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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Aussies and Kiwis can be “us” to Brexiteers - so why are EU citizens “them”?

Nostalgia for the empire means Brexiteers still see Australians and New Zealanders as "Brits abroad". 

There are many terrible things about Brexit, most of which I counted, mournfully, on the night of the referendum while hiding in a stairwell because I was too depressed to talk to anyone at the party I’d just run away from. But one of the biggest didn’t hit me until the next day, when I met a friend and (I’m aware how ridiculous this may sound) suddenly remembered she was Dutch. She has been here 20 years, her entire adult life, and it’s not that I thought she was British exactly; I’d just stopped noticing she was foreign.

Except now, post-referendum, she very definitely was and her right to remain in Britain was suddenly up for grabs. Eleven months on, the government has yet to clarify the matter for any of Britain’s three million European residents. For some reason, ministers seem to think this is OK.

If you attended a British university in the past 20 years, work in the NHS or the City – or have done almost anything, in large parts of the country – you’ll know people like this: Europeans who have made their lives here, launching careers, settling down with partners, all on the assumption that Britain was part of the EU and so they were as secure here as those with British passports. The referendum has changed all that. Our friends and neighbours are now bargaining chips, and while we may not think of them as foreigners, our leaders are determined to treat them as such. People we thought of as “us” have somehow been recast as “them”.

There’s a problem with bringing notions of “us” and “them” into politics (actually, there are many, which seems like a very good reason not to do it, but let’s focus on one): not everyone puts the boundary between them in the same place. Take the Tory MEP Daniel Hannan. The sort of man one can imagine spent boyhood afternoons copying out Magna Carta for fun, Hannan spent decades campaigning for Brexit. Yet he’s not averse to all forms of international co-operation, and in his spare time he’s an enthusiastic advocate of CANZUK, a sort of Commonwealth-on-steroids in which there would be free movement ­between Canada, Australia, New Zealand and the UK.

When pushed on the reasons this entirely theoretical union is OK, when the real, existing one we’re already in isn’t, he has generally pointed to things such as shared language, culture and war memorials. But the subtext, occasionally made text by less subtle commentators, is that, unlike those Continentals, natives of the other Anglo countries aren’t really foreign. An Australian who’s never set foot in Britain can be “us”; the German doctor who’s been here two decades is still “them”.

There’s a funny thing about Hannan, which I wouldn’t make a big thing of, except it seems to apply to a number of other prominent Leave and CANZUK advocates: for one so fixated on British culture and identity, he grew up a very long way from Britain. He spent his early years in Peru, on his family’s farm near Lima, or occasionally on another one in Bolivia. (You know how it is.) That’s not to say he never set foot in Britain, of course: he was sent here for school.

His bosom pal Douglas Carswell, who is currently unemployed but has in the past found work as both a Conservative and a Ukip MP, had a similarly exotic upbringing. He spent his childhood in Uganda, where his parents were doctors, before boarding at Charterhouse. Then there’s Boris Johnson who, despite being the most ostentatiously British character since John Bull, was born in New York and spent the early years of his life in New England. Until recently, indeed, he held US citizenship; he gave it up last year, ostensibly to show his loyalty to Britain, though this is one of those times where the details of an answer feel less revealing than the fact that he needed to provide one. Oh and Boris went to boarding school, too, of course.

None of these childhoods would look out of place if you read in a biography that it had happened in the 1890s, so perhaps it’s not surprising that they instilled in all of their victims a form of imperial nostalgia. I don’t mean that the Brexiteers were raised to believe they had a moral duty to go around the world nicking other people’s countries (though who knows what the masters really teach them at Eton). Rather, by viewing their homeland from a distance, they grew up thinking of it as a land of hope and glory, rather than the depressing, beige place of white dog poo and industrial strife that 1970s Britain was.

Seen through this lens, much of the more delusional Brexiteer thinking suddenly makes sense. Of course they need us more than we need them; of course they’ll queue up to do trade deals. Even Johnson’s habit of quoting bits of Latin like an Oxford don who’s had a stroke feels like harking back to empire: not to the Roman empire itself (he’s more of a late republican) but to the British one, where such references marked you out as ruling class.

There’s another side effect of this attitude. It enables a belief in a sort of British diaspora: people who are British by virtue of ancestry and ideology no matter how far from these shores they happen to live. In the 19th century, Australians and Canadians were just Brits who happened to be living abroad. What Britain absolutely wasn’t, however, was just another European country. So, in the Leavers’ minds, Aussies and Kiwis still get to be us. The millions of Europeans who have made Britain their home are still, unfortunately, them.

I’m sure these men bear Britain’s European citizens no ill-will; they have, however, fought for a policy that has left them in limbo for 11 months with no end in sight. But that’s the thing about Brexiteers, isn’t it? They may live among us – but they don’t share our values.

Jonn Elledge is the editor of CityMetric

Jonn Elledge edits the New Statesman's sister site CityMetric, and writes for the NS about subjects including politics, history and Daniel Hannan. You can find him on Twitter or Facebook.

This article first appeared in the 18 May 2017 issue of the New Statesman, Age of Lies

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