Move over TINA, here comes TARA. There Are Real Alternatives!

The ‘Autumn Budget’ is just around the corner. The pomp and ceremony, the Chancellor’s Red Box held aloft outside Number 11, the cheers from the government benches as the Chancellor delivers his speech, and boos from the opposition are a piece of annual parliamentary theatre.

Austerity or not?

When George Osborne made his budget speech in 2015, he boasted of the changes since 2010 under Conservative leadership. By 2010 the country had ‘collapsed’, he said, the deficit was out of control and we were bailing out the banks. But under the Conservatives there would be no ‘unfunded spending’, no ‘irresponsible’ extra borrowing, no short term ‘giveaways’. His budget, he said, made difficult decisions for economic security. Deficit elimination and debt reduction were the goals. Austerity was the name of the game. Challenges to this view have been countered with ‘TINA’ – There Is No Alternative.

In the run up to budget day the media treats the public to a daily diet of analysis and comment about what the Chancellor may or may not do. Now, in 2018, the question is still whether the Tory love affair with austerity is over as Theresa May pledged in her Conference speech or whether her Chancellor, Philip Hammond, will prevail in his quest to balance the books.

What issues should a responsible 2018 Budget address above all?

While politicians and think tanks like the IFS talk about fiscal responsibility in terms of book balancing, the country faces the very real consequences of the last 8 years of austerity and the decades of free market dogma. A responsible budget should deal with the most pressing real issues of the day. And there are significant issues facing the UK economy. How responsible will a Budget be that does not deal with the truly shocking warnings this month about Universal Credit failure pushing families into poverty and homelessness whilst global news centred on the UN report into devastating acceleration of climate change? In one of the saddest reports to be published since the start of the austerity agenda, the Royal College of Paediatrics and Child Health warn that infant mortality is on the rise and set to rise even further. The United Nations’ estimates of infant mortality indicate that only about six other countries have had increases over the past two or three years. Ironically, given the comparisons which are always brought into play when we talk about increasing public spending, with this grim statistic we really are keeping company with Venezuela.

There is plenty of evidence to show that the last 8 years of emphasis on deficits and debt above all else have had hugely damaging consequences. Wealth has grown by £274 billion of which £66 billion is in the past year alone, but this is not reflected across the population as a whole. The Director of The Equality Trust, Dr Wanda Wyporska, noted earlier this year.

“…. a vast amount of the nation’s wealth has been captured by a tiny number of people. This is economically illiterate, socially poisonous and politically dangerous […].
“The UK’s appalling wealth inequality is a gross injustice and a dire threat to our economy and social cohesion. If wealth continues to gush upwards, then opportunity and hope for future generations will steadily be strangled. This is a recipe for resentment, social division and, potentially, disaster.
“This fawning over obscene wealth is downright scandalous in a society where foodbank use, child poverty and inequality are damaging lives on a daily basis.”

What could it look like if the Chancellor of the Exchequer was operating with monetary realities and how could they determine the options and policies open to a government?

Unfortunately the government response to the climate change report did not offer any hope that this might be an option. Claire Perry is the government’s climate minister. She commented to the BBC on the UN climate change report, “Now we know what the goal is and we know what some of the levers are” she said, “But for me, the constant question is what is the cost and who’s going to bear that, both in the UK and in the global economy.”

It is extraordinary that we are still at a point that when faced with climate change on an unprecedented scale a government minister has to stop and ask ‘what is the cost and who’s going to bear that’ when stark reality is that we will all bear the real cost of environmental degradation – sooner rather than later, unless the government takes action. Governments have whichever resources the country provides at their disposal, if they choose to use them. Creating the money to pay for those resources is the one thing that they are NOT constrained by.

Seen through the MMT lens, the success of the government’s fiscal mission would be measured against a set of criteria agreed through the democratic process in the interests of the nation’s economic and social well-being. 2018’s budget should address ecological concerns, inequality and access to essential services first and foremost. This means addressing which resources are available, not whether the use of those resources will ‘cost too much’ or upset the balance-sheet. How is the death of a child or the destruction of an irreplaceable eco-system accounted for in those figures?

There are real alternatives and we are in urgent need of a blueprint for government which puts public purpose ahead of imaginary fiscal constraints or credibility rules to deliver national economic and social well-being now and for future generations. TARA can’t come into our political discourse soon enough.