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Britain dont be fooled by budget headlines austerity isnt over

Marxist Analysis · 2026-05-13

Core Argument

The article's central thesis is that the Conservative government's claim that "the era of austerity is finally coming to an end" is a deliberate deception, not a genuine policy shift. The budget announced by Philip Hammond in November 2018 offered only marginal increases in spending, almost entirely consumed by a single department (the NHS), while leaving the vast majority of cuts already imposed — totalling approximately £42bn from departmental budgets and £17bn from social security — untouched and unreversed. The argument is that austerity is not a policy choice that can be switched off by a change of political mood, but a structural necessity imposed by the crisis-ridden state of British capitalism. The budget's promises are further hollowed out by their dependence on a smooth Brexit outcome, which the article treats not as the cause of Britain's economic difficulties but as a symptom of its deeper, long-term decline.

Theoretical Grounding

The analysis draws on the Marxist understanding of the capitalist state as an instrument for managing crises on behalf of the ruling class, not as a neutral arbiter of competing interests. The article implicitly deploys the concept of the tendency of the rate of profit to fall — or, more precisely, the crisis tendencies inherent in capitalism — to argue that austerity is not a temporary adjustment but a permanent feature of a system in long-term decline. The claim that "capitalism = austerity" is a blunt but theoretically coherent statement: under conditions of overaccumulation and weak growth, the state must shift the costs of crisis onto the working class to restore profitability.

The article sits within the Trotskyist tradition's insistence that reformism within capitalism is a dead end. It rejects the notion that a Labour government under Corbyn could manage capitalism more humanely, pointing instead to the objective constraints that any government — Tory or Labour — must face. This is consistent with the Marxist position that the capitalist state cannot transcend the logic of accumulation, and that only a break with capitalism itself can end austerity.

Conjunctural Relevance

The article was written in November 2018, at a moment when the Corbyn leadership had shifted the political narrative against austerity, forcing the Tories onto the defensive. The budget was a response to this shift, not a spontaneous act of generosity. The article identifies several specific conjunctural features:

  • Weak economic fundamentals: The OBR's improved forecasts are dismissed as a "magic money tree" — a rhetorical concession to the anti-austerity mood, not a reflection of genuine recovery. Martin Wolf's comment that "the economy is in far from excellent condition" is cited as establishment confirmation of stagnation.
  • The Carillion collapse: The failure of the outsourcing giant is presented as the logical endpoint of privatisation and Tory economic management, undermining the narrative of Conservative competence.
  • Brexit as a symptom: The article insists that Brexit is not the cause of Britain's economic problems but a reflection of its long-term decline and reduced position on the world stage. The budget's dependence on a smooth Brexit is treated as a political threat to Tory Brexiteers, not a serious economic plan.
  • Global crisis signals: The article points to collapsing currencies in emerging economies, the renewal of the euro crisis centred on Italy, and the combination of economic fragility with political instability as warning lights for a new world slump, a decade after 2008.

Where the Argument Continues

The article leaves several questions open, which are developed elsewhere in the IDOM corpus:

  • The nature of the coming slump: The article warns of a new world crisis but does not analyse its specific drivers or likely trajectory. This is taken up in subsequent IDOM articles on the global economy, particularly those tracking the intersection of debt, overaccumulation, and geopolitical instability.
  • The Corbyn project's limits: The article notes that Corbyn and McDonnell have shifted the narrative but does not systematically critique the strategy of a left government within capitalism. This is developed in IDOM pieces on the Labour Party, the "alternative" economic strategy, and the question of the state.
  • Brexit and the British ruling class: The article treats Brexit as a symptom of decline but does not explore the factional struggles within the British bourgeoisie over the form of departure. This is addressed in IDOM's ongoing coverage of Brexit negotiations and their class character.

Connections

  • Marx's Capital, Volume 3: The theoretical foundation for understanding crisis and the falling rate of profit.
  • Trotsky's The Revolution Betrayed: For the analysis of the capitalist state's inability to transcend its own logic.
  • IDOM articles on the 2008 crash and its aftermath: For the longer arc of the crisis that made austerity necessary.
  • Against the Stream episodes on the British economy: For ongoing conjunctural analysis of the UK's position within global capitalism.
  • The work of the IFS and Resolution Foundation: The article uses their data as empirical grounding, but from a Marxist perspective that rejects their policy prescriptions.

Key Quotes

  1. "The idea that austerity is over is a sick joke when local councils and important departments are running on empty."

  2. "The Institute for Fiscal Studies (IFS) estimates that £19bn extra will be needed (on top of the money allocated to the NHS) in order to prevent further cuts to government departments. And this is without any reversal of the approximately £42bn that has been slashed from departmental budgets since 2010, or the £17bn chopped away from social security."

  3. "Brexit – soft or hard; smooth or chaotic – is not the cause of the country's economic woes, but a reflection of them; a confirmation of British capitalism's long-term decline and reduced position on the world stage."

  4. "In the final analysis, it is the world crisis of capitalism that conditions whether or not austerity is required. This is the reality that any government in Britain – be it Tory or Labour – must contend with."

  5. "The Resolution Foundation predict that the giveaway will put an extra £410 per year in the pockets of Britain's wealthiest households, compared to only £30 per year for the poorest."

  6. "A decade on from the 2008 crash, the global economy is heading for another world slump. Warning lights are flashing across the board: from collapsing currencies in the so-called 'emerging' economies; to concerns over a renewal of the euro crisis, with Italy at the centre."