The revolt against Osborne grows

Lib Dem MPs join economists in calling for a change of course.

Our exclusive story on how once supportive economists have turned against George Osborne has made the front page of today's Guardian, with the rest of Fleet Street, including the Mail and the Telegraph, also following up the piece, which appears in full in this week's magazine.

The Guardian leads on this week's New Statesman cover story.

And there's more bad news for Osborne today. The FT's Kiran Stacey reports that Lib Dem MPs are also now urging Osborne to take advantage of the UK's record low borrowing rates and stimulate growth through higher capital spending. John Pugh, the co-author of the party's 2010 economic policy, tells the paper:

We need to look again very carefully at the implications of the sharp reduction we have seen in capital expenditure.

There are a fair number of people who think that if we returned to the plans as conceived by Vince Cable . . . we would be in a slightly healthier position than we are.

Pugh is right. Osborne's decision to reduce capital expenditure - the most valuable spending, according to the OBR - by 48% (£24.3bn) is one of the main reasons why the UK, with the exception of Italy, is the only G20 member in recession.

When it was pointed out to Pugh that it would be difficult for the Chancellor to perform such a U-turn, he rightly replied:

The situation is serious enough now for people not to be bothered about what you call the plan.

Two other MPs - Annette Brooke and John Leech - make similar calls, and a senior economic adviser to the party comments: "We may have to resort to emergency measures to stimulate demand. We have already let the timetable on eliminating the deficit slip: we may have to do that again."

Perhaps most significantly, Stacey reports that party president Tim Farron is being urged by the Lib Dem leadership to call for deficit-funded spending "in order to give Nick Clegg, the deputy prime minister, a mandate to argue for it at the top of government."

The Lib Dems' restlessnes is unsurprising. As even the IMF has stated, there is no evidence that a reduced pace of deficit reduction would trigger a rise in British bond yields. With investors increasingly reluctant to lend to eurozone countries, the UK is, as Osborne has observed, a "safe haven". Yet, for no other reason other than political pride, the Chancellor is unwilling to change direction. Borrowing for growth would be a tacit admission that his nemesis, Ed Balls, was right and he was wrong. But until Osborne is prepared to take this step, there is no prospect of recovery, for either the economy or his party.

George Osborne is under increasing pressure to stimulate growth through higher infrastructure spending. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty Images
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Bomb Isil? That's exactly what they want

The government appears not to answer the nature of its enemy, warns Maria Norris.

As MPs are set to vote on further airstrikes in Syria, it is difficult to shake off the feeling that the government does not fully appreciate the complexity of the problem Isil poses. Just a cursory glance at its magazine, the pronouncements of its leaders and its ideology reveals that Isil is desperate for Western bombs to fall out of the sky. As Martin Chulov argues, Isil is fighting a war it believes was preordained since the early days of Islam. Isil’s obsession with the city of Dabiq, in Northern Syria, stems from a hadith which prophesises that the ‘Crusader’ army will land in the city as a precursor to a final battle where Islam will emerge victorious. Dabiq is also the name of its magazine, which starts every issue with the same quote: "The spark has been lit here in Iraq, and its heat will continue to intensify -- by Allah's permission -- until it burns the crusader armies in Dabiq". Isil wants a war with the West. If we don’t negotiate with terrorists, then we also should not give them what they want.

Further, bombs are indiscriminate and will inevitably lead to the suffering of those trapped in Isil territories. Isil is counting on this suffering to swell their ranks. Civilian suffering from airstrikes only underline the narrative that the West is at war with Islam, which plays directly into Isil’s hands. And despite misleading headlines and the genuine government concern with individuals fleeing to Syria, Isis is supremely unpopular. It is no wonder that its magazine is filled with glossy adds begging people to move to its territories.  You cannot be a state without people. Terrorist attacks such as Paris thus have a two-pronged purpose: they provoke the West to respond with its military, and they act as a recruitment drive. The fact that fake Syrian passports were found around the sites of the Paris attacks is no coincidence as Isil are both seeking to stem the flow of refugees from its territories and hoping to provoke an Islamophobic backlash. They hope that, as more Muslims feel alienated in the West, more will join them, not just as fighters, but as the doctors, nurses and teachers it desperately needs.

In addition to this, airstrikes overlook the fact that Isil is a result of what Fawaz Gerges calls a severe, organic institutional crisis in the Middle East. In a lecture at the London School of Economics earlier this year, Gerges pointed out the dysfunction created when a region that is incredibly resource rich also is also deeply undemocratic, riddled with corruption, food insecurity, unemployment and poverty. This forms an institutional vacuum that is filled by non-state actors as the population does not trust its political structures. Further, the civil war in Syria is also the site of the toxic soup of Middle Eastern state dysfunction. Iran supports Assad, Saudi Arabia and the Gulf countries, fund anti-Shia groups in Syria. Throw in the Kurdish conflict, Turkey’s ambiguous position and Russian bombs, it is difficult to see how airstrikes will solve anything.

Finally, it is crucial that Isil is seen as a direct result of the Iraq war. The American-led invasion destroyed the institutions, giving the Shia majority power almost overnight, creating deep dissatisfaction in the Sunni regions of Iraq. On top of this thousands of foreign fighters flooded Iraq to fight the invaders, attracting disenfranchised and angry Sunnis. The result is that since 2003, Iraq has been embroiled in a sectarian civil war.  It is in civil war, inherently connected to the Iraq War, that you find the roots of Isil. As even the Prime Minister concedes that ground troops are necessary, albeit it regional ground troops with its own set of problems, it is important to consider what further monster can arise from the ashes of another ill-thought out military intervention in the Middle East.
We have had decades of military intervention in the Middle East with disastrous consequences. Airstrikes represent business as usual, when what we actually need is a radically new approach. Who is funding Isil? Who is buying its oil? How to curb Isil’s recruitment drives? What can be done about the refugees? How to end the conflict in Syria? What happens to Assad? These are questions hopefully being addressed in talks recently held in Vienna with Russian, Ira, the USA, France, Syria’s neighbours and the Gulf states. Airstrikes do not answer any of these questions. What airstrikes do is give Isil exactly what it is asking for. Surely this is reason enough not to bomb Syria. 

Maria W. Norris is a PhD candidate and a teacher at the London School of Economics and Political Science. Her PhD is on the UK counter-terrorism strategy since 9/11 and its relationship with identity. She tweets as @MariaWNorris.