Nobel Prize-winning economists think Osborne’s budget plans are bad – but what do they know, anyway?

Carrying on regardless is a sign that it is ideology – not evidence – that is swaying Osborne

The truth will continue to fall on deaf ears (Getty Images)

The Conservative government continues to rewrite the economic rulebook – even in the face of the OECD, IMF and Nobel Prize winning economists telling him to abandon austerity.

Osborne isn’t listening – not to the growing chorus of economists saying more cuts are unnecessary; independent bodies deeming public spending cuts and personal tax changes unfair; not to the teachers and research saying academies are not working; and not to the young people laden in debt and on low wages for whom savings is wishful thinking. Carrying on regardless is a sign that it is ideology – not evidence – that is swaying Osborne.

We were told by Osborne that government spending was the reason we were the ‘worse prepared of any of the major economies’ to deal with the financial crash. This logic means we need further cuts to help us deal with current economic woes. Never mind that the 2008 crash was actually caused by poor banking regulation rather than public spending, and that our sharp recession and long recovery was a product of over-exposure to global financial markets and the Coalition government’s programme of cuts.

We are being told a very different economic story – one where taking money out of the economy is good for growth.

It is not like I’m the only one shouting about this outrageous and barefaced lie, but the truth will continue to fall on deaf ears.

Why? Apart from clever but incorrect credit card analogies, cheaper mortgage costs, a fall in petrol prices, tax allowance changes and access to cheap credit means that many people don’t feel the impacts of cuts on their spending power.

What they will become increasingly aware of is a fledging NHS, poor social care provision for their ageing parents and more homeless people on the street. But this is a slow process, and one that is being blamed on poor local authority management, those on welfare and immigration, rather than the billions in public service cuts.

Osborne’s logic failed elsewhere too. A budget for the future, by definition, cannot reward the fossil fuel industry, encourage fossil fuel consumption while failing to invest heavily in renewables.

All-in-all this budget probably won’t be remembered for much beyond the sugar tax – but for the many economists who are fighting for a fundamental change in policy, Osborne’s unwavering commitment to cuts even in the face of economic turmoil is a sign that the fight has just got much harder.

Faiza Shaheen is Director of Class: Centre for Labour and Social Studies