Brexit was the kiss of death for Osbornomics

George Osborne was the biggest political casualty of Brexit, after Cameron. Now that he’s been sacked, his economic policy of austerity is dead in the water.

As David Cameron hummingly resigned from his post of Prime Minister, Britain is moving forward with Theresa May at the helm.

Though we’ve only known May would succeed Cameron for a few days, it’s already become clear that she wants to make a clean break with her predecessor.

Her speech on Monday was a thinly veiled criticism of previous government policies.

In fact, it was so full of lines like ‘making Britain fairer’ and ‘getting tough on big business’ that it could’ve been ripped off from Jeremy Corbyn.

May’s hiring and firing decisions similarly reflect her desire to leave her own mark on this cabinet. The clearest example of this is the appointment of a new chancellor, Philip Hammond.

It makes George Osborne the biggest political casualty of Brexit after David Cameron.

With so many prominent Tories making the case for increased government spending in the past few weeks, Osborne must have known he’d be given the axe.

Leadership candidate Stephen Crabb and Communities Secretary Sajid Javid both proposed spending £100bn on infrastructure, for example.

Most significant, though, was Theresa May openly criticising Osborne on Monday.

May accused Osborne of having ignored the country’s productivity slump and opened the door to an infrastructure spending spree.

The ex-chancellor may have abandoned his deficit targets as soon as the EU referendum results were in, but it was too little too late.

Now that Osborne has been sacked, his economic policy of austerity is dead in the water.

The austerity myth

“I hope I’ve left the economy in a better state than I found it,” Osborne tweeted after his fate was sealed.

I don’t know, has he?

The Cameron-Osborne tandem won over voters with a story about irresponsible government spending. Yet, six years of Osbornomics haven’t actually improved the economy all that much.

Osborne’s policies didn’t kick-start the economy and the chancellor never came close to his borrowing targets. They did put a lot of pressure on public services and increase the threat of deflation.

The new leading voices in the Tory party have exposed Osborne’s austerity myth. Government spending should not be in line with the economic cycle, it should be counter-cyclical.

You can’t slash government spending to historic lows and still expect to fix a stagnating economy. Many economists therefore denounced Osborne’s austerity policies arguing they only slowed down Britain’s recovery.

Osborne also showed a knack for setting unrealistic targets. His aims to eliminate the deficit by 2015 and achieve a surplus by 2020 proved way too optimistic and left a question mark over his competence.

Austerity didn’t prove a way to decrease the deficit either. In fact, with the Treasury’s tax receipts going down, Osborne ended up borrowing £171bn more than he planned six years ago.

In short, the UK economy doesn’t look any less vulnerable to a new shock than it did when Osborne moved into 11 Downing Street.

We’re all in this together?

However, the thing that ultimately cost Osborne his job was that he failed to create, in May’s words, “a country that works for everyone, not just for the privileged few.”

Voters bought the Conservative argument that austerity was a necessary evil. Yet they must have frowned when Osborne blatantly cut the tax rate for Britain’s highest earners in 2012.

It’s around that time Osborne’s ‘we’re all in this together’ credo got the addition ‘but some of us are more in this than others’.

Still, the Conservatives were returned to office with an absolute majority as even plenty of voters on lower and middle incomes figured the Tories could best be trusted with the economy.

Since then Osborne has betrayed that trust completely. Freed from the shackles of coalition, Osborne announced cuts to disability benefits and tax credits while handing out tax breaks to corporations.

Osborne faced calls to step down but his partner in crime Cameron managed to save him then. When the EU referendum result forced the Prime Minister to abandon his post, Osborne was beyond saving.

Brexit proved the kiss of death for Osbornomics. I for one won’t miss it.

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