t’s not recessions that should scare us the most: it’s the political choices that follow. Due to a failure to suppress its public health crisis and the subsequent lockdowns, Britain suffered its worst annual decline in 300 years, with a 9.9% drop in GDP in 2020. Behind this abstract statistic is an all too real human crisis: lost jobs, cut wages, rising debts, rent arrears, hunger. Whether this crisis is exacerbated or resolved will not depend on market forces, but on political responses. More than a decade ago, it was David Cameron of all people who declared: “It’s time we admitted that there’s more to life than money and it’s time we focused not just on GDP but on GWB – general wellbeing.” It is normally those who have too much of it who claim there’s more to life than money – those who spend sleepless nights staring at ceilings panicking about energy bills rarely utter those words – but the point about wellbeing trumping economic statistics is an important one. Yet the policy decisions taken by Cameron and his sidekick, George Osborne, represented an onslaught on wellbeing. Offloading the costs of the 2007-08 financial crisis caused by the financial sector on to low-paid workers and disabled people by slashing the welfare state had inevitable adverse human consequences. One study suggested that austerity cuts led to more than 130,000 avoidable deaths between 2012 and 2019, while health inequalities grew to a higher level than a century earlier. By 2019, childhood happiness was at its lowest in a decade, while rough sleeping in England had soared by more than 250% in nearly a decade. None of these phenomena were the inevitable consequences of the financial crash, but rather of policy decisions made by the government. The Tories did not have to slash per pupil spending on schools, and particularly severely in poorer areas; to cut spending on local authorities by 38%, hammering youth services and social care alike; to attack in-work benefits such as tax credits in a country in which most households below the poverty line are classified as in-work. These were all political decisions. And indeed, by suppressing living standards and failing to create well-paid, secure jobs, the Tories’ economic strategy failed on its own terms, meaning lower tax revenues flowed into the exchequer while more people required state support – despite that support being less generous in real terms for each family. It is for this reason that Osborne’s pledge to the British electorate in 2010, that the deficit would be eliminated within a parliamentary term, would fall short. Now, the political chameleon Boris Johnson has claimed he always believed that “austerity was just not the right way forward for the UK”, and pledged last year that the pandemic would not lead to the return of cuts. In the 2019 election campaign, Johnson effectively combined Brexit populism with an eschewing of Osbornomics, committing to investment in health, schools and policing – areas that most appealed to the socially conservative, economically interventionist voters. But already his chancellor, Rishi Sunak – whose reticence delayed vital lockdown measures, causing graver economic consequences down the track – has imposed real-terms pay cuts on public sector workers whom he and other Tory politicians hypocritically applauded during the first phase of the pandemic. Universal credit is due to be cut back by April. That the chancellor has briefed Tory MPs that there is no “magic money tree” appears to set the scene for a renewed bout of austerity, too. This time around, expect them to be canny about it. Several Labour MPs fear that Johnson will promote big projects in “red wall” seats to make the case that voting Tory yields local results, while cutting back spending on those who tend not to vote Conservative, such as young people and poorer people in urban areas. It is this response that will determine how many lose their jobs, how many families will be tipped further into household debt, and to what degree already rising levels of poverty will soar still further. It is on this terrain Labour must fight – if they have the political courage to do so.