The London Economic Politics

The banks have paid back the cash – so why is the government still imposing austerity?

The Government has recovered all but five per cent, £58 billion, of the £1.2 trillion bailout provided to the banks during the credit crunch and recession, but it is continuing to impose crippling austerity regardless.

George Osborne introduced austerity policies during the Conservative’s first term in charge in response to the trillions of pounds paid out by the government to keep our banks solvent.

But after ten years of austerity imposed on the public most of that money has now been reclaimed by the government according to new National Audit ­Office figures, yet cuts continue to be imposed.

Public sector workers have been reported to be turning to payday loans to make ends meet after Theresa May narrowly defeated a bid to end the pay freeze in the House of Commons. Shocking figures from GMB show almost 2.5 million children are being hit by the pay cap, which has led to public sector workers missing out on £9,000 in wages since it was introduced in 2010, all at a time when inflation continues to soar.

The same union recently criticised a “double bite of austerity” rolled out by the government after a rise in the pension age to 68 was brought forward. Ironically, the announcement came in the same week as a new report from the Institute of Health Equity at University College London confirmed that life expectancy rises in England began to stall since 2010.

Hardly surprising given the “humanitarian crisis” the NHS is now facing. According to research by the Red Cross austerity is killing 30,000 people a year as cuts to social care leaving local authorities barely able to provide basic care to elderly people in the UK.

But why the suffering? According to the NAO the level of taxpayer support for the banking sector should have fallen since the peak of the credit crunch, and even if the government fails to recover all the money it will still reclaim the vast majority of it.

As Des Cohen wrote in Open Democracy here, the main reason can be attributed to the basic mantra of the Tory government that inequality is good for economic growth and for the health of society, despite the clear evidence that this is untrue.

If the Tories were a party that stood up for the disabled, the sick, the single parents, the unemployed, the homeless, the increasing numbers in low paid and insecure employment, the poorly educated and inadequately trained then we might have a different scenario on our hands. As it is they still represent the rich and powerful.

Say hello to ten years more austerity.


10 years since the credit crunch, and it’s still the poor people’s fault

Austerity and inequality: The NHS in crisis

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