Osborne is losing political control of the economic debate

The once mighty 'Plan A' is reduced to a pile of cold pasties.

In today’s Telegraph, Liam Fox has written a brisk précis of the analysis often heard on the right wing of the Tory party about why the economy isn’t growing. The problem, in the former Defence Secretary’s view, is a lack of rigour in pursuing supply side reforms.
 
Chiefly, that means aggressive labour market deregulation. The theory is that rules protecting employees’ rights are deterring companies from taking on staff. Relaxing those rules - making it easier to sack people - is thus supposed to lubricate private sector job creation. This was the essential thrust of a report commissioned last year by Downing Street from Adrian Beecroft, a venture capitalist (and Tory party donor).
 
The Beecroft report got bogged down in coalition warfare as Lib Dems briefed heavily against it – suggesting it was a shoddy piece of work with recommendations that were mostly peripheral to the task of rebooting the economy. Fox takes a swipe at Nick Clegg’s party for “intuitive left-wing opposition to supply side reform”.
 
It is worth recalling at this point what Lib Dem Energy Secretary Ed Davey said in a New Stateman interview on this subject recently.  (He was the employment minister at the time of the most ferocious rows over Beecroft):

I never bought the argument that our labour market was the most regulated there is. All the evidence shows we have one of the least regulated labour markets in the world.

One reason this issue ignites internal coalition tension is that it becomes a proxy for pro- and anti-European feeling. The right wing of the Conservative party sees the EU as an engine of pernicious bureaucracy and regulation. Eurosceptics put setting employment rules at the top of their list of powers to be “repatriated”. The Lib Dems are desperately trying to steer the government into a more consensual approach in Brussels and find all talk of repatriation unhelpful.
 
But there is a different political problem for David Cameron and George Osborne contained in Fox’s intervention. The news of a double dip recession has emboldened both the left and right in their conviction that the coalition’s current course is failing. Naturally, they have entirely different diagnoses and as a sense of urgency - bordering on panic – takes hold, that divergence will become more extreme. The great danger for the Prime Minister and the Chancellor (and, by association, for Nick Clegg and Danny Alexander) is that they will lose control of the economic debate entirely.
 
As the Tory backbenches get frothy about bolder supply side measures and deeper cuts, Labour bangs its Keynesian drum for a change of course in the opposite direction. That leaves Downing Street holding a bunch of discredited budget measures that no one thinks will make the blindest bit of difference to growth. Plan A is reduced to a pile of cold pasties.

 

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

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Will there be a second EU referendum? Petition passes 1.75 million signatures

Updated: An official petition for a second EU referendum has passed 1.75m signatures - but does it have any chance of happening?

A petition calling for another EU referendum has passed 1.75 million signatures

"We the undersigned call upon HM Government to implement a rule that if the remain or leave vote is less than 60% based a turnout less than 75% there should be another referendum," the petition reads. Overall, the turnout in the EU referendum on 23 June was 73 per cent, and 51.8 per cent of voters went for Leave.

The petition has been so popular it briefly crashed the government website, and is now the biggest petition in the site's history.

After 10,000 signatures, the government has to respond to an official petition. After 100,000 signatures, it must be considered for a debate in parliament. 

Nigel Farage has previously said he would have asked for a second referendum based on a 52-48 result in favour of Remain.

However, what the petition is asking for would be, in effect, for Britain to stay as a member of the EU. Turnout of 75 per cent is far higher than recent general elections, and a margin of victory of 20 points is also ambitious. In the 2014 independence referendum in Scotland, the split was 55-45 in favour of remaining in the union. 

Unfortunately for those dismayed by the referendum result, even if the petition is debated in parliament, there will be no vote and it will have no legal weight. 

Another petition has been set up for London to declare independence, which has attracted 130,000 signatures.