WATCHING David Cameron and George Osborne at the Covid inquiry claim that austerity did not leave the NHS weaker ahead of the pandemic was like being thrown back in time 10 years. 

The evidence is totally clear. Austerity left our whole society weaker — with reversals in life expectancy for many communities, 300,000 excess deaths due to austerity and the undermining of many of the vital services that bind our society together and make people’s lives better.  

It also severely undermined our economy. One of the key lies of Cameron and Osborne throughout the austerity years was that an economic crisis meant we could not afford to make the public investment necessary. Worryingly, that damaging logic seems to be back in fashion. 

The Tories have unleashed a propaganda offensive against Labour’s Green Prosperity Fund, a positive programme of investment that can stimulate the high-quality jobs and industries we desperately need while helping to bring down energy bills and tackle climate change. 

Day after day, in the House of Commons and in the media, the Tories are falsely claiming that Labour’s green plans are not affordable, that if Labour borrows to invest this will crash the economy and that it even risks making inflation worse. 

As we head towards the next general election, the Tories are going to be relentless in presenting Labour’s green investment plans as a danger. We need to challenge this logic head-on and not give an inch to it. 

An excellent report this month from the Institute for Public Policy Research showed that Britain has suffered decades of underinvestment, both in the public and the private sector, and that this has left our economy and our social fabric much weaker than it should be. 

Britain is consistently ranked the lowest of the major G7 economies on investment levels and is now falling ever further behind. Investment is £500 billion lower in Britain than it would have been had it kept up with the average of the G7 countries over the past 20 years. 

That is the reason that Britain has suffered such a huge decline in the quality of transport, health, education and other key services. It is the reason our economy is trapped in a doom loop of low growth. 

So instead of letting the Tories make the weather with their false narrative, we need to make the case for public investment. We need to highlight that when the government invests, this helps grow the wider economy, helps bring in other investments, and raises the taxes going to the government which can in return reduce government debt levels. 

One example of this is in healthcare. The King’s Fund — a leading health think tank — estimates that the multiplier effect of health spending means for every £1 spent on health, £3.60 of income is generated across the economy. Given the government gets around a third of this back in tax, this investment would effectively pay for itself. 

That is just one example, but we know that across the economy investment leads to a bigger return. In fact, that’s exactly why businesses do it — they make an initial outlay to get more back over the longer term.  

The same applies to public investment too. It is pretty much universally agreed — except by the right-wing Tory think tanks that helped tank the economy last autumn — that public spending on investment brings high returns. 

If we take the fight to the Tories on this, then we can win the argument with the public that this investment is the way to create jobs, boost incomes and rebuild our economy and strengthen society after the last 13 years of Tory cuts. 

Nor would this investment be inflationary. It would be made over a time period when all the estimates show inflation will already be lower than now. 

And more importantly, because public investment expands the supply side of the economy it can actually help lower prices. For example, public investment in cheaper forms of energy, in public transport and social housing would all help tackle some of the high costs that people face in key areas of their lives. 

The real reason the Tories oppose any plans for public investment is that they oppose an active economic role for the state. They believe that the market should determine everything and that everything should be run for profit. 

Of course, there is no doubt that borrowing to make these public investments is now more expensive than before because of the damage caused by Liz Truss’s Budget and ongoing reckless Tory policies. 

But that doesn’t make it unaffordable. And investment can be funded through other means too. It’s increasingly clear that wealth taxes have, for example, a key role in providing the resources needed to invest in our public services and tackle climate change. 

We can easily raise tens of billions per year — nearly £40bn — by three simple measures to tax wealth more fairly. An annual tax of 1.5 per cent on wealth above £10m would raise £17bn per year. 

Ending the non-dom tax avoidance scheme would bring in another £3bn, while equalising capital gains with income tax rates would raise around £16bn per year. 

In doing this we would redistribute from those who have done very well out of the last period to those that have lost out. Because for some this is not a time of crisis, it’s boom time. 

The Sunday Times Rich List 2023 revealed that the total wealth of UK billionaires has nearly tripled in the last decade to an eye-watering £684bn. 

Such figures are almost too difficult to imagine. So, to put it another way, they have increased their wealth by £120m every single day for 10 years. 

This soaring wealth of the billionaire class is the flip side of wage stagnation that has afflicted the British economy, and that means real wages are now at 2005 levels. 

So, if the government really thinks that reducing demand is the way to tackle inflation then it should be reducing the demand of the super-rich through wealth taxes — not by attacking wages. 

A wealth tax would be popular too. A recent YouGov poll showed three in four people would back a 1 per cent or 2 per cent tax on those with over £10m in assets. This even included over two-thirds of Tory voters. 

David Cameron and George Osborne returned to the front pages for a few days with their appalling remarks to the Covid inquiry. We have to ensure that their dogmatic anti-public investment arguments don’t make a more permanent comeback. That could undermine our economy and society for the next decade, just as it did the last one.  

Richard Burgon is Labour MP for Leeds East.