Why austerity is ending

The last day of the parliamentary term is usually an occasion for the government to get a whole bunch of bad news out of the way all at once. But this summer’s end-of-term announcements were used as a chance to put out some seemingly good news. Teachers, prison officers and members of the military will all receive pay increases of above 1 per cent for the first time in five years. The lifting of the public sector pay cap is another reminder of how politics and the Tories have moved on from the age of austerity that George Osborne announced in his 2009 conference speech.

Much has been written about the 2017 election and how the loss of the Tory majority changed Brexit. But it had almost as big an impact on government spending rules. It persuaded the Tory party that the public sector pay cap was unsustainable. Indeed, Gavin Barwell, the Prime Minister’s chief of staff, thinks that the cap was one of the things that cost him his Croydon seat.