United Kingdom government austerity programme

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The United Kingdom government austerity programme is a fiscal policy undertaken by the government of the United Kingdom in response to the Great Recession in the UK. It is a deficit reduction programme and it consists of sustained reductions in public spending, intended to reduce the government budget deficit and the welfare state in the United Kingdom. The NHS[1] and education[2] have been "ringfenced" and protected from direct spending cuts.[3] United Kingdom austerity policies have received pointed criticism from Leftist politicians and economists, and have prompted anti-austerity movements among citizens more generally.[4]

History[edit]

Following the financial crisis of 2007–2008 a period of economic recession began in the UK. In 2009, the term "age of austerity" was popularized by British Conservative leader David Cameron in his keynote speech to the Conservative Party forum in Cheltenham on 26 April 2009, in which he committed to end years of what he characterized excessive government spending.[5][6] The austerity programme was initiated in 2010 by the Conservative and Liberal Democrat coalition government. Its original stated goal was to, "achieve [a] cyclically-adjusted current balance by the end of the rolling, five-year forecast period". At the June 2010 budget, the end of the forecast period was 2015–16.

Between 2010 and 2013, the Coalition Government said that it had reduced public spending by £14.3bn compared with 2009-10.[7] However, in a speech in 2013 David Cameron indicated that his government had no intention of increasing public spending once the structural deficit had been eliminated and proposed that the public spending reduction be made permanent.[8] In 2014 the Treasury extended the proposed austerity period until at least 2018.[9] By 2016 the Chancellor George Osborne was aiming to deliver a budget surplus by 2020, but following the result of the United Kingdom European Union membership referendum, 2016, he expressed the opinion that this goal was no longer achievable.[10]

Osborne's successor as Chancellor, Philip Hammond, retained the aim of a balanced budget[11] but abandoned plans to eliminate the deficit by 2020.[12] In Hammond's first Autumn statement in 2016 there was no mention of austerity, and some commentators concluded that the austerity program had ended.[13][14] However, in February 2017 Hammond proposed departmental budget reductions of up to 6% for the year 2019-20,[7] and Hammond's 2017 budget continued government policies of freezing working-age benefits.[15] The 2017 Conservative Party manifesto pledged to eliminate the deficit by the "middle of the next decade".[16]

Effects[edit]

Demographics[edit]

In 2016 research from the Women’s Budget Group and the Runnymede Trust indicated that women, people of colour and in particular women of colour have been affected most by austerity, and that they will continue to be affected disproportionately until 2020. This is due to the fact that black and Asian women are more likely to be employed in the public sector, be in low-paid jobs and insecure work, and experience higher levels of unemployment than other groups.[17]

Food banks[edit]

Researchers have linked budget cuts and sanctions against benefit claimants to increasing use of food banks. In a twelve month period from 2014 - 2015, over one million people in the United Kingdom had used a food bank, representing a '19% year-on-year increase in food bank use'.[18]

A study published in the British Medical Journal in 2015 found that each one percentage point increase in the rate of Jobseeker's Allowance claimants sanctioned was associated with a 0.09 percentage point rise in food bank use.[19] However, the Organisation for Economic Co-operation and Development found that people answering yes to the question "Have there been times in the past 12 months when you did not have enough money to buy food that you or your family needed?" decreased from 9.8% in 2007 to 8.1% in 2012,[20] leading some to say that the rise was due to both more awareness of food banks, and the government allowing Jobcentres to refer people to food banks when they were hungry, in contrast to previous governments.[21]

Health services[edit]

In 2016, figures analysed by the King's Fund think tank showed that 'mental health trusts in England are still having their budgets cut, despite government assurances they would be funded on a par with physical healthcare'. The analysis 'suggests 40% of the 58 trusts saw budgets cut in 2015-16'.[22]

A 2016 report authored by the NatCen Social Research for UNISON shows that LGBT people have suffered from a lack of access to mental health services as a result of austerity.[23]

In 2017, the Royal Society of Medicine said that government austerity decisions in health and social care were likely to have resulted in 30,000 deaths in England and Wales in 2015.[24][25]

Criticism[edit]

The austerity programme has faced opposition from disability rights groups for disproportionately affecting disabled people. The under-occupancy penalty (commonly known as the "bedroom tax") is an austerity measure that has attracted particular criticism. This reduces the amount of housing benefit available for those living in a house with a bedroom that the Government believes they do not need, with activists claiming that two-thirds of council houses affected by the policy are occupied with a person with a disability.[26]

Some have argued that austerity measures in the UK are fueling a growing gap between the old and the young which seems likely to undermine inter-generational fairness. Some have even gone as far as to comment that this is deliberate, part of a wider campaign to residualise the welfare state so that it mainly rewards people for paid work, particularly through the contributory state pension, while undermining the social safety net for people of working age.[27]

Feminist Fightback's "Cuts Are a Feminist Issue" featured in Issue 49 of Soundings Journal (published online in 2011 by the New Left Project) described the particular gendered impact of the austerity programme and "how the government's cutbacks in social provision are privatising work that is crucial to the sustenance of life". [28] In 2012, the Fawcett Society published "The Impact of Austerity on Women" which, in particular, criticised the Treasury for not collecting "sufficient data and analysis of the impact of either the raft of individual measures that have been announced in key budget statements since June 2010, nor on the cumulative impact of these measures on women’s equality across the board".[29] A briefing from the UK Women’s Budget Group on the cumulative distributional effects of cuts in public spending and tax changes on household income by gendered types over the period 2010-20 identified significant, and disproportionate, negative impacts of the government’s plans on women and low-income households (in which women predominate) despite claims that the burden would be shared equally.[30]

Ring-fenced departments[edit]

Peter Dominiczak (political editor at The Daily Telegraph) wrote that because spending on the NHS and foreign aid is ring-fenced, "other Whitehall departments will face savage cuts to their budgets".[31] However, some (such as Dr Louise Marshall in The Guardian) have questioned whether the National Health Service (NHS) really is exempt from austerity measures.[32]

See also[edit]

References[edit]

  1. ^ "NHS funding protected?". NHS Support Federation. Retrieved 19 May 2017. 
  2. ^ "School spending stays protected from budget cuts". BBC News. 26 June 2013. 
  3. ^ "Should NHS budget be ring-fenced?". BBC News. 1 May 2013. Retrieved 3 September 2016. 
  4. ^ Krugman, Paul. "The Austerity Delusion". The Guardian. Retrieved 2 May 2016. 
  5. ^ Deborah Summers (26 April 2009). "David Cameron warns of 'new age of austerity'". The Guardian. . Archived from the original on 29 April 2009. Retrieved 26 April 2009. 
  6. ^ M. Nicolas Firzli & Vincent Bazi. "Infrastructure Investments in an Age of Austerity : The Pension and Sovereign Funds Perspective". Revue Analyse Financière, volume 41 (Q4 2011 ed.). Retrieved 30 July 2011. 
  7. ^ a b Rob Merrick (28 February 2017). "Chancellor Philip Hammond accused of more 'failed austerity' after demanding extra spending cuts before the election". The Independent. 
  8. ^ Nicholas Watt (12 November 2013). "David Cameron makes leaner state a permanent goal". The Guardian. 
  9. ^ James Kirkup (5 Jan 2014). "George Osborne to cut taxes by extending austerity and creating smaller state". Retrieved 1 February 2014. 
  10. ^ Peter S. Goodman (7 October 2016). "Europe May Finally End Its Painful Embrace of Austerity". New York Times. Retrieved 17 October 2016. 
  11. ^ Peter Walker; Rowena Mason (3 October 2016). "Philip Hammond to ditch George Osborne's economic targets". The Guardian. Retrieved 18 October 2016. 
  12. ^ Michael Wilkinson (3 October 2016). "Philip Hammond warns Britain's economy heading for post-Brexit 'rollercoaster' ride as he drops pledge for budget surplus by 2020". The Telegraph. Retrieved 18 October 2016. 
  13. ^ Will Chalk (24 November 2016). "Whatever happened to austerity?". BBC Newsbeat. Retrieved 28 November 2016. 
  14. ^ Christopher Hood; Rozana Himaz (27 November 2016). "How does austerity look in retrospect? The UK's recent fiscal squeeze in historical perspective". The London School of Economics and Political Science. Retrieved 28 November 2016. 
  15. ^ Anoosh Chakelian (8 March 2017). "What welfare changes did Philip Hammond make in his Budget 2017?". New Statesman. 
  16. ^ "Reality check: How big is the UK's deficit and debt?". BBC News. 17 May 2017. 
  17. ^ Maya Goodfellow (28 November 2016). "A toxic concoction means women of colour are hit hardest by austerity". The Guardian. 
  18. ^ Food bank use tops million mark over the past year. The Guardian. Published 22 April 2015. Retrieved 20 May 2017.
  19. ^ Loopstra, Rachel (2015). "Austerity, sanctions, and the rise of food banks in the UK" (PDF). BMJ. 350: 2. doi:10.1136/bmj.h1775. Retrieved 25 June 2015. 
  20. ^ McKinstry, Leo. "Despite the Left's claims over soaring foodbank use, Britain is not going hungry". Express.co.uk. Retrieved 2015-11-11. 
  21. ^ Read. "Was food poverty actually higher under the last Labour government? - Spectator Blogs". Blogs.spectator.co.uk. Retrieved 2015-11-11. 
  22. ^ Mental health budgets 'still being cut despite pledge'. BBC NEWS. Published 14 October 2016. Retrieved 21 May 2017.
  23. ^ Sinclair, Sarah (November 25, 2016). "Austerity measures are harming the LGBT community's mental health". Pink News. Retrieved November 26, 2016. 
  24. ^ Haroon Siddique (17 February 2017). "Health cuts most likely cause of major rise in mortality, study claims". The Guardian. 
  25. ^ Hannah Summers (18 February 2017). "Tony Blair's Brexit speech 'not helpful', says Jeremy Corbyn". The Guardian. 
  26. ^ Ryan, Frances (16 July 2013). "'Bedroom tax' puts added burden on disabled people". Retrieved 25 June 2015. 
  27. ^ "New research shows austerity is favouring older voters at the expense of the young | The Intergenerational Foundation". www.if.org.uk. Retrieved 2015-11-26. 
  28. ^ Feminist, Fightack (2011-12-15). "Cuts Are a Feminist Issue". Soundings Journal. Issue 49 (49). Retrieved 2016-04-17. 
  29. ^ "The Impact of Austerity on Women" (PDF). The Fawcett Society. The Fawcett Society. Retrieved 2016-04-18. 
  30. ^ "A cumulative gender impact assessment of ten years of austerity policies" (PDF). The Women's Budget Group. The Women's Budget Group. Retrieved 2016-04-18. 
  31. ^ Peter Dominiczak (21 July 2015). "George Osborne to demand £20billion of Whitehall cuts". 
  32. ^ Marshall, Dr Louise (3 December 2012). "Should we start preparing for a decade of austerity in the NHS?". The Guardian. Guardian News and Media. Retrieved 12 November 2015.