Setting the Scene

This chapter discusses and defines fiscal squeeze, explains why fiscal squeeze and austerity is important and intriguing, sets out a way to identify, classify, and measure fiscal squeezes, and shows what can be learnt from exploring a single case, that of the UK, over a century. It reviews relevant literature and identifies three key political choices in fiscal squeeze: (a) tax hikes versus spending cuts; (b) depth versus length of squeezes (‘surgery without anaesthetics’ or ‘boiling frogs’); (c) how to handle the blame and the tactic of ‘heresthetic’. It develops the analytic approach pursued in the book, combining quantitative and qualitative analysis and focusing the latter on loss imposition, political cost to incumbents, and state effort in fiscal squeeze.