Osborne wrote austerity into our laws, now experts warn how deep it will bite

Support us and go ad-free

George Osborne has been warned by the Institute for Fiscal Studies (IFS) that his Fiscal Charter will require him to impose even more painful austerity measures on British citizens.

Weak growth and forecasting over-optimistic tax receipts could force the government to make “sharp adjustments” in public spending, in order to hit the deadline.

But the IFS has warned Osborne about something he is well aware of. In fact, the very purpose of the Fiscal Charter is to enshrine austerity into law in order to legitimise squeezing the public sector further.

The Fiscal Charter compels the government to run a budget surplus by 2019-20 and continue this pattern in “normal times” – an arbitrary deadline which artificially makes austerity an economic imperative.

It makes no economic sense for the British public. Austerity only plummets us further into perpetual debt; Osborne has piled on more public debt than every Labour government combined since World War II. At the same time, public debt is relatively low historically – at 80% of GDP compared to 225% of GDP in 1945, when we founded the NHS and built over a million new homes. And post-war investment did not skyrocket public debt like relentless austerity does. By 1980 public debt was down to just 45%.

If Osborne really wants to learn how to run a budget surplus, he should look to progressive Scandinavian governments.

Sweden, Norway, and Denmark were all running budget surpluses before the 2009 financial crash – not after reckless cuts but on the back of a robust public sector and strong welfare state. At a time when we should be investing in infrastructure, public institutions, and people, Osborne’s Fiscal Charter encourages the opposite. Public spending – other than health – is at its lowest since the 1940s.

Read on...

Support us and go ad-free

However, the Fiscal Charter makes a whole lot of sense for the profiteering private sector. The arbitrary deadline acts as an artificial stranglehold on public debt, creating the impression that Osborne is forced to sell off our assets to the private sector.

This is the aim of his charter: a wealth transfer from the poor to the rich.

Osborne sold off a record-breaking £26bn of our assets in 2015, at a huge loss to the public sector. Private companies close to the government relish in bargain prices and the long-term profits yielded from owning these institutions, all while ordinary citizens are robbed from enjoying these profits in the future.

The Independent’s coverage on this focuses on “fiscal headaches” for the Chancellor, when really it is the British people who will suffer the biggest headaches. Osborne just took away free school meal grants for some British children, and we’ve just learned that Iain Duncan Smith has confiscated the mobility vehicles of nearly 14,000 disabled people since April 2013.

But it isn’t just the poorest and most vulnerable who will feel the cuts. Osborne’s looming March budget is likely to take aim at the middle class too.

The fact that historically low long-term interest rates are on offer for the government confirms that the Fiscal Charter is a scam. The IFS said it was “odd” that Osborne is not making use of this prime opportunity to invest in infrastructure and institutions, failing to recognise that the Chancellor only works for the public insofar as we pay his salary.

Osborne is only really interested in enriching the private sector, not in sorting out public finances. And he is orchestrating the biggest robbery in history from right under the noses of the British people.

Get involved!

Write to your MP to express your discontent.

Support the Canary so we can continue to hold the Tories to account.

Pledge to take direct action.

Featured image via Flickr.

Support us and go ad-free

We need your help to keep speaking the truth

Every story that you have come to us with; each injustice you have asked us to investigate; every campaign we have fought; each of your unheard voices we amplified; we do this for you. We are making a difference on your behalf.

Our fight is your fight. You’ve supported our collective struggle every time you gave us a like; and every time you shared our work across social media. Now we need you to support us with a monthly donation.

We have published nearly 2,000 articles and over 50 films in 2021. And we want to do this and more in 2022 but we don’t have enough money to go on at this pace. So, if you value our work and want us to continue then please join us and be part of The Canary family.

In return, you get:

* Advert free reading experience
* Quarterly group video call with the Editor-in-Chief
* Behind the scenes monthly e-newsletter
* 20% discount in our shop

Almost all of our spending goes to the people who make The Canary’s content. So your contribution directly supports our writers and enables us to continue to do what we do: speaking truth, powered by you. We have weathered many attempts to shut us down and silence our vital opposition to an increasingly fascist government and right-wing mainstream media.

With your help we can continue:

* Holding political and state power to account
* Advocating for the people the system marginalises
* Being a media outlet that upholds the highest standards
* Campaigning on the issues others won’t
* Putting your lives central to everything we do

We are a drop of truth in an ocean of deceit. But we can’t do this without your support. So please, can you help us continue the fight?

The Canary Support us

Comments are closed