Stop focusing on triple dips. Anaemic growth is just as bad

Welcome to stagnation. It's not a nice place to be.

Tomorrow, the ONS will release its second estimate of GDP growth for the fourth quarter of 2012. The revisions may be up or down, and you'd be a fool to bet on which direction it will be. But barring a miracle, it's still going to be terrible growth.

That's true even if the revisions push the estimated contraction into positive territory. Such is the focus on whether or not Britain will enter a "technical recession" for the second time running that we have started to act as if anaemic growth is acceptable. It isn't.

If nothing else, it's important to remember that GDP staying flat is the equivalent of every individual in Britain getting poorer. That's because the British population is growing, usually by somewhere between 0.5 and 1 per cent a year (0.7 per cent according to the most recent figures from the World Bank). As a result, GDP per capita, the share of the national income that each of us receives, is correspondingly lower than GDP. Unless annual GDP growth is higher than population growth, it's not even really fair to say we're "stagnating". We are getting poorer.

But even discounting that possibility, stagnation above the rate of population growth remains an extremely concerning phenomenon. 2013 overall will probably experience real growth in GDP per capita. NIESR's economic forecasts put it at 0.4 per cent growth per capita, and 1.1 per cent GDP growth:

But 1.1 per cent growth is far, far below anything that Britain would need to either keep deficit reduction on track (the main worry if you're George Osborne) or to prevent further erosion of crucial public services (the main worry if you're anyone else). The Bank of England, which made similar projections to NIESR, is so shocked that it is prepared to overlook its entire raison d'être and allow a period of above-target inflation to get us out of those doldrums.

The OBR, kings of the downward revision, have spent the last three years forecasting that 2 per cent growth was just around the corner. That remains their forecast, and currently that growth rate is projected for 2014. The OBR has previously forecast two per cent growth for 2011, 2012 and 2013. Whether that continued optimism is justified or not, when future economic plans are based on it, every miss hits even harder.

(To be clear, the problem isn't that the OBR is frequently wrong. All economic forecasts are hugely variable, and the agency makes clear in its outlooks that the rage of probable outcomes is large. The problem is that the OBR is frequently wrong in the same direction. For over two years now, it has predicted growth above the actual outcome. If someone misses the bullseye nine times in a row, they're just unlucky — but if every one of those shots hits above the centre, it's pretty likely that they need to start aiming lower.)

The worst thing about accepting stagnation as a natural, even positive, outcome is that it will lead to a huge amount of unnecessary pain. It's not just that we won't grow fast enough. It's also that we'll be trapped in a dead zone of investment, too poor for the government to finally decide it has "enough money" to start dealing with our broken housing market and crumbling infrastructure, but growing just enough that it won't be forced to abandon austerity and enact pro-growth measures which actually work.

But if the right is wrongly promoting the acceptability of stagnation, there's a parallel criticism for the left. A "technical recession" isn't that much worse than minuscule growth. The difference between 0.1 per cent contraction and 0.1 per cent growth is 0.2 percentage points. A truism, certainly, but if the Chancellor's forecast was for 2.0 per cent and the outcome was 1.8 per cent, there would be little commentary.

As our economy floats along at the zero line, sometimes slightly over, sometimes slightly under, the temptation may be to crow every time the latter occurs. But that runs the risk of implying that the former is acceptable, when it really isn't. Our corrugated economy is the problem, and that's not going away any time soon.

This puppy is sad at British economic stagnation. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Getty
Show Hide image

How the Lib Dems learned to love all-women shortlists

Yes, the sitting Lib Dem MPs are mostly white, middle-aged middle class men. But the party's not taking any chances. 

I can’t tell you who’ll be the Lib Dem candidate in Southport on 8 June, but I do know one thing about them. As they’re replacing a sitting Lib Dem (John Pugh is retiring) - they’ll be female.

The same is true in many of our top 20 target seats, including places like Lewes (Kelly-Marie Blundell), Yeovil (Daisy Benson), Thornbury and Yate (Clare Young), and Sutton and Cheam (Amna Ahmad). There was air punching in Lib Dem offices all over the country on Tuesday when it was announced Jo Swinson was standing again in East Dunbartonshire.

And while every current Lib Dem constituency MP will get showered with love and attention in the campaign, one will get rather more attention than most - it’s no coincidence that Tim Farron’s first stop of the campaign was in Richmond Park, standing side by side with Sarah Olney.

How so?

Because the party membership took a long look at itself after the 2015 election - and a rather longer look at the eight white, middle-aged middle class men (sorry chaps) who now formed the Parliamentary party and said - "we’ve really got to sort this out".

And so after decades of prevarication, we put a policy in place to deliberately increase the diversity of candidates.

Quietly, over the last two years, the Liberal Democrats have been putting candidates into place in key target constituencies . There were more than 300 in total before this week’s general election call, and many of them have been there for a year or more. And they’ve been selected under new procedures adopted at Lib Dem Spring Conference in 2016, designed to deliberately promote the diversity of candidates in winnable seats

This includes mandating all-women shortlists when selecting candidates who are replacing sitting MPs, similar rules in our strongest electoral regions. In our top 10 per cent of constituencies, there is a requirement that at least two candidates are shortlisted from underrepresented groups on every list. We became the first party to reserve spaces on the shortlists of winnable seats for underrepresented candidates including women, BAME, LGBT+ and disabled candidates

It’s not going to be perfect - the hugely welcome return of Lib Dem grandees like Vince Cable, Ed Davey and Julian Huppert to their old stomping grounds will strengthen the party but not our gender imbalance. But excluding those former MPs coming back to the fray, every top 20 target constituency bar one has to date selected a female candidate.

Equality (together with liberty and community) is one of the three key values framed in the preamble to the Lib Dem constitution. It’s a relief that after this election, the Liberal Democratic party in the Commons will reflect that aspiration rather better than it has done in the past.

Richard Morris blogs at A View From Ham Common, which was named Best New Blog at the 2011 Lib Dem Conference

0800 7318496