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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How the row over Jackie Walker triggered a full-blown war in Momentum

Jon Lansman, the organisation's founder, is coming under attack. 

The battle for control within Momentum, which has been brewing for some time, has begun in earnest.

In a sign of the growing unrest within the organisation – established as the continuation of Jeremy Corbyn’s first successful leadership bid, and instrumental in delivering in his re-election -  a critical pamphlet by the Alliance for Workers’ Liberty (AWL), a Trotskyite grouping, has made its way into the pages of the Times, with the “unelected” chiefs of Momentum slated for turning the organisation into a “bland blur”.

The issue of contention: between those who see Momentum as an organisation to engage new members of the Labour party, who have been motivated by Jeremy Corbyn but are not yet Corbynites.

One trade unionist from that tendency described what they see the problem as like this: “you have people who have joined to vote for Jeremy, they’re going to meetings, but they’re voting for the Progress candidates in selections, they’re voting for Eddie Izzard [who stood as an independent but Corbynsceptic candidate] in the NEC”.  

On the other are those who see a fightback by Labour’s right and centre as inevitable, and who are trying to actively create a party within a party for what they see as an inevitable purge. One activist of that opinion wryly described Momentum as “Noah’s Ark”.

For both sides, Momentum, now financially stable thanks to its membership, which now stands at over 20,000, is a great prize. And in the firing line for those who want to turn Momentum into a parallel line is Jon Lansman, the organisation’s founder.

Lansman, who came into politics as an aide to Tony Benn, is a figure of suspicion on parts of the broad left due to his decades-long commitment to the Labour party. His major opposition within Momentum and on its ruling executive comes from the AWL.

The removal of Jackie Walker as a vice-chair of Momentum after she said that Holocaust Memorial Day belittled victims of other genocides has boosted the AWL, although the AWL's Jill Mountford, who sits on Momentum's ruling executive, voted to remove Walker as vice-chair. (Walker remains on the NEC, as she has been elected by members). But despite that, the AWL, who have been critical of the process whereby Walker lost her post, have felt the benefit across the country.

Why? Because that battle has triggered a series of serious splits, not only in Momentum’s executive but its grassroots. A raft of local groups have thrown out the local leadership, mostly veterans of Corbyn’s campaign for the leadership, for what the friend of one defeated representative described as “people who believe the Canary [a pro-Corbyn politics website that is regularly accused of indulging and promoting conspiracy theories]”.

In a further series of reverses for the Lansmanite caucus, the North West, a Momentum stronghold since the organisation was founded just under a year ago, is slipping away from old allies of Lansman and towards the “new” left. As one insider put it, the transition is from longstanding members towards people who had been kicked out in the late 1980s and early 1990s by Neil Kinnock. The constituency party of Wallasey in particular is giving senior figures in Momentum headaches just as it is their opponents on the right of the party, with one lamenting that they have “lost control” of the group.

It now means that planned changes to Momentum’s structure, which the leadership had hoped to be rubberstamped by members, now face a fraught path to passage.

Adding to the organisation’s difficulties is the expected capture of James Schneider by the leader’s office. Schneider, who appears widely on television and radio as the public face of Momentum and is well-liked by journalists, has an offer on the table to join Jeremy Corbyn’s team at Westminster as a junior to Seumas Milne.

The move, while a coup for Corbyn, is one that Momentum – and some of Corbyn’s allies in the trade union movement – are keen to resist. Taking a job in the leader’s office would reduce still further the numbers of TV-friendly loyalists who can go on the airwaves and defend the leadership. There is frustration among the leader’s office that as well as Diane Abbott and John McDonnell, who are both considered to be both polished media performers and loyalists, TV bookers turn to Ken Livingstone, who is retired and unreliable, and Paul Mason, about whom opinions are divided within Momentum. Some regard Mason as a box office performer who needs a bigger role, others as a liability.

But all are agreed that Schneider’s expected departure will weaken the media presence of Corbyn loyalists and also damage Momentum. Schneider has spent much of his time not wrangling journalists but mediating in local branches and is regarded as instrumental in the places “where Momentum is working well” in the words of one trade unionist. (Cornwall is regarded as a particular example of what the organisation should be aiming towards)

It comes at a time when Momentum’s leadership is keen to focus both on its external campaigns but the struggle for control in the Labour party. Although Corbyn has never been stronger within the party, no Corbynite candidate has yet prevailed in a by-election, with the lack of available candidates at a council level regarded as part of the problem. Councilors face mandatory reselection as a matter of course, and the hope is that a bumper crop of pro-Corbyn local politicians will go on to form the bulk of the talent pool for vacant seats in future by-elections and in marginal seats at the general election.

But at present, a draining internal battle is sapping Momentum of much of its vitality. But Lansman retains two trump cards. The first is that as well as being the founder of the organisation, he is its de facto owner: the data from Jeremy Corbyn’s leadership campaigns, without which much of the organisation could not properly run, is owned by a limited company of which he is sole director. But “rolling it up and starting again” is very much the nuclear option, that would further delay the left’s hopes of consolidating its power base in the party.

The second trump card, however, is the tribalism of many of the key players at a local level, who will resist infiltration by groups to Labour’s left just as fiercely as many on the right. As one veteran of both Corbyn’s campaigns reflected: “If those who have spent 20 years attacking our party think they have waiting allies in the left of Labour, they are woefully mistaken”. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.