Diane Abbott, The Independent
Rishi Sunak’s spring statement has been widely attacked as offering no help to the millions of people struggling with what has become known as the cost of living crisis. So much so, that even the Tory ultra-loyalists of the Daily Express felt moved to hint at betrayal on its front page the following day.
That alone is a new factor in British politics — the depth of anger over living standards is so broad it reaches into the Tory hardcore. The various think tanks — such as the Institute for Fiscal Studies, the Resolution Foundation, the Joseph Rowntree Foundation and others — have played their customary and important role in keeping us all well-informed about both the trends in the economy, and the consequences of government fiscal policy. Their verdicts include: “grim”, “dire” and “record fall in living standards”.
There is little value in simply repeating those analyses, although they do deserve a wide airing. Instead, a crucial and underreported area is how much the chancellor’s spring statement actually deepens existing inequalities. As this has been a recurring theme of all austerity measures since 2010, we are forced to conclude it is a feature of the policy — not a bug. A criminologist might call it a modus operandi.
Any fiscal event should begin with the real state of the economy and living standards, which are indeed dire. Yet what we got was another a narrow accounting exercise focused on government finances. There was also sleight of hand with national insurance and income tax, with a cut promised in good time for the next election. It was another austerity package from the government. Austerity has been imposed for 12 consecutive years. If it worked, we would all be living in luxury now.
There was no attempt to address the underlying weakness of the economy and its feeble growth rate. Instead, reducing debt and the deficit without a plan for growth just means more austerity. Ratcheting up austerity through the pandemic has significantly deepened inequalities of all types. The statement added to those burdens both direct and indirectly.
Perhaps one of the most shocking omissions is the failure to address the needs of disabled people. Lack of access and denied mobility, along with the effects of having to heat homes 24 hours a day for some, means that the real rate of inflation is far higher for disabled people. Campaigners say this leaves disabled people living on the bare bones of benefits.
This is the most extreme example of a general and terrible trend. The Office for Budget Responsibility (OBR) said it expects the biggest hit to household finances since comparable records began in the mid-1950s. Yet the government has done nothing for those dependent on benefits, the very poorest, besides a small amount of extra cash for local authorities to dispense at their discretion. Local authorities in turn are being faced with even tighter spending pressures themselves.
Naturally, the think tanks have also shown that the effects of austerity are felt much harder by middle- and lower-paid workers and the poor, a large proportion of whom are pensioners. How could it be otherwise when the universal credit top-up was cut, and the pledge to “triple-lock” pensions was broken at the same time as there have been tax cuts for big business and the banks?
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Within that increased burden on the poor, two things should be clear. First, that the cost of living crisis is really a product of government policy. This is true both in terms the active policy decisions as well as the refusal to act to soften the blows of rising prices. Benefits, pensions and public sector wages are all being cut sharply in real terms, while ministers refuse to hold down energy prices in the way other countries have.
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Because of existing inequalities, in particular lower pay and job discrimination all these factors tend to hit Black and Asian people harder, as well as women. For women the burden is made even greater by increased caring responsibilities they are forced into by the government’s failed response to the pandemic.
The long-term effects of these policies are becoming even more stark. The broadest possible measures of wellbeing include mortality and life expectancy. These have gradually been deteriorating in recent years under the impact of austerity.