Tory austerity and the deepening crisis of British capitalism has plunged hundreds of thousands into poverty, with 1.25 million people now classified as ‘destitute’ according to latest figures from the Joseph Rowntree Foundation (JRF), a social research charity. At the same time, the Foundation reported that more than 14 million people are living in poverty in Britain, defined as those on less than 60% of the average income.
The human cost of this poverty is immeasurable but the economic costs to the state have been calculated by the JRF to be around £78 billion, or 4% of the UK’s GDP. To put this astonishing figure in context, this is double the amount spent by the British state on funding the military.
Poverty levels in Britain have soared since the onset of austerity, first under the Con-Lib coalition government and then the subsequent Tory majority. JRF report that a combination of rising housing costs and cuts to services and welfare has pushed a further 400,000 children and 300,000 pensioners into poverty over the past four years alone.
Under a headline of “BROKE BRITAIN”, the Metro newspaper (4th December 2017) noted that “the JRF singled out higher food and energy bills, housing costs, along with the four-year freeze on tax credits and working age benefits among the chief causes” for this rise in UK poverty.
Austerity isn’t ideological
These cuts and attacks unleashed by the Tories have clearly been done with callous disregard for the working class, as one would expect from the Conservative Party. But austerity is not simply the result of any peculiarly sadistic ideology on the part of the Tories. Rather, first David Cameron and now Theresa May are simply acting to stabilise the capitalist system that plunged itself into crisis in 2008, with the state taking on the burden of debts incurred by the bankers.
The aim of austerity, therefore, is to achieve financial and economic equilibrium. But this is being done on the backs of workers, the youth, the poor, and even the “squeezed middle”. As a result, the relative economic stability achieved comes at an enormous expense of disrupting the social equilibrium. This is evidenced by the Brexit vote, on one side, and the mass popularity of the Corbyn movement, on the other. And both of these are now acting to unsettle big business and threaten the UK economy on an even larger scale.
At the same time, increased levels of poverty are now also acting as a major drain on the finances of the state, with estimates that at least half of the budget for preventing crime is spent deterring criminal activity that can be attributed to poverty.
Meanwhile, with a scourge of sky-high rents and a proliferation of low pay, the government is spending a fortune on subsidising the profits of parasitic landlords and exploitative big business through housing benefits and tax credits. The JRF report even suggests that 20% of all spending on public services is linked to poverty, amounting to £69 billion. The bad medicine of austerity, therefore, has only made the decrepit system even sicker.
The capitalists and their political representatives are at a complete impasse. On the one hand, they need to resolve the hole in public finances in order to maintain investors’ confidence. On the other, worsening poverty is an increasing burden on the whole of society and will spark further social unrest.
This dilemma is made worse for the ruling class as a result of the chaos surrounding Brexit, with all the disruption to trade and investment that this will cause. As a result, the UK economy is set to contract for the first time since 2009.
The Tories’ dearth of answers was demonstrated in the recent Budget, which revealed by the lack of any meaningful measures. Panic is setting in amongst the ruling class. Meanwhile, Corbyn’s Labour continue to breath down the Conservatives’ neck.
Jeremy Corbyn is right to point out that this Tory government is going to continue to inflict misery on millions of people across the country. Labour must provide a radical alternative to attacks and austerity in the form of a bold socialist programme. The mass poverty we are seeing in Britain - and across the world - is a clear sign that the system is broken and cannot be reformed.