January 25, 2023

When Liz Truss and Kwasi Kwarteng’s infamous ‘mini’ budget shook up Britain’s finances in September, it was pilloried as a blatant example of putting ideology before evidence. Both architects were gone within weeks and a chastised conservative party announced a series of U-turns. The damage was done, but relatively short-lived.

This makes it all the more tragic that a previously catastrophic policy did not meet the same timely fate. The effects of the Conservatives’ austerity program during the Cameron-Osborne years have steadily accumulated over the past decade, but this winter that trickle has turned into a torrent.

Chart showing that the Tories' austerity program has made deep and lasting cuts in government spending, especially investment, eroding Britain's state capacity

If you’re lucky, you can cut back for a few years. Everything is getting a bit more fragile, but as long as there are no nasty external shocks, you may be able to avoid disaster. The effects of cutting public services are a little harder to hide, but you can get away with a gradual deterioration.

The problem is that when you are hit in a short space of time by a pandemic, an energy crisis and an act of gross economic self-sabotage, your now-fragile and depleted public services will collapse where a sound system would have taken the strain.

Twelve years after the start of austerity, the data paints a scathing picture, from stagnant wages and frozen productivity to rising chronic diseases and a knee-deep health care system.

Chart showing real wages in the UK are lower today than they were 18 years ago, and have fared much worse than any country

Real wages in the UK are below levels seen 18 years ago. Life expectancy has stagnated, with Britain trailing most other developed countries, and preventable mortality – premature deaths that should not occur with timely and effective health care – rising to the highest level among its peers, with the exception of the US, whose opioid crisis makes it unparalleled .

Yes, the NHS budget was protected throughout, but the demarcation of health spending masked catastrophic missteps beneath the surface.

With a rapidly aging and diseased population, simply maintaining expenditures was not enough. Over the past decade, Britain has lagged behind its peers in overall health spending, while investment in health infrastructure fell by half between 2010 and 2013. This left the NHS with less spare capacity than any other developed country when the pandemic hit. This proved to be a huge drag on productivity, paralyzing British health workers with a shortage of beds and equipment.

Chart showing impacts of austerity have been strong, from rising waiting lists and deteriorating A&E performance to rising preventable deaths and slowing life expectancy

The implicit assumption that the only expenditure protecting and promoting the health of the population falls within the NHS budget has also proven to be false economics. Cuts in housing and community budgets have left Britain’s homes in such a sorry state that they are now leading to child deaths.

Lost lives, lost income, lost years. Unlike Trussonomics, sobriety is a slow and silent killer. For nearly twelve years, the conservatives have been sowing the seeds. This year they reap the harvest.

john.burn-murdoch@ft.com, @jburnmurdoch

Leave a Reply

Your email address will not be published. Required fields are marked *