As Your Party supporters discuss what policies a new party needs, CALLUM JOYCE reviews a book by two Starmer apologists and argues that it’s not sufficient to criticise the consequences of austerity, you need a socialist programme to fight it.
The Only Way Is Up: How to take Britain from Austerity to Prosperity
By Polly Toynbee and David Walker
Published by Atlantic Books, 2024, £14-99
“The sorry tale starts with austerity, a deliberate Tory decision in the wake of the financial crash not to ask the better-off to pay more in taxes but instead to cut back welfare and public services”. This is how the authors of The Only Way Is Up begin their account of 14 years of economic and social decline under the previous Tory governments, outlining in graphic detail how Britain’s public services have been systematically stripped of funding and resources and the brutal consequences for workers and young people.
Nearly 800 libraries shut, 760 youth centres closed, local council spending power reduced by 29%, and something like one million secure job positions lost over the whole public sector. The number of cuts are too many to list, but the results at the end of the Tories’ reign are clear – an extra 600,000 children living in poverty, 1.2 million families stuck on council house waiting lists, and wages effectively stagnant while the costs of housing, energy, and food have soared.
Particularly shocking are the impacts outlined for the ‘austerity generation’ who have grown up in this period of sustained decline, with 4.2 million children trapped in poverty. Numbers with probable mental health problems rose to 20%, levels of school attendance reached ‘crisis point’ particularly following Covid, and disgracefully in the sixth richest country in the world, the death rate for children rose by 8% in 2023 – with more than one third of those deaths being declared ‘avoidable’.
Alongside the cuts, privatisation continued apace, raising profits but reducing the quality of services for members of the public. 285,000 council homes were sold off, many ending up in the hands of private landlords. Thames, Southern, and South East Water failed to invest in infrastructure whilst racking up huge debts, the cost of servicing them amounting to more than a quarter of water bills. The rolling-stock companies which rent trains to the rail operators saw their profits treble in 2024 while in 2023 two fifths of all train services ran late.
The authors argue that these cuts were not ‘necessary’ or ‘unavoidable’, but were the deliberate policy of the newly elected Tory-Lib Dem coalition in 2010, in response to the turmoil of the ‘Great Recession’ following the 2008 financial crisis. Under the leadership of prime minister David Cameron and chancellor George Osborne (with help from their austerity mascot Lib Dem leader Nick Clegg) the Tories set about with a swingeing programme of cuts, boasting that they had managed to reduce public spending by over £14 billion by 2013. By 2019 the Progressive Economy Forum think tank estimated an extra £540 billion would have been spent on public services if it had not been for austerity.
No-growth economy
The stated aim was to reduce Britain’s budget deficit (the amount that the government spends over its income) and to reduce the national debt as a share of GDP, arguing that this would encourage investment and lead to a return to economic growth. But even if you accept the brutal logic of making the poorest in society pay for a crisis they didn’t cause and focus purely on economic outcomes, then austerity has still been a resounding failure. GDP growth levels are barely bumping along at 1% and rather than reducing Britain’s level of debt, at the end of Osborne’s term as chancellor he had increased it by £555 billion!
The real motivation – although the authors do not make this clear – was in fact to defend the interests of big business in the face of an economic crisis that threatened their profits, done under the cloak of ‘fixing the economy’. Through quantitative easing, billions of pounds were pumped into the financial sector to bail out the banks during the financial crisis, the majority of it being pocketed by the very same institutions and individuals who had contributed to the crisis in the first place! In reality, austerity was the working class being made to pay the bill for that historic bailout as well as funding increased cuts to the amount of tax paid by the super-rich.
From that point of view austerity was a great success – the wealth of the top 1% has multiplied 31 times since 2010. By 2023, the richest 50 families in the UK held more wealth than half of the UK population. The architects of austerity were duly rewarded for their efforts with Osborne landing a job as editor of the right-wing Evening Standard newspaper and Cameron getting a cushy position lobbying for investment firm Greensill Capital.
Rather than helping to solve the economic problems of British capitalism, however, this has only exacerbated them. As the authors explain, “austerity was self-defeating because it had a strong and immediate effect on demand by shrinking social security payments and reduced growth potential by cutting infrastructure investment and local services”. The issues with public infrastructure are well known – water and energy networks are crumbling and in 2023 two-fifths of all train services were late, while the backlog of road repairs was at its highest level ever. All of this contributes to the picture of Britain as an unattractive place to invest when it comes to areas like housebuilding and manufacturing – the lack of surrounding infrastructure makes it harder for capitalist investors to be confident in making a big enough profit, especially when the returns available from speculating on the financial markets are so much greater.
The result has been a historic decline in the productivity levels of the British economy, with the productivity gap with Germany, the US, and France doubling to 18%. Real wages have effectively ceased to grow as well – according to the Office for Budget Responsibility it will take until 2028 for workers to again earn the equivalent of what they did in 2008 – assuming there are no further attacks on our wages until then! This is compared to a growth in real wages of a third each decade between 1970 and 2007. If wages had continued to grow at the same rate up to now, the average worker would be £10,700 a year better off.
Starmer’s ‘tough choices’
These issues all came home to roost in the 2024 general election where the Tories suffered their worst electoral defeat in history, losing 251 seats. The result was a reflection of the complete alienation of British workers from what was once the most successful capitalist party in the world.
That brings us to the period we are in now, with Starmer’s Labour having been elected on the promise of ‘change’, which for some will have meant a hope that Tory austerity would be coming to an end. The authors shared this hope at the time of the book’s publication, just after the general election. As they state, their aim was not just to provide a catalogue of the effects of austerity but to put forward a programme that they think could reverse the damage of the last 14 years and lead to a renewed period of economic growth.
Many of the demands for reforms that they put forward, although limited, would be supported by socialists – ending right-to-buy and no-fault evictions, reopening closed libraries, swimming pools, and community spaces etc. But the key question that remains unaddressed in the book is how will they be implemented?
If this book was meant to serve as a benchmark for Labour’s progress then the authors will be sorely disappointed. In a little over a year after coming to power, Starmer has gone on the offensive against pensioners, benefit claimants, disabled people, students, public sector workers, and more – almost every group in society except the super-rich! Far from acting to expand investment in public services, Labour are cutting further in service of their own self-imposed fiscal rules, trying to win the confidence of the international finance markets by proving that they will not be too radical and are willing to make ‘tough choices’ – meaning tough for workers, but not for the bosses.
In reality it was clear long before the election what the character of this new Labour government would be as it attempts to manage a crisis-ridden capitalist system in terminal decline. The hopes of the authors are based on the mistaken view that previous periods of economic growth have come about primarily as a result of individual government policy – separate from historical factors and global economic and political processes – and that if Starmer simply chooses to prioritise more investment into public services along with greater regulation then perhaps a period of growth similar to that of the new Labour government of Blair can be repeated.
But the situation for Starmer is far different to that which faced Blair when he first came to power in 1997. At that time Blair inherited an economy that was growing by 4.9% – stratospheric compared to the 0.1% inherited by Starmer – and was able for a period to invest in public services given the extra economic headroom – although even this was largely through the involvement of the private sector through schemes like Private Finance Initiatives (PFIs) which loaded public services with billions of pounds of debt. The authors acknowledge that 2% of the NHS’s annual budget now goes to repaying Labour-introduced PFI debts.
Those years of shallow but relatively stable growth were not a result of Blair’s policies, but rather a result of accelerated globalisation following the collapse of the Stalinist regimes in Eastern Europe and the opening up of China which threw millions of low-paid workers onto the global market. This allowed the temporary boosting of profits through the shifting of production to countries where the bosses had to spend far less on wages and could more easily exploit their workforces.
That period came to a definitive end with the 2008 financial crisis and the end of the shallow boom that British capitalism had briefly enjoyed. Of course, we shouldn’t forget that even during that period the Blair government further privatised the NHS, introduced tuition fees for university students, and oversaw the vast academisation of schools across Britain – none of which the authors suggest should be reversed.
Capitalist anarchy
The difference in the economic situation today leaves Starmer with much less room to manoeuvre. The public sector is already loaded with debt – levels are now at over 90% of GDP, compared to less than 40% in 1997 – and the shift in private investment from manufacturing to the financial sector has only intensified. Not to mention the global economic turmoil unleashed by Trump’s tariffs and the general shift away from globalisation and ‘free trade’ towards protectionism and trade wars.
This backdrop makes it hard to share the ‘vision’ of the authors that “some kind of social-market democracy grows out of the earth scorched by austerity”, with “scope for better matching private enterprise and the pursuit of profit with a wider interest, mediated by the state as planner, regulator, tax authority and trade negotiator”.
They also optimistically suggest, “might a growing sense of a world in crisis lay the ground for domestic coming-together?”. But capitalism is an inherently anarchic system based on an unplanned market and the actions of competing individual capitalists investing solely for profit. While they have a degree of common interest in each wanting a stable economy to do business in, they are still fundamentally in competition with one another and will not agree to serious concessions that they feel might threaten their individual profits in the here and now – even if it is in the long-term interests of the economy. On the contrary, economic and political crises will only drive the ruling class to demand further attacks on the working class and intensified competition and conflict globally.
Even intervention by the state cannot overcome this fundamental contradiction as the authors hope. The state under capitalism can play a role in attempting to curb the excesses of individual capitalists through laws and regulations and it can apply some pressure to areas of the economy through investment, taxation, and other financial tools. But it cannot fundamentally direct production and economic growth on a society-wide scale while key sections of the economy remain in the hands of a tiny group of private individuals, who do not have shared interests with the majority of the population who they exploit and oppress to maintain their wealth and power.
That is particularly clear around the issue of taxing the super-rich, which is raised by the authors as a way for the government to access the necessary funds in a time of economic crisis, quoting a study to suggest that “a one per cent per year charge on estates worth more than £2 million would yield a massive £80 billion over five years”. Socialists of course support any measures, including taxation, that can go some way to addressing the wealth imbalance in society. But it is a mistake to suggest that such measures on their own will be sufficient and will not face serious attempts at sabotage by the rich themselves. The authors acknowledge this challenge and admit that “the rich and their representatives frighten chancellors with threats to offshore their money”, with a third of the UK’s estimated 93 billionaires already having done so. Sabotage by the international markets would be likely too – just look at how Liz Truss was unceremoniously removed after ‘the markets’ effectively passed a vote of no-confidence in her government when her policies were deemed to be a danger to their profits. A government attempting to take the wealth off the rich would face the same, if not far worse.
Working-class struggle
The authors concede that “plutocrats aren’t going to rush to relinquish their leverage over the media and boardrooms or to stop oiling the wheels of politics, but at some sweet spot, moral sentiments, however residual, meet political realism and their fear of what a future rougher and radical government might do. At that point they accept fiscal concessions”. This is closer to the truth – not that the super-rich will ever respond to moral appeals, but that they can be forced to give concessions when threatened by an organised movement of the working class.
The 1945 Labour government shows how the capitalists can be forced to give far-reaching concessions at times, allowing the establishment of the NHS and the modern welfare state along with the nationalisation of various sectors of the economy like mining, steel, energy etc. This was not because of a ‘coming-together’ after world war two however, but because of the pressure of a developing mass movement of the British working class who refused to return to the poverty-stricken conditions of the pre-war period and the threat of a strengthened Soviet Union posing the idea of an alternative social system across Europe. As one of the more sober representatives of British capitalism at the time, Tory MP Quintin Hogg, stated “if you do not give the people social reform, they are going to give you social revolution”.
It is clear that simply making a well thought-out argument for more investment is not enough to bring an end to austerity – a clear, fighting strategy is needed to wrest concessions from the bosses. But it is also necessary to explain the limitations of any concessions won under capitalism and to prepare workers and youth for what kind of struggle will be needed to consolidate them.
While the welfare state implemented by the 1945 Labour government was a huge victory for the British working class, its poor state today shows that the capitalists will always attempt to claw back concessions when they feel they can no longer afford them. To win improvements in our lives on a permanent basis it is necessary not just to partially rebalance the distribution of wealth between the richest and poorest, but to fundamentally reorganise society so that the power of the ruling class is removed and the key levers of the economy – the top 150 monopolies and the banks – are brought into public ownership where they can be democratically controlled and directed by the working class in the interests of the majority.
The authors point out that dividends paid by companies in the UK reached a record high of £99.8 billion in 2018 – not to mention the huge profits that already exist but have been hoarded and stashed away in tax havens. Imagine what would be possible if even a fraction of that wealth were put to work building high-quality council housing, raising wages, and massively expanding public services instead. Now imagine if, rather than a fraction, we used all of it – poverty, homelessness, hunger, unemployment, and all the social ills of capitalism could be done away with.
A future workers’ government would not be able to implement this programme solely through acts of parliament however, but would require the mass mobilisation of workers and young people through their own independent organisations to defend that programme and to ensure it is implemented against attempts at sabotage by the ruling class.
Using the vast resources and wealth that exist in Britain to massively raise the standard of living and end capitalist exploitation would be a huge inspiration to workers and poor people around the world, encouraging them to carry through similar programmes in their own countries. On that basis it would be possible to prevent the intervention of the international finance markets and foreign military powers and begin the construction of a global society where poverty and oppression are abolished.
That is not to say that struggles against austerity are pointless unless they lead to the ending of the capitalist system, but it is necessary to clearly understand and explain that there is a viable alternative for running society. Otherwise, there is the danger of accepting the limitations of capitalism and the brutal austerity consequences that come with it if no other solution seems possible.
And this is the very trap which the authors fall into. In one article written for The Guardian newspaper after the publication of this book, Polly Toynbee criticises resident doctors in the BMA for taking strike action as part of their struggle to restore the wages which they have lost in real terms due to austerity, blaming them for adding to NHS waiting lists. Incredibly, in another article she praises the Labour government’s decision to not compensate the WASPI women who were unfairly faced with a rapid rise in their retirement age with virtually no notice, saying “the government is right in its decision not to pay the women up to £10.5bn in compensation – it simply can’t afford to”.
Accepting the logic that there is no money in society – and seemingly forgetting her own demand to tax the rich – only plays into the hands of the bosses who are desperate to maintain their profits at all costs and to continue making working-class people pay for their crisis. Anti-cuts campaigners who read this book will find useful information in its clear and damning outline of the cost of austerity. But those who want a clear strategy and programme to finally bring an end to it must turn to socialist ideas instead.