Don’t believe Tory anti-austerity propaganda

In a year of unpleasant political surprises, what are the chances that this Tory government will surprise us by abandoning austerity? In reality, they are vanishingly small.

There has been a concerted effort by the mainstream media to portray this government as radically different from its predecessor, even to suggest that it will reverse austerity. But the evidence we have so far suggests exactly the opposite:

This summary of measures could have been taken straight from the Osborne playbook, with cuts to social security, pensions and other entitlements that all hit working people again combined with further cuts to investment. The only thing that is new is this security and immigration-obsessed government has provided a small amount of funding to conduct cyber-warfare because it feels it is falling behind. If the Osborne approach was completely mimicked in the upcoming Autumn Statement, there would also be a new tax giveaway for big business.

There is a fundamental reason for this. The Tories have not implemented austerity because they are ‘the Nasty Party’, although they are. The entire austerity programme, the cuts to public services and pay, cuts to social welfare, cuts to business taxes, further privatisation and cuts to public sector investment all have one central purpose. This is not, as stated, to eliminate the deficit, otherwise the Corporation Tax rate would not have been cut and costly privatisations made, such as Royal Mail or the sale of Lloyds Bank shares.

The purpose of austerity is to restore profitability and this has been a failure. Economic weakness from Brexit is sure to hit profits too. In all likelihood the main effort to restore them will be through increasing the rate of exploitation.

Brexit will make matters worse. Last March the Office for Budget Responsibility forecast (pdf) that GDP growth would be effectively 2.1% per year over the next 5 years and that the public sector deficit would become a surplus by 2018/19. Public sector debt was forecast to fall every year as a proportion of GDP, beginning this year. The real costs of Brexit should be reflected in much more pessimistic forecasts from the OBR on all these fronts.

Even before taking rising prices into account, the level of profits in the second quarter of this year was lower than it was in the third quarter of 2014. Profits are not sufficiently recovering to allow any major reversal of austerity for a government wholly committed to driving down wages and the social wage while giving big handouts to big business.

Of course, some tinkering and publicity-seeking measures are likely, as the government pretends to be on the side of working people. No doubt it will be aided by the extremely compliant media. But anti-austerity activists should be clear. This will be the same old austerity Tories as before, and with new motivation to extend it.

A version of this piece has previously appeared on the People’s Assembly Against Austerity website.