Austerity and Brexit Make for a Harsher Life in Britain
in the name of eliminating budget deficits, and last year Britain finally produced a modest budget surplus. But worries about Britain’s pending departure from the European Union — Brexit, as it is known — will depress growth for years to come.
Just eight months before the country is due to leave the bloc, Prime Minister Theresa May is battling to save her government. In the last week, two members of her cabinet, the foreign secretary, Boris Johnson, and David Davis, the Brexit secretary, have resigned over her approach, showing there are deep divisions among even those who want to leave the union. And many Britons remain opposed to leaving at all.
Though every major economy has been expanding lately, Britain’s barely grew during the first three months of 2018. The unemployment rate sits just above 4 percent — its lowest level since 1975 — yet most wages remain lower than a decade ago, after accounting for rising prices The government has created destitution,” says Barry Kushner, a Labour Party councilman in Liverpool and the cabinet member for children’s services. “Austerity has had nothing to do with economics. It was about getting out from under welfare. It’s about politics abandoning vulnerable people.”
Conservative Party leaders say that austerity has been driven by nothing more than arithmetic. “It wasn’t driven by a desire to reduce spending on public services,” says Daniel Finkelstein, a Conservative member of the House of Lords. “It was driven by the fact that we had a vast deficit problem, and the debt was going to keep growing.”
Whatever the thinking, austerity has refashioned British society, making it less like the rest of Western Europe, with its generous social safety nets and egalitarian ethos, and more like the United States, where millions lack health care and job loss can set off a precipitous plunge in fortunes.
Much as the United States took the Great Depression of the 1930s as impetus to construct a national pension system while eventually delivering health care for the elderly and the poor, Britain reacted to the trauma of World War II by forging its own welfare state.
The United States has steadily reduced benefits since the Reagan Revolution of the 1980s. Britain rolled back its programs in the same era, under Margaret Thatcher.
Still, its safety net remained robust by world standards. Then came the global financial panic of 2008 — the most crippling downturn since the Great Depression — and Britain’s turn from its welfare state.
British austerity has been a slow bleed, though the cumulative toll has been substantial. Local governments have suffered a roughly one- fifth plunge in revenue since 2010, after adding taxes they collect, according to the Institute for Fiscal Studies in London.
Nationally, spending on police forces has dropped 17 percent since 2010, while the number of police officers has dropped 14 percent, according to an analysis by the Institute for Government. Spending on road maintenance has shrunk more than one-fourth. The number of elderly people receiving government- furnished care that enables them to remain in their homes has fallen by roughly a quarter.
In the blue- collar reaches of northern England, in places like Liverpool, austerity is the latest villain: London bankers concocted a financial crisis, multiplying their wealth through reckless gambling; then London politicians used budget deficits as an excuse to cut spending on the poor while handing tax cuts to corporations. Robin Hood, reversed.
“It’s clearly an attack on our class,” says Dave Kelly, a retired bricklayer in the town of Kirkby, on the outskirts of Liverpool. “It’s an attack on who we are. The whole fabric of society is breaking down.”
Today, more than a quarter of Liv- erpool’s roughly 460,000 residents are officially poor. Public institutions charged with aiding vulnerable people are straining from cutbacks.
Over the past eight years, the Merseyside Fire and Rescue Service, which serves greater Liverpool, has closed five fire stations, cutting the force to 620 from about 1,000. The fire chief, Dan Stephens, says people losing benefits are falling behind on electric bills and losing service, resorting to candles for light — a major fire risk. “There are knock- on effects all the way through the system,” says Chief Stephens, who plans to resign and move to Australia.
Raised in the Liverpool neighborhood of Croxteth, Emma Wilde, a 31-year- old single mother, has depended on welfare benefits to support herself and her two children.
Her father, a retired window washer, is disabled. She has been taking care of him full time, relying on a socalled caregiver’s allowance, which amounts to about $ 85 a week, and income support reaching about $145 a month.
A letter sent by a private firm contracted to manage part of the government’s welfare programs informed Ms. Wilde that she was being investigated for fraud, accused of living with a partner — a development she is obliged to have reported.
Ms. Wilde l ives only with her children, she insists. But while the investigation proceeds, her benefits are suspended. “Everyone is in the same situation now,” Ms. Wilde says. “You just don’t have enough to live on.”
The political architecture of Britain insulates those imposing austerity from the wrath of those on the receiving end. London makes the aggregate cuts, while leaving local politicians allocating the pain.
Spend a morning with the aggrieved residents of Prescot and one hears scant mention of London, or even austerity. People train their fury on the Knowsley Council, and especially on the man who was until recently its leader, Andy Moorhead. They accuse him of hastily concocting plans to sell Browns Field without community consultation.
Mr. Moorhead, 62, seems an unlikely figure for the role of austerity villain. A career member of the Labour Party, he said: “I didn’t become a politician to take things off of people. But you’ve got the reality to deal with.”
The reality is that London is phasing out grants to local governments, forcing councils to live on housing and business taxes. To Mr. Moorhead, the equation ends with the imperative to sell valuable land, yielding an endowment to protect remaining parks and services. “We’ve got to pursue development,” he says. “Locally, I’m the bad guy.”
The real malefactors are the same as ever, he says. He points at a picture of Mrs. Thatcher on the wall behind him. He vents about London bankers, who left his people to clean up their mess.
“No one should be doing this,” he says. “Not in the fifth-wealthiest country in the whole world.”
Shrinking the welfare state, and spreading poverty conditions.