Double-dip recession: don't say we didn't warn you

We warned in 2009 that Osborne had no plan for growth.

While many are wise after the event, the New Statesman was warning of the danger of a double-dip recession as long ago as March 2010 (see our cover of 29 March 2010, above ). Our economics editor David Blanchflower rightly predicted that premature withdrawal of fiscal stimulus would strangle growth and raise unemployment, particularly among the young.

In the wake of George Osborne's "emergency Budget" in June 2010, he wrote:

I am now convinced that as a result of this reckless Budget the UK will suffer a double-dip recession or worse

Before that, he warned in October 2009:

Lesson number one in a deep recession is you don't cut public spending until you are into the boom phase. John Maynard Keynes taught us that. The euro area appears to be heading back into recession and the austerity measures being introduced in certain eurozone countries, especially those in Germany, will inevitably lower UK growth, too. It is extremely unlikely, therefore, that net trade will leap to our rescue. taught us that. The consequence of cutting too soon is that you drive the economy into a depression, with the attendant threats of rapidly rising unemployment, social disorder, rising poverty, falling living standards and even soup kitchens.

At a time when Osborne was being hailed by much of the British press as the country's economic saviour, we warned that he had no plan for growth. In October 2009, an NS leader argued:

Mr Osborne is a skilful politician, with a flair for rhetoric and the easy headline - the latest example being his opportunistic statements on curtailing bankers' bonuses, something that could be achieved only through concerted international co-operation. The only economic plan he seems to have is for attempting to balance the books. He does not have a plan for growth. He has a plan for a lack of growth.

In August 2010, we warned that "in spite of Mr Osborne's doctrinaire "emergency" Budget, all the economic data suggests that the UK is facing a deadly combination of rising unemployment, falling house prices, diminished consumer confidence and low - if not negative - growth for the rest of the year and beyond."

But not everyone was so doubtful about Osborne's ability to stimulate growth. Here are some influential figures and institutions who may now regret their early optimism.

And ... some who got it wrong

"The UK economy is on the mend. Economic recovery is underway, unemployment has stabilized, and financial sector health has improved. The government's strong and credible multi-year fiscal deficit reduction plan is essential to ensure debt sustainability."

IMF, 27 September 2010

"The Chancellor has achieved his twin objectives of setting out a credible plan for the public finances and producing a convincing growth strategy for the longer-term ... This Budget is the UK's first important step on the long journey back to economic health."

Richard Lambert, CBI Director-General, 25 June 2010

"George Osborne has faced up to the challenge. The economy needed faster and deeper deficit reduction and that's exactly what the Chancellor has delivered ... We do not believe the Budget will threaten economic recovery. Quite the contrary, it is likely to improve the economic outlook by showing the public finances are finally being brought under control."

Miles Templeman, Director General of the Institute of Directors, 22 June 2010

"The Budget announced today by the U.K. Chancellor of the Exchequer is a courageous move ... It provides the necessary degree of fiscal consolidation over the coming years to restore public finances to a sustainable path, while still supporting the recovery."

Angel Gurría, secretary general of the OECD, 22 June 2010

"We are relatively sanguine about the UK's ability to grow through the fiscal tightening. In an open economy, robust global growth - and that's what it's looking like at the moment - does quite a bit of the work."

Ben Broadbent, Goldman Sachs, 3 January 2011

"Now for one prediction: consumer spending will be squeezed by the regrettable (and avoidable) hike in Vat and from the (necessary) cuts in spending. But reduced debt-financed spending will go hand in hand with growth in private investment and exports, partly thanks to strong global demand, thus cushioning most of the impact. The years ahead will be very tough - but there will be no double dip recession made in Downing Street."

Allister Heath, City AM editor, 24 June 2010

"The UK economy will be the surprise success of Europe in 2011 ... The enterprise culture of SMEs, exports and the strong corporate sector will all help recovery, which will be in the Midlands as well as in the south-east."

Nick Bosanquet, Imperial College London and Reform, 3 January 2011

Our cover from 29 March 2010.

George Eaton is political editor of the New Statesman.

John Moore
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The man who created the fake Tube sign explains why he did it

"We need to consider the fact that fake news isn't always fake news at the source," says John Moore.

"I wrote that at 8 o'clock on the evening and before midday the next day it had been read out in the Houses of Parliament."

John Moore, a 44-year-old doctor from Windsor, is describing the whirlwind process by which his social media response to Wednesday's Westminster attack became national news.

Moore used a Tube-sign generator on the evening after the attack to create a sign on a TfL Service Announcement board that read: "All terrorists are politely reminded that THIS IS LONDON and whatever you do to us we will drink tea and jolly well carry on thank you." Within three hours, it had just fifty shares. By the morning, it had accumulated 200. Yet by the afternoon, over 30,000 people had shared Moore's post, which was then read aloud on BBC Radio 4 and called a "wonderful tribute" by prime minister Theresa May, who at the time believed it was a genuine Underground sign. 

"I think you have to be very mindful of how powerful the internet is," says Moore, whose viral post was quickly debunked by social media users and then national newspapers such as the Guardian and the Sun. On Thursday, the online world split into two camps: those spreading the word that the sign was "fake news" and urging people not to share it, and those who said that it didn't matter that it was fake - the sentiment was what was important. 

Moore agrees with the latter camp. "I never claimed it was a real tube sign, I never claimed that at all," he says. "In my opinion the only fake news about that sign is that it has been reported as fake news. It was literally just how I was feeling at the time."

Moore was motivated to create and post the sign when he was struck by the "very British response" to the Westminster attack. "There was no sort of knee-jerk Islamaphobia, there was no dramatisation, it was all pretty much, I thought, very calm reporting," he says. "So my initial thought at the time was just a bit of pride in how London had reacted really." Though he saw other, real Tube signs online, he wanted to create his own in order to create a tribute that specifically epitomised the "very London" response. 

Yet though Moore insists he never claimed the sign was real, his caption on the image - which now has 100,800 shares - is arguably misleading. "Quintessentially British..." Moore wrote on his Facebook post, and agrees now that this was ambiguous. "It was meant to relate to the reaction that I saw in London in that day which I just thought was very calm and measured. What the sign was trying to do was capture the spirit I'd seen, so that's what I was actually talking about."

Not only did Moore not mean to mislead, he is actually shocked that anyone thought the sign was real. 

"I'm reasonably digitally savvy and I was extremely shocked that anyone thought it was real," he says, explaining that he thought everyone would be able to spot a fake after a "You ain't no muslim bruv" sign went viral after the Leytonstone Tube attack in 2015. "I thought this is an internet meme that people know isn't true and it's fine to do because this is a digital thing in a digital world."

Yet despite his intentions, Moore's sign has become the centre of debate about whether "nice" fake news is as problematic as that which was notoriously spread during the 2016 United States Presidential elections. Though Moore can understand this perspective, he ultimately feels as though the sentiment behind the sign makes it acceptable. 

"I use the word fake in inverted commas because I think fake implies the intention to deceive and there wasn't [any]... I think if the sentiment is ok then I think it is ok. I think if you were trying to be divisive and you were trying to stir up controversy or influence people's behaviour then perhaps I wouldn't have chosen that forum but I think when you're only expressing your own emotion, I think it's ok.

"The fact that it became so-called fake news was down to other people's interpretation and not down to the actual intention... So in many interesting ways you can see that fake news doesn't even have to originate from the source of the news."

Though Moore was initially "extremely shocked" at the reponse to his post, he says that on reflection he is "pretty proud". 

"I'm glad that other people, even the powers that be, found it an appropriate phrase to use," he says. "I also think social media is often denigrated as a source of evil and bad things in the world, but on occasion I think it can be used for very positive things. I think the vast majority of people who shared my post and liked my post have actually found the phrase and the sentiment useful to them, so I think we have to give social media a fair judgement at times and respect the fact it can be a source for good."

Amelia Tait is a technology and digital culture writer at the New Statesman.