Davis's call for faster cuts is economically reckless

An accelerated cuts programme would prolong the recession.

The most notable section of David Davis's speech on the economy this afternoon, provocatively entitled "There is an alternative: why the government needs a growth strategy", was that on the spending cuts. Davis's contention is that George Osborne, rather than going "too far, too fast", has cut too slowly. He pointed out that that deficit was £125bn last year and challenged Keynesians to explain why "a fiscal stimulus of this size is not already making our economy grow."

It's an argument that many on the Tory backbenches will sympathise with but it's also hopelessly misconceived. The deficit that Davis highlights is not the result of Osborne borrowing for growth but of a collapse in tax receipts caused by the recession and a higher-than-expected benefits bill (the cost of failure, in other words). And while it's true that the cuts to current spending have been more modest than many claim (current spending is down 2.9% or £11.5bn on 2009-10 levels), the cuts to capital spending, the most valuable spending in growth terms, have been far larger, with investment down 47.9% (£24.4bn) in the last two years.

These cuts go some way to explaining why Britain, with the exception of Italy, is the only G20 country to have suffered a second recession. When consumer spending is depressed and businesses are hoading cash, the government must act as a spender of last resort and stimulate growth through tax cuts and higher spending. If it fails to do so, it crashes the economy, which is exactly what has happened.

Davis also underestimated the damage that faster cuts would have done. An accelerated cuts programme, with even greater job losses (393,000 public sector jobs have been cut so far), would likely have tipped the economy back into recession even earlier.

Former Conservative leadership candidate David Davis. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Appreciate the full horror of Nigel Farage's pro-Trump speech

The former Ukip leader has appeared at a Donald Trump rally. It went exactly as you would expect.

It is with a heavy heart that I must announce Nigel Farage is at it again.

The on-again, off-again Ukip leader and current Member of the European Parliament has appeared at a Donald Trump rally to lend his support to the presidential candidate.

It was, predictably, distressing.

Farage started by telling his American audience why they, like he, should be positive.

"I come to you from the United Kingdom"

Okay, good start. Undeniably true.

"– with a message of hope –

Again, probably quite true.

Image: Clearly hopeful (Wikipedia Screenshot)

– and optimism.”

Ah.

Image: Nigel Farage in front of a poster showing immigrants who are definitely not European (Getty)

He continues: “If the little people, if the real people–”

Wait, what?

Why is Trump nodding sagely at this?

The little people?

Image: It's a plane with the name Trump on it (Wikimedia Commons)

THE LITTLE PEOPLE?

Image: It's the word Trump on the side of a skyscraper I can't cope with this (Pixel)

THE ONLY LITTLE PERSON CLOSE TO TRUMP IS RIDING A MASSIVE STUFFED LION

Image: I don't even know what to tell you. It's Trump and his wife and a child riding a stuffed lion. 

IN A PENTHOUSE

A PENTHOUSE WHICH LOOKS LIKE LIBERACE WAS LET LOOSE WITH THE GILT ON DAY FIVE OF A PARTICULARLY BAD BENDER

Image: So much gold. Just gold, everywhere.

HIS WIFE HAS SO MANY BAGS SHE HAS TO EMPLOY A BAG MAN TO CARRY THEM

Image: I did not even know there were so many styles of Louis Vuitton, and my dentists has a lot of old copies of Vogue.

Anyway. Back to Farage, who is telling the little people that they can win "against the forces of global corporatism".

 

Image: Aaaaarggghhhh (Wikipedia Screenshot)

Ugh. Okay. What next? Oh god, he's telling them they can have a Brexit moment.

“... you can beat Washington...”

“... if enough decent people...”

“...are prepared to stand up against the establishment”

Image: A screenshot from Donald Trump's Wikipedia page.

I think I need a lie down.

Watch the full clip here:

Stephanie Boland is digital assistant at the New Statesman. She tweets at @stephanieboland