Clegg’s new tone on the economy

The coalition needs to work on a climb down.

It’s not every day you open the paper to read about a cabinet minister – one who isn’t the Chancellor - holding forth about the ‘instruction’ that has been given to the Treasury on a key aspect of economic policy. Nor we should we suppose that Nick Clegg elected to give the interview to the FT only to use this line due to a slip of the tongue.  It tells us something.

The specifics are about whether the Treasury should use its ‘balance sheet’ to enable a ‘massive’ increase in infrastructure spending (on housing and transport).  The timing reflects the wider context. The last few weeks have been unkind for the Coalition’s favoured economic narrative. The return of recession has been the key event but hardly the only one. The election of President Hollande, the continued euro-zone crisis, President Obama regularly appearing on our TV screens talking about jobs and growth, a Labour reshuffle that was seen to help unify different shades of economic opinion, and now the IMF saying (once again) that further action may be required, including fiscal stimulus, if the economy doesn’t pick up – all these have unsettled the Coalition.   

As a result the economic and political mood has, for now at least, tilted away from the Coalition on the economy. Pundits who were once scathing about any deviation from the coalition’s economic strategy are now straining to see nuance and be open minded.  Of course, we should never underestimate the fickleness of the commentariat – sentiment could easily shift back again – but the Coalition won’t be relaxed about how this is currently playing out.

One reason for their concern is that they feel very dug in. The stringency and tone of the economic argument made since 2010 on fiscal consolidation didn’t leave rhetorical space for a graceful transition to a different tack if the economy didn’t recover as hoped. That was a very deliberate choice. And given the enormous levels of uncertainly about our economic prospects it was always a foolhardy one.  

Which brings us back to Nick Clegg’s remarks. They are a sign of the resulting strain. Based on the FT report it’s not exactly obvious what the instructions given to the Treasury are, though the point is clearly designed to signal that infrastructure investment will be increased as part of a new emphasis on growth, and that the state can facilitate this without further increasing borrowing (let’s leave to one side the reality that capital investment is actually being slashed). Nor is it immediately obvious why the government thinks that borrowing at rock-bottom interest rates will lead to economic Armageddon yet piling new risks on the state balance sheet is a shiny new idea fit for our times.

Whatever the substance, the way this new tone on the economy has materialised also raises questions.  To date, the rules of exchange for the Coalition have been clear: the parties can differentiate on all manner of issues but when it comes to overall macroeconomic and fiscal policy they have to be seamless. It’s the glue that binds. True, Clegg emphasised that the new edict for the Treasury was agreed by Cameron, so it would be wrong to overstate this, but any perception of disagreement between the coalition parties on core economic strategy would be poison for them.  

Economically, it is to be hoped that there will be a shift in strategy – whatever label they choose to put on it – and others have set out compelling ideas for the form this could take.  Politically, the coalition urgently needs to work out exactly how it wants to evolve its economic narrative in the light of shifting events and then stick firmly to this script. And it might be a good idea if the Chancellor led the way.
 

Photograph: Getty Images

Gavin Kelly is a former adviser to Downing Street and the Treasury. He tweets @GavinJKelly1.

Photo: Getty
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Leader: History is not written in stone

Statues have not been politicised by protest; they were always political.

When a mishmash of neo-Nazis, white supremacists, Trump supporters and private militias gathered in Charlottesville, Virginia on 12 August – a rally that ended in the death of a counter-protester – the ostensible reason was the city’s proposal to remove a statue of a man named Robert E Lee.

Lee was a Confederate general who surrendered to Ulysses S Grant at the Appomattox Court House in 1865, in one of the last battles of the American Civil War – a war fought to ensure that Southern whites could continue to benefit from the forced, unpaid labour of black bodies. He died five years later. It might therefore seem surprising that the contested statue of him in Virginia was not commissioned until 1917.

That knowledge, however, is vital to understanding the current debate over such statues. When the “alt-right” – many of whom have been revealed as merely old-fashioned white supremacists – talk about rewriting history, they speak as if history were an objective record arising from an organic process. However, as the American journalist Vann R Newkirk II wrote on 22 August, “obelisks don’t grow from the soil, and stone men and iron horses are never built without purpose”. The Southern Poverty Law Center found that few Confederate statues were commissioned immediately after the end of the war; instead, they arose in reaction to advances such as the foundation of the NAACP in 1909 and the desegregation of schools in the 1950s and 1960s. These monuments represent not history but backlash.

That means these statues have not been politicised by protest; they were always political. They were designed to promote the “Lost Cause” version of the Civil War, in which the conflict was driven by states’ rights rather than slavery. A similar rhetorical sleight of hand can be seen in the modern desire to keep them in place. The alt-right is unwilling to say that it wishes to retain monuments to white supremacy; instead, it claims to object to “history being rewritten”.

It seems trite to say: that is inevitable. Our understanding of the past is perpetually evolving and the hero of one era becomes a pariah in the next. Feminism, anti-colonialism, “people’s history” – all of these movements have questioned who we celebrate and whose stories we tell.

Across the world, statues have become the focus for this debate because they are visible, accessible and shape our experience of public space. There are currently 11 statues in Parliament Square – all of them male. (The suffragist Millicent Fawcett will join them soon, after a campaign led by Caroline Criado-Perez.) When a carving of a disabled artist, Alison Lapper, appeared on the fourth plinth in Trafalgar Square, its sculptor, Marc Quinn, acknowledged its significance. “This square celebrates the courage of men in battle,” he said. “Alison’s life is a struggle to overcome much greater difficulties than many of the men we celebrate and commemorate here.”

There are valid reasons to keep statues to figures we would now rather forget. But we should acknowledge this is not a neutral choice. Tearing down our history, looking it in the face, trying to ignore it or render it unexceptional – all of these are political acts. 

The Brexit delusion

After the UK triggered Article 50 in March, the Brexiteers liked to boast that leaving the European Union would prove a simple task. The International Trade Secretary, Liam Fox, claimed that a new trade deal with the EU would be “one of the easiest in human history” to negotiate and could be agreed before the UK’s scheduled departure on 29 March 2019.

However, after the opening of the negotiations, and the loss of the Conservatives’ parliamentary majority, reality has reasserted itself. All cabinet ministers, including Mr Fox, now acknowledge that it will be impossible to achieve a new trade deal before Brexit. As such, we are told that a “transitional period” is essential.

Yet the government has merely replaced one delusion with another. As its recent position papers show, it hopes to leave institutions such as the customs union in 2019 but to preserve their benefits. An increasingly exasperated EU, unsurprisingly, retorts that is not an option. For Britain, “taking back control” will come at a cost. Only when the Brexiteers acknowledge this truth will the UK have the debate it so desperately needs. 

This article first appeared in the 24 August 2017 issue of the New Statesman, Sunni vs Shia