Category Archives: Austerity

Reeves to raise spectre of Liz Truss to persuade Labour MPs to accept cuts

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Chancellor to tell party she is making steep cuts to avoid similar fallout to that which followed 2022 mini-budget

Rachel Reeves will raise the spectre of Liz Truss’s disastrous mini-budget in the lead-up to next week’s spring statement as she tries to persuade her Labour colleagues to accept the steepest departmental cuts since austerity.

The chancellor will tell her fractious party she has decided to cut public spending rather than increasing borrowing because of the risk of a similar fallout to that which followed the then prime minister’s disastrous fiscal statement in 2022.

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Former Bank of England deputy warns Rachel Reeves against kneejerk cuts

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Charlie Bean says OBR forecasts are ‘flaky’ and cautions against trying to hit targets five years away

The former Bank of England deputy governor Charlie Bean has warned the chancellor against making kneejerk cuts in next week’s spring statement to try to hit fiscal targets that are five years away.

Rachel Reeves is preparing to slash spending, including on disability benefits, in response to weaker forecasts from the independent Office for Budget Responsibility (OBR) – prompting a backlash from within her own party.

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Reeves warned UK inflation will push public sector unions to seek higher pay rises

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Plan for ‘reasonable’ 2.8% rises may prove insufficient, forcing chancellor to find billions in extra funding

Rachel Reeves has been warned public sector unions will demand higher pay increases to compensate for accelerating inflation, heaping pressure on the chancellor to find billions of pounds in extra funding.

The government made recommendations in December for a 2.8% pay rise for teachers, NHS staff and other public sector workers for the financial year beginning in April, saying it was a “reasonable amount” given forecasts for the economy.

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Tory police cuts are only part of the ongoing crisis affecting victims of crime

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Austerity affected courts, prisons and public services while rates of poverty surged, creating the conditions for more crime

The period in which clear-up rates for the most serious crimes collapsed coincided with big cuts to police budgets, and the subsequent fall in police officer numbers of about 20,000.

The last Conservative government, responsible for the cuts after 2010 in the name of austerity, spent its time denying they would have any damaging effect on crime fighting in England and Wales. Then, in its final years, it started to reverse the cuts, and pretended “wokery” among law enforcement had diverted officers’ attention.

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Why has France’s austerity budget caused a political storm?

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Country is at risk of fresh turmoil with its government on the brink amid soaring sovereign borrowing costs

France is at risk of being plunged into fresh political turmoil as its minority government teeters on the brink of collapse amid opposition anger over a planned austerity budget.

Reflecting growing unease in financial markets, French sovereign borrowing costs have risen sharply, reaching the highest premium over German bonds since the height of the eurozone debt crisis in 2012.

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French sovereign borrowing costs rise to highest premium in 12 years

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Government faces risk of collapse over planned austerity budget

French sovereign borrowing costs have soared to the highest premium since the eurozone debt crisis amid political turmoil as the government faces the risk of collapse over a planned austerity budget.

The gap between French 10-year government bond yields and their German equivalent ballooned to as much as 90 basis points on Wednesday, the widest level in 12 years, while shares listed on the Paris stock exchange also tumbled.

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Hard-hit Defra to have budget slashed further despite warnings

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Department’s finances were slashed during austerity and campaigners say more cuts will stall progress to meet nature and climate targets

Rachel Reeves has been urged not to cut the government’s environment funding in the budget as analysis shows the department’s finances were slashed at twice the rate of other departments in the austerity years.

Between 2009/10 and 2018/19, the environment department budget declined by 35% in monetary terms and 45% in real terms, according to Guardian analysis of annual reports from the Department for the Environment, Food and Rural Affairs (Defra), the Environment Agency and Natural England. By comparison, the average cut across government departments during the Conservative austerity programme was about 20%. During the first five years of austerity, it was the most cut department.

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Labour needs £25bn a year in tax rises to rebuild public services, warns IFS

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Thinktank says tax increases in budget will be necessary even if Rachel Reeves changes fiscal rules

Keir Starmer’s promise to end austerity and rebuild public services will require tax increases of £25bn a year in the coming budget even if debt rules are changed to provide scope for extra investment spending, a leading thinktank has said.

In its preview of the first Labour budget in 14 years, the Institute for Fiscal Studies said Rachel Reeves would need to raise taxes to fresh record levels to meet the government’s policy goals. The chancellor was also warned of the risk of a Liz Truss-style meltdown if the City responded badly to substantially higher borrowing.

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UK Covid-19 inquiry live: report calls for UK-wide civil emergency strategy

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Former health secretaries Jeremy Hunt and Matt Hancock criticised for their failure to better prepare the UK for the pandemic

Among the recommendations in the report are:

The leader or deputy leader of each of the four nations should chair a Cabinet level committee responsible for civil emergency preparedness.

A UK-wide pandemic response exercise should run at least every three years and a new UK-wide whole-system civil emergency strategy put in place.

External “red teams” should regularly challenge the principles, evidence and advice on emergency plans

An independent statutory body to advise the UK government and devolved administrations should be set up and consult with voluntary groups and council-based directors of public health on civil emergency preparedness and response.

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Buenos Aires metro fare jumps 360% amid Argentina’s harsh austerity measures

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Libertarian president Javier Milei has slashed public spending as he wrestles to tame hyperinflation, now at 289% annually

Commuters in Buenos Aires have been hit by an overnight 360% increase in subway fares, in one of the most dramatic price hikes in a harsh budget austerity campaign launched by Argentina’s libertarian president, Javier Milei.

After weeks of hearings, a judge on Thursday lifted an order that had temporarily blocked the scheduled increase in subway fares. That cleared the way for the change to take effect on Friday morning as office workers across Buenos Aires streamed through the turnstiles of South America’s oldest underground metro.

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NHS spending rise lags behind Tory funding pledges, IFS finds

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Thinktank says extra funding eaten up by higher inflation despite greater demand with service in poor state of repair

Spending on the NHS in England has risen less quickly than the Conservatives promised at the last election despite the extra demand created by the pandemic and record waiting lists, a leading thinktank has said.

The Institute for Fiscal Studies (IFS) said increases in funding from the government had been eaten up by higher than expected inflation and, as a result, NHS day-to-day spending had grown by 2.7% a year during the current parliament – below the 3.3% pledged by Boris Johnson in 2019.

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Real terms average pay lower in most UK local authorities than in 2008, TUC finds

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Union body says austerity is to blame for longest squeeze on wages since Napoleonic era with most ‘wage black spots’ in London

Pay packets are smaller than they were in 2008 in most local authority areas in the UK, according to analysis by the Trades Union Congress, which described the findings as a “damning indictment” of the Conservatives’ economic record.

The TUC, which includes 48 unions with more than five million members, said stagnating wages meant British workers were in the midst of the longest squeeze on wages since the Napoleonic era.

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Budget 2024: Jeremy Hunt announces 2p cut in national insurance

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Chancellor also scraps ‘non-dom’ tax breaks and slashes capital gains on property in pre-election gambit

Jeremy Hunt has announced a 2p national insurance cut in his budget as a pre-election gambit to revive flatlining opinion poll ratings and reboot Britain’s economy from recession.

In what could be the last major economic intervention before voters go to the polls, the chancellor said the government was making progress on its economic priorities and could now help hard-pressed families by permanently lowering certain taxes.

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Cash-strapped London council starts crowdfunding drive to pay for green upgrades

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Southwark asks residents to invest as little as £5 to help fund eco-projects such as cycle hangars and school upgrades

Deep cuts to government funding have led a council in south London to ask its residents to invest their own money, for a financial return, to build cycle hangars, new LED street lighting and green upgrades at schools and leisure centres.

In the midst of a financial crisis hitting town halls across England, councillors in Southwark have resorted to a crowdfunding scheme to raise £6m over the next six years to help fund climate-friendly projects.

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‘It’s on our doorstep’: Bristol’s fearful parents seek answers after three knife deaths in three weeks

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As teenage victims are mourned across the English city, some believe the return of youth centres would keep children safer

Terre Baptiste has been checking her teenage son’s whereabouts compulsively since a 16-year-old boy was fatally stabbed two weeks ago in a park a mile away from their home in the east of Bristol.

“It is very worrying,” says Baptiste, in her living room. “Bristol isn’t a perfect city. But there weren’t stabbings one after the other. It was few and far between. Now it is on our doorstep.”

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Health inequalities ‘caused 1m early deaths in England in last decade’

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Exclusive: Review by Michael Marmot decries 'shocking political failure’ behind differing life expectancies across country

More than 1 million people in England died prematurely in the decade after 2011 owing to a combination of poverty, austerity and Covid, according to “shocking” new research by one of the UK’s leading public health experts.

The figures are revealed in a study by the Institute of Health Equity at University College London led by Sir Michael Marmot. They demonstrate the extent to which stark economic and social inequalities are leading to poorer people dying early from cancer, heart problems and other diseases.

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Key Covid inquiry report creates election date headache for PM

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Heather Hallett’s first findings are to be published before the summer and will show how austerity and Brexit hit pandemic planning

An explosive report spelling out how the Conservative government failed to prepare the country for the Covid-19 pandemic as it obsessed about Brexit is to be released before the likely date of the next general election, the Observer has been told.

In a move that will cause alarm in Downing Street, Heather Hallett’s independent Covid-19 inquiry will issue a detailed interim report “before the summer” on the first batch of public hearings held last June and July, which revealed a catalogue of errors, including the lack of PPE and failures to act on recommendations of previous pandemic planning exercises.

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The fall of Woking: what happens after a council goes bust

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Woking declared itself bankrupt in June. Now, residents want answers as care, arts and leisure facilities face funding cuts

On a clear day, the council’s ambitious plan was for Woking’s tall buildings to be seen from the viewing levels of the Shard in London. Residents, however, view the unfinished towers with much less pride and a symbol of the Surrey town’s financial woes.

Woking borough council this week announced a sweeping package of cuts to local services, after the local authority in effect declared itself bankrupt in June, revealing a £1.2bn deficit racked up from a risky investment spree overseen by its former Conservative administration. The towers were at the centre of the problem, with cost overruns adding to vast debts.

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Councils in England in crisis as Birmingham ‘declares itself bankrupt’

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With Birmingham indicating it cannot balance its books, experts warn of others living ‘hand to mouth’

The crisis in local authorities was laid bare on Tuesday as Birmingham city council in effect declared itself bankrupt, with experts warning that others across the UK were now living “hand to mouth”.

The council’s head of finance took the dramatic decision on Tuesday to issue a section 114 notice, indicating that it did not have the resources to balance its books.

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Austerity has led to NHS quality of care declining in key areas, study finds

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Exclusive: Experts say fall in funding caused ‘turning point’ in standards in health service in England

The quality of care that the NHS provides has got worse in many key areas and patients’ long waits to access treatment could become even more common, research has found.

The coalition government’s austerity programme in the early 2010s led to the heath service no longer being able to meet key waiting time targets, the Nuffield Trust and Health Foundation said.

Fewer people with long-term heath conditions such as cancer, diabetes and depression, are getting enough help to manage their condition.

Breast cancer screening rates for women aged 53-74 have fallen.

It has become harder for patients to see a named GP.

Only 6% of midwives think their maternity unit has enough staff to do its job properly.

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