Austerity will continue to harm Britain for years to come, and Brexit won’t help matters

Even if the UK refused to pay the divorce bill to the EU as well as ceasing all subventions to EU budgets and agencies, the economic shock to the UK will be of historic – and self inflicted – proportions

Communities across Britain have endured a decade of almost unrelenting austerity. They have grown used to poorer public services, though not complacent or satisfied about the result. They have, for example, seen cuts in community policing that have compromised efforts to combat burglary and other significant crimes. Even allowing for the usual considerations of special pleading, the latest warnings from the Police Federation about offences going not only unpunished, but uninvestigated, ring true – because we gave seen such a dereliction of public safety in recent years.

The statistics substantiate the claims: murder and violent crime rates are up; there is more drink driving; the wave of cyber attacks on bank accounts threatens ruin for many families. Scandals over the disclosure of material in criminal cases such as rape highlight how the digital age and a vast volume of text and email messages consume detectives’ finite time. The scourge of gangs, moped muggings, the drug dealers’ county lines and, as in Moss Side overnight, shootings, are all challenges that are stretching constabularies nationally.

They are hardly alone. The financial collapse of Northamptonshire County Council is likely to be merely the first of many. The NHS, supposedly protected from austerity, has found its annual winter crisis becoming normalised. The armed forces and security services too are being asked to do more with less, as are schools and social services. Universal credit, meanwhile, looks capable of devastating both public spending targets and the welfare of the poorest in society, so botched has it been. Certainly there will be little money available to rescue rail commuters from their misery.

The tragedy is that relief was in sight, as the economy picked up, employment reached record highs and tax rises yielded results for the Exchequer. The public finances recently moved towards a position where the nation was borrowing to invest rather than spend on “current” activities. Britain’s credit rating was no longer in imminent jeopardy. The sacrifices looked to be perhaps worth it.

Yet, just as the public finances started to look sustainable, Brexit threatens more disruption and, in due course, further cuts in spending and services; and, nonetheless, increased taxation and borrowing. It is a chilling prospect, about which only the very wealthy can feel comfortable.

The chancellor, Philip Hammond, has done what he can to prepare for the worst but, as with so many others, has underestimated how chaotic a hard Brexit next spring will be – and it is a 60 per cent probability according to his colleague Liam Fox.

The UK economy has already lost nearly £30bn of investment because of Brexit uncertainties. That is doubly damaging because it reduces the future productive capacity of the economy, depressing productivity and in due course wages and output.

The truth is that Mr Hammond faces the worst outlook for the public finances in decades. Indeed so bad is it in some respects that even throwing money at the problem will not work. If and when EU nationals leave after Brexit, public services will simply be unable to recruit the skilled, or for that matter unskilled, staff necessary, at whatever wage rates are offered.

The outlook, then, is grim and far away from the breezy optimism of the Brexiteers in the 2016 referendum. Even if the UK refused to pay the divorce bill to the EU as well as ceasing all subventions to EU budgets and agencies, the economic shock to the UK will be of historic – and self inflicted – proportions. The NHS would be lucky to see the £350m a week promised, given the hammering tax renewals will soon suffer.

Individual households, as a recent ONS study detailed with terrifying accuracy, have no room for manoeuvre in their budgets either. Companies for their part feel they cannot risk investing. The government’s own finances will thus come under even greater pressure. And the nation still runs a trade deficit, one that will widen when we lose key EU markets. The abandonment of key public service provision is already a reality in local authorities. What will follow? A means tested NHS? Fees for sixth formers? Lower caps on housing benefit?

Some dismiss such notions as “project fear”. But tough choices will come in the 2020s. If we are to face this situation and the potential for civil disorder, does it not make sense to give the people most affected a final say on averting it? Some will feel the cost is still worth it for regaining sovereignty, and would give up their own job to leave the EU; others will not. Either way they deserve a chance to have their say about the future.