Spring Statement: Even with the deficit reduced, the Tories continue to sacrifice the present and future of ordinary people

Photograph: NATO Summit Wales 2014 by the Foreign and Commonwealth Office (License) (Cropped)

On Tuesday, the Chancellor Philip Hammond is set to mark the end of the financial year with the government's report at the Spring Statement - and will perhaps mark the near elimination of the budget deficit.

This month has already seen his predecessor and former boss, George Osborne and David Cameron respectively, pat each other on the back for setting in motion the policy of wiping out the deficit that Hammond has overseen in it's latter stages.

With the deficit is reduced, and a bumper year of tax receipts as well, surely austerity can be eased now? No, is the answer from the Chancellor. There will be no new spending because there is still a debt to pay off. So says the Chancellor.

As a result, the Spring Statement is set to be a plain response to the Office of Budgetary Responsibility (OBR) biannual forecast - and will likely be taken as an opportunity for the Conservative government to revel a little. However, Hammond is expected to be as cautious as ever.

In 2013, then Prime Minister Cameron told the gold plated, black tie, Lord Mayor's Banquet that austerity should become a permanent feature for ever - to produce a 'leaner' and 'more efficient' state that could be afforded in the long term.

That isn't good enough for the worst off. As with the closing of the coal mines in the 1980s, austerity is slashing the state and gambling on the private sector picking up the slack - and perhaps the pieces of those people whose lives were shattered and were left to fend for themselves.

Yet the Conservatives double-down on austerity every time - even when their doesn't really chime well with reality. For instance, the current budget has largely been in balance - taking day-to-day spending against tax revenues - for years. And the national debt is not the product of reckless public spending, but of quantitative easing (nationalising huge corporate financial debt to save the banks) and borrowing to invest in the future.

However, the Conservatives have pursued balancing spending both for the present and for the future against current receipts. They have managed to nearly eliminate this definition of the deficit - but they have done so on the backs of the poor, sacrificing their present and the future for their children in the process.

Squeezing both present and future spending into today's tax receipts makes today harder for the worst off, while hurting our ability to lay the ground ready for the future - especially since borrowing for long term infrastructure investment is so efficient.

The present fiscal situation is not exactly a resounding success story either. The Conservative plan is long beyond it's target year and still borrowing around £40bn a year for investment. And, while growth has helped, it is a very minor up tick to 1.5% - which is simply less bad than thought. The same goes for productivity.

For the Chancellor, this appears to be a sign of work still to do. But there are questions that need answers. There is still a shortage of homes. A necessity for food banks. Household debt being driven by a struggle to afford even necessities.

The Chancellor is flying in the face of opinion by pursuing debt reduction over ending austerity. Economic growth has been strangled and the UK national debt is not proving to be very worrying to anyone. He has room to manoeuvre.

But Hammond is the model of a fiscal conservative. He wants rid of the debt and to put something aside for a rainy day. That means another £40bn or more is still to be cut from public spending - either through budget cuts or raised in taxes.

At the weekend came the news that around a £1bn went unspent from the housing and local government budgets - which was ostensibly for building affordable homes - and was recouped by the treasury.

While there are people asking why was this money not spent and if it will it be reinvested in building affordable homes, the reality is that it simply be squirrelled away for the rainy day fund.

It is telling, perhaps, that the Chancellor and the Government don't seem to see this as a rainy day - perhaps looking gloomily ahead to the impact of Brexit? But there are many people out there in the real world who may very well disagree.

It is understandable to rule out major changes to taxation and rules - the IFS were among those recommending it stop. Doing so twice a year is a lot to keep up with. However, no one struggling under the burden of austerity is looking for a complicated readjustment of fiscal rules and tax brackets.

For those who have carried the burden of getting to this point, they want a little more support. A little more investment, or cheap credit, that could create a few more opportunities. Some surety of a roof over their heads and a means of putting food on the table. Care they can rely on when they're ill or retire. None of this should be considered too much to ask.

References

'We're not out of austerity tunnel yet - Chancellor Philip Hammond'; on the BBC; 11 March 2018.

Larry Elliott's 'What will Philip Hammond say in his spring statement? Calls for investment are growing but despite being in a good position the UK chancellor won’t want to create waves'; in The Guardian; 11 March 2018.

Ben Chu's 'What is the Spring Statement and what will be in it?'; in The Independent; 8 March 2018.

'David Cameron and George Osborne hail plan after UK deficit target met'; on the BBC; 2 March 2018.

Dan Bailey's 'David Cameron’s speech this week revealed the neoliberal undercurrents of state austerity'; on LSE British Politics and Policy blog; 14 November 2013.

Joe Weisenthal's 'Here's David Cameron Calling For Permanent Austerity In Front Of All Kinds Of Ridiculous Gold Things'; on Business Insider; 12 November 2013.

'General Election 2017 - The Budget: Progressive optimism vs Tory pessimism'; in The Alternative; 26 May 2017.