Thing is Richard we are prevented by the EEC from doing so many things that might help us back onto our feet. We cannot subsidise industry, we cannot give preference to UK companies when awarding contracts.
We cannot limit the influx of EEC citizens, who (it would appear} are willing to work for low wages. As long as ANYBODY is prepared to work for low wages, the employers will NEVER increase wages, 'cos they don't have to. We are also limited as to how much we can increase or decrease VAT, and we certainly can't remove it totally from chosen items. (AFAIK)
Austerity isn't government imposed, it's a fact of life at the moment. If cutting one's coat according to the cloth available is austerity, then that's where we're at.