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The Dangerous and Destructive Consensus Around Austerity Needs To Be Challenged
A dangerous and destructive political consensus has formed in British politics that places ‘fiscal responsibility’ at the core of both main party’s political agendas.
Just ten days ago at the TUC conference Keir Starmer pledged to not ‘take any risks with the public finances’ as he sought to position Labour as the party of ‘sound money’ and ‘economic stability.’ And just five days later, on the steps of Number 10, the new Prime Minister, Rishi Sunak, pledged to ‘place economic stability and confidence at the heart of this government’s agenda’ meaning ‘difficult decisions to come.’
The rationale for this return to austerity is that Liz Truss’ disastrous 50 days in office demonstrated how jittery the financial markets are and thus any alternative to ‘austerity 2.0' risks a return to rising gilt yields, which means higher mortgage rates and rents for the rest of us.
And so the media wax lyrical about a ‘fiscal black hole’ (that seems to vary in size from somewhere between £30 and £50 billion) that needs to be closed through tax rises and spending cuts, with the conversation then moving swiftly on to a discussion about precisely where the pain will fall, without pausing, even for a moment, to examine the credibility of the assertion that ‘there is no alternative.’
