George Osborne: An increasingly lonely poster boy for austerity

As the IMF distances itself from unbalanced fiscal consolidation, Osborne is running out of allies — and time

It has always been the case that the Coalition would be judged on the effectiveness of their economic policies. The salvation of the economy from the phantom menace of "becoming Greece" has, after all, been the explicitly stated reason for this Faustian pact.

It is, therefore, particularly bad news that on Wednesday a paper from the top economists at the IMF was published suggesting what many already knew: that a path of unbalanced, overly zealous austerity has a much more disastrous effect on economic growth than originally envisaged.

Olivier Blanchard, the IMF's Economic Counsellor, and its chief research economist Daniel Leigh, have confirmed, complete with scatter diagrams, what was trailed in October's World Economic Outlook report. Specifically, that a cut of government spending results in, not, as previously thought, an equivalent loss in economic output, but triple that.

Oops! We got our multipliers radically wrong, folks. Sorry, Greece. Sorry, Europe. Sorry, World. Everyone makes mistakes, you may say.

But this was not an error of scientific judgment. It was an error of ideology, policy and presentation. The Coalition was caught in a pincer movement. The rhetoric of doom and gloom was essential to defeating any opposition to a programme of ideologically driven cuts – and making everyone who argued against it look like a debt denier. Its unfortunate, but completely foreseeable side-effect however, was to scare the private sector stiff. The slack that was being created at a phenomenal rate, was not being picked up by private enterprise.

In other words, if you want someone else to take over the wheel, it really doesn't help to be running around screaming "we're all going to die". The net result has been to terrify the private sector into reserve hoarding and balance sheet retrenchment. The blame for that lays entirely with the Coalition and any other government that chose to speak the grand guignol language of fear.

"Forecasters significantly underestimated the increase in unemployment and the decline in domestic demand associated with fiscal consolidation", Blanchard and Leigh conclude, causing one commentator to describe the paper as "a mea culpa submerged in a deep pool of calculus and regression analysis".

Increasingly, then, our Chancellor refusing to admit error and put into effect a "plan B", cuts an isolated figure. This will only encourage the dissenting voices in Opposition – whose catchphrase "too far, too fast" could have been the title of this latest IMF paper. It will also encourage dissenting voices within his own party, who have shown open resentment for the coalition deal.

And increasingly, the hollow excuses of too much rain/too much sun/not enough sun/three flakes of snow more than expected/the Royal Jubilee/the Olympics/the dog ate my homework, will start to sound like precisely that: hollow excuses.

If, as some predict, we slide into a triple dip recession, the wider public will begin to perceive that, far from "healing", the economy is choking with an occasional gasp for breath. And George Osborne will look increasingly incompetent and devoid of allies, under a PM who showed through the Mitchell affair that loyalty in not a favourite currency.

Osborne's peculiar brand of neoliberal auto-erotic asphyxiation has limits. The safe word for stopping it is "reshuffle".

Osborne in 2009. Photograph: Getty Images

Greek-born, Alex Andreou has a background in law and economics. He runs the Sturdy Beggars Theatre Company and blogs here You can find him on twitter @sturdyalex

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Remain voters must ditch party differences to gain a voice in Brexit Britain

It's time for politicians and activists to put aside their tribal loyalties.

The status quo has broken. British politics lies shattered into pieces, and even Brexiteers look stunned. We are in a new landscape. Anyone who tells you they have the measure of it is lying; but anyone reaching for old certainties is most likely to be wrong.
 
Through this fog, we can already glimpse some signposts. There will be a leadership election in the Tory Party within three months. While it is still unclear who will win, the smart money is on a champion of Brexit. The Leave camp are in the ascendancy, and have captured the hearts of most Tory members and voters.
 
The next Conservative prime minister will lack a clear mandate from voters, but will need one to successfully negotiate our exit from the EU. They will also see a golden opportunity to capture the working-class Leave vote from Labour – and to forge an even more dominant Conservative electoral coalition. UKIP too would fancy their chances of dismembering Labour in the north; their financier Arron Banks now has almost a million new registered supporters signed up through Leave.EU.
 
In this context, it seems inevitable that there will be another general election within six to twelve months. Could Labour win this election? Split, demoralised and flailing, it has barely begun to renew, and now faces a massive undertow from its heartlands. In this time of crisis, a party divided will find it difficult to prevail – no matter who leads it. And amidst all today’s talk of coups against Corbyn, it is currently tough to envisage a leader who could unite Labour to beat the Brexiteers.  
 
From opposite ends of the political spectrum, I and my Crowdpac co-founder Steve Hilton have been testing the possibilities of new politics for years. In this referendum I supported Another Europe Is Possible’s call to vote In and change Europe. But it is crystal clear that the Leave campaigns learnt many of the lessons of new politics, and are well positioned to apply them in the months and years to come. I expect them to make significant use of our platform for crowdfunding and candidate selection.

Time to build a progressive alliance

On the other side, the best or only prospect for victory in the onrushing general election could be a broad progressive alliance or national unity platform of citizens and parties from the centre to the left. Such an idea has been floated before, and usually founders on the rocks of party tribalism. But the stakes have never been this high, and the Achilles heels of the status quo parties have never been so spotlit.
 
Such an alliance could only succeed if it embraces the lessons of new politics and establishes itself on open principles. A coalition of sore losers from Westminster is unlikely to appeal. But if an open primary was held in every constituency to select the best progressive candidate, that would provide unprecedented democratic legitimacy and channel a wave of bottom-up energy into this new alliance as well as its constituent parties.
 
In England, such an alliance could gather together many of those who have campaigned together for Remain in this referendum and opposed Tory policies, from Labour to Greens and Liberal Democrats. It might even appeal to Conservative voters or politicians who are disenchanted with the Leave movement. In Scotland and Wales too, some form of engagement with the SNP or Plaid Cymru might be possible.
 
An electoral alliance built on open and democratic foundations would provide a new entry point to politics for the millions of young people who voted to stay in the EU and today feel despairing and unheard. Vitally, it could also make a fresh offer to Labour heartland voters, enabling them to elect candidates who are free to speak to their concerns on immigration as well as economic insecurity. I believe it could win a thumping majority.

A one-off renegotiation force

A central goal of this alliance would be to re-negotiate our relationship with Europe on terms which protect our economy, workers’ rights, and the interests of citizens and communities across the country. Work would be needed to forge a common agenda on economic strategy, public services and democratic reform, but that looks more achievable than ever as of today. On more divisive issues like immigration, alliance MPs could be given flexibility to decide their own position, while sticking to some vital common principles.
 
This idea has bubbled to the surface again and again today in conversations with campaigners and politicians of different parties and of none. What’s more, only a new alliance of this kind has any prospect of securing support from the new network movements which I helped to build, and which now have many more members than the parties. So this is no idle thought experiment; and it surely holds out greater hope than another rearranging of the deckchairs in the Parliamentary Labour Party.
 
The alliance would probably not last in this form beyond one parliamentary term. But during that time it could navigate us safely through these turbulent referendum seas, and lay foundations for a better country and a better politics in the coming decades. Food for thought, perhaps.
 
Paul Hilder is co-founder of Crowdpac, 38 Degrees and openDemocracy. He has played leadership roles at Change.org, Avaaz and Oxfam, and was a candidate for general secretary of Labour in 2011. 

Paul Hilder is an expert on new politics and social change. He is the Executive Director of Here Now, a movement lab working with partners around the world. He co-founded 38 Degrees and openDemocracy, helped launch Avaaz.org and served as Vice-President of Global Campaigns at Change.org. He has worked on social change in the UK and around the world, including in the political arena and with Oxfam and the Young Foundation.