Today's GDP figures are the final nail in the coffin of Osborne's credibility

This was all so avoidable, and entirely predictable.

The Q2 GDP growth figures from the ONS today were absolutely awful. Indeed, it was even worse than I had expected, having predicted -0.5 per cent against a consensus view of -0.2 per cent. The number came in at -0.7 per cent, which meant that the economy has had three successive quarters of negative growth - four of the last five and five of the last seven.

The economy has contracted by 1.4 per cent over the last three quarters and by 0.8 per cent since the Chancellor's autumn statement in 2010. The UK and Italy are the only two major countries in double dip recession and growth has been worse in the UK over the last year than it has been in Spain. The decline was broad-based, driven especially by a collapse in construction, which declined by 5.2 per cent in Q2, following 4.9 per cent on the previous quarter. Production fell by 1.3 per cent and services by 0.1 per cent. The IMF forecast of 0.2 per cent growth last week already looks overly optimistic - I have pencilled in -0.5 per cent or worse.

The coalition government took over an economy that was growing and by its inept policies it has killed growth stone dead. In interviews today, the Chancellor claimed he was “relentlessly focused” on sorting the economy out in the same way (presumably as King Canute was also determined to keep the tide back?). This, as ever, was worthless drivel because it is clear to all that the government's economic policy of austerity has failed and they have no clue what to do. The only fix is a fundamental U-turn with tax cuts, especially VAT, and big incentives for firms to invest and hire today – not in three years time. And what about youth unemployment? Policies to get infrastructure going are welcome but they won't have any effect for years; they should have been implemented when the government took office - now it is too late to get the economy growing again anytime soon. The Tory-led government still has no growth plan. If it does, let’s hear it.

The recession deniers were out in force saying that they couldn’t possibly be wrong, so there must be something wrong with the numbers. Of course, the main reason for this is that they supported the government's austerity nonsense and have egg on their faces. Just to make the point for the umpteenth time – the average data revision over the last 20 years is +0.1 per cent and over the last five years -0.1 per cent. In fact, the data revisions have generally been on the low side when the economy is slowing, as occurred in 2008. The statistical chances of the data being revised down further are the same as being revised up.

I do recall the 35 business leaders, who wrote to the Telegraph in October 2010 to say:

It has been suggested that the deficit reduction programme set out by George Osborne in his emergency Budget should be watered down and spread over more than one parliament. We believe that this would be a mistake. Addressing the debt problem in a decisive way will improve business and consumer confidence....There is no reason to think that the pace of consolidation envisaged in the Budget will undermine the recovery.

It hasn't exactly worked out that way. There has been no recovery, the economy is smaller today than it was when they put pen to paper, and business and consumer confidence has collapsed. It would be interesting to hear from them today on why it all went so badly wrong. Their silence is telling.

I now have every expectation that within a few days the UK will lose its AAA credit rating. I never thought it was actually a big deal as proved by the fact that when France was downgraded and bond yields fell. But Slasher Osborne set it up as something he should be judged against and so we should all do that.

This was all so avoidable, and entirely predictable. Our incompetent, part-time Chancellor and his advisers should be removed from office and put out to pasture. Ed Balls was right.

I am very angry that this visitation of evil spirits had to be foisted on the British people. We deserve better. This really is time for the biggest U-turn in history - that's what failure brings. I really have no sympathy for the fools – Cameron, Osborne and Clegg especially – who talked the economy down by claiming it was bankrupt and falsely comparing the UK to Greece.

No more excuses.

 

"Slasher" Osborne has been proved wrong yet again. Photograph: Getty Images

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

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Erdogan’s purge was too big and too organised to be a mere reaction to the failed coup

There is a specific word for the melancholy of Istanbul. The city is suffering a mighty bout of something like hüzün at the moment. 

Even at the worst of times Istanbul is a beautiful city, and the Bosphorus is a remarkable stretch of sea. Turks get very irritated if you call it a river. They are right. The Bosphorus has a life and energy that a river could never equal. Spend five minutes watching the Bosphorus and you can understand why Orhan Pamuk, Turkey’s Nobel laureate for literature, became fixated by it as he grew up, tracking the movements of the ocean-going vessels, the warships and the freighters as they steamed between Asia and Europe.

I went to an Ottoman palace on the Asian side of the Bosphorus, waiting to interview the former prime minister Ahmet Davu­toglu. He was pushed out of office two months ago by President Recep Tayyip Erdogan when he appeared to be too wedded to the clauses in the Turkish constitution which say that the prime minister is the head of government and the president is a ceremonial head of state. Erdogan was happy with that when he was prime minister. But now he’s president, he wants to change the constitution. If Erdogan can win the vote in parliament he will, in effect, be rubber-stamping the reality he has created since he became president. In the days since the attempted coup, no one has had any doubt about who is the power in the land.

 

City of melancholy

The view from the Ottoman palace was magnificent. Beneath a luscious, pine-shaded garden an oil tanker plied its way towards the Black Sea. Small ferries dodged across the sea lanes. It was not, I hasten to add, Davutoglu’s private residence. It had just been borrowed, for the backdrop. But it reminded a Turkish friend of something she had heard once from the AKP, Erdogan’s ruling party: that they would not rest until they were living in the apartments with balconies and gardens overlooking the Bosphorus that had always been the preserve of the secular elite they wanted to replace.

Pamuk also writes about hüzün, the melancholy that afflicts the citizens of Istanbul. It comes, he says, from the city’s history and its decline, the foghorns on the Bosphorus, from tumbledown walls that have been ruins since the fall of the Byzantine empire, unemployed men in tea houses, covered women waiting for buses that never come, pelting rain and dark evenings: the city’s whole fabric and all the lives within it. “My starting point,” Pamuk wrote, “was the emotion that a child might feel while looking through a steamy window.”

Istanbul is suffering a mighty bout of something like hüzün at the moment. In Pamuk’s work the citizens of Istanbul take a perverse pride in hüzün. No one in Istanbul, or elsewhere in Turkey, can draw comfort from what is happening now. Erdogan’s opponents wonder what kind of future they can have in his Turkey. I think I sensed it, too, in the triumphalist crowds of Erdogan supporters that have been gathering day after day since the coup was defeated.

 

Down with the generals

Erdogan’s opponents are not downcast because the coup failed; a big reason why it did was that it had no public support. Turks know way too much about the authoritarian ways of military rule to want it back. The melancholy is because Erdogan is using the coup to entrench himself even more deeply in power. The purge looks too far-reaching, too organised and too big to have been a quick reaction to the attempt on his power. Instead it seems to be a plan that was waiting to be used.

Turkey is a deeply unhappy country. It is hard to imagine now, but when the Arab uprisings happened in 2011 it seemed to be a model for the Middle East. It had elections and an economy that worked and grew. When I asked Davutoglu around that time whether there would be a new Ottoman sphere of influence for the 21st century, he smiled modestly, denied any such ambition and went on to explain that the 2011 uprisings were the true succession to the Ottoman empire. A century of European, and then American, domination was ending. It had been a false start in Middle Eastern history. Now it was back on track. The people of the region were deciding their futures, and perhaps Turkey would have a role, almost like a big brother.

Turkey’s position – straddling east and west, facing Europe and Asia – is the key to its history and its future. It could be, should be, a rock of stability in a desperately un­stable part of the world. But it isn’t, and that is a problem for all of us.

 

Contagion of war

The coup did not come out of a clear sky. Turkey was in deep crisis before the attempt was made. Part of the problem has come from Erdogan’s divisive policies. He has led the AKP to successive election victories since it first won in 2002. But the policies of his governments have not been inclusive. As long as his supporters are happy, the president seems unconcerned about the resentment and opposition he is generating on the other side of politics.

Perhaps that was inevitable. His mission, as a political Islamist, was to change the country, to end the power of secular elites, including the army, which had been dominant since Mustafa Kemal Atatürk created modern Turkey after the collapse of the Ottoman empire. And there is also the influence of chaos and war in the Middle East. Turkey has borders with Iraq and Syria, and is deeply involved in their wars. The borders do not stop the contagion of violence. Hundreds of people have died in the past year in bomb attacks in Turkish cities, some carried out by the jihadists of so-called Islamic State, and some sent by Kurdish separatists working under the PKK.

It is a horrible mix. Erdogan might be able to deal with it better if he had used the attempted coup to try to unite Turkey. All the parliamentary parties condemned it. But instead, he has turned the power of the state against his opponents. More rough times lie ahead.

Jeremy Bowen is the BBC’s Middle East editor. He tweets @bowenbbc

This article first appeared in the 28 July 2016 issue of the New Statesman, Summer Double Issue