Catching up on Twitter last week, I came across a Guardian article wherein three-time advisor to the US Government Robert Reich argues against austerity as an economic strategy. Despite having been published in March, it was timely for me as we’re just finishing our report on the research we carried out among Quids in! readers earlier this year.
We’ll publish the report in the next few weeks but, spoiler alert, I can reveal our research shows that people already living below the poverty line have been hit hardest by austerity – ie, cuts to welfare and services. Working age people not in full-time work are likely to face a perfect storm where their health, employability and home life are not only impacted but where each issue erodes the other.
In the face of rising costs, those reliant on benefits (whether in work or not) no longer have to choose between eating and heating. Our research suggests most cannot properly do either.
Reich rejects austerity as a cure for economic disaster. He says that our problems are not national debt in itself but its relationship to GDP: If fewer people are able to work, GDP goes down and the proportion is worse:
“The issue is not the deficit per se. The issue in all our countries is the ratio of the deficit to GDP – to the entire economy. And if you embrace austerity and thereby reduce economic growth you actually end up potentially in a worse place than you started, with a higher ratio of public debt to GDP. At the same time you are generating huge amounts of human suffering unnecessarily. It takes a huge toll on individuals, on families and on communities.”
This ‘toll’ is measured in our own research:
- 54% saw their benefits decrease
- 52% said their mental health had suffered (higher among working age readers not in full-time employment)
- 51% turned off their heating despite being cold (higher among working age readers not in full-time employment)
- 37% had had to skip meals; 46% of working age and not in full-time employment; 52% of households bringing in less than £200 a week
- 30% had become physically ill due to money worries (higher among… you guessed it)
- 53% were more isolated, missing out on occasions with families and friends
George Osborne takes credit for economic recovery but most of his headlines have been about cutting welfare to ‘scroungers’. Even if fewer people claim benefit, people in work are not earning more. That’s some reasoning at work if he thinks slashing benefits has created wealth. A dog has four legs; my cat has four legs; my cat is a dog.
We need to challenge the Government’s pronouncements on how wealth creation and distribution works. George Osborne may defend liberal economics, suggesting free trade makes us all richer, but surely we all know that in a global economy this is not guaranteed, in fact it’s unlikely. We know corporate companies raising huge profits in the UK dodge domestic tax, one way the nation funds services and balances its books. We also know that when employers make more money, it doesn’t follow that their staff do – shareholders are the only stakeholders they really consider.
Ninety percent of the time, I remain optimistic that there is the hope of a better future for people in poverty in the UK. But then I look at the stats and read how wrong current policy is and I wonder whether the end goal is really tough love to encourage self-help at all. If people can’t heat their homes or eat properly, maybe austerity will succeed – if success is a Darwinian contest where only the fittest survive. The needy will perish but at least the cost of supporting them will diminish.
