It may be too late to prevent recession

George Osborne's policies have failed. He talked down the economy -- and now it is sinking.

The data releases this week have all been bad for the coalition. It started in the United States, which matters because generally what happens there is repeated in the UK a few months later.

First, the Conference Board published data on consumer confidence that showed a much greater collapse than had been expected, especially in relation to the respondents' expectations for the future.

Second, the Case-Shiller house price index -- the leading measure of US home prices -- shows that the US National Home Price Index declined by 4.2 per cent in the first quarter of 2011, after having fallen 3.6 per cent in the fourth quarter of 2010. The National Index hit a new recession low with the first quarter's data and posted an annual decline of 5.1 per cent versus the first quarter of 2010. Nationally, home prices are back to their mid-2002 levels. As of March 2011, 19 of the 20 MSAs covered the index were down compared to March 2010.

Third, ahead of the official release of employment data on Friday, an ADP Employment Services report suggests that private-sector payroll growth slowed sharply in May, falling to the lowest level in eight months. This prompted some economists to lower their forecasts for job growth in Friday's data release. It looks as if the US is slowing.

In Europe, the final Markit eurozone manufacturing PMI fell sharply to a seven-month low of 54.6 in May, down from 58.0 in April and below the flash estimate of 54.8. The fall in the index was the largest since November 2008, as manufacturers reported slower rates of increase in output, new orders, employment and inventory accumulation. China is also slowing. Economic output in Australia shrank by 1.2 per cent in the three months to March -- the worst quarterly slide since 1991 -- the national accounts of the Australian Bureau of Statistics showed yesterday.

The data releases for the UK today were truly awful. They follow from the public finance data that shows that, far from paying off the debt, Osborne is increasing it. Plus such growth as there wasn't -­ GDP grew by zero over the past six months -- was driven by government spending. Then, today, the PMI for manufacturing in May was worse than the market expected.

According to Capital Economics, on past form, that leaves the balance consistent with quarterly falls in manufacturing output of around 1 per cent. Some of this fall, it argues, is likely to have been driven by the temporary disruption to supply chains caused by the Japanese earthquake. But Capital Economics points out that the new orders balance also fell from 50.8 to 48.3, which, it argues, suggests that "beneath the monthly volatility, a sharp underlying slowdown in demand is taking place".

There were also a number of statistical releases from the Bank of England, which added to the bleak picture. It appears that banks are simply not lending enough to get the economy moving. This suggests the poorly named Merlin project -- which should be renamed the Mickey Mouse project -- has not worked any magic. First, the money-supply growth was weak. Second, the stock of lending to UK businesses overall contracted in the three months to February, as did the stock of lending to small and medium-sized enterprises. Third, the number of loans approved for house purchases fell by 4 per cent to a four-month low of 45,166 in April ­- the lowest figure for April since records began in 1992.

This inept Chancellor has talked the economy down by falsely claiming it was bankrupt when it wasn't, which has decimated animal spirits among both businesses and consumers. He has also tried to blame a once-in-a-hundred-year global financial crisis on the previous government, which was clearly also untrue and hyperbolic. Osborne has implemented toothless regulation over the banks and has demonstrably failed to get them to lend. He also has no interest in controlling bankers' bonuses, despite his absurd claims to the contrary when he was shadow chancellor. And all of this before the public spending cuts hit: currently it is the public sector that is the driver for growth but that is all about to change. The public finances are worsening, not improving.

The government's economic policy is in total disarray and the economy is sinking. Osborne has been hoisted by his own petard; his numerous false claims were inevitably going to catch up with him and now they have. The coalition's austerity programme was never based on sound economics and was simply a political move to shrink the state. Interestingly, the claims that the economics profession supported his actions have turned out to be false. In my NS column in the issue out tomorrow, I make clear that one of the initial signatories to the letter to the Times that Osborne touted as supporting him ­- the 2010 Nobel Prize winner in economics, Chris Pissarides -­ has now, embarrassingly for Osborne, turned against him and now opposes the ill-conceived and wreckless austerity programme of cuts and tax increases.

It is hard to find any economists outside the City of London that do support the government's strategy, other than a few of the usual right-wing hangers-on.

It is time for Osborne to explain to the British people why his economic policies have failed and what he intends to do about it. My fear is that Slasher has inflicted so much damage on the British economy that it is too late to prevent us slipping back into recession.

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

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The World Cup you’ve never heard of, where the teams have no state

At the Conifa world cup – this year hosted by the Autonomous Republic of Abkhazia – ethnic groups, diaspora communities and disputed territories will battle for footballing glory.

Football's European Championship and the Olympics are set to dominate the back pages over the next few months. How will Team GB fare in Rio? Will the zika virus stop the tournament even going ahead? Will the WAGS prove to be a distraction for the Three Lions? And can Roy Hodgson guide England to a long-awaited trophy?

But before the sprinters are in their blocks or a ball has been kicked, there's a world cup taking place.

Only this world cup is, well, a bit different. There's no Brazil, no damaged metatarsals to speak of, and no Germany to break hearts in a penalty shootout.  There’s been no sign of football’s rotten underbelly rearing its head at this world cup either. No murmurs of the ugly corruption which has plagued Fifa in recent years. Nor any suggestion that handbags have been exchanged for hosting rights.

This biennial, unsung world cup is not being overseen by Fifa however, but rather by Conifa (Confederation of Independent Football Associations), the governing body for those nations discredited by Fifa. Among its member nations are ethnic groups, diaspora communities or disputed territories with varying degrees of autonomy. Due to their contested status, many of the nations are unable to gain recognition from Fifa. As a consequence they cannot compete in tournaments sanctioned by the best-known footballing governing body, and that’s where Conifa provides a raison d’être.

“We give a voice to the unheard”, says Conifa’s General Secretary, Sascha Düerkop, whose world cup kicks off in the Autonomous Republic of Abkhazia at the end of this week.

“We are proud to give our members a forum where they can put themselves on the map.

“From that we hope to give back in the long run and invest in the football infrastructure in our member nations to help them grow.”

The two week footballing celebration starts with an opening ceremony before Kurdistan and Székely Land kick off the tournament. It follows on from 2014’s maiden competition which saw The County of Nice avenging a group stage defeat to Ellan Vannin from the Isle of Man, to take the spoils in the final via a penalty shoot-out.  There were some blowout scores of note however, with South Ossetia smashing Darfur 20-0 and Kurdistan beating the Tamils 9-0 at the event which took place in Östersund, Sweden. Neither of the finalists will be returning to the tournament – throwing down the gauntlet to another twelve teams. 

This, the second Conifa world cup, is testament to the ever-expanding global footprint of the tournament. Abkhazia will welcome sides from four continents – including Western Armenia, the Chagos Islands, United Koreans in Japan and Somaliland.

Despite the “minor” status of the countries taking part, a smattering of professional talent lends credibility to the event. Panjab can call on the experience of ex-Accrington Stanley man Rikki Bains at the heart of their defence, and the coaching savoir-faire of former Tranmere star Reuben Hazell from the dugout. Morten Gamst Pedersen, who turned out for Blackburn Rovers over 300 times and was once a Norwegian international, will lead the Sapmi people. The hosts complete the list of teams to aiming to get their hands on silverware along with Padania, Northern Cyprus, and Raetia.

A quick glance down said list, and it’s hard to ignore the fact that most of the nations competing have strong political associations – be that through war, genocide, displacement or discrimination. The Chagos Islands is one such example. An archipelago in the Indian Ocean, Chagos’ indigenous population was uprooted by the British government in the 1960s to make way for one of the United States' most strategically important military bases – Diego Garcia.

Ever since, they've been campaigning for the right to return. Their side, based in Crawley, has crowdfunded the trip to the tournament. Yet most of its members have never stepped foot on the islands they call home, and which they will now represent. Kurdistan’s efforts to establish an independent state have been well-highlighted, even more so given the last few years of conflict in the Middle East. The hosts too, broke away from Georgia in the 1990s and depend on the financial clout of Russia to prop up their government.

Despite that, Düerkop insists that the event is one which focuses on action on the pitch rather than off it. 

“Many of the nations are politically interested, but we are non-political,” he says. 

“Some of our members are less well-known in the modern world. They have been forgotten, excluded from the global community or simply are ‘unpopular’ for their political positions.

“We are humanitarians and the sides play football to show their existence – nothing more, nothing less.”

The unknown and almost novel status of the tournament flatters to deceive as Conifa’s world cup boasts a broadcast deal, two large stadiums and a plush opening ceremony. Its aim in the long run, however, is to develop into a global competition, and one which is content to sit below Fifa.

“We are happy to be the second biggest football organisation,” admits Düerkop.

“In the future we hope to have women’s and youth tournaments as well as futsal and beach soccer.”

“Our aim is to advertise the beauty and uniqueness of each nation.”

“But the most important purpose is to give those nations that are not members of the global football community a home.”

George Weah, the first African winner of Fifa World Player of the Year award remarked how “football gives a suffering people joy”.

And after speaking to Düerkop there’s certainly a feeling that for those on the game’s periphery, Conifa’s world cup has an allure which offers a shared sense of belonging.

It certainly seems light years away from the glitz and glamour of WAGs and corruption scandals. And that's because it is.

But maybe in a small way, this little-known tournament might restore some of beauty lost by the once “beautiful game”.