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.

Grant Shapps on the campaign trail. Photo: Getty
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Grant Shapps resigns over Tory youth wing bullying scandal

The minister, formerly party chairman, has resigned over allegations of bullying and blackmail made against a Tory activist. 

Grant Shapps, who was a key figure in the Tory general election campaign, has resigned following allegations about a bullying scandal among Conservative activists.

Shapps was formerly party chairman, but was demoted to international development minister after May. His formal statement is expected shortly.

The resignation follows lurid claims about bullying and blackmail among Tory activists. One, Mark Clarke, has been accused of putting pressure on a fellow activist who complained about his behaviour to withdraw the allegation. The complainant, Elliot Johnson, later killed himself.

The junior Treasury minister Robert Halfon also revealed that he had an affair with a young activist after being warned that Clarke planned to blackmail him over the relationship. Former Tory chair Sayeedi Warsi says that she was targeted by Clarke on Twitter, where he tried to portray her as an anti-semite. 

Shapps appointed Mark Clarke to run RoadTrip 2015, where young Tory activists toured key marginals on a bus before the general election. 

Today, the Guardian published an emotional interview with the parents of 21-year-old Elliot Johnson, the activist who killed himself, in which they called for Shapps to consider his position. Ray Johnson also spoke to BBC's Newsnight:


The Johnson family claimed that Shapps and co-chair Andrew Feldman had failed to act on complaints made against Clarke. Feldman says he did not hear of the bullying claims until August. 

Asked about the case at a conference in Malta, David Cameron pointedly refused to offer Shapps his full backing, saying a statement would be released. “I think it is important that on the tragic case that took place that the coroner’s inquiry is allowed to proceed properly," he added. “I feel deeply for his parents, It is an appalling loss to suffer and that is why it is so important there is a proper coroner’s inquiry. In terms of what the Conservative party should do, there should be and there is a proper inquiry that asks all the questions as people come forward. That will take place. It is a tragic loss of a talented young life and it is not something any parent should go through and I feel for them deeply.” 

Mark Clarke denies any wrongdoing.

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.