Focus on a "triple dip" misses the point

The economy is stuck and without a change in government policy the slump is set to continue, writes the TUC's Duncan Weldon.

Will the UK economy experience a triple dip recession?

The simple answer is that I simply don’t know. The more honest answer is that I don’t really think it matters. Today’s industrial production figures certainly point towards one, but last week’s PMI surveys’ suggest growth of 0.1 per cent.

In reality whilst a triple dip would no doubt generate many headlines, the difference between a Q1 GDP figure -0.1 per cent and one of +0.1 per cent is pretty unimportant, especially as the figures are subject to revision for years afterwards.

The bigger picture is that the UK’s recent economic performance has been disastrous.

Whether compared to the original forecasts (on which fiscal policy is still based), to our international peers or to our own historical experience, this has been an extremely weak recovery.

The much-hoped for rebalancing has simply not occurred. Today’s industrial production statistics tell us that industrial output is now back to 1992 levels. Business investment grew by 0.4% last year against an original forecast of 10.0%.  Net trade subtracted from growth.

The government expected growth of 2.3% in 2011 and 2.8% in 2012, with two thirds of that coming from an increase in business investment and an improvement in net trade. Instead we got neither the growth nor the rebalancing.

The result has been missed fiscal targets and a downgraded credit rating.

Real wage falls, coupled with changes to the tax credit and social security system, have given us the longest squeeze in living standards in modern British economic history.

The labour market is hailed as ‘good news; but as important research from the Resolution Foundation today demonstrates, we still face a job gap of 850,000 to get back to pre-crisis levels of employment.

Productivity growth has collapsed, risking a longer term impact on living standards and growth.

And despite all of the government’s rhetoric on the UK being in a ‘global race’ – whether you measure it by growth, exports, manufacturing output or living standards, the UK is falling behind the other leading economies.

Against a backdrop of terrible growth, no rebalancing, a living standards squeeze, a weak labour market and productivity falls, the difference between a small  contraction in Q1 and some small growth in Q1 doesn’t seem very important.

The economy is stuck and without a change in government policy the slump is set to continue.

This piece was originally published at ToUChstone, and is republished here with permission.

Cars roll off the production line, but fewer than before. Photograph: Getty Images

Duncan Weldon is a senior policy officer at the Trades Union Congress. He blogs for them at Touchstone.

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Richmond is a victory for hope - now let's bring change across the country

The regressives are building their armies. 

Last night a regressive alliance was toppled. Despite being backed by both Ukip and the Conservative Party, Zac Goldsmith was rejected by the voters of Richmond Park.

Make no mistake, this result will rock the Conservative party – and in particularly dent their plans for a hard and painful Brexit. They may shrug off this vote in public, but their majority is thin and their management of the post-referendum process is becoming more chaotic by the day. This is a real moment, and those of us opposing their post-truth plans must seize it.

I’m really proud of the role that the Green party played in this election. Our local parties decided to show leadership by not standing this time and urging supporters to vote instead for the candidate that stood the best chance of winning for those of us that oppose Brexit. Greens’ votes could very well be "what made the difference" in this election (we received just over 3,500 votes in 2015 and Sarah Olney’s majority is 1,872) - though we’ll never know exactly where they went. Just as importantly though, I believe that the brave decision by the local Green party fundamentally changed the tone of the election.

When I went to Richmond last weekend, I met scores of people motivated to campaign for a "progressive alliance" because they recognised that something bigger than just one by election is at stake. We made a decision to demonstrate you can do politics differently, and I think we can fairly say that was vindicated. 

There are some already attacking me for helping get one more Liberal Democrat into Parliament. Let me be very clear: the Lib Dems' role in the Coalition was appalling – propping up a Conservative government hell bent on attacking our public services and overseeing a hike in child poverty. But Labour’s record of their last time in office isn't immune from criticism either – not just because of the illegal war in Iraq but also their introduction of tuition fees, privatisation of our health service and slavish worship of the City of London. They, like the Liberal Democrats, stood at the last election on an austerity manifesto. There is a reason that we remain different parties, but that doesn’t mean we shouldn't also seize opportunities like this to unite behind what we have in common. Olney is no perfect candidate but she has pledged to fight a hard Brexit, campaign against airport expansion and push for a fair voting system – surely progressives can agree that her win takes us forward rather than backwards?

Ultimately, last night was not just defeat of a regressive alliance but a victory for hope - a victory that's sorely needed on the back of of the division, loss and insecurity that seems to have marked much of the rest of this year. The truth is that getting to this point hasn’t been an easy process – and some people, including local Green party members have had criticisms which, as a democrat, I certainly take seriously. The old politics dies hard, and a new politics is not easy to forge in the short time we have. But standing still is not an option, nor is repeating the same mistakes of the past. The regressives are building their armies and we either make our alternative work or risk the left being out of power for a generation. 

With our NHS under sustained attack, our climate change laws threatened and the increasing risk of us becoming a tax haven floating on the edge of the Atlantic, the urgent need to think differently about how we win has never been greater. 

An anti-establishment wave is washing over Britain. History teaches us that can go one of two ways. For the many people who are utterly sick of politics as usual, perhaps the idea of politicians occasionally putting aside their differences for the good of the country is likely to appeal, and might help us rebuild trust among those who feel abandoned. So it's vital that we use this moment not just to talk among ourselves about how to work together but also as another spark to start doing things differently, in every community in Britain. That means listening to people, especially those who voted for Britain to leave the EU, hearing what they’re saying and working with them to affect change. Giving people real power, not just the illusion of it.

It means looking at ways to redistribute power and money in this country like never before, and knowing that a by-election in a leafy London suburb changes nothing for the vast majority of our country.

Today let us celebrate that the government's majority is smaller, and that people have voted for a candidate who used her victory speech to say that she would "stand up for an open, tolerant, united Britain".  But tomorrow let’s get started on something far bigger - because the new politics is not just about moments it's about movements, and it will only work if nobody is left behind.

 

Caroline Lucas is the MP for Brighton Pavilion.