Trouble ahead for Osborne as economy is forecast to have shrunk again

Danger of a triple-dip recession as NIESR forecasts that the economy contracted by 0.3 per cent in the final quarter of 2012.

"The only function of economic forecasting is to make astrology look respectable", John Kenneth Galbraith once remarked and recent events have done nothing to prove him wrong. But the National Institute of Economic and Social Research (NIESR) has a better record than most and its latest forecast suggests that the economy shrank by 0.3 per cent in the final quarter of 2012.

"The only function of economic forecasting is to make astrology look respectable", John Kenneth Galbraith once remarked and recent events have done nothing to prove him wrong.

In the last quarter, as you'll recall, David Cameron and George Osborne boasted that we're "on the right track" after the economy grew by 1 per cent (later revised down to 0.9 per cent). But that figure was artificially inflated by the Olympic ticket sales, which added 0.2 per cent to growth, and by the bounce-back from the extra bank holiday in June, which added 0.5 per cent. To borrow Cameron's phrase, the government should never have assumed that "the good news will keep coming".

While a contraction in quarter four wouldn't represent an unprecedented "triple-dip recession" (that would require two successive quarters of negative growth), it would make it significantly harder for Osborne to claim that the economy is "healing". If the economy is shown to have shrunk in Q4, four of the last five quarters will have been negative. We'll know for sure when the Office for National Statistics publishes its first estimate of GDP on 25 January.

The longer-term outlook for the economy remains unremittingly grim. After a growth rate of 0.0 per cent in 2012, NIESR expects the economy to grow by little more than 1 per cent in 2013 and doesn't expect output to return to its pre-recession peak until 2014 at the earliest.

George Osborne said that the economy was "on the right track" after growth of 0.9 per cent in the third quarter of 2012. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Copeland must be Labour's final warning

Unison's general secretary says Jeremy Corbyn is a friend - but must also take responsibility for turning the party's prospects around. 

No one objective could argue that last night’s by-election results were good for Labour.

Whilst it was undoubtedly pleasing to see serial fibber Paul Nuttall and his Trumpian politics put in their place in Stoke, this was never a seat where the result should have been in doubt. 

But to lose Copeland – held by Labour for 83 years – to a party that has inflicted seven years of painful spending cuts on our country, and is damaging the NHS, is disastrous.

Last autumn, I said that Labour had never been farther from government in my lifetime. Five months on the party hasn’t moved an inch closer to Downing Street.

These results do not imply a party headed for victory. Copeland is indicative of a party sliding towards irrelevance. Worse still, Labour faces an irrelevance felt most keenly by those it was founded to represent.

There will be those who seek to place sole blame for this calamity at the door of Jeremy Corbyn. They would be wrong to do so. 

The problems that Labour has in working-class communities across the country did not start with Corbyn’s leadership. They have existed for decades, with successive governments failing to support them or even hear their calls for change. Now these communities are increasingly finding outlets for their understandable discontent.

During the 2015 election, I knocked on doors on a large council estate in Edmonton – similar to the one I grew up on. Most people were surprised to see us. The last time they’d seen Labour canvassers was back in 1997. Perhaps less surprisingly, the most common response was why would any of them bother voting Labour.

As a party we have forgotten our roots, and have arrogantly assumed that our core support would stay loyal because it has nowhere else to go. The party is now paying the price for that complacency. It can no longer ignore what it’s being told on the doorstep, in workplaces, at ballot boxes and in opinion polls.

Unison backed Corbyn in two successive leadership elections because our members believed – and I believe – he can offer a meaningful and positive change in our politics, challenging the austerity that has ravaged our public services. He is a friend of mine, and a friend of our union. He has our support, because his agenda is our agenda.

Yet friendship and support should never stand in the way of candour. True friends don’t let friends lose lifelong Labour seats and pretend everything is OK. Corbyn is the leader of the Labour party, so while he should not be held solely responsible for Labour’s downturn, he must now take responsibility for turning things around.

That means working with the best talents from across the party to rebuild Labour in our communities and in Parliament. That means striving for real unity – not just the absence of open dissent. That means less debate about rule changes and more action on real changes in our economy and our society.

Our public servants and public services need an end to spending cuts, a change that can only be delivered by a Labour government. 

For too many in the Labour party the aim is to win the debate and seize the perceived moral high ground – none of which appears to be winning the party public support. 

But elections aren’t won by telling people they’re ignorant, muddle-headed or naive. Those at the sharp end – in particular the millions of public service employees losing their jobs or facing repeated real-terms pay cuts – cannot afford for the party to be so aloof.

Because if you’re a homecare worker earning less than the minimum wage with no respite in sight, you need an end to austerity and a Labour government.

If you’re a nurse working in a hospital that’s constantly trying to do more with less, you need an end to austerity and a Labour government.

And if you’re a teaching assistant, social worker or local government administrator you desperately need an end to austerity, and an end to this divisive government.

That can only happen through a Labour party that’s winning elections. That has always been the position of the union movement, and the Labour party as its parliamentary wing. 

While there are many ways in which we can change society and our communities for the better, the only way to make lasting change is to win elections, and seize power for working people.

That is, and must always be, the Labour party’s cause. Let Copeland be our final warning, not the latest signpost on the road to decline.

Dave Prentis is Unison's general secretary.