AFTER eight and a half years of deep cuts to public services, the Government has rowed back but not abandoned austerity.
But the trouble is that after pursuing an ideological austerity agenda for nearly a decade, the Government does not have a clue what to put in its place or how to build a stronger economy that will pay for better public services and the higher living standards that people rightly want and need.
This crippling uncertainty could not come at a worse time, with the Brexit date for us to leave the EU now under five months away.
We desperately need a clear strategy that will deliver real and sustained economic growth – not the ‘unspectacular’ growth that the Government’s official forecaster predicts.
At least Philip Hammond’s predecessor George Osborne had a plan. It was the wrong plan, but at least it was a plan.
On this Chancellor’s watch we have no sense of direction or confidence. Wages have failed to keep pace with the rising cost of living and many working in the public sector have not had a real-terms pay rise for almost a decade.
Around 60 per cent of families in poverty today are in work, often working hard in more than one job or in the uncertain world of the gig economy.
The Prime Minister claimed at the Conservative Party conference a month ago that years of austerity under the Tories were coming to an end.
That may be true for higher earners who will be the biggest winners from Philip Hammond’s income tax cuts that will overwhelmingly benefit wealthier households.
But that is not true for the tens of thousands of children across Yorkshire who live in poverty. Child poverty is now on the increase nationally and it’s a huge challenge in Leeds West with more than one in three – or 7,000 children – in poverty today.
And despite the best efforts of Leeds-based debt charity StepChange to help people with money worries, there is no sign of austerity coming to an end for all those struggling to get by.
In the Budget, there was an announcement of welcome and overdue funding for the NHS. But, as the Institute for Fiscal Studies warned, many public services, including schools and the police, will remain squeezed for years to come.
There was £1.7bn aimed at easing some of the misery caused by the roll-out of Universal Credit. But that falls far short of the £3bn needed to ensure no one is worse off. And it only undoes half of the cuts made by George Osborne just under two years ago.
There were some small measures to help people struggling with debt. But it doesn’t seem to have occurred to the Government that people are struggling with debt as a direct result of the Government’s choice to pursue a path of austerity.
Put this in contrast to what happens at the top of some big businesses. We have seen the new head of the Royal Mail given a £5.8m golden hello; money not for doing the job but for taking it. That’s what you get with Tory and Liberal Democrats’ botched privatisation of our Royal Mail.
A worker on the average wage now would have to toil away for 167 years to earn what a FTSE 100 chief executive earns in just 12 months.
When she was running to be PM, Theresa May claimed she wanted major changes in the way big business was run, including a plan to put employees on boards to ensure greater scrutiny of these sorts of pay deals. Like so many of this Government’s promises, that idea has been kicked into the long grass.
Perhaps the greatest insult in the Budget was the Chancellor’s patronising pledge of funds for schools to buy “the little extras they need”.
The £400m promised is the equivalent of £24 to £48 per child per year, as little as 50p a week. The next generation deserve better than this and so do the teachers who are struggling with falling budgets.
The respected Institute for Fiscal Studies summarised the Chancellor’s final Budget before Brexit as a gamble with public finances, especially as we still don’t know what Brexit is actually going to mean.
I agree with that verdict, but fear it’s much worse than that. The Chancellor and this Government are gambling with people’s lives and futures. And they are doing nothing to create the jobs and new homes we need across our region.
After eight and a half years of austerity, the deficit remains, growth is sluggish and the debt is twice as high as it was before the financial crisis.
The truth is the Government’s austerity programme has failed woefully. The pain and the deep cuts to public services and benefits have not delivered the stronger economy or public finances the Conservatives promised.
The public appetite for cuts has all but evaporated, but the Government is not brave enough to admit that it got it wrong – or to change course to end austerity and repair all the damage and pain it has caused.
Rachel Reeves is the Labour MP for Leeds West. She chairs Parliament’s Business, Energy and Industrial Strategy Committee.