A victory for Ed Miliband and Ed Balls will not end austerity, of course, since they long ago conceded the intellectual case for substantial cuts to welfare, investment and public sector jobs. But it will pose awkward questions about Britain’s economic recovery.
After all, mainstream journalists are predicting that a Labour victory will bring economic chaos. “Why a Labour win is a disaster for homeowners, landlords and tenants”, reads a typically alarmist headline. By contrast, George Osborne has “a superb economic story to sell”, argues Telegraph journalist Ian Birrell, echoing what has become a media mantra.
So the Tories may lose Downing Street, but in a deeper sense, they’re still winning the argument about austerity. George Osborne has convinced most mainstream pundits, and (though they dare not admit it) the Labour leadership, that he stands for “common sense” and “efficiency”. We are allowed to question his morals, but his economic record is regarded as unassailable. But in reality, the one group that defiantly rejects austerity is professional economists. A poll of experts by the Centre for Macroeconomics found that “the great majority of respondents disagree with the proposition that the coalition government’s austerity policies have had a positive effect on aggregate economic activity”. Put simply, very few impartial authorities back cuts as an effective economic strategy. Two-thirds either disagreed or strongly disagreed with Con-Dem policy. Britain is only just catching up with 2008 levels of output (never mind wages) after years of stagnation. Other countries recovered pre-crisis output years ago.
The Tories also scored a huge ideological victory by depicting public sector debt as the main cause of the crash. Miliband sheepishly nods along, conceding that New Labour’s problem was spending too much public money. It follows that Osborne is the “tough choices” Chancellor who put responsibility before ideology.
Somehow, the real events of 2008 have been forgotten. Irresponsible public spending was not Britain’s problem; the real cause of the six-year recession was irresponsible private gambling by a politically untouchable financial clique. The crisis should have forced Britain’s two main parties to reform the City’s treacherous speculation culture. Instead, seven years on, corporate culture remains more arrogant and irresponsible than ever. Britain missed a unique opportunity to ditch casino economics; its future is, more than ever, premised on real estate booms, low pay and a lawless culture of tax avoidance.
Osborne will be remembered as the Chancellor who presided over this missed opportunity. Rather than reforming the financial markets and ending “light touch” regulation, he consolidated their influence. When the next crash comes, the poorest will have few protections left. And that’s a victory for extreme free market ideology rather than “common sense”.
However, Osborne’s damage to Britain’s economy is only half the story. The constitution has arguably taken an even tougher battering from austerity. When the Con-Dems assumed office, Scottish independence was regarded as an eccentric and marginal phenomenon. Five years on, Scotland is a country transformed, and the SNP have built an indomitable political machine on anti-cuts sentiments.
Of course, if Britain does lose Scotland, Osborne won’t get all the blame. Arguably the truly decisive factor has been the sight of Labour politicians standing shoulder-to-shoulder with the parties imposing the bedroom tax. Osborne won’t break up Britain alone. He needs a feeble opposition and an uncritical audience of commentators to complete the job. But he has played an indispensable role.
So an unreformed economy, food banks and NHS privatisation will only be part of his legacy. Perhaps Osborne will play a deeper role in history: making the break-up of Britain inevitable. One thing is certain, though: nobody is going to remember a “superb economic story”.
• Cat Boyd is a trade union activist and a co-founder of the Radical Independence Campaign
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