The consensus is turning against austerity

The global organisations who supported Osborne are now warning against excessive austerity.

In making the case for his deficit reduction programme, George Osborne has often leaned heavily on arguments from authority. Here, from his speech to the 2010 Conservative conference, is a typical example:

On one side there is the IMF, the OECD, the credit rating agencies, the bond markets, the European Commission, the Confederation of British Industry, the Institute of Directors, the British Chambers of Commerce, the Governor of the Bank of England, most of British business, two of our great historic political parties, one of the Miliband brothers, Tony Blair, and the British people.

On the other side is Ed Miliband and the trade union leaders who put him where he is.

But even in October 2010, when the austerity consensus was at its height, this was to understate the opposition. As Mehdi pointed out at the time, those on the other side also included Barack Obama, US Federal Reserve Chairman Ben Bernanke, Nobel Prize-winning economists Paul Krugman and Joseph Stiglitz, FT columnists Martin Wolf and Samuel Brittan, Keynes's biographer Robert Skidelsky. One could add that 53 per cent of the "the British people" voted for parties opposed to the Conservatives' economic programme.

Still, Osborne could comfort himself with the thought that much of the political and economic establishment was on his side. What he forgot was that throughout history the economic consensus has often proved disastrously wrong. Now, after austerity has comprehensively failed in Britain and Europe, the intellectual tide is beginning to turn.

In a statement ahead of the World Economic Forum's annual meeting in Davos next week, the heads of the IMF, the OECD, the World Trade Organisation and the World Bank have all warned against too fast a pace of deficit reduction. They declare that fiscal consolidation should be used "to promote rather than reduce prospects for growth and employment" and should be applied "in a socially responsible manner."

Of course, none of these institutions is calling for deficit reduction to be abandoned. They're merely recognising the need for a more balanced approach of the kind that Labour has consistently argued for. Even the credit rating agenices now recognise the risks of too great a pace of austerity. Explaining its decision to downgrade the credit ratings of nine eurozone countries including France, Standard & Poor's - hitherto an advocate of extreme fiscal tightening - cited concerns over growth, not borrowing. "A reform process based on a pillar of fiscal austerity alone risks becoming self-defeating," it warned, "as domestic demand falls in line with consumers' rising concerns about job security."

That the consensus has begun to shift is unsurprising. In Europe, austerity has increased, rather than diminished, the threat of a Greek default and the collapse of the single currency. In Britain, Osborne's programme has entirely failed to deliver the growth and jobs that he promised. The Chancellor told the House of Commons in November 2010 that private sector job creation would "far outweigh" the job losses in the public sector. But the number of public sector jobs lost in the last year (276,000) now exceeds the number of private sector jobs created (262,000). In the last quarter, 67,000 public sector jobs were lost but just 5,000 private sector jobs were created. Moreover, if we reclassify RBS and Lloyds as private sector institutions, there were 3,000 job losses in the private sector.

Delivering his emergency Budget in June 2010, Osborne told the Commons: "Some have suggested that there is a choice between dealing with our debts and going for growth. That is a false choice. The crisis in the Eurozone shows that unless we deal with our debts there will be no growth."But rather than stimulating growth, Osborne's policies have strangled it. Over the last year, Britain has grown at a slower rate than ever EU country except Greece, Cyprus, Portugal, Slovenia and Denmark (see the final column on this Eurostat chart).

For all this, it is the Tories, not Labour, who enjoy a three-point lead in the latest YouGov poll. At the very moment that Ed Balls has been vindicated on the economy, it is his party that is losing the political battle. Labour is learning, to its horror, that you can combine austerity and popularity.

George Eaton is political editor of the New Statesman.

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The Prevent strategy needs a rethink, not a rebrand

A bad policy by any other name is still a bad policy.

Yesterday the Home Affairs Select Committee published its report on radicalization in the UK. While the focus of the coverage has been on its claim that social media companies like Facebook, Twitter and YouTube are “consciously failing” to combat the promotion of terrorism and extremism, it also reported on Prevent. The report rightly engages with criticism of Prevent, acknowledging how it has affected the Muslim community and calling for it to become more transparent:

“The concerns about Prevent amongst the communities most affected by it must be addressed. Otherwise it will continue to be viewed with suspicion by many, and by some as “toxic”… The government must be more transparent about what it is doing on the Prevent strategy, including by publicising its engagement activities, and providing updates on outcomes, through an easily accessible online portal.”

While this acknowledgement is good news, it is hard to see how real change will occur. As I have written previously, as Prevent has become more entrenched in British society, it has also become more secretive. For example, in August 2013, I lodged FOI requests to designated Prevent priority areas, asking for the most up-to-date Prevent funding information, including what projects received funding and details of any project engaging specifically with far-right extremism. I lodged almost identical requests between 2008 and 2009, all of which were successful. All but one of the 2013 requests were denied.

This denial is significant. Before the 2011 review, the Prevent strategy distributed money to help local authorities fight violent extremism and in doing so identified priority areas based solely on demographics. Any local authority with a Muslim population of at least five per cent was automatically given Prevent funding. The 2011 review pledged to end this. It further promised to expand Prevent to include far-right extremism and stop its use in community cohesion projects. Through these FOI requests I was trying to find out whether or not the 2011 pledges had been met. But with the blanket denial of information, I was left in the dark.

It is telling that the report’s concerns with Prevent are not new and have in fact been highlighted in several reports by the same Home Affairs Select Committee, as well as numerous reports by NGOs. But nothing has changed. In fact, the only change proposed by the report is to give Prevent a new name: Engage. But the problem was never the name. Prevent relies on the premise that terrorism and extremism are inherently connected with Islam, and until this is changed, it will continue to be at best counter-productive, and at worst, deeply discriminatory.

In his evidence to the committee, David Anderson, the independent ombudsman of terrorism legislation, has called for an independent review of the Prevent strategy. This would be a start. However, more is required. What is needed is a radical new approach to counter-terrorism and counter-extremism, one that targets all forms of extremism and that does not stigmatise or stereotype those affected.

Such an approach has been pioneered in the Danish town of Aarhus. Faced with increased numbers of youngsters leaving Aarhus for Syria, police officers made it clear that those who had travelled to Syria were welcome to come home, where they would receive help with going back to school, finding a place to live and whatever else was necessary for them to find their way back to Danish society.  Known as the ‘Aarhus model’, this approach focuses on inclusion, mentorship and non-criminalisation. It is the opposite of Prevent, which has from its very start framed British Muslims as a particularly deviant suspect community.

We need to change the narrative of counter-terrorism in the UK, but a narrative is not changed by a new title. Just as a rose by any other name would smell as sweet, a bad policy by any other name is still a bad policy. While the Home Affairs Select Committee concern about Prevent is welcomed, real action is needed. This will involve actually engaging with the Muslim community, listening to their concerns and not dismissing them as misunderstandings. It will require serious investigation of the damages caused by new Prevent statutory duty, something which the report does acknowledge as a concern.  Finally, real action on Prevent in particular, but extremism in general, will require developing a wide-ranging counter-extremism strategy that directly engages with far-right extremism. This has been notably absent from today’s report, even though far-right extremism is on the rise. After all, far-right extremists make up half of all counter-radicalization referrals in Yorkshire, and 30 per cent of the caseload in the east Midlands.

It will also require changing the way we think about those who are radicalized. The Aarhus model proves that such a change is possible. Radicalization is indeed a real problem, one imagines it will be even more so considering the country’s flagship counter-radicalization strategy remains problematic and ineffective. In the end, Prevent may be renamed a thousand times, but unless real effort is put in actually changing the strategy, it will remain toxic. 

Dr Maria Norris works at London School of Economics and Political Science. She tweets as @MariaWNorris.