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

The New Statesman warned in 2009 that Osborne had no plan for growth.

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Even by the standards of recent economic data, today's OECD report makes for particularly grim reading. The body's soothsayers predict that the UK will suffer a double-dip recession, with growth contracting in the fourth quarter of this year and in the first quarter of 2012. In total, the British economy will grow by just 0.5 per cent next year. To put that figure into context, recall that as recently as May the OECD expected growth of 1.8 per cent, while in March the Office for Budget Responsibility predicted growth of 2.5 per cent. The outlook for jobs is little better. Unemployment is forecast to rise from 8.3 per cent at present to 9.1 per cent in 2013 as the private sector fails to compensate for public sector job losses.

These are, of course, just forecasts but recent history suggests that the most pessimistic growth forecasts are invariably the most accurate. In any case, George Osborne's 2010 promise of "a steady and sustained economic recovery, with low inflation and falling unemployment" is already a distant dream.

While many are wise after the event, the New Statesman was warning of the danger of a double-dip as long ago as March 2009 (see cover above). Our economics editor David Blanchflower predicted that premature withdrawal of fiscal stimulus would strangle growth and raise unemployment, particularly among the young.

He wrote 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.

In the wake of Osborne's emergency Budget, he warned:

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.

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 (including the OECD itself).

My personal favourite is Nick Bosanquet, professor of health policy at Imperial College London and consultant director for Reform, who predicted in January that the UK economy would be "the surprise success of Europe in 2011". Since then, Britain has grown at a slower rate than every EU country expect Cyprus, Greece and Portugal.

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

George Eaton is political editor of the New Statesman.

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I'd only given a literary talk, but someone still told me to leave the country

“So if you don’t like it so much,” he says, “why don’t you leave?” And his tone suggests that there is a good train leaving from St Pancras in half an hour.

So here I am at the Romanian Cultural Institute in Belgrave Square. Eventually. After a misunderstanding that finds me first, forlorn and bemused, at Olympia, with the London Book Fair closing down for the evening, watching my fee grow wings and fly away into the night air. I am called up and told where I could more profitably go instead – that is to say, the venue I should be at. On reassurance that my expenses will be met, I hop into a cab as soon as I find one (which, on Kensington High Street at 7pm, takes far longer than you would think. I will not use Uber).

I am going there in order to be on a panel that is talking about Benjamin Fondane (1898-1944), the Romanian intellectual, poet, essayist, philosopher and all-round dude. I know nothing about the guy beyond what I learned from reviewing a selection of his writings last July but this makes me, apparently, one of this country’s leading experts on him. Such is the level of intellectual curiosity in this part of the world. Fondane was treated much better in Paris, where he moved after finding studying law in Bucharest too boring; treated very much worse in 1944, when he was sent to Auschwitz.

A little corner of me is panicking a bit before the gig starts: I know next to nothing about the man, especially compared to my co-panellists, and I might betray this to the audience of around 80 (I refer to their number, not their age), sitting in their little gilt chairs, in a nice gilt drawing room, which is par for the course for European cultural institutes in this neck of the woods.

Another part of me says: “Don’t be silly, you’ll be fine,” and it turns out I am. I even manage to throw in a few jokes. During the course of one of my answers I say that the UK is a cultural desert and that there was a reason Fondane stopped moving when he got to Paris. The idea of coming to London to breathe the pure air of artistic freedom and inspiration was, and remains, laughable. It gets a chuckle or two out of the (mostly Mittel-European) audience, who like a bit of British self-deprecation as much as we do.

Or do we? Downstairs, and clutching my first glass of the evening (a perfectly drinkable Romanian Merlot), I chat to various people who come up and say they like my reviews etc, etc. All very pleasant. And then a man comes up to me, about my age, maybe a year or three younger, smartly tweeded.

“I was very offended by what you said about this country being a cultural desert,” he says. He is not joking.

“Oh?” I say. “Well, it is.”

He has the look of someone about to come up with a devastating argument.

“What about Shakespeare?” he asks me. “What about Oscar Wilde?”

“They’re dead,” I say, leaving aside the fact that Wilde was Irish, and that anywhere was better than Ireland in the 19th century for gay playwrights.

“So’s Fondane,” he says.

I think at this point I might have raised my glasses and massaged the bridge of my nose with finger and thumb, a sign for those who know me of extreme exasperation, and a precursor to verbal violence.

“So if you don’t like it so much,” he says, “why don’t you leave?” And his tone suggests that there is a good train leaving from St Pancras in half an hour.

“Do not presume to tell me, sir, whether I should leave the country.”

He tells me he has a Polish wife, as if that has any bearing on the matter. He says something else, which for the life of me I can’t remember, but I do know that when I replied to it, I used only one word, and that the word was “bollocks”.

“Well, if you’re going to use bad language . . .”

“I’ve got more,” I say, and proceed to launch a volley of it at him. Things have escalated quickly, I know, but there is no jest in his tone and what I am detecting is, I realise, his strong awareness of the Z in my name, my nose, and my flawless olive complexion. One develops antennae for this kind of thing, after almost half a century. And there’s a lot more of it about these days.

In the end, I become pretty much incoherent. On stage I’d caught myself thinking: “Golly, talking is even easier than writing;” but now my fluency deserts me. But God, it’s fun getting into a fight like this.

I’ve left my tobacco at home but the Romanian government gives me a whole pack of Marlboro Gold, and more wine. Vata-n libertate ori moarte! As they say. You can work it out. 

Nicholas Lezard is a literary critic for the Guardian and also writes for the Independent. He writes the Down and Out in London column for the New Statesman.

This article first appeared in the 23 March 2017 issue of the New Statesman, Trump's permanent revolution