Second time around

If you’ve got a feeling of déjà vu, it might be because history appears to be repeating itself. We stand on the precipice of a new era of austerity, just as we did when the coalition was formed 12 years ago. In the autumn statement, the government announced £30bn in spending cuts, albeit with a slight reprieve until 2025 when most of the reductions will be implemented. The circumstances we find ourselves in are very different to those that accompanied round one of austerity, however, and the government will have to work much harder to persuade the public that cuts are the answer.

How austerity was sold to the public in 2010

When introducing austerity, the coalition government used four arguments to sell the idea of cuts to the public.

First, they framed the cuts in terms of ‘Labour’s debt’, claiming that the deficit had been caused by profligate public spending by Labour. This deflected attention from the bank bailouts following the financial crisis, which had contributed to raising the budget deficit from £38bn before the financial crisis to £155bn by 2009/10.

Second, they argued that cuts were fair. They argued that we were ‘all in this together’, while justifying extensive welfare cuts with language such as ‘benefits scroungers’ and ‘sick note Britain’. They argued that money-saving reforms would reduce benefit fraud and motivate people to work who were seen as ‘lazy’ or ‘work shy’, placing responsibility for poverty on the actions of the poor.

The coalition often framed austerity in terms of house-hold budgeting. In 2010, Nick Clegg compared the government with a family in debt, spending beyond their means. He said: “You’d set yourself a budget. And you’d try to spend less. That is what this government is doing.” Such comparisons contributed to their third argument, that cutting spending was unavoidable, just as it might be for a household. More explicitly, Cameron argued: “We are not doing this because we want to, driven by theory or ideology. We are doing this because we have to.”

Fourth, the government argued that austerity was the moral choice. They routinely spoke of the need to “balance the books” and “show the world that we can live within our means”. They also appealed to the needs of future generations, saying we should not be “asking our children to pay back” the country’s debts.

So, could the coalition government’s ‘pitch’ for austerity work a second time around? There is already evidence of Sunak’s administration turning to similar arguments, but they may be received differently.

Whose fault will Austerity 2.0 be?

Where the Conservatives previously claimed to be ‘cleaning up Labour’s mess’, the current economic challenges began under Conservative leadership. In the autumn statement, Hunt emphasised the role of ‘unprecedented global headwinds’ in the economic downturn. However, these external factors – a global pandemic and war in Ukraine – are mixed up with nearly continuous political turmoil in Westminster. While Sunak may try to distinguish himself as fiscally responsible, his challenge will be separating himself from his tenure as Chancellor, when he instigated the highest ever peacetime government borrowing.

That being said, the public is still likely to be receptive to the argument that austerity is needed. Across the coalition’s tenure, polls showed that the public consistently believed that spending cuts were necessary. My own research has shown that, even by 2019, many people still accepted the need for austerity and spoke of it using the coalition government’s language of ‘necessity’. Hunt has already used similar language, saying: “This government will take the difficult decisions necessary to ensure there is trust and confidence in our national finances.”

Labour has challenged the idea that austerity is necessary, saying another round of deep spending cuts will not help to stabilise or grow the economy. Its argument has garnered some support, but the party will need to consistently and forcefully challenge the idea that austerity is necessary to avoid this idea being deployed as effectively as it was in 2010.

Is Austerity 2.0 fair and morally right?

In Hunt’s recent announcements there have been echoes of the coalition’s claim that austerity was morally right. Hunt has argued that: “We are a country that funds our promises and pays our debts.” Appealing to the notion of ‘doing the right thing’ has the potential to be as effective now as it was a decade ago. In my research about austerity in 2018–19, many people still spoke of it in these terms, saying there was a duty for the government to be fiscally responsible. It is likely the government can once again leverage this point to sell the idea of austerity.

However, recent discussions of fairness have had a very different emphasis. Before the autumn statement, there was a debate in the Conservative party about whether benefits should be uprated in line with pay or inflation. The decision to do the latter, so avoiding real-terms cuts, marks a change from Austerity 1.0, where the focus was on how far to cut benefits.

Hunt has said the government’s priority “will always be the most vulnerable”, which, if it proves to be more than a mere slogan, may help soften the blow of austerity. This approach is likely to be more acceptable to the public as polls showed that, under the coalition, while cuts were seen as necessary, they were not seen as fair. For the government to argue that cuts are fair, it will need to make the case that the vulnerable are being protected, not that they’ve ‘got it coming’.

Are spending cuts unavoidable?

Despite Truss’ best efforts during her short tenure as PM, tax rises are now on the way thanks to the autumn statement, with changes and freezes to thresholds as well as some new taxes, amounting to some £25bn in extra tax revenue. This marks another departure from the coalition government’s approach. The possibility of raising tax revenues was little discussed by the coalition, while the Labour party advocated for smaller spending cuts, rather than no cuts at all. Recently, Shadow Chancellor Rachel Reeves ruled out spending cuts, saying: “The truth is our public services, our schools, our hospitals are already on their knees.”

A Tory government proposing tax rises and a Labour party opposing cuts offers a very different landscape to Austerity 1.0 and undermines the argument that cuts are unavoidable. Most significantly, recent polling has shown strong support for tax rises, while only one in five Conservative voters believe that spending cuts are inevitable. This leaves Hunt fighting an uphill battle to persuade the public that there is no alternative to cuts.

Previously, the apparent lack of alternatives to austerity was key to public support for the policy. Yet this is where the current administration is likely to struggle most to sell the idea of new cuts. It is not enough to say that austerity is right and necessary to find a solution to the economic crisis we face if the public can see that there are alternatives.

A new approach

While some of the coalition government’s arguments may work a second time, the Sunak administration will not be able to simply repeat its approach. Persuading the public that austerity is necessary will be crucial for the Conservatives, but potentially more challenging than a decade ago. And for austerity to be seen as fair, a very different approach to spending cuts would be needed, protecting the departmental budgets that most affect the poorest. Finally, current public support for raising taxes will mean that selling spending cuts as the solution is likely to be harder. It is certainly possible for Hunt to sell austerity again, but it is looking more challenging in 2022 than it did in 2010.

Image credit: Belfast anti-austerity poster, Ardfern, CC BY-SA 3.0 via Wikimedia Commons

Image credit: anti-austerity rally, Peter Damian, CC BY-SA 3.0 via Wikimedia Commons