% higher than it was in the same month last year. Keynes’s paradox of thrift is being verified with a vengeance: thrift cuts revenue and not just cost, so it can make things worse rather than better.

Anyone reading this piece might feel there’s nothing new in my making this claim. I’ve said it all before, haven’t I? So why am I saying it again now?

Because now we learn that the Tories are not only persisting with their austerity policies in the face of evidence that they aren’t working, but even in the face of evidence that they’re costing them votes. 

Now that’s truly odd. Because if the Tories are anything, they’re an election-winning machine, hypersensitive to any chance to win a vote, or any risk of losing one. It’s quite extraordinary that they’re sticking – for now – to a policy they know might lose them power.

Which leads to a further question. If it isn’t working financially; if it’s costing them votes politically; then why on earth are the Tories continuing to pursue austerity?

Could it really be that they are, ultimately, entirely heartless? Do they truly believe that the poor need to be punished for the offence of being, simply, poor? And the best way of punishing them is to impoverish them further?

I find it hard to believe that any but a few of the Tory leaders are quite that ruthless. Sadly, though, that leaves only one explanation: that they simply can’t see what they’re doing. Which suggests that the Parliamentary Conservative Party has simply lost all contact with reality.

Surely we wouldn’t want to suggest that Tories might be that benighted, would we?

It just takes a little patience, and a bit more money

A homeowner with a leaking roof called in a man who claimed to be a roofer.

“Ah,” said the roofer, “it’ll cost a lot and it’ll take at least a year.”

After grumbling a bit, the homeowner agreed to the terms, even though the sheer cost meant a lot of pain, cancelling a holiday, not entertaining friends, even eating rather less.

At the end of the year, the roof was still leaking.

“Yes,” said the roofer, “but it’s leaking less. If you’ll pay me rather more than last time and give me another year, I’ll get it fixed for you.”


A man flagged down a taxi and asked how much it would cost to drive to the airport. The driver quoted a figure that sounded excessive, but the passenger was in a hurry and accepted.

They drove for so long that the passenger was far too late for his plane. Then the driver pulled in and told him they’d arrived.

“But this isn’t the airport,” said the passenger.

“No, but it’s closer,” said the driver. “If you pay me even more I can get you to the airport in time for the next plane.”


An internet user was absolutely delighted to have been put in a position to receive £10 million from the manager of a Nigerian bank. He willingly paid the £60,000 asked for, since it was dwarfed by the amount he was due to receive.

He waited six months but no funds showed up. He wrote to the same e-mail address and, slightly to his surprise, received a reply.

“Good sir, there is now chance we make available not £10 million but £14 million. You please send £130,000 more and we transfer whole sum.”


The UK Prime Minister David Cameron campaigned in the 2010 election pledging: “We will protect Britain’s credit rating with a credible plan to eliminate the bulk of the structural deficit over a Parliament.”

At the end of the following Parliament, the deficit is still out of control but Britain has suffered austerity which has seen the proliferation of food banks, disabled people denied benefits, the poor made poorer, while only the wealthiest have done well.

At the Conservative Party Conference yesterday, George Osborne, Chancellor of the Exchequer, the man in charge of our finances, told us that he was “humbled by how much more we have to do.” And he declared that “we here resolve we will finish the job that we have started.”

All he needs is the chance to impose five more years of austerity to make it happen.

George Osborne: didn't do the job, but would like to try again
What's not to trust?

Eggs broken, but where's the omelette?

You can’t make an omelette without breaking eggs.

That’s a sentiment that’s repeatedly used, and for one purpose only: to justify damage to individuals to serve some more general and, supposedly, lofty goal. 

The present British government came to office determined to make omelettes, and it’s certainly broken a lot of eggs.

It’s aim was to wipe out the ‘structural’ budget deficit on public expenditure over its five year term. In effect, that would mean bringing public expenditure nearly into balance. Equally they were going to get public debt falling, because they regarded the high level of indebtedness as a disaster in itself as well as an indictment of the previous Labour government. Finally, with George Osborne, Chancellor of the Exchequer, in the lead, they set up an acid test of their performance, protection of Britain’s triple-A credit rating.

George Osborne:
great at breaking eggs, not so good on the omelette

To achieve those aims, they cracked a lot of eggs, principally among the working and non-working poor. Systems that made life possible on low incomes, such as tax credits or housing benefits, have been eliminated or scaled back. The disabled have been forced off benefits by being classified as fit for work, with large numbers of these fit people subsequently dying. 

They also introduced what’s come to be known as the Bedroom Tax. This measure means that people on housing benefit who have a spare room, lose a proportion of their benefit to pay for it. For many this has created a double-bind: unable to cover their rent and unable to find smaller accommodation into which they could move, they face eviction and being made homeless.

Charities dealing with homelessness report large increases in their workload.

At the same time, Britain has half a million people dependent on food banks, compared to 40,000 when the government was formed.

So much for the broken eggs.

What about the omelette? Growth is back but at an anaemic rate. The coveted triple-A credit rating has been lost. The deficit is dipping but is still far higher than it was under Labour before the crisis struck. Even the government admits that the target of eliminating the ‘structural’ element within a parliament has been irretrievably missed.

As for debt, far from starting to fall, it’s risen from around 70% at the end of the Labour government to nearly 100% under the present one. The Tories liked to attack the previous, Labour government for amassing an unacceptable level of debt and leaving it to the next generation to manage for us.

Far from wiping out that debt they’ve hugely increased it. And since they’ve taken youth unemployment to nearly 20%, the highest level for 17 years, they’ve made it significantly more difficult for the next generation to deal with it.

And what has George Osborne's reaction been to this track record?

He wants to take another £25 billion out of the benefit budget.

That’s going to plunge a lot more people into grinding poverty. It will break a lot more eggs. But will it produce a better omelette? Or will it just give the same results of the cuts we've seen so far, and make things a lot worse?

Would Labour make things better? Well, they did last time. They got many things wrong, but they spent a lot on improving the NHS and they took a million kids out of poverty. Under the present government, 300,000 have been driven back in, and the NHS is groaning at the seams.

Osborne has at least made the choice before us clear. On the one hand, Labour which made some limited progress in dealing with a series of fundamental problems. On the other hand, a Conservative Party which has failed to achieve its stated goals despite inflicting devastating cuts on the rest of us. And, with that enviable track record, they’re asking us to give them a chance to do a lot more of the same for another five years.

Does anyone really want to give them that opportunity? Or, putting it another way, if you’re contemplating voting Tory – are you sure you can really afford it?