31/10/2018 13:20 GMT | Updated 31/10/2018 13:20 GMT

The Government's Budget Indicates An End To Austerity Is Still Not In Sight

This was a pause on the storm, not an end to it


“Austerity is coming to an end,” Phillip Hammond announced in his budget speech. Eight years of an idea focused on cuts to public services, wage freezes and failure to build enough homes now to be discarded it seems.

Not quite. This was easing of the knife, rather than taking it out entirely. Austerity is still there, just with less snarl. There are plans for the economy to have a much-needed £15bn pumped into it next year while the NHS will finally begin receiving necessary investments after years of being squeezed to the brink of collapse. In a bid to accrue more revenue, Hammond promised a £400m-a-year levy on the larger tech firms such as Google and Facebook whilst the income tax personal allowance was increased to £12,500.

Elsewhere the government promised a £2bn rise in funding for mental health services. Britain has recently transitioned from a society that ignored mental health to one more willing to discuss. A facet of that understanding has been recognising that there simply isn’t a well-funded support infrastructure for those in need of therapy. Someone could put themselves down for NHS’ mental health services and months later find themselves still waiting.

There are signs of a government shifting away from the free-market policies pursued by David Cameron and leaning, or at least trying to, towards genuine One-Nation politics. But, as mentioned before this was austerity being eased rather than entirely stopped altogether and that ultimately is not good enough for the country. There is still little sign of genuinely tackling inequality at an early level. The Resolute Foundation warned that departments not ringfenced by the Treasury would still suffer with spending cuts in the upcoming years. Elsewhere, raising the tax threshold to £12,500 actually does nothing for the working poor but simply works as a tax cut to the wealthiest. What would have helped the working poor is ending the tight constriction on welfare spending. Majority of those in poverty who depend on welfare are in work rather than scrounging.

There were tax cuts to the wealthiest earners by raising the higher-rate threshold to £50,000 which delivered a savings of £860 a year to the higher-income earners. Britain is in a social crisis precipitated by austerity with alarming hikes in homelessness, wage freeze and in-work poverty growing. And though it should never be left exclusively in the hands of the British state, the market simply cannot be trusted to behave with any degree of social responsibility. The housing crisis is proof of that. In such a time, a government has to be looking to siphon as much revenue as possible instead of offering tax cuts. Not only does this exacerbate inequality, it also means promises of ending austerity will always ring hollow because it’s near impossible to offer well-funded and high-quality services when deprived of revenue.

There were and are two things hanging over the Conservatives when Theresa May promised to end austerity. The first is the genuine possibility of Labour winning the next election. With such a risk the party cannot continue pursuing austerity as it did. That is reflected in its rhetoric, though not necessarily policies, of advocating for more social responsibility and sense of community. The other, and a graver threat for the country in general, is the outcome of Brexit. How the deal, or absence of one, unfolds will ultimately shape things like austerity and workers’ rights.

For both the Tories and the country, there is a critical urgency in getting the best deal for Brexit; one that respects the outcome but seeks to maintain as much economic stability as possible. There will be some material setbacks but for austerity to end, a good deal on Brexit is needed. Both parties, harbouring serious aspirations of winning power, recognise that Brexit cannot be seen as some independent and disconnected political situation to the process of enacting domestic policies.

There is always the risk that a bad Brexit deal could just encourage right-wing Tories to push for harder austerity, which makes it imperative that the government gets the best deal as possible. And it also makes it doubly important for Labour to hold the Tories to account better on both Brexit and this budget. The country has for years been calling for an end to the relentless cuts that have decimated communities all around the country. Hammond said austerity was ending but this was anything but. This was a pause on the storm, not an end to it.