Grant Shapps should give Obama his campaign line back

The Conservative chairman borrows Obama's "don't give them the keys back" line. But it's his party that crashed the car again.

It's well known that most Conservative cabinet ministers supported Barack Obama's re-election and in an interview in today's Independent, Tory chairman Grant Shapps borrows one of the US president's favourite campaign lines.

Shapps tells the paper: "We are in a global race. Britain is on the right track, don't go back. Don't give the keys to the guys who crashed the car in the first place. Do you want to go through all this pain again?"

Obama told a Democratic fundraiser in May 2010: "So after they drove the car into the ditch, made it as difficult as possible for us to pull it back, now they want the keys back.  No! You can’t drive! We don't want to have to go back into the ditch! We just got the car out! We just got the car out!" He used the analogy again at a labour day rally in Milwaukee in September of that year.

It's a good line, but unfortunately for Shapps it's not one the Conservatives have any right to use. While the US economy enjoyed a sustained recovery under Obama (with 13 consecutive quarters of growth), the UK fell into a double-dip recession (and is at risk of a triple-dip). To adapt Obama's analogy, the Tories didn't drive the car out of the ditch; they drove it back in (you could call it a double-ditch recession).

When Labour left office, the economy was recovering, with growth of 0.4 per cent in Q3 of 2009, 0.4 per cent in Q4, 0.6 per cent in Q1 of 2010 and 0.7 per cent in Q2 (see this table for the full data). Since then, it has stagnated. Over the last year, the US economy has grown by 2.3 per cent, while the UK hasn't grown at all. As a result, while the US economy is now 2.3 per cent above its pre-recession peak, the UK remains 3.1 per cent below.

If and when Shapps's party boasts a comparable record, he might be entitled to borrow Obama's line. But until then, he should gracefully return it to its original owner.

Conservative chairman Grant Shapps speaks at the party's conference in Birmingham last year. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
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Germany's political stability could be threatened by automation

The country's resistance to populism may be tested by changes to its manufacturing industry.

Germans head to the polls this Sunday 24 September. With Merkel set to win a fourth term as Chancellor, it has been dubbed a "sleepy" election – particularly compared to the Dutch and French campaigns a few months ago. Populism, while present, has not taken off to the same extent as in Germany’s neighbouring countries.

In a new Legatum Institute report co-authored with Matthew Elliott, we explore in detail why this is the case, evaluating the historical and economic circumstances as well as social, cultural and political attitudes. In short, support for both the populist Left Party (Die Linke/DL) and for the populist right Alternative for Germany (AfD) has so far been concentrated in former East Germany. At the national level, it has therefore been hard for either party to win more than around 10 per cent of the vote.

However, a longer term trend that might disrupt German politics in future election cycles is automation. With manufacturing making up a large proportion of the German economy, a significant amount of jobs are set to shift between occupational groups. According to the OECD, the portion of jobs at high risk of automation in Germany – 12 per cent – is one of the highest among countries measured.

While the elimination of some jobs and occupations does not necessarily mean net job losses – on the contrary, BCG estimates a net increase of 350,000 jobs by 2025 – it does mean upheaval, both in the job market and in the political sphere.

On the job market front, Germany has a shrinking pool of skilled labour. The Association of German Chambers of Commerce and Industry (DIHK) consider this poses the biggest risk to their businesses. The government is acutely aware of the issue – its August 2017 progress report projects 700,000 fewer skilled workers in 2030 than in 2014. Moreover, with an ageing population, the demographics are currently not in Germany’s favour.

Resolving this issue will require big and difficult political changes. On the one hand, it means that more immigration, particularly of young skilled workers, will likely be necessary. Given the backlash to Merkel’s "welcome" policy at the height of the refugee crisis, an anti-immigration sentiment was stirred which was dormant before.

On the other hand, while new jobs will be available, this does not necessarily mean that from one day to another that those working, for example, in manufacturing, will be keen to move into the service industry or another occupation altogether. Nor does it mean they will want to, or even perhaps be capable of, reskilling to carry out new digital roles.

In the UK and the US, we recently witnessed how these labour market changes were one of the big factors associated with support for the protectionist and anti-immigration rhetoric of the Leave campaign for Brexit and Donald Trump for president.

In Germany, the regions most exposed to the effects of automation are in the industrial south and west – parts of the country so far spared from the worst of populism. The potential for populist support to expand at the national level should therefore worry observers. To its credit, the current government has already been thinking about it, as evidenced in the Work 4.0 White Paper.

However, policy choices in the next few years will be crucial for mitigating the future labour market and political shockwaves of automation. If politicians choose to merkeln (do nothing) on the issue, the populist backlash might hit Germany, too.

Claudia Chwalisz is a consultant at Populus and a fellow at the Crick Centre, University of Sheffield. She is the author of The People’s Verdict: Adding Informed Citizen Voices to Public Decision-making (2017) and The Populist Signal: Why Politics and Democracy Need to Change (2015). Her guide to the German election authored with Matthew Elliott can be downloaded here