Austerity policies have resulted in nine years of slower growth and left us all £1,495 a year worse off, analysis by The New Economics Foundation has revealed.
The think tank found the impact of tax and spending changes since the Conservatives came to power had left the economy £100 billion smaller than it would otherwise have been.
As a result, the cumulative effect of tax, public spending and welfare adjustments on growth by the end of the 2018-19 financial year had left the average household £3,629 a year worse off – the equivalent of £1,495 per person.
Chancellor Philip Hammond has vowed to end austerity in his budget for 2019 but it is still unclear whether he will hit his forecast for budget deficit of £25.5 billion to do so.
The UN Special Rapporteur on extreme poverty and human rights Philip Alston suggested last year that austerity may not have saved the country as much as expected following the financial crisis.
John McDonnell, the shadow chancellor, said: “Austerity has torn apart the fabric of our society, and this new work by NEF shows just how damaging its impact has been over nine years.”
NEF head of economics Alfie Stirling added: “At this time of year there is often renewed speculation over whether the chancellor will meet his year-end deficit targets by March. But for nine years, the elephant in the room has largely been missed: the sheer scale of economic damage that these targets have contributed to in the first place.”
“The big picture here is that the livelihoods of people and communities have been made more bleak as a direct consequence of active government decisions. This should not be allowed to happen again.”
The Treasury defended its handling of the economy, saying since 2010 the economy has grown 18.3 per cent, faster than France, Italy and Japan.