More bad news for the ideologue George Osborne

The overnight forecast of "lacklustre" growth is at odds with overly optimistic OBR figures.

Over the weekend, our out-of-touch Chancellor, George Osborne, said that he sympathised with those facing hard times -- but warned of "financial turmoil" if he scrapped his plans. The issue is not so much whether Osborne should scrap his plans but that he should slow the pace of deficit reduction so as not to compromise growth. Claiming it's "my way or the highway" is unlikely to give the markets confidence that he is anything other than an incompetent ideologue.

Ed Balls is quite right: Osborne is in denial but the facts are speaking and our bungling Chancellor can only keep his head in the sand for so long. I think the shadow chancellor had it about right in his op-ed in the Independent in the weekend, when he wrote:

He appears complacent, even carefree, and in denial about the risk to jobs and growth, with no apparent concern over the impact of his tax rises and spending cuts. There is no historical precedent to support his projections and he has no Plan B if the scale and pace of his deficit-cutting prove to go too far and too fast. This is not a wise approach to running the economy.

It certainly looks that way.

The big news overnight is the release of the National Institute for Economic and Social Research's (NIESR) latest quarterly forecast for the UK economy. The main headline is that growth in 2011 will be "lacklustre", which is not exactly what Slasher wanted to hear. NIESR is forecasting that the economy will grow by only 1.5 per cent in 2011 and 1.8 per cent in 2012. This contrasts with the Office for Budget Responsibility's overly optimistic forecasts of 2.1 per cent and 2.6 per cent and the MPC's utterly unlikely forecast of 2.4 per cent and 2.8 per cent.

Only some of the output lost to the exceptionally poor weather in late 2010 -- when GDP fell by 0.5 per cent -- will be regained in early 2011, says the NIESR: the average rate of growth across the two quarters they forecast will be just 0.1 per cent. Such a low growth rate would mean that unemployment will rise, perhaps even through the three million mark by 2012. It makes Osborne's claim that unemployment will fall each year of this parliament look as if it is from cloud cuckoo land.

With the recovery so subdued, NIESR says that this year's surge in inflation will "peter out" and CPI inflation will fall to 1.8 per cent in 2012. It argues that there is a "case for delaying some of the austerity programme". Of course there is.

My choice is the highway for Slasher.

David Blanchflower is economics editor of the New Statesman and professor of economics at Dartmouth College, New Hampshire

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Like it or hate it, it doesn't matter: Brexit is happening, and we've got to make a success of it

It's time to stop complaining and start campaigning, says Stella Creasy.

A shortage of Marmite, arguments over exporting jam and angry Belgians. And that’s just this month.  As the Canadian trade deal stalls, and the government decides which cottage industry its will pick next as saviour for the nation, the British people are still no clearer getting an answer to what Brexit actually means. And they are also no clearer as to how they can have a say in how that question is answered.

To date there have been three stages to Brexit. The first was ideological: an ever-rising euroscepticism, rooted in a feeling that the costs the compromises working with others require were not comparable to the benefits. It oozed out, almost unnoticed, from its dormant home deep in the Labour left and the Tory right, stoked by Ukip to devastating effect.

The second stage was the campaign of that referendum itself: a focus on immigration over-riding a wider debate about free trade, and underpinned by the tempting and vague claim that, in an unstable, unfair world, control could be taken back. With any deal dependent on the agreement of twenty eight other countries, it has already proved a hollow victory.

For the last few months, these consequences of these two stages have dominated discussion, generating heat, but not light about what happens next. Neither has anything helped to bring back together those who feel their lives are increasingly at the mercy of a political and economic elite and those who fear Britain is retreating from being a world leader to a back water.

Little wonder the analogy most commonly and easily reached for by commentators has been that of a divorce. They speculate our coming separation from our EU partners is going to be messy, combative and rancorous. Trash talk from some - including those in charge of negotiating -  further feeds this perception. That’s why it is time for all sides to push onto Brexit part three: the practical stage. How and when is it actually going to happen?

A more constructive framework to use than marriage is one of a changing business, rather than a changing relationship. Whatever the solid economic benefits of EU membership, the British people decided the social and democratic costs had become too great. So now we must adapt.

Brexit should be as much about innovating in what we make and create as it is about seeking to renew our trading deals with the world. New products must be sought alongside new markets. This doesn’t have to mean cutting corners or cutting jobs, but it does mean being prepared to learn new skills and invest in helping those in industries that are struggling to make this leap to move on. The UK has an incredible and varied set of services and products to offer the world, but will need to focus on what we do well and uniquely here to thrive. This is easier said than done, but can also offer hope. Specialising and skilling up also means we can resist those who want us to jettison hard-won environmental and social protections as an alternative. 

Most accept such a transition will take time. But what is contested is that it will require openness. However, handing the public a done deal - however well mediated - will do little to address the division within our country. Ensuring the best deal in a way that can garner the public support it needs to work requires strong feedback channels. That is why transparency about the government's plans for Brexit is so important. Of course, a balance needs to be struck with the need to protect negotiating positions, but scrutiny by parliament- and by extension the public- will be vital. With so many differing factors at stake and choices to be made, MPs have to be able and willing to bring their constituents into the discussion not just about what Brexit actually entails, but also what kind of country Britain will be during and after the result - and their role in making it happen. 

Those who want to claim the engagement of parliament and the public undermines the referendum result are still in stages one and two of this debate, looking for someone to blame for past injustices, not building a better future for all. Our Marmite may be safe for the moment, but Brexit can’t remain a love it or hate it phenomenon. It’s time for everyone to get practical.