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Even without Brexit delays, austerity’s effects will be felt for years to come

Politics Explained: There is bound to be a delay between the spending taps being turned back on and Britons noticing the difference

John Rentoul
Chief Political Commentator
Thursday 06 June 2019 07:56 BST
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Theresa May declares 'austerity is over' after decade of cuts

Many things have been postponed until “after Brexit”. Theresa May said she wouldn’t stand down until we had left the EU, and David Cameron said he wouldn’t publish his memoir. Both those events are now going to take place while we are still an EU member, but Adam Hills, presenter of The Last Leg, is still growing his beard and, as far as I know, Jake Berry, the local government minister, is still not drinking.

And Liz Truss, the chief secretary to the Treasury, confirmed today that the end of austerity, too, has been postponed until after the Brexit crisis has been resolved. As we report today, she told a House of Lords committee that the public spending review promised for this autumn is now “unlikely to happen”.

Theresa May said at the Conservative Party conference in October (the one where she danced onto the stage): “A decade after the financial crash, people need to know that the austerity it led to is over.”

The trouble with relaxing a squeeze on public spending is that it takes a long time for the public to feel it. The Labour government struggled to convince people that things did actually “get better” after it turned on the spending taps in 1999 – having raised expectations in the 1997 election, it kept to stringent Tory spending plans for two years and even after that it took longer than expected for the benefits to be felt in wards and classrooms.

Now the Conservatives seem to have repeated that mistake. The prime minister announced the end of austerity before the new money had started to flow. She has made eye-catching promises of vast extra spending on the NHS, outbidding the Leave campaign’s £350m a week on the side of the bus by promising an extra £394m a week by 2023. But most of this money is some way into the future, and now the spending review, which would have set out spending plans for all departments over the next three years, has been postponed.

That means that most departments face an immediate future in which budgets will only just keep up with inflation. This is better than the year-on-year cuts in real spending (except in the protected budgets for health, defence and aid) during the coalition government.

But Philip Hammond, the chancellor, was forced to announce an emergency top-up to the Home Office’s policing budget in his spring statement in March, and there are still large cuts in the social security budget pencilled in to be made as universal credit is extended.

Of course, the delay to this autumn’s spending review is not directly the result of the postponement of Brexit. It is the change of prime minister – or, as Truss put it, the “goings-on within the Conservative Party” – that means the review has been put off. The new prime minister, expected to take office in the week beginning 22 July, will want to reset the government’s spending priorities.

Whoever it is, they will want to reannounce the “end of austerity”. But it may be several years before most of the British people will feel it.

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