George Osborne: The Public Spending Hairdresser

by Charlie_East_West on June 26, 2013

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This wasn’t supposed to happen. When George Osborne set out his government’s programme of departmental austerity back in the Spending Review of October 2010, it was claimed that it this would account for the full amount of public austerity. It would be a harsh short back and sides public spending haircut. Yet, now, we are all about to get another expensive trim from the most austere salon in town – The Treasury.

Back in the Autumn of 2010, the Spending Review was austerity in its harshest form. It set out plans between 2011 and 2015 for an average 19% cut in departmental budgets, £7bn in additional welfare budget cuts – including changes to incapacity and housing benefit. Total cuts over the four-year period were to eventually total £81 billion and would lead to over 500,000 public sector jobs disappearing.

Back in 2010, Osborne insisted the cuts would be evenly spread in their impact, with the poorest taking a smaller hit than the rich. Cough cough, splutter splutter. I am willing to wager that he will justify the same framed bat-shit crazy argument within today’s Spending Review.

So today, George Osborne will state that we need even more pain and another £11.5 billion worth of cuts – despite all the mounting evidence to suggest that austerity is actually failing. Osborne will state that the public finances are still in a mess. The UK’s public debt interest repayments now total £120m a day, or £43bn a year. Osborne will state what he always states, that his policies ‘show our determination to take the tough decisions needed to deliver our economic plan and to turn Britain around’.

Today’s Spending Review is not about turning Britain around (Osborne has already done that – by turning Britain around towards a cliff edge). Today’s Spending Review is not about any economic requirement. Today’s Spending Review is all about petty politics. As the New Statesman pointed out, “There is no constitutional or economic requirement for George Osborne to set out spending plans for 2015-16 this far in advance. The current spending period (2011-15) doesn’t end until April 2015 and it would have been prudent to wait until the preceding October (as in the case of the previous two reviews) when more recent forecasts will have been produced. Osborne’s decision not to do so has everything to do with politics and nothing to do with economics. By announcing spending limits for the first year after the election, the Conservatives’’ chief political strategist is seeking to draw the battlelines in his party’s favour. He knows that if Labour accepts his plans it will be accused of intellectual surrender and that if it rejects them it will be accused of fiscal recklessness.”

As we have pointed one more than one occassion, cutting public spending does not provide a robust economic template. It destroys lives, stunts growth and leads to higher unemployment. There was (and still is) an alternative economic path. Britain has the monetary freedom to borrow for growth. A short term spike in the debt to create a long term growth strategy. Instead, we have a growth inaction strategy and politically motivated austerity from the Tories – which has not worked both in terms of short term results or creating a roadmap towards long term prosperity.

So once again we have our Chancellor of the Exchequer appearing more interested in Machiavellianism than doing the right thing for the majority. We have had three years for George Osborne to create an economic strategy with a focus towards generating growth and yet still there is a blank canvas on this strategy. Instead, he is hell bent on squeezing another £11.5bn of cuts that take us through into the next parliamentary term beyond 2015.

Why should Gideon care? He does not feel the pinch as he hacks away at people’s lives. It is all a game of snakes and ladders for him. The rich climb up, and everyone else slides down. Osbornomics? Bollocks to growth. Bollocks to public services. Bollocks to equality. Bollocks to deficit reduction – Yes, not even that has worked out – it is still going up.

In terms of deficit reduction – let’s remind ourselves of what was intended:

2010/11: £149bn
2011/12: £116bn
2012/13: £89bn
2013/14: £60bn
2014/15: £37bn
2015/16: £20bn

Unfortunately, it has not worked out as Gideon/George/Jeffrey Osborne had intended. In the last financial year the deficit actually rose by £300m. Deficit reduction has been replaced with deficit growth, leaving a massive gap between the position Britain was meant to be in and the deficit of truth. In 2012/13 the total gap between Osborne’s projections and reality was almost £30bn wide.

So, austerity has made bugger all difference to the deficit – it is actually increasing it. Gideon is not for turning. He just continues to hammer away on additional public sector cuts.

Question: With so much hard evidence stacking up against this strategy why does George Osborne persist?
Answer: The General Election of 2015.

All that matters now for Osborne and his Tory alikadoos is May 2015. Our fate as a country does not matter a jot to him. His fate as a politician has just cost us another £11.5 billion of public services. That is a grotesquely high cost for another public sector haircut.

Welcome to Gideon Osborne’s Austerity Salon. Osborne has the scissors and clippers out and he is ready to give us all another unnecessary haircut. It will not be a good look. When he has finished cutting, we will look in the mirror and demand a refund.

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