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Echo Column: Chancellor's u-turn exposes failed austerity agenda

A month has not yet passed since I wrote in this column about my expectations for the Autumn Statement.

Back then I wrote about how I believed the Chancellor would press ahead with his tax credit changes regardless of the widespread opposition to them, including from within his own party. So I have to confess that it was quite a surprise to hear the Chancellor drop the plans entirely during his statement. Unfortunately, this is only a short-lived victory. Universal Credit, which is being phased in, will still leave millions of working families worse off by up to £3000 a year.  

The cancellation of the tax credit reforms was good news, but let’s be clear: it only happened because the Office for Budget Responsibility suddenly found an extra £27billion in tax revenue, and because Labour and the House of Lords forced George Osborne to think again. Abandoning a completely misguided and unfair policy is welcome, but a Chancellor that really cared about working people would never have taken the proposals this far in the first place. 

The Chancellor also used the extra tax projections to protect police budgets and front-load money for the NHS. Again, these are welcome measures, but what’s interesting about them is how quickly George Osborne allows austerity to drop off the agenda when it suits him. We also know that our NHS will be under major pressure this winter, in part because social care is being starved of the resources needed to help vulnerable and older people. 

The truth is that the Chancellor has been found out. He missed all his targets over the last Parliament and his decision to abandon changes to tax credits means he will breach his own benefits cap in its first year. He devolves more powers to local councils while at the same time greatly reducing their budgets, so that they get the blame for cutting services instead of Whitehall. On top of everything, Britain’s debt to GDP ratio continues to grow with every new statement or budget that he puts forward (net debt as a percentage of GDP has increased from around 50% in 2009/2010 to close to 80% in 2014/2015). It is clear that his austerity is not about belt-tightening in the national interest, but an ideological experiment to cut money from public services and support for working people.

What is most worrying is that this is the man who may well lead the Tory party after David Cameron steps down. That’s why it's vital that George Osborne's failed promises to the working people of this country are exposed.

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