Austerity isn't over. So why have we stopped talking about it?
The biggest hit to disposable incomes since records began in 1950 is forecast by the Office of Budget Responsibility. A crisis without precedent in most of our lives. Yet the Chancellor’s Spring Statement failed to protect those on low and middle incomes from the rising cost of essentials. Politicians, anti-poverty groups and many others have decried the lack of financial support for households. In the fifth richest country in the world, it is utterly shameful that people can’t afford the basics that they need. However, cash incomes are only part of the story. Far too little attention is paid to the continued impact on living standards of chronically underfunded public services. Austerity is not over, so why have we stopped talking about it?
The bottom line is that people have a right to the basics they need to live a fulfilling life. These basics include; a warm and secure home, nourishing food, education, people to look after us when we can’t look after ourselves, healthcare when we are ill, water and electricity, transport to take us where we need to go, access to the internet and a safe environment.
Most of these basics can be delivered in the form of publicly provided services (or ‘in kind’ benefits) – and the value of these benefits is huge. To put it simply, you wouldn’t be so poor if your rent wasn’t so high. You’d be much better off if childcare costs weren’t so extortionate. If there were a sufficient and affordable public transport system, you wouldn’t have to spend thousands of pounds a year on fuel and car
maintenance. The impact of collectively provided services on household spending power is highly significant – and even more so if you are a single parent, a full time carer, have a physical or mental disability, or are on a low income. After more than a decade of public spending cuts that have decimated public services, no wonder people are suffering on such a scale.
A series of shocks have battered the UK economy. The long shadow of the Global Financial Crash still looms over us, with wage growth and productivity failing to regain pre-2008 levels. Then came Brexit which is creating a direct long-term negative effect on national income. Next, the pandemic gave the economy the biggest shock we have seen in a lifetime. And now, the war in Ukraine and sanctions on Russia have pushed up the cost of fuel, so that inflation is rising at the fastest rate in more than 30 years. Finally, that’s the context in which we must act on climate change and ecological breakdown by radically reducing C02 emissions globally.
Far from investing in and nourishing the systems that support people to thrive during hard times, the policy responses to these crises have all but destroyed the collective safety net. Following the 2008 crash, austerity measures brought massive cuts to local government (a key provider of public services), as well as to the NHS, education, transport, social services and early years provision. Brexit pushed up prices and limited availability of essentials as basic as food. The pandemic brought the NHS to its knees, led to acute staff shortages in education, care and health, and created serious issues for public transport funding.
According to the Resolution Foundation, absolute poverty in the UK is expected to rise by 1.3 million, including 500,000 children. Analysis by the New Economics Foundation found that over 34% of the population, 23.5 million people, will fall short of the independently calculated Minimum Income Standard (MIS).
But meeting this MIS is not just a case of people having enough money. It’s about people having access to the things they fundamentally need to be able to live a good life. Most of these essentials are extremely expensive – think of health care, education, transport networks, communication networks, social care, housing. In order to create a system in which everyone has access to what they need, we must to pool our resources and provide them collectively. This is what we should be fighting for. By focusing on cash alone, we are missing the bigger picture.
Access to life’s essentials is a right, not a privilege or a concession. These services should be available to everyone – free at the point of use, or at genuinely affordable prices. We already know this; it is the principle at the core of our NHS and our public education system. This is a battle we have already won on some important fronts. And it is a battle that we clearly need to be fighting still. We aim far too low if all we can say in response to the cost of living crisis is that we must increase cash incomes. Cash is just one piece of the jigsaw. The value in-kind benefits in the form of collectively provided services is absolutely crucial.
Public services are more efficient than their private counterparts, they are more redistributive, more environmentally sustainable and help build social solidarity and generate employment at all skills levels across the country.
The Social Guarantee provides a framework for policy and practice
based on meeting people’s fundamental needs through collectively provided services and a living income. Both are essential.
Maeve Cohen is Project Lead at the Social Guarantee