5. Deficit Reduction and Budget Irresponsibility

The coalition and Conservative governments have repeatedly espoused that eliminating the budget deficit is their principal policy objective. Yet they have also repeatedly failed to meet their fiscal targets in this regard. Keynesian economists have criticised the intention to radically cut spending, but also identified an apparent relaxation of George Osborne’s cuts agenda as decisive in the resumption of steady growth in 2013. However, a Keynesian analytical lens offers only a partial understanding of the relationship between austerity and fiscal policy. In practice, deficit reduction, even if never achieved, functions as a legitimising mechanism for the wider objectives of austerity—and this function has now been institutionalised in the form of the Office for Budget Responsibility.