Although it appears that he will not be able to make good on his ‘do or die’ promise to leave the EU by the arbitrary deadline of 31st October, Boris Johnson will still be able to celebrate a milestone in his premiership this week, as the 1st November marks the end of his first 100 days in office.
This is usually when a new administration is at its most active in introducing its policies. For better or worse, Boris Johnson’s government has been no exception to this rule. Since he won his party’s leadership contest in July, the headlines have inevitably been dominated by his numerous attempts to push through a hard Brexit.
But alongside this, there have also been a string of policy announcements on the domestic front. The centrepiece of this has been an increase in spending on vital public services, most notably Health, Education, and Police-which have been previously starved of funding during a decade of cuts. Intent on building up support prior to a General Election, Boris Johnson would have you believe that the austerity of the Cameron and May eras has now been placed on the scrap heap, and the spending taps have been turned on.
The reality is quite different.
Whilst any increase in funding for public services is to be welcomed, the truth is that the money has been pledged does not go nearly far enough to make up for the devastating effect that austerity has had on communities up and down the UK. It is well worth saying that the £13.8 Billion in extra spending that the Chancellor announced at last month’s spending round is less than a third of the £47bn of cuts this Government has voted through since 2010.
Whilst this rise in spending falls well short of what is needed, at the same time, it is not at all clear where this money will be coming from. By cancelling the budget, initially scheduled for November 6th, the government has missed a vital opportunity to clarify this.
Whilst Labour has a credible plan to reverse austerity through a series of tax rises on the wealthiest 5% and amendments to current deficit reduction targets, the government hasn’t committed to either of these things. In fact, if the pledges Boris Johnson made during the Tory leadership campaign are anything to go off of, the Tories may well look to accompany their recent spending pledges with a programme of tax cuts that will disproportionately benefit the wealthiest voters.
At the same time, it is also highly unlikely that this increased spending can be funded through growth, when the economy has been teetering on the brink of recession for several months now, and future projections suggest that we are only likely to see modest expansion in the short term.
If increased revenues from these sources is not forthcoming, then the money will inevitably need to be found from extra borrowing instead. The dire predictions for the state of the public finances following these policy announcements only serve to confirm this. After the Spending Round at the beginning of September, the Institute for Fiscal Studies projected that government borrowing is on course to top £50 Billion next year, breaking the government’s own self-imposed rules to cap borrowing at no more than 2% of GDP.
Far from reversing the impact of austerity, it is clear that the government has somehow managed to underfund public services whilst also showing gross irresponsibility with the public finances at the same time. Boris Johnson’s fiscal policy, much like his approach to Brexit, seems to be have his cake and eat it-to accept all of the electorally appealing aspects of raising public spending, but none of the accompanying downside of having to raise taxes or adjust spending commitments.
And this is all before we get onto the calamitous impact that a potential no deal or hard Brexit will inevitably have on public spending. Although the ratification of the Prime Minister’s Brexit deal is perhaps the most important matter to come before parliament since the end of World War 2, the Chancellor has obstinately refused to release any economic analysis of it-likely out of fear that MPs would baulk from supporting it if the true costs were known.
The one forecast that we do have at the time of writing, from the independent think tank, the UK in a Changing Europe, makes for sobering reading. Despite being trumpeted as bringing much needed economic certainty to business, the renegotiated deal is predicted to cause considerable damage to the public purse, costing the government anything between £16 Billion and £49 Billion a year. Even under the most optimistic figure, the loss to the Treasury would still be greater than the sum of all of the spending increases that the government has pledged since Boris Johnson took office combined. And this is by no means a worst case scenario. If we were to leave the EU without any deal whatsoever, things would be worse still, with public debt forecast to spiral to it’s highest level in half a century.
The dire predictions for the state of our public finances is all the more inexplicable when you consider that for the past decade, this Conservative government has persistently attacked my party with accusations of financial irresponsibility. If leading Tory politicians are to be believed, the levels of debt built up under the last Labour government were so unsustainable that they put us on the verge of following Greece into total economic collapse.
But when forecasts repeatedly show that there unfunded spending plans and reckless approach to Brexit will send public debt to a level even higher than after the Great Recession, these warnings are casually disregarded in favour of claims that liberation from the bureaucracy of Brussels will deliver prosperity by allowing us to strike free trade deals with countries across the globe, who are queuing up to offer us access to their markets on favourable terms.
This is an ideological fantasy that has no basis in fact.
The debt that the last Labour government accumulated was the price of averting the collapse of our banking system and the economic disaster that such a catastrophe would bring. But if it reaches a similar level under the Tories, it will have been because of a combination of cynical pre-election giveaways and their own dogmatic fixation on delivering the hardest possible Brexit-despite the lack of evidence to say that this what the public wanted when they voted in 2016.
Over the last decade, I have consistently opposed austerity and the devastating impact it has had on the communities I represent. Now, we are facing the prospect of the small progress that has been made in reducing the public debt being wiped out through sheer incompetence. This clearly demonstrates how, even when judged on it’s own terms, this government has utterly failed to deliver prosperity to this country. This is why I voted against the recent Queen’s Speech, and why I look forward to the opportunity to replace it as soon as the consequences of a damaging hard Brexit have been averted.