Austerity leaves UK economy £100bn smaller - thinktank
By Caoimhe Toman
Date: Thursday 21 Feb 2019
(Sharecast News) - The UK government's austerity policies have left the country's economy £100bn smaller since 2010, a thinktank said on Thursday.
The New Economics Foundation (NEF) found that the policies implemented by former Chancellor George Osborne when the Conservatives came to power caused slower growth and left every household £3,629 a year worse off, or £1,495 per person.
The report also said that reduced government spending forced households to increase their own borrowing.
Although the harshest impact was seen from 2010 to 2012 as the government tried to reduce the deficit, the following years of austerity kept dragging the economy down, the NEF reports stated. Osborne was sacked by Prime Minister Theresa May when she succeeded David Cameron as leader in 2016.
Osborne's obsession with cutting the UK's deficit as he sought to blame the previous Labour administration for the bank-generated financial crisis of 2008 produced huge cuts in spending across government departments, resulting in the cancellation of school and road building programmes, slashing of welfare payments and withdrawal of local government services.
They have also been attributed to the rise in food banks across the country as families struggle to make ends meet.
Current Chancellor Philip Hammond vowed to end austerity in his budget for 2019 but it was still unclear whether he will hit his forecast for budget deficit of £25.5bn to do so.
NEF head of economics Alfie Stirling said: "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," he added.
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