At this year’s Conservative Party conference, Theresa May announced with much fanfare that austerity was “over”.

Next week’s Budget will be the first chance to see if she meant what she said.

After eight hard years of spending cuts, a change of direction is urgently needed.

But until the government starts to invest in the economy properly, we won’t be holding our breath.

Austerity has failed

When George Osborne announced the start of austerity back in 2010, he argued that cutting spending to reduce the deficit was “a necessary precondition for sustained economic growth”.

According to his logic, as the government spent less, the private sector would spend more – and this would in turn boost economic growth.

But as workers suffering from weak wages and insecure work know all too well, the last eight years have seen some of the weakest economic growth we’ve experienced in the post-war period.

As the following chart shows, GDP per head grew by an annual average of only 0.4% in the decade to Q2 2018. Even during the weakest decade before this, GDP per head expanded at five times this rate: