Playing the eurozone blame game shows the extent of Osborne's failure

The longer the coalition remains in denial, the longer it will take for Britain to recover from its economic depression.

One of the first lessons a new government learns is how to blame their predecessors. Labour spent years blaming the ills of the country on "18 years of Conservative misrule". Two years after taking office the coalition has not missed a trick in turning the blame game into an art form. The promised deep public spending cuts were all Gordon Brown's fault and lower than expected economic growth was blamed on everything from the weather to the Royal Wedding.

The current chief culprit for the coalition's failings is the eurozone. I'm sure I'm not the only one who felt a distinct feeling of déja vu when the government responded to this week's dreadful Q2 figures by blaming the euro.

Of course, given that the eurozone is our main trading partner its problems, to put it mildly, do not help British exports. More than two years into the crisis it is still unclear whether Europe's leaders have the political will and nous to break the link between heavily indebted banks and sovereigns and restore calm to the markets.

But the reality is that even while the eurozone faces an existential crisis, with a handful of its 17 countries needing emergency support because they can't access the bond market, Britain is still faring worse. A chart by ABD Investment shows that, since the financial crisis began at the end of 2007, Britain has been comfortably outperformed by the US, Japan, Germany and France.

This year Britain's output is estimated to be 93.5 compared to the baseline figure of 100 in 2008. To put this in context, Germany is one of the few countries where output has now overtaken pre-crisis levels at 104.2 compared to a eurozone average at 97.5. The Spanish economy, which is serious danger of needing a €300 billion bail-out as it struggles to cope with crippling borrowing rates of over 7 per cent and scarily high unemployment, is only fractionally lower than Britain's at 91.9, with Italy at 90.9. France, which lost its triple-A credit rating at the start of the year, is at 97.7.

After three quarters in a row reporting a decline in output, the bald truth is that economic output is now lower than it was when the Coalition took office. There can certainly be little doubt that were Britain a member of the eurozone, we would have needed a massive bail-out, possibly larger than Spain, Greece, Ireland, Portugal and Cyprus put together. Our triple-A credit rating would have gone months ago, perhaps even last year.

By any yardstick, George Osborne and Danny Alexander have failed on an impressive scale and should be waiting for their P45s.

But, whisper it, Britain should actually be profiting from the eurozone crisis. As investors in the European bond market panic, sending borrowing rates sky-high for Spain, Italy and others, the UK is one of the main beneficiaries from the flight of capital. Despite the weaknesses in the British economy, like the US, traders are so desperate to buy our bonds that they will pay for the privilege. Earlier this week interest rates on 10 year gilts fell to 1.4 per cent, well below the 2.4 per cent inflation level, and fully 6 per cent lower than Spain. It is frightening to imagine the extra debt we would have had without the eurozone crisis.

The Coalition should be using the massive advantage of such historically low borrowing costs to fund targeted stimulus measures. The best place to start would be to bring forward badly needed public infrastructure projects. The National Infrastructure plan states that Britain needs to invest £400 billion in infrastructure between now and 2020 if we are to remain competitive, and there is no better time to start. While penal borrowing costs, particularly for the southern Mediterranean nations, are effectively forcing eurozone countries to drastically scale back public spending, Britain is in an almost unique position to launch a series of supply-side measures to boost demand and generate growth.

At some point, people will tire of the coalition's protestations that the double dip recession is all the fault of Gordon Brown and those incompetent foreigners in the eurozone. Labour, too, have to be honest enough to admit that Britain's comatose economy is of our own making and, regardless of what does or doesn't happen in the eurozone, requires resolution at home.

The longer Cameron and Osborne et al remain in denial, absolving themselves of responsibility while persisting with the idea that Britain can operate like a north European version of the Cayman Islands, the longer it will take for Britain to recover from its economic depression. The stark reality is that even with a solid Olympics-driven bump, 2012 will be a year of recession. Of more concern to ministers is that barring a heroic recovery over the next three years, the Tories and Lib Dems will go to the country on the basis of economic output that is comfortably lower than it was in 2007. Barring an implosion by the Labour Party, that would probably cost them their jobs.

 

Photograph: Getty Images
Show Hide image

Meet Anne Marie Waters - the Ukip politician too extreme for Nigel Farage

In January 2016, Waters launched Pegida UK with former EDL frontman Steven Yaxley-Lennon (aka Tommy Robinson). 

There are few people in British political life who can be attacked from the left by Nigel Farage. Yet that is where Anne Marie Waters has found herself. And by the end of September she could well be the new leader of Ukip, a party almost synonymous with its beer-swilling, chain-smoking former leader.

Waters’s political journey is a curious one. She started out on the political left, but like Oswald Mosley before her, has since veered dramatically to the right. That, however, is where the similarities end. Waters is Irish, agnostic, a lesbian and a self-proclaimed feminist.

But it is her politics – rather than who she is – that have caused a stir among Ukip’s old guard. Former leader Paul Nuttall has said that her views make him “uncomfortable” while Farage has claimed Ukip is “finished” if, under her leadership, it becomes an anti-Islam party.

In her rhetoric, Waters echoes groups such as the English Defence League (EDL) and Britain First. She has called Islam “evil” and her leadership manifesto claims that the religion has turned Britain into a “fearful and censorious society”. Waters wants the banning of the burqa, the closure of all sharia councils and a temporary freeze on all immigration.

She started life in Dublin before moving to Germany in her teens to work as an au pair. Waters also lived in the Netherlands before returning to Britain to study journalism at Nottingham Trent University, graduating in 2003. She subsequently gained a second degree in law. It was then, she says, that she first learnt about Islam, which she claims treats women “like absolute dirt”. Now 39, Waters is a full-time campaigner who lives in Essex with her two dogs and her partner who is an accountant.

Waters’s first spell of serious activism was with the campaign group One Law for All, a secularist organisation fronted by the Iranian feminist and human rights activist Maryam Namazie. Waters resigned in November 2013 after four years with the organisation. According to Namazie, Waters left due to political disagreements over whether the group should collaborate with members of far-right groups.

In April 2014, Waters founded Sharia Watch UK and, in January 2016, she launched Pegida UK with former EDL frontman Steven Yaxley-Lennon (aka Tommy Robinson). The group was established as a British chapter of the German-based organisation and was set up to counter what it called the “Islamisation of our countries”. By the summer of 2016, it had petered out.

Waters twice stood unsuccessfully to become a Labour parliamentary candidate. Today, she says she could not back Labour due to its “betrayal of women” and “betrayal of the country” over Islam. After joining Ukip in 2014, she first ran for political office in the Lambeth council election, where she finished in ninth place. At the 2015 general election, Waters stood as the party’s candidate in Lewisham East, finishing third with 9.1 per cent of the vote. She was chosen to stand again in the 2016 London Assembly elections but was deselected after her role in Pegida UK became public. Waters was also prevented from standing in Lewisham East at the 2017 general election after Ukip’s then-leader Nuttall publicly intervened.

The current favourite of the 11 candidates standing to succeed Nuttall is deputy leader Peter Whittle, with Waters in second. Some had hoped the party’s top brass would ban her from standing but last week its national executive approved her campaign.

Due to an expected low turnout, the leadership contest is unpredictable. Last November, Nuttall was elected with just 9,622 votes. More than 1,000 new members reportedly joined Ukip in a two-week period earlier this year, prompting fears of far-right entryism.

Mike Hookem MEP has resigned as Ukip’s deputy whip over Waters’ candidacy, saying he would not “turn a blind eye” to extremism. By contrast, chief whip, MEP Stuart Agnew, is a supporter and has likened her to Joan of Arc. Waters is also working closely on her campaign with Jack Buckby, a former BNP activist and one of the few candidates to run against Labour in the by-election for Jo Cox’s former seat of Batley and Spen. Robinson is another backer.

Peculiarly for someone running to be the leader of a party, Waters does not appear to relish public attention. “I’m not a limelight person,” she recently told the Times. “I don’t like being phoned all the time.”

The journalist Jamie Bartlett, who was invited to the initial launch of Pegida UK in Luton in 2015, said of Waters: “She failed to remember the date of the demo. Her head lolled, her words were slurred, and she appeared to almost fall asleep while Tommy [Robinson] was speaking. After 10 minutes it all ground to an uneasy halt.”

In an age when authenticity is everything, it would be a mistake to underestimate yet another unconventional politician. But perhaps British Muslims shouldn’t panic about Anne Marie Waters just yet.

James Bloodworth is editor of Left Foot Forward

This article first appeared in the 17 August 2017 issue of the New Statesman, Trump goes nuclear