Last week a Times headline proclaimed that "Austerity is
Over" in the UK. It may have been an exaggeration, but the
headline captured the spirit of the time.
Labour's anti-austerity rhetoric played well with voters
during the election campaign. The Conservatives, who ran their 2010
and 2015 election campaigns on the need to reduce public debt, have
gone quiet on austerity. As Torsten Bell at the Resolution
Foundation notes, the deficit got a mere three mentions in the 2017
Conservative manifesto, down from 17 in 2015.
The hard grind of austerity started in 2010 and most of the
progress in cutting public borrowing has come from squeezing public
spending. It is a sign of how tough this process has been that
after seven years of austerity the UK is borrowing more each year,
as a share of GDP, than any EU nation, including Greece, Italy or
Portugal. So far austerity in the UK has been about slowing the
rate of growth of government debt, not reducing debt levels.
