The country’s governing class is enmeshed and transfixed by Brexit and there is little bandwidth for any other policy initiatives. That is a problem. Some of society’s imbalances which contributed to Brexit in the first place are getting worse.
Austerity was a necessary initial response to collapsing public finances post the crash of 2008 but few predicted the impact of quantitative easing (essentially pumping money into the financial system) that accompanied it.
Fuelled by cheap cash, surging house prices and stock markets over the past decade have resulted in huge disparities of wealth. If you own property and shares you have done well. If you rent, rely heavily on benefits and public services, and are employed in the public sector, you have not. Austerity was always the ‘boiling frog’ of politics. Its real impact, initially almost imperceptible, gradually gets worse. The pain after 9 years, as cut lands on cut, is now excruciating.
Theresa May rashly said the age of austerity was over starting with an ill-thought out cash bung at the NHS, but it is not. In England and Wales, 40% of councils anticipate further cuts to front-line services rising to 71% regarding social care services. Central government funding cuts to local authorities since 2010/11 have now reached nearly 50% according to the National Audit Office. Short term cash boosts to paper over the cracks have made little impact.
Zero or sub-inflation rises in public sector remuneration are now also really biting. Teachers’ pay, for example, to name just one public service, is down nearly 10% in real terms causing recruitment shortages across the board.
And then a perfect storm of higher utility bills has just arrived. This week it was announced energy bills could rise by as much as 10% for 15 million households along with council tax rises of 5%. Again according to the National Audit Office, an estimated 8.3 million people in the UK are unable to pay off debts or household bills.
Our economy is one of the largest in the world, but pressures are building. Growth is grinding to a halt as Brexit bites and inequalities and the north/south divide continue to expand as austerity bites. Whilst record levels of employment are a real success of this government, many jobs are poorly paid, long hours service roles. Productivity and business investment are weak and our relatively small manufacturing base could be further eviscerated by leaving Europe.
What is most needed, as a minimum, are constructive, well thought out reforms to social care (green paper currently stalled due to lack of ministerial time), housing and taxation (subjects for another blog) from a talented, moderate Tory government. To coin a phrase, however, that sounds like a reference to ‘unicorn politics’; the involvement of a beautiful, magical beast who happens to take an interest in politics but doesn’t actually exist…
Society’s imbalances, will be made worse by leaving Europe but the government is unable or unwilling to alleviate the pain. Just like austerity, it feels Brexit is another of those ‘boiling frog’ policies. The consequences will only dawn on many of us (just ask Sunderland…) when it is too late.
Inside Right Politics 