Why the Tories shouldn't get excited about "good" economic news

The economy might appear to be improving but forecasters predict a "triple-dip recession" and rising unemployment.

This week's economic news has prompted hope among the Tories that the tide is finally turning in their favour. Employment is at a record high, inflation is down to 2.2 per cent, its lowest level since November 2009, and borrowing has fallen to its lowest level for four years. The positive trend will continue next week when the Office for National Statistics (ONS) announces that the economy finally returned to growth in the third quarter (the National Institute of Economic and Social Research, for instance, has predicted growth of 0.8 per cent). Team Osborne hope that all of this will allow them to tell a plausible story of recovery.

However, it's worth pointing out several inconvenient truths. First, the next set of growth figures will be artificially inflated by the bounce back from the extra bank holiday in the previous quarter (which reduced growth by an estimated 0.5 per cent) and by the inclusion of the Olympic ticket sales (which are expected to add around 0.2 per cent to GDP). So, if the ONS announces that the economy grew by 0.8 per cent in the third quarter, the underlying rate of growth will be just 0.1 per cent.

Worse, many expect the economy to contract in the fourth quarter (what our economics editor David Blanchflower has termed a "triple-dip recession"). Bank of England MPC member Martin Weale has warned: "The Jubilee depressed output in the second quarter so you get an automatic bounce back. But if we talk about underlying growth then I think the economy is flat. I certainly would not say there is no risk of [a triple-dip recession] happening." Martin Beck, UK economist at Capital Economics, told the Today programme last week: "we expect the economy to start contracting again in the fourth quarter."

On employment, the picture is similarly mixed. As I noted when the most recent figures were published on Wednesday, 59 per cent of the 212,000 jobs created in the last quarter are part-time and nearly half (101,000) are in London, suggesting that the labour market benefited from a temporary Olympics effect. Adequately paid, full-time employment is still remarkably hard to come by. Of the new jobs created over the last three months, one in three offer fewer than 15 hours week a work, while 54 per cent offer fewer than 30 hours. A near-record 1.4 million people are working part-time because they can't find full-time jobs. It's also worth noting that most forecasters expect unemployment to rise significantly next year as further spending cuts, a lack of growth and rising productivity restrict job creation. The CBI, for instance, predicts that unemployment will increase by nearly 200,000 to 2.7m.

Finally, the deficit. While September's figures were better-than-expected, borrowing so far this year remains £2.7bn (4.2 per cent) higher than in the same period last year and George Osborne is still expected to miss his annual target by £5-10bn. The Chancellor aims to borrow no more than £121bn this year, but in the first six months of 2012 he's borrowed £65.1bn. As a result, when he delivers his autumn statement on 5 December, Osborne will likely be forced to postpone his goal of eliminating the structural deficit (originally scheduled for 2015) for a third year - to 2018. Having once hoped to offer significant cuts in taxation at the next election, the Tories will only be able to promise yet more austerity.

Chancellor George Osborne speaks at the Conservative conference in Manchester earlier this month. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Anti-semitism and the left: something is rotten in the state of Labour

Labour held three separate inquiries into anti-Semitism within its ranks during the first part of 2016. A new book by Dave Rich investigates how we got to this point.

The relationship between the left and the Jews has always been a complex one – ostensibly harmonious but with an underlying unease. For decades, the left’s ideological stance against racism and intolerance made it – in Britain, at least – a natural home for Jews. Its largest party, Labour, could rely on a majority share of Britain’s Jewish vote. Yet the 19th-century German socialist August Bebel, who described anti-Semitism as “the socialism of fools”, understood that, like a tumour, it has always existed in the left-wing body politic.

It is this duality that Dave Rich seeks to explore in his impressive and important book. How, he asks, did we get to the situation in which Labour, the party whose founding principles include opposing bigotry, felt the need to hold three separate inquiries into anti-Semitism within its ranks during the first part of 2016?

For so long, the dichotomy was simple, consisting of a clash of two notions of the Jew: an oppressed figure deserving of the left’s solidarity and the perennial embodiment of socialism’s great enemy, capitalism. In the words of (the Jewish) Karl Marx:


What is the worldly religion of the Jew? Huckstering. What is his worldly God? Money . . . Money is the jealous god of Israel, in face of which no other god may exist. Money degrades all the gods of man – and turns them into commodities . . . The bill of exchange is the real god of the Jew.


Whether or not Marx meant the words ironically (as many academics contend), he articulated the most prominent leftist critique of Jews of his time. However, as Britain’s former chief rabbi Jonathan Sacks has argued, anti-Semitism, like any virus, must mutate to survive. Now the most significant word in the quotation above – which Marx uses figuratively – is not “money”, as he would have seen it, but “Israel”.

As Rich notes, the link between British Jews and Israel is almost inviolable. While support for Israeli policies is mixed (there is much opposition to the settlements), he records that 82 per cent of British Jews say that the country plays a central role in their identity, while 90 per cent see it as the ancestral home of the Jewish people. Set against this is his (correct) observation that: “Sympathy for the Palestinian cause and opposition to Israel have become the default position for many on the left – a defining marker of what it means to be progressive.” He argues that once you discover what someone on the left thinks about Israel and Zionism, you can usually guess his or her views on terrorism, Islamist extremism, military intervention and British-American relations.

When Stalin’s show trials and bloodlust finally discredited communism, many on the left, bereft of an ideology, fell into a dull, almost perfunctory anti-Americanism, dressed up as “anti-imperialism”. Intellectually flaccid but emotionally charged, this strand of thought became – to those on the hard left who had for so long been confined to the margins – all-encompassing. The dictum “My enemy’s enemy is my friend”, in effect, was adopted as its slogan. Any Middle Eastern or South American dictatorship that “stands up” to the US ipso facto is an ally, as is any Islamist hate preacher who does so. Israel, viewed as a US-backed colonial outpost, became the physical manifestation of all that was wrong with the world.

With Jeremy Corbyn’s election as Labour leader last year, this particular leftist world-view entered the heart of the party. In 2008, Corbyn wrote of the Balfour Declaration – the UK government’s promise to British Jews of a homeland in Palestine – that it had “led to the establishment of the state of Israel in 1948 and the expulsion of Palestinians . . . Britain’s history of colonial interference . . . leaves it with much to answer for.” The description of Israel as a colonialist enterprise, rather than a movement for sovereignty through national independence, and the culpability of an “imperial” Britain, encapsulate the twin impulses that drive Corbyn’s beliefs about foreign affairs.

The problem, Rich argues, is that it is just a short step from these beliefs to the ideas that Israel should not exist and that its Western supporters, who include most Jews, are racists. Combined with a resurgence of social media-charged conspiracies about Zionist wealth and power, the left has formed an anti-racist politics that is blind to anti-Semitism. Jews are privileged; they are wealthy; they cannot be victims.

Thus, “Zionist” has become not a term to describe a political position but an insult; thus, Jews, unless they denounce Israel (their “original sin”), are excluded from the left that now dominates the Labour Party. When such ideas become normalised, anything is possible. Jackie Walker, the recently suspended vice-chairwoman of the Corbyn-supporting group Momentum, can claim with sincerity that “many Jews” were the “chief financiers” of the slave trade, a modern myth and piece of bigotry popularised by the Nation of Islam’s Louis Farrakhan – a notorious anti-Semite – in a 1991 book.

By the middle of this year, as many as 20 Labour Party members had been suspended or expelled for alleged anti-Semitism. At times, Rich appears bewildered. Though he never articulates it, the question “What has happened to my party?” echoes through these pages. Is it a case of just a few bad ­apples, or is the whole barrelful rotten? The answer, Rich concludes convincingly, in this powerful work that should be read by everyone on the left, is sadly the latter. 

The Left’s Jewish Problem by Dave Rich is published by Biteback, 292pp, £12.99

This article first appeared in the 20 October 2016 issue of the New Statesman, Brothers in blood