Is austerity now “in the past”?

Ben Chu

Mandelson 150x150 Is austerity now in the past?The Financial Times quotes Peter Mandelson arguing that Labour should stop banging on about austerity:

“The whole argument about whether we’re cutting too far and too fast, it’s in the past. It is rather predictable party political stuff from over the dispatch box, and it is a bit tiring to the public…We need to focus on how to redevelop our economy rather than fight about the past and fight about what’s too far and what’s far enough. The Labour Party as got to offer more than that.”

“In the past”?

Here’s the scale of the cuts to come by 2015/16 (taken from the Budget red book):

CUTS MANDELSON Is austerity now in the past?

So we’re £53bn through, with £52bn more to come.

What’s more, this is just the start of it. Because the UK’s growth prospects are so dismal there are going to be more cuts (or tax rises) needed after 2015/16. Here’s the Institute for Fiscal Studies’ analysis of the scale of the potential cuts to come:

IFS cuts1 Is austerity now in the past?

Departmental budgets have so far been cut 9 per cent. In the absence of tax hikes this will double to 18.4 per cent by 2017/18.

If this is Mandelson’s definition of “the past” I’m not sure I’d want him investing my money (or advising me on economic policy for that matter).

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  • Jason Arneil

    Be really interesting to see a graph of total public spending. Is that being cut, or not?

  • Ben Chu

    Total state spending rising in cash terms, but falling as share of GDP:

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