What are Osborne's choices now?

The Chancellor can do what’s best for the economy or retain the support of the Tory party faithful. He cannot do both.

The original game plan for the Conservative-led coalition was fairly simple: to eliminate the structural deficit it had inherited within the five-year parliament and ride the global recovery back to economic growth. With that achieved, the Tories’ reputation for economic competence would be restored, promises to end austerity could be made, and a thumping Conservative majority in 2015 would be the just reward. Unfortunately that proved to be one of many over-optimistic projections.

With the Conservatives and Liberal Democrats now trailing Labour in opinion polls, George Osborne appears to face a difficult balancing act between nurturing a pallid economic recovery, maintaining the UK’s AAA credit rating, broadening support for the coalition’s policies, and cementing the loyalty of the Tory party faithful. It seems unlikely that all of these objectives can be achieved simultaneously.

Broadly speaking, the chancellor has three options. First, he could slow the pace of fiscal consolidation over and above simply allowing the "automatic stabilisers" to work, reducing the fiscal drag on the economy. Yet, 90 per cent of those who support the government believe the pace of tightening is about right, or could even be accelerated. With the coalition's austerity programme not even halfway complete, reversing course now would be an admission of failure, a sure-fire way of losing yet more support in the run-up to the 2015 general election.

Alternatively, the Chancellor could maintain the current timetable of austerity but look to spread the pain more broadly across society. Economically, this could make sense. ASR’s UK Household Finances Survey clearly illustrates that those on lower incomes are most insecure in their jobs and are experiencing the most significant financial pressures; shifting more of the burden onto those with broader shoulders could help to free up disposable income and support consumer spending. But again, this issue polarises opinion.

Finally, the Chancellor could look to stay the course and stick with the current strategy. This is not as simple as it sounds. As the Institute for Fiscal Studies has pointed out, another £27bn of cuts will need to be specified if the Chancellor is to meet his fiscal envelope. Assuming the coalition endorses the opinions advanced in the Household Finances Survey and maintains the sacrosanctity of the NHS and education, this would leave other departments facing unprecedented cuts of 16 per cent in real-terms during the three years to 2017-18 – areas such as the police, defence and transport. Such cuts look unviable and would prove unpopular. In other words, maintaining the status quo is a false option; the Chancellor will have to either inflict further pain on some segments of society or abandon his remaining fiscal targets before the next election in 2015.

Is there a third way? A boost to public investment notionally financed through the private sector seems like a possible method of fiscal support. This would achieve the multiple aims of supporting growth in the near-term, enhancing the supply-side of the economy and keeping debt off the public sector’s balance sheet. Already, the government plans to guarantee £40bn of loans to finance infrastructure projects, with projects worth £10bn already under consideration. Similar schemes, such as privately-contracted road pricing schemes, might also be considered.

Otherwise, this leaves the British government looking like Mr Micawber, simply hoping that "something will turn up". There are two potential saviours. The government could lean on the Bank of England further, adapting its mandate to provide additional monetary support above and beyond that consistent with its inflation target. At the very least, further rounds of Quantitative Easing look likely. Alternatively, the rest of the world could come to the UK's rescue. A global recovery – particularly one that spreads to the eurozone – would provide a source of demand where currently there is none. Ironically, the UK public’s growing hostility towards the EU comes at a time when it needs Europe more than ever.

Dominic White is chief European economist and Richard Mylles is a political risk analyst at Absolute Strategy Research

Chancellor George Osborne leaves Number 11 Downing Street. Photograph: Getty Images.

Dominic White is chief European economist and Richard Mylles is a political risk analyst at Absolute Strategy Research

Photo: Getty
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In focusing on the famous few, we risk doing a disservice to all victims of child sexual abuse

There is a danger that we make it harder, not easier, for victims to come forward in future. 

Back in the 1970s when relations between journalists and police were somewhat different to today a simple ritual would be carried out around the country at various times throughout the week.

Reporters, eager for information for their regional newspaper, would take a trip to the local station and there would be met by a desk sergeant who would helpfully skim through details in the crime Incident Book.

Among the entries about petty thefts, burglaries and road accidents there would occasionally be a reference to an allegation of incest. And at this point the sergeant and journalist might well screw-up their faces, shake their heads and swiftly move on to the next log. The subject was basically taboo, seen as something ‘a bit mucky,’ not what was wanted in a family newspaper.

And that’s really the way things stayed until 1986 when ChildLine was set up by Dame Esther Rantzen in the wake of a BBC programme about child abuse. For the first time children felt able to speak out about being sexually assaulted by the very adults whose role in life was to protect them.

And for the first time the picture became clear about what incest really meant in many cases. It wasn’t simply a low level crime to be swept under the carpet in case it scratched people’s sensitivities. It frequently involved children being abused by members of their close family, repeatedly, over many years.

Slowly but surely as the years rolled on the NSPCC continued to press the message about the prevalence of child sexual abuse, while encouraging victims to come forward. During this time the corrosive effects of this most insidious crime have been painfully detailed by many of those whose lives have been derailed by it. And of course the details of the hundreds of opportunistic sexual assaults committed by Jimmy Savile have been indelibly branded onto the nation’s consciousness.

It’s been a long road - particularly for those who were raped or otherwise abused as children and are now well into their later years - to bring society around to accepting that this is not to be treated as a dark secret that we really don’t want to expose to daylight. Many of those who called our helpline during the early days of the Savile investigation had never told anyone about the traumatic events of their childhoods despite the fact they had reached retirement age.

So, having buried the taboo, we seem to be in danger of giving it the kiss of life with the way some cases of alleged abuse are now being perceived.

It’s quite right that all claims of sexual assault should be investigated, tested and, where there is a case, pursued through the judicial system. No one is above the law, whether a ‘celebrity’ or a lord.

But we seem to have lost a sense of perspective when it comes to these crimes with vast resources being allocated to a handful of cases while many thousands of reported incidents are virtually on hold.

The police should never have to apologise for investigating crimes and following leads. However, if allegations are false or cannot be substantiated they should say so. This would be a strength not a weakness.

It is, of course, difficult that in many of the high-profile cases of recent times the identities of those under investigation have not been officially released by the police but have come to light through other means. Yet we have to deal with the world as it is not as we wish it would be and once names are common knowledge the results of the investigations centring on them should be made public.

When it emerges that someone in the public eye is being investigated for non-recent child abuse it obviously stirs the interest of the media whose appetite can be insatiable. This puts pressure on the police who don’t want to repeat the mistakes of the past by allowing offenders to slip through their hands.  And so there is a danger, as has been seen in recent cases, that officers lack confidence in declaring there is a lack of evidence or the allegations are not true. 

The disproportionate weight of media attention given to say, Sir Edward Heath, as opposed to the Bradford grooming gang sentenced this week, shows there is a danger the pendulum is swinging too far the other way. This threatens the painstaking work invested in ensuring the public and our institutions recognise child abuse as a very real danger. 

Whilst high profile cases have helped the cause there is now a real risk that the all-encompassing focus on them does both victims of abuse and those advocating on their behalf a fundamental disservice.

As the public watches high -profile cases collapsing amidst a media fanfare genuine convictions made across the country week in week out go virtually unannounced. If this trend continues they may start to believe that child sexual abuse isn’t the prolific problem we know it to be.

So, while detectives peer into the mists of time, searching for long lost clues, we have to face the unpalatable possibility that offences being committed today will in turn only be investigated fully in years or decades' time because there is not the manpower to deal with them right now.

So, now the Goddard Inquiry is in full swing, taking evidence about allegations of child sex crimes involving ‘well known people’ as well as institutional abuse, how do we ensure we don’t fail today’s victims?

If they start to think their stories are going to be diminished by the continuing furore over how some senior public figures have been treated by the police they will stay silent. Therefore we have to continue to encourage them to come forward, to give them the confidence of knowing they will be listened to.

If we don’t we will find ourselves back in those incestuous days where people conspired to say and do nothing to prevent child abuse.

Peter Wanless is Chief Executive of the NSPCC.