“Austerity” is a popular term David Cameron likes to use when advocating for government backed welfare reforms. Since his 2009 keynote speech at the Conservative party forum in Cheltenham, Cameron has made it a political priority to focus on “expansionary austerity” measures as a means of cutting the nation deficit. In the aftermath of a (mostly) political victory in 2010 and an economic recession, the British Coalition government has actively sought to slash government spending, as a means of increasing economic growth – again all in the name of “austerity.”
But, do austerity measures work? Do countries, at a time of economic downturn, infuse economic growth through austerity policies? Some, like Paul Krugman from The New York Times, question the sensibility and confidence of governments that advocate implementing policies that reduce employment in order to increase economic prosperity. While some bodies like researchers at the International Monetary Fund debunk supposed evidence that spending cuts create jobs, others (like Cameron) still clench onto expansionary austerity ideology. What is the cost of this ideological construction?
The commitment of the UK government to the ideology of expansionary austerity is best seen in the welfare reform bill that went to the House of Commons for another reading on February 1st. After an unprecedented seven defeats in the House of Lords, the government was able to have those amendments overturned in the House of Commons. This victory reinstated the original proposals into legislation, which included a cap on benefits to £26,000/year along with other measures. Ministers also say they will use the rule of financial privilege to ensure the Lords will not send the same amendments back to the Commons after they conduct a second reading of the bill. This rule does not allow the Lords to rule on financial matters.
The defeated amendments were (taken from here):
- Exclude child benefit from overall cap
- Not charging single parents for Child Support Agency if they’ve taken steps to reach a settlement
- Exempt cancer patients from means testing of ESA
- Means test other ESA claimants after two years, not one as planned
- Allow young disabled people who have never worked to keep claiming “contributory” ESA
- Exempt social tenants with one spare room from “under occupancy” penalties
- Limit reduction to lower rate of “disabled child element” of Child Tax Credits
Alongside the welfare reform bill, the government has also greatly reduced public sector and civil society funding while devolving its power to local authorities.
What does this mean for the British public? One can easily infer that the government is more concerned with backing austerity measures than trying to address real social problems. If the privilege rule is successful used then the Lords still have some recourse to either protest the use of the privilege rule, or reject the entire bill. If this occurs then the Commons will be in a fight to use Parliament Acts to ensure a bill goes through that severely dismantles the welfare system. So I ask again, do austerity measures make sense in a time of economic downturn?
