Leader comment: Why Brexit means austerity will continue

Politicians may regret signalling the end of austerity as demands for pay rises increase.

Theresa May could come to regret signalling an end to austerity (Picture: Frank Augstein/PA Wire)

The Brexit referendum vote, the rise of Donald Trump in the US and Jeremy Corbyn in the UK – all have been attributed to the public’s desire for change of almost any kind after a decade of austerity.

But, despite these political earthquakes, some have expressed surprise that years of flat-lining pay rates and rising living costs have not produced industrial unrest or even civil disorder. Instead, the public seemed to recognise the seriousness of the 2008 crash, deciding to soldier on even while cursing the greed of bankers and ill-defined ‘elites’. We were all ‘in it together’, as the saying goes, apart from ‘the 1%’ or some other small, privileged group.

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However, this remarkable patience may be about to wear out, particularly after two major signals from our political leaders. The first came when the Scottish Government, which has sought to stress its opposition to “Tory austerity”, announced a 6.5 per cent pay rise for police officers over 31 months. It was a head-turning figure. The second came in Theresa May’s speech on Wednesday to the Conservative party conference when she predicted the imminent end of this long age of austerity. So it is perhaps no surprise to learn that Scotland’s teachers are now threatening to strike after negotiations over a pay rise broke down. The unions claim teachers’ pay has effectively fallen by 20 per cent over the last decade, while their workload has increased, prompting record numbers of teachers to quit. The Scottish Government said the offer would mean an increase of at least five per cent, with some teachers getting up to 11 per cent in one year.

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To many that will sound a lot, but expectations have been raised and there is a sense that the dam of public forbearance could be about to break. If it does, the timing could hardly be worse.

The UK economy is weak with an economic growth rate of just 1.2 per cent. And, in a few short months, the UK looks certain to depart the European Union and it seems increasingly likely that it will do so without a trade deal. The effect on the economy could be devastating – Ross McEwan, CEO of the Royal Bank of Scotland, warned yesterday it could push Britain into recession.

The public’s frustrations are understandable, but we must remain patient a little longer, at least until we have negotiated the most serious threat to the UK since the Second World War.