The Institute for Public Policy Research (IPPR), the UK’s leading progressive think tank, published a report today on Ending Austerity in the UK.
This report argues for a fundamental shift away from the ‘consolidation state’ to the ‘investment state’ arguing that the statement must have a greater role in addressing four ‘social deficits’; care (focussed on young and the old), skills (addressing low pay and productivity), health (inequalities and rising mental ill-health), and security (end poverty, growing levels of debt and economic insecurity).
Key highlights from the report written by Harry Quilter-Pinner and Dean Hochlaf
Ending the Consolidation State, How has austerity failed?
- Economically – by taking demand out of the economy. The New Economics Foundation finds the UK’s economy is about £100 billion smaller today than it would have been without the cuts
- Fiscally- Debt as a percentage of GDP has risen every year since the onset of austerity
- Socially- many types of crimes are increasing (ONS 2018), life expectancy has stopped rising and inequalities in health are growing again (Marmot 2019). Over a million people a year are now using foodbanks (Trussell Trust 2019), rough sleeping has more than doubled (Economist 2018), and poverty has started to rise once again: one in three children and around one in five pensioners have now dropped below the poverty line (DWP 2019).
Creating an Investment State:
- The UK government should commit to matching European levels of social spending. This could be achieved through incrementally increasing the size of the state by 0.7 percentage points per year – which would see spending rise from around 43 per cent of GDP today (when we factor in private pension spending) to around 48 per cent of GDP by 2030. As a result, we would be able to spend an extra £280 per head on education, £450 per head on health and £930 per person on social protection than under the status quo.
- We need to raise an additional £66 billion per year by the end of this parliament, rising to £119 billion by the point of convergence in 2025 and £124 billion by the end of the next parliament (except in the case of an economic downturn) in order to meet the average level of spending of our European neighbours. Comparable European countries currently pay 41.8 per cent of GDP in taxes compared to 33.3 per cent in the UK in 2018.
- To achieve this, they call for increases in corporation, wealth and income tax on high earners – together raising as much as £57 billion in revenues per year – in the short run. They argue that this is crucial because it will result with people on middle incomes more willing to pay tax also
- Everybody – including those on middle and higher incomes – will need to benefit from high quality public services in order to create a coalition in favour of the ‘investment state’. This will require a shift towards more universalist public services and welfare provision. They therefore call for the additional funding raised in the short term to be invested in universal childcare, social care and mental health provision – as well as reversing cuts to universal credit, adult education and public health. These priorities should be funded before more regressive universalist policies such as free tuition fees are considered.
Executive Director External Engagement at City Lit, Phil Chamberlain commented, “Interesting to see the IPPR report published today, which talks about the importance of appropriate investment in adult education along side other important societal issues, will impact positively on us all. This report joins a significant wealth of evidence and reports arguing the case for investment and support for lifelong learning, which we hope will be up the list of priorities for the Government come the next Spending Review and any new policy decisions taken by the next Prime Minister.”
City Lit was awarded the 2019 Festival of Learning President’s Award for being a 'beacon for lifelong learning for the last century'. City Lit first opened its doors for enrolments in September 1919, and in its first century has supported well over a million adults in London to learn. City Lit has more than a thousand tutors teaching five thousand courses every year – ranging from languages to visuals arts, humanities to business, and music to wellbeing. The vibrant diversity of the capital is reflected in the diversity of courses available and learners taking part.