Curious George and the Guardian’s contrarian columnist

For once, Simon Jenkins is behind the curve as he expresses doubts about the coalition’s austerity m

As a columnist, Simon Jenkins likes to think of himself as something of a high-class contrarian: he invariably allows a consensus to form and then writes against it. There's something of the old-style Tory anarchist about his love of mischief and lofty provocation; his high, rhetorical Oxonian style, so redolent of the 1950s, has served him well through a long career of churning out 1,200 words three times a week to non-negotiable newspaper deadlines. One has to admire the old boy's stamina. And his Olympian range!

"I absolutely love writing columns; in fact, I live to write them," he once told me when I spent a weekend in his company at Casa Ecco, the philanthropist Drue Heinz's house on Lake Como, at a grandly titled conversazione dedicated to the form of the essay.

In the Guardian today Jenkins has belatedly written about George Osborne's austerity Budget and the coalition's hawkish deficit reduction programme. He has allowed a consensus to form -- nearly all the newspapers and columnists support doctrinaire cuts in public spending and are opposed to Keynesian hyperstimulus and deficit spending -- and has now decided to write against it.

Yet, for once, Jenkins is behind the curve as he expresses doubts about the austerity measures and warns of an impending double-dip recession.

Sound familiar? In truth, his column reads as little more than a hasty summary of the position of our own economics columnist, Professor David Blanchflower, who, since he joined us in September last year, has been absolutely consistent in his opposition to the foolishness of slashing spending during a downturn.

As I said recently on Any Questions -- when in response to my contribution Kenneth Clarke conceded, with characteristic candour, that withdrawing stimulus could lead us back into recession -- George Osborne is a conviction politician. He's been very impressive since becoming Chancellor; his performance in the House as he delivered his first Budget was outstanding. He is a low-tax, small-state, social and economic liberal. He believes that there is something morally reprehensible about running large Budget deficits. All of this is sincere.

However, I disagree with him profoundly, and fear that at a time of systemic crisis we are repeating the mistakes of the 1930s, when premature attempts to reduce spending and to balance the Budget plunged Britain and the United States back into severe recession.

At present, it's too early to say how the economy will respond to severe deficit reduction. But the government should have been more pragmatic and more flexible, and it should have learned from the mistakes of the past. It should have remained in wait-and-see mode. "O Lord," wrote Saint Augustine in his Confessions, "give me chastity and continence, but not yet."

Or, as the New York Times said in a recent leader about the coalition's needlessly draconian emergency Budget:

In the days since, the misguided nature of this budget has become clear. Some cutbacks were necessary, if only to reassure Europe's panicky bond markets. But the coalition's budget aims to cut too much too soon, in pursuit of a pointless structural budget surplus by 2015. Its real achievements are more likely to be drastically downsized public services and, if the fiscal austerity backfires, as it well might, a contribution to years of stagnation or worse in Britain and the rest of Europe.

There was more:

No reputable economic theory justifies this bleeding. In fact, most mainstream economists have argued for delaying the most severe cuts until a more robust economic recovery has begun. The coalition budget reflects Conservative Party ideology, which asserts that as the government withdraws money from the economy, private businesses and consumers will step in to replace it. That won't happen if Britons see only hard times ahead.

And already, as David Blanchflower writes in his weekly column tomorrow, all the available data indicates that consumer confidence is diminishing once more.

There may be trouble ahead.

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Jason Cowley is editor of the New Statesman. He has been the editor of Granta, a senior editor at the Observer and a staff writer at the Times.

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What type of Brexit did we vote for? 150,000 Conservative members will decide

As Michael Gove launches his leadership bid, what Leave looks like will be decided by Conservative activists.

Why did 17 million people vote to the leave the European Union, and what did they want? That’s the question that will shape the direction of British politics and economics for the next half-century, perhaps longer.

Vote Leave triumphed in part because they fought a campaign that combined ruthless precision about what the European Union would do – the illusory £350m a week that could be clawed back with a Brexit vote, the imagined 75 million Turks who would rock up to Britain in the days after a Remain vote – with calculated ambiguity about what exit would look like.

Now that ambiguity will be clarified – by just 150,000 people.

 That’s part of why the initial Brexit losses on the stock market have been clawed back – there is still some expectation that we may end up with a more diluted version of a Leave vote than the version offered by Vote Leave. Within the Treasury, the expectation is that the initial “Brexit shock” has been pushed back until the last quarter of the year, when the election of a new Conservative leader will give markets an idea of what to expect.  

Michael Gove, who kicked off his surprise bid today, is running as the “full-fat” version offered by Vote Leave: exit from not just the European Union but from the single market, a cash bounty for Britain’s public services, more investment in science and education. Make Britain great again!

Although my reading of the Conservative parliamentary party is that Gove’s chances of getting to the top two are receding, with Andrea Leadsom the likely beneficiary. She, too, will offer something close to the unadulterated version of exit that Gove is running on. That is the version that is making officials in Whitehall and the Bank of England most nervous, as they expect it means exit on World Trade Organisation terms, followed by lengthy and severe recession.

Elsewhere, both Stephen Crabb and Theresa May, who supported a Remain vote, have kicked off their campaigns with a promise that “Brexit means Brexit” in the words of May, while Crabb has conceded that, in his view, the Leave vote means that Britain will have to take more control of its borders as part of any exit deal. May has made retaining Britain’s single market access a priority, Crabb has not.

On the Labour side, John McDonnell has set out his red lines in a Brexit negotiation, and again remaining in the single market is a red line, alongside access to the European Investment Bank, and the maintenance of “social Europe”. But he, too, has stated that Brexit means the “end of free movement”.

My reading – and indeed the reading within McDonnell’s circle – is that it is the loyalists who are likely to emerge victorious in Labour’s power struggle, although it could yet be under a different leader. (Serious figures in that camp are thinking about whether Clive Lewis might be the solution to the party’s woes.) Even if they don’t, the rebels’ alternate is likely either to be drawn from the party’s Brownite tendency or to have that faction acting as its guarantors, making an end to free movement a near-certainty on the Labour side.

Why does that matter? Well, the emerging consensus on Whitehall is that, provided you were willing to sacrifice the bulk of Britain’s financial services to Frankfurt and Paris, there is a deal to be struck in which Britain remains subject to only three of the four freedoms – free movement of goods, services, capital and people – but retains access to the single market. 

That means that what Brexit actually looks like remains a matter of conjecture, a subject of considerable consternation for British officials. For staff at the Bank of England,  who have to make a judgement call in their August inflation report as to what the impact of an out vote will be. The Office of Budget Responsibility expects that it will be heavily led by the Bank. Britain's short-term economic future will be driven not by elected politicians but by polls of the Conservative membership. A tense few months await. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.