The battle for growth

Slower growth in 2011 is not due to the eurozone crisis; slower growth in 2012 will be.

George Osborne was reported recently by the BBC as saying: "It is a very, very difficult and dangerous situation in the eurozone - Britain is impacted by what's happening. There's no doubt that growth in Britain, jobs in Britain, have been hit by what's going on in the Eurozone."

This is probably only true of the last few months, and then only to a limited extent. The slowdown in growth in Britain began in the fourth quarter of last year, since when real GDP has only increased by 0.5 per cent, and employment growth began to falter earlier this year. The crisis in the eurozone has been rumbling on for some time, but it only came to a head sufficiently to affect the UK over the summer months.

This can be seen in the latest trade data. UK export volumes to other EU countries increased by 5 per cent over the last year; exports to the rest of the world were up just 1 per cent over the same period. If the eurozone crisis was to blame for weak growth in Britain, these figures would be the other way round.

Other explanations are needed for the underperformance of the growth in Britain and two stand out. First, higher oil and food prices - and the increase in VAT - have squeezed households' spending power. This is evident in the latest retail sales data. Sales values increased by 5.4 per cent over the last year - a healthy rate of increase - but sales volumes were up just 0.6 per cent. The difference is inflation. Second, the Chancellor's tough fiscal plans have taken demand out of the economy and dented business confidence about future levels of spending. Hiring and investment spending have slowed as a result. Hopes that the private sector would respond to a tough fiscal policy with a burst of entrepreneurial activity have proved totally misplaced.

The worry in all this is that the effect of the eurozone crisis on growth and jobs in Britain is yet to come. Even if the crisis does not worsen - and it would be a brave person who argued that this categorically will not happen - demand in the eurozone is going to weaken in coming months and many forecasters believe it will slide back into recession. This will affect UK exporters: around two-thirds of UK exports go to the rest of Europe. Harder to measure, but possibly more important for growth and jobs in the UK, will be the effect on business confidence. Few company directors will feel comfortable implementing expansion plans at a time when the news headlines are dominated by the risk of Armageddon on the UK's doorstep.

And if the crisis does get worse, the prospect of the banking system freezing up again, followed by another credit crunch, will be a real one.
This is already being reflected in economic forecasts. Earlier this week the CBI revised down its estimates for growth in the UK to 0.9 per cent in 2011 and 1.2 per cent in 2012 and the European Commission predicts growth of just 0.7 per cent in 2011 and 0.6 per cent in 2012. If the Commission is right then the UK is going to come perilously close to a recession in the next few quarters.

This is a challenging backdrop for the Chancellor as he prepares for his Autumn Statement on 29 November. The Government has published a Growth Review, a Plan for Growth and is now reviewing the Plan for Growth. But the economy is barely growing and the outlook is for things to get worse not better. Each of these documents suffered from the same basic weakness. It started from a set of measures agreed between the coalition partners - cuts in corporate tax rates, an increase in the personal tax allowance, aggressive budget deficit reduction - and attempted to build a growth plan around them. This is the wrong approach.

A plan for growth should not be based on a set of miscellaneous policies agreed in coalition negotiations. It should identify what is needed for the economy to grow - additional demand in the short-term and increasing supplies of capital, labour and land in the medium-term, together with better ways of utilising them - and then work out how the government can help deliver them.

We are promised "credit easing" and a focus on housing and infrastructure. These are welcome but more, much more, is needed.

Tony Dolphin is the Senior Economist and Associate Director for Economic Policy at ippr

Tony Dolphin is chief economist at IPPR

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"We repealed, then forgot": the long shadow of Section 28 homophobia

Why are deeply conservative views about the "promotion" of homosexuality still being reiterated to Scottish school pupils? 

Grim stories of LGBTI children being bullied in school are all too common. But one which emerged over the weekend garnered particular attention - because of the echoes of the infamous Section 28, nearly two decades after it was scrapped.

A 16-year-old pupil of a West Lothian school, who does not wish to be named, told Pink News that staff asked him to remove his small rainbow pride badge because, though they had "no problem" with his sexuality, it was not appropriate to "promote it" in school. It's a blast from the past - the rules against "promoting" homosexuality were repealed in 2000 in Scotland, but the long legacy of Section 28 seems hard to shake off. 

The local authority responsible said in a statement that non-school related badges are not permitted on uniforms, and says it is "committed to equal rights for LGBT people". 

The small badge depicted a rainbow-striped heart, which the pupil said he had brought back from the Edinburgh Pride march the previous weekend. He reportedly "no longer feels comfortable going to school", and said homophobia from staff members felt "much more scar[y] than when I encountered the same from other pupils". 

At a time when four Scottish party leaders are gay, and the new Westminster parliament included a record number of LGBTQ MPs, the political world is making progress in promoting equality. But education, it seems, has not kept up. According to research from LGBT rights campaigners Stonewall, 40 per cent of LGBT pupils across the UK reported being taught nothing about LGBT issues at school. Among trans students, 44 per cent said school staff didn’t know what "trans" even means.

The need for teacher training and curriculum reform is at the top of campaigners' agendas. "We're disappointed but not surprised by this example," says Jordan Daly, the co-founder of Time for Inclusive Education [TIE]. His grassroots campaign focuses on making politicians and wider society aware of the reality LGBTI school students in Scotland face. "We're in schools on a monthly basis, so we know this is by no means an isolated incident." 

Studies have repeatedly shown a startling level of self-harm and mental illness reported by LGBTI school students. Trans students are particularly at risk. In 2015, Daly and colleagues began a tour of schools. Shocking stories included one in which a teacher singled out a trans pupils for ridicule in front of the class. More commonly, though, staff told them the same story: we just don't know what we're allowed to say about gay relationships. 

This is the point, according to Daly - retraining, or rather the lack of it. For some of those teachers trained during the 1980s and 1990s, when Section 28 prevented local authorities from "promoting homosexuality", confusion still reigns about what they can and cannot teach - or even mention in front of their pupils. 

The infamous clause was specific in its homophobia: the "acceptability of homosexuality as a pretended family relationship" could not be mentioned in schools. But it's been 17 years since the clause was repealed in Scotland - indeed, it was one of the very first acts of the new Scottish Parliament (the rest of the UK followed suit three years later). Why are we still hearing this archaic language? 

"We repealed, we clapped and cheered, and then we just forgot," Daly says. After the bitter campaign in Scotland, in which an alliance of churches led by millionaire businessman Brian Souter poured money into "Keeping the Clause", the government was pleased with its victory, which seemed to establish Holyrood as a progressive political space early on in the life of the parliament. But without updating the curriculum or retraining teaching staff, Daly argues, it left a "massive vacuum" of uncertainty. 

The Stonewall research suggests a similar confusion is likely across the UK. Daly doesn't believe the situation in Scotland is notably worse than in England, and disputes the oft-cited allegation that the issue is somehow worse in Scotland's denominational schools. Homophobia may be "wrapped up in the language of religious belief" in certain schools, he says, but it's "just as much of a problem elsewhere. The TIE campaign doesn't have different strategies for different schools." 

After initial disappointments - their thousands-strong petition to change the curriculum was thrown out by parliament in 2016 - the campaign has won the support of leaders such as Nicola Sturgeon and Kezia Dugdale, and recently, the backing of a majority of MSPs. The Scottish government has set up a working group, and promised a national strategy. 

But for Daly, who himself struggled at a young age with his sexuality and society's failure to accept it, the matter remains an urgent one.  At just 21, he can reel off countless painful stories of young LGBTI students - some of which end in tragedy. One of the saddest elements of the story from St Kentigern's is that the pupil claimed his school was the safest place he had to express his identity, because he was not out at home. Perhaps for a gay pupil in ten years time, that will be a guarantee. 

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