The government is going to borrow a lot this year – probably more £300bn, the highest since the Second World War. Pandemics are expensive, with tax revenues plummeting, health costs surging and government paying 80% of the wages of 8.7 million workers.
It’s not surprising that people suspect we’re in for a repeat of the austerity of the 2010s. After all, borrowing will be much higher than during the last financial crisis. Many worry that evil economists, caring only about the public finances, will browbeat politicians into spending cuts.
But that worry is a phantom menace, says a new survey of leading economists by the Centre for Macroeconomics. When asked when the Treasury should take steps to address the deficit, economists were all but unanimous: not in the next budget. Some 63% said nothing should be done until the pandemic subsides. It’s not just on timing that economists are defying the stereotype. When we come to reduce the deficit, they favour tax rises. Precisely zero economists backed public spending cuts.
Of course some economists were cheerleaders for cuts before, but they won’t be now. That’s partly because it’s so cheap to borrow but also because of the last 10 years, and any fool knows that public services couldn’t take a repeat.
So if your definition of left or right wing comes down to attitudes to public spending cuts, I have news for you: economists are a bunch of radical lefties these days.
• Torsten Bell is chief executive of the Resolution Foundation. Read more at resolutionfoundation.org
