The UK economy hasn't grown more than the US

The US has grown by 2.3 per cent in the last year, while the UK has remained flat.

The final set of US growth figures before the presidential election were released today, showing that the economy grew at an annual rate of 2 per cent in the third quarter or a quarterly rate of 0.5 per cent. The Tories, unsurprisingly, are keen to point out that that's a worse performance than the UK, which, as we learned yesterday, grew at a quarterly rate of 1 per cent in Q3.  But they would be wise not to invite too much comparison of the UK and US economies.

First, while the US has grown by 2.3 per cent over the last year, the UK economy has failed to grow at all. As the Office for National Statistics reported yesterday: "GDP in volume terms was estimated to have been flat in Q3 2012, when compared with Q3 2011".

Second, while the US economy is now 2.3 per cent above its pre-recession peak, the UK remains 3.1 per cent below. The US has grown for 13 consecutive quarters, but we've only just recovered the output lost in the double-dip recession (a fate that the US, partly thanks to a policy of stimulus, rather than austerity, avoided). As a result, while they've grown by 3.9 per cent over the last two years, we've grown by just 0.6 per cent.

Finally, since the UK Q3 figure was artificially inflated by the bounce-back from the extra bank holiday in June (responsible for around half of the 1 per cent growth) and the inclusion of the Olympic ticket sales (responsible for 0.2 per cent), it's foolish of the Treasury to cite it as proof that we're "on the right track". Indeed, as I wrote yesterday, a significant number of forecasters believe it's possible or even probable that the economy will shrink in quarter four. Rather than complacently boasting about a one-off surge in growth, the Tories should be acting to prevent a triple-dip recession.

The US economy is now 2.3 per cent above its pre-recession peak, while the UK remains 3.1 per cent below. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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The 5 things the Tories aren't telling you about their manifesto

Turns out the NHS is something you really have to pay for after all. 

When Theresa May launched the Conservative 2017 manifesto, she borrowed the most popular policies from across the political spectrum. Some anti-immigrant rhetoric? Some strong action on rip-off energy firms? The message is clear - you can have it all if you vote Tory.

But can you? The respected thinktank the Institute for Fiscal Studies has now been through the manifesto with a fine tooth comb, and it turns out there are some things the Tory manifesto just doesn't mention...

1. How budgeting works

They say: "a balanced budget by the middle of the next decade"

What they don't say: The Conservatives don't talk very much about new taxes or spending commitments in the manifesto. But the IFS argues that balancing the budget "would likely require more spending cuts or tax rises even beyond the end of the next parliament."

2. How this isn't the end of austerity

They say: "We will always be guided by what matters to the ordinary, working families of this nation."

What they don't say: The manifesto does not backtrack on existing planned cuts to working-age welfare benefits. According to the IFS, these cuts will "reduce the incomes of the lowest income working age households significantly – and by more than the cuts seen since 2010".

3. Why some policies don't make a difference

They say: "The Triple Lock has worked: it is now time to set pensions on an even course."

What they don't say: The argument behind scrapping the "triple lock" on pensions is that it provides an unneccessarily generous subsidy to pensioners (including superbly wealthy ones) at the expense of the taxpayer.

However, the IFS found that the Conservatives' proposed solution - a "double lock" which rises with earnings or inflation - will cost the taxpayer just as much over the coming Parliament. After all, Brexit has caused a drop in the value of sterling, which is now causing price inflation...

4. That healthcare can't be done cheap

They say: "The next Conservative government will give the NHS the resources it needs."

What they don't say: The £8bn more promised for the NHS over the next five years is a continuation of underinvestment in the NHS. The IFS says: "Conservative plans for NHS spending look very tight indeed and may well be undeliverable."

5. Cutting immigration costs us

They say: "We will therefore establish an immigration policy that allows us to reduce and control the number of people who come to Britain from the European Union, while still allowing us to attract the skilled workers our economy needs." 

What they don't say: The Office for Budget Responsibility has already calculated that lower immigration as a result of the Brexit vote could reduce tax revenues by £6bn a year in four years' time. The IFS calculates that getting net immigration down to the tens of thousands, as the Tories pledge, could double that loss.

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

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