Time to ban the word austerity

Time to ban the word austerity

by Bill Jamieson
article from Thursday 29, January, 2015

WHAT IS “austerity”? It is time, surely, this word was banned.  

It has become so ubiquitous, so frequently invoked that it seems no critique of government policy is complete without it being hurled at the platform in the most condemnatory manner. “Austerity cuts!”; “the hard austerity agenda of the Westminster elite!”; “the Tories’ harsh austerity policies!” 

A dictionary definition of austerity would typically give a variety of uses: austerity as in sternness or severity of manner; plainness and simplicity in appearance and, in economics, a state of reduced spending and frugality by government. 

This is the condition that the word today is most frequently invoked to describe: austerity measures undertaken to shrink growing deficit and debt.

But austerity is a state that, unlike ‘recession’ (two successive quarters of negative growth) would struggle to be defined by simple quantitative measure. Over time it has acquired an altogether wider and darker meaning than one of spending constraint and reduction. 

Today it stirs – as one suspects it is intended to do - memories of the bleak 1940s and early 1950s: cold winters, fuel shortages, queues at the shops, relentless rationing and misery. 

Now it co-mingles with the economic catastrophe that has befallen Greece: 3.5 million unemployed, 25.8 per cent of the workforce, business failures and liquidations, credit rationing, cash-only transactions, shortages and severe recession.  But is the UK, with the highest ever numbers in work and an economy growing at 2.5 per cent a year, suffering anything like the austerity being experienced in Greece? Nothing like it, I would say. 

Here in Britain we have, we are told, been locked in “austerity” since 2010 and with no end in sight. Opposition politicians from Labour through the SNP to the Greens constantly decry “austerity misery” and the “savage cuts” to public spending – health and welfare in particular. Services have been “pared to the bone”. Local government “is being decimated”. 

But there is something odd about the images that are conjured up and from which we are invited to recoil. 

The “austerity” being experienced today is nothing like the deprivation suffered by our parents and grandparents in the aftermath of the second world war. In fact, it doesn’t begin to compare. And the idea that “austerity” can be invoked to describe conditions in the UK as well as those in Greece is beyond fanciful. 

However, none of this seems to exercise any restraint on the use of the word. Apologists insist that use of the word is fair because government spending has been heavily cut. Little wonder that Labour, the SNP and the Greens have common cause in denouncing austerity. Budgets have been pared. Widespread pain has been caused. The anti-austerity narrative holds fast to the truth!

What are the facts? 

As Brian Monteith pointed out in an exemplary op ed piece in The Scotsman this week (January 26) the Scottish budget for 2015-16 in real terms is the second highest it has ever had at its disposal since the Scottish Parliament came into being almost 16 years ago. 

“Over a number of years”, he wrote, the Scottish government “has added new commitments that are building a structural deficit greater than that of Westminster’s. Free tuition fees, free personal care, free bus passes, free bridge tolls, free prescription charges, free eye and ear tests – these and other policies have created fixed costs that have to be met this year and every year, forever – unless there is a change in policy ….”

There is, of course, no such thing as a “free” public or welfare service. It is financed by government spending which in turn is funded by taxation, or by cuts elsewhere or by higher borrowing (together, of course, with the debt interest, which also has to be funded).

Ah, but isn’t the “austerity agenda” and public spending reduction being forced across the whole of the UK? 

However, you would struggle to construct a conventional image of austerity from the figures. 

Checking back on the Budget ‘Red Book’ figures over the past six years we find the following:

  • In 2009-10 spending on social security benefits came to £164 billion. By 2013-14 this had climbed to £207 billion. By 2019-20 it is forecast to rise to £240.7 billion. 
  • Public Sector Current Expenditure in 2009-10 came to £600 billion. By 2013-14 this had risen to £658 billion, and it is projected to rise to £707 billion in 2019-20. 
  • Total Managed Expenditure in 2009-10 came to £669.3 billion. For 2013-14 this figure had risen to £720 billion. And by 2019-20 it is projected to rise to £779 billion. 

Yes, local authority budgets have been pared and funding for a wide range of services and functions has been withdrawn. But a key reason why overall government spending continues to rise is because of ever-increasing pension costs, provision for EU contributions and of course, debt interest. Here the figure, has risen from just over £30 billion in 2009-10 to £48.7 billion in 2013-14 and is forecast to rise further to £64.8 billion in 2019-20.

We rarely hear Labour opposition figures – and here in Scotland the SNP – acknowledging the constraint imposed by debt interest charges – the deferred cost of spending in previous years. While this reality is denied, the promises of spending restoration and spending increases lacks credibility. 

As for debt and deficit – yes, the annual budget deficit – the amount by which outstanding government debt rises each year – is rising at a slower rate. But the overall debt total – Public Sector Net Debt – has mushroomed from £616 billion in 2008-09 to £1.4 trillion currently and is projected to hit £1.6 trillion by 2018-19.

But never mind the facts. “Austerity” is the damning charge levelled at the government – while the opposition spending plans mount up.  The latest example is a call by Scottish Labour leader Jim Murphy to nationalise the rail service in Scotland and provide what he calls a “People’s ScotRail”. And the cost of re-nationalisation? Not a word.

Clearly, the prevailing condition of “austerity” will vanish like morning mist on May 8. Austerity no more. After all, what’s in a word? 

 

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