UK Fiscal Squeezes over a Century. A Summary Comparison
Working mainly from historical financial outcome statistics, this short chapter aims to do two main things. First, it reports and compares the main episodes of fiscal squeeze—in terms of major revenue increases, spending cuts, or both—identifiable from such statistics in the UK between 1900 and the mid-2010s. It then compares periods of 'austerity' when measured by our fiscal squeeze approach as against measures of fiscal consolidation in terms of deficit reduction. The aim is to show how many squeezes we can identify over that period from those statistics, how sensitive episodes of squeeze are to the metrics or statistical source employed, how deep or long the squeezes were, what mix of spending cuts and tax rises they involved, and what changes we can see over time.
Second, the chapter looks briefly at what conditions preceded or accompanied those squeezes, what kinds of spending were cut and what extra taxes imposed—and again, what changes over time we can identify.
Answers to some of those questions are indeterminate or contestable and inevitably there are limitations as well as possibilities in what we can learn about fiscal squeezes from reported historical statistics. But as explained in Chapter One, we aim to compensate for some of those limitations in the qualitative chapters that follow.