The coalition’s growth gamble is about to become clear

New figures expected to show sharp slowdown in growth.

If last week was dominated by the cuts debate, this week will be dominated by the growth debate. Both David Cameron and Ed Miliband are addressing the CBI's annual conference today, the latter making his first speech to business leaders since his election.

The data will speak for itself on Tuesday when the growth figures for the third quarter of this year are published – the first to account solely for the coalition's time in office. As today's FT reports, the consensus forecast is for the data to show that the economy grew at 0.4 per cent in the third quarter, down from 1.2 per cent in the second quarter. But, since conventional economic wisdom is rarely right, it's worth pointing out that the forecasts range from a quarterly contraction of 0.2 per cent to growth of 0.8 per cent.

In recent weeks Ed Miliband and Alan Johnson have avoided talk of a double-dip recession, instead predicting that the coalition's cuts will push Britain into an "L-shaped recession". But with the cuts and the VAT rise yet to come, we can expect growth of 0.4 per cent or lower to spark new talk of a double dip.

Here, for instance, is the verdict of Samuel Tombs at Capital Economics: "With the fiscal squeeze not yet fully under way, a figure in this region [0.4 per cent] would clearly cast further doubt on the ability of the coalition to force through a painful fiscal tightening without throwing the economy back into recession".

In addition, it's worth remembering (as few did last week) that George Osborne's room for manoeuvre is extremely limited. Interest rates are already at record lows and the exchange rate has fallen sharply since the crisis began. By contrast, as Robert Skidelsky points out in this week's issue, after the savage cuts of the 1981 Budget, Geoffrey Howe was able to cut rates by 2 per cent and prevent a precipitous economic decline.

Should growth turn negative, Osborne's only option (other than "reprofiling" the cuts) is further quantitative easing by the Bank of England. By the end of this week, the scale of the coalition's economic gamble will become clear to all.

George Eaton is political editor of the New Statesman.

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The buck doesn't stop with Grant Shapps - and probably shouldn't stop with Lord Feldman, either

The question of "who knew what, and when?" shouldn't stop with the Conservative peer.

If Grant Shapps’ enforced resignation as a minister was intended to draw a line under the Mark Clarke affair, it has had the reverse effect. Attention is now shifting to Lord Feldman, who was joint chair during Shapps’  tenure at the top of CCHQ.  It is not just the allegations of sexual harrassment, bullying, and extortion against Mark Clarke, but the question of who knew what, and when.

Although Shapps’ resignation letter says that “the buck” stops with him, his allies are privately furious at his de facto sacking, and they are pointing the finger at Feldman. They point out that not only was Feldman the senior partner on paper, but when the rewards for the unexpected election victory were handed out, it was Feldman who was held up as the key man, while Shapps was given what they see as a relatively lowly position in the Department for International Development.  Yet Feldman is still in post while Shapps was effectively forced out by David Cameron. Once again, says one, “the PM’s mates are protected, the rest of us shafted”.

As Simon Walters reports in this morning’s Mail on Sunday, the focus is turning onto Feldman, while Paul Goodman, the editor of the influential grassroots website ConservativeHome has piled further pressure on the peer by calling for him to go.

But even Feldman’s resignation is unlikely to be the end of the matter. Although the scope of the allegations against Clarke were unknown to many, questions about his behaviour were widespread, and fears about the conduct of elections in the party’s youth wing are also longstanding. Shortly after the 2010 election, Conservative student activists told me they’d cheered when Sadiq Khan defeated Clarke in Tooting, while a group of Conservative staffers were said to be part of the “Six per cent club” – they wanted a swing big enough for a Tory majority, but too small for Clarke to win his seat. The viciousness of Conservative Future’s internal elections is sufficiently well-known, meanwhile, to be a repeated refrain among defenders of the notoriously opaque democratic process in Labour Students, with supporters of a one member one vote system asked if they would risk elections as vicious as those in their Tory equivalent.

Just as it seems unlikely that Feldman remained ignorant of allegations against Clarke if Shapps knew, it feels untenable to argue that Clarke’s defeat could be cheered by both student Conservatives and Tory staffers and the unpleasantness of the party’s internal election sufficiently well-known by its opponents, without coming across the desk of Conservative politicians above even the chair of CCHQ’s paygrade.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.