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We’ve Not Got Any Austerity So Why Raise Taxes To End It?

The public conversation is labouring under a misapprehension. Or if you prefer, the b’stards are lying. We’ve not actually got any austerity in the public finances. Given this there’s no need to raise taxes to end that austerity, is there? But people keep giving us plans to end what doesn’t exist in the first place:

Philip Hammond could make progress towards ending austerity in his budget on 29 October despite opposition from backbench Tory MPs to tax rises and extra borrowing, according to a leading tax and benefits thinktank.

The Resolution Foundation said a freeze on income tax and inheritance tax thresholds before the end of the parliament would raise billions of pounds for public services. Cutting a string of tax reliefs for employers would also improve the chancellor’s war chest as he seeks to pay for increased NHS spending and reverse planned cuts to services.

But there hasn’t been any cut in spending.

What austerity? Credit,, used with permission

A standard Keynesian pattern that. We had a recession, a bad one, so spending went up on those automatic stabilisers. As the economy recovers the spending comes down again. This is what is supposed to happen. Note those numbers are in relation to GDP. So, government is currently swallowing more of everything than the average of Gordon Brown’s Chancellorship. You know, the spendthrift wastrel spent less than this.

What austerity?

And thus, of course, what tax rises required to reverse what does not exist, the austerity?

The thing is the entire country believes there has been some massive slashing of the State. Which there simply hasn’t been, the belief inculcated simply by the b’stards lying to us this past decade. By both sets of course. The left by screaming that their pet projects die as what is spent goes to other peoples’ desires – something that a democracy should perhaps do when an election changes national priorities. The government itself appealing to its base by insisting that it is cutting without actually doing so.

The government’s spending about the same portion of everything as G. Brown was in 2007. What damn austerity?

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5 years ago

You’re going to have to clarify yourself. You say spending hasn’t gone down, then point to a graph showing spending going down from 2011 onwards.

5 years ago
Reply to  jgh

The spending as a %age of GDP has declined from its 2010 peak but in absolute terms it has continued to increase according to chart 2.11
Tim, maybe you could paste the more informative chart?

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