George Osborne’s economic policy is based on lies

The budget is the fiscal equivalent of sticking your fingers in your ears and shouting ‘LALALALA NOT LISTENING’.

On Wednesday the Chancellor announced his plan, hailed by many as a “steady as she goes budget”. I confess some confusion as to how this might be a good thing, when according to most indicators “she” is steadily going to hell. I am also bemused by the attention this man’s policy announcements have attracted. It seems to me that intense dissemination of how these policies might work in practice, is tantamount to a spirited and detailed conversation about the quality of the stitching on the Emperor’s New Clothes.

The assumption that this Government will implement anything it says, let alone implement it successfully, flies in the face of evidence. Infrastructure projects which will not be completed during this Parliament (and some which will not even have started), Enterprize Zones which are still being set up, two years after being announced, and have delivered 5 per cent of the jobs projected, a Business Bank which is only now setting out a schedule for its creation, a Funding for Lending scheme (a replacement for the grand Loan Guarantee Scheme, scrapped after four months) which has actually seen lending drop dramatically, a Back To Work programme which is actually worse at getting people into jobs than doing nothing, a Green Investment Bank whose only action so far has been to appoint an expensive private consultant, a Right to Buy home ownership scheme which has delivered 1.5 per cent of the sales envisaged, a Big Society Bank for a Big Society which Cameron launched four times, that shows no signs of getting going and, in fact, hopes to have appointed a Chair by 2014! I could go on.

Why should anybody be interested in any big announcements this government makes? They are just that: announcements. With the economy stagnating for three years now, they are the equivalent of what I do when I am supposed to go out, but having a “fat day”; I try on every single outfit, having already decided to stay in and sob quietly, while having a large pepperoni pizza.

The only thing of interest in a budget nowadays is the actual data of how the Chancellor has performed – not his promises of how much better he is about to. In that respect, the budget was fascinating. Many commentators have assessed thoroughly and forensically the failures of this Government on growth, stagnating wages, lending, future borrowing et al – the IFS’s review does so as well as any. I am more interested in the two items claimed by the government as successes; the two planks to which this drowning Chancellor is clinging: the borrowing rate and the employment figures.

On these, I offer two short sentences from the OBR’s budget report.

On the Chancellor’s attempt to show – “by hook or by crook” according to the IFS – that we borrowed less this year compared to last, para. 4.27 explains that “the Government has taken action to ensure that central government departments spend less in 2012-13” and this includes “a number of elements”. Here is one:  “payments that were due to be made late in the current financial year (for example payments to international institutions), but which are being delayed into 2013-14.”

Read that again. Take it in. In order to keep his head above water, the Chancellor has asked Government departments to delay payments which were due this financial year until after 1 April. These payments, of course, still have to be made. Just not right now. The direct fiscal equivalent of sticking your fingers in your ears and shouting “LALALALA NOT LISTENING”. And this man, with his Delboy approach to state finance, is the person entrusted with the long-term health of the country’s economy.

On the employment rate, many have expressed doubts about the claim repeated with almost drummerlike monotony that “one million new private sector jobs have been created”. We know, for instance, that there has been an astonishing surge of hundreds of thousands of people who show as “self-employed”. We know there have been strange transfers of public service jobs directly to the private sector, as support services are privatised in every department.

The OBR hints at these irregularities in their executive summary: “The labour market continues to surprise on the upside, despite the continued weakness of GDP growth.” As a former civil servant, I would be tempted to read that as “there is something really dodgy about these figures”. Then, at para. 3.108, which talks about “people employed in government supported training and employment programmes” comes the confirmation: “Of the total increase in employment in 2012, compared to 2011, around 14 per cent reflects increased participation in those programmes.”

People on unpaid internships, training schemes, apprenticeships and workfare schemes, are counted as employed. One hundred and forty thousand of them are part of the Government’s job creation success story.

I never understood Hollywood’s obsession with the Evil Genius as the film villain of choice. It has always been clear that, given a position of power, an Clueless Idiot has infinitely more potential to cause harm. What I find astonishing is that Conservative MPs, many of whom are honourable men and women and all of whom are obsessed with fiscal responsibility, have not yet grabbed this man by his expensively tailored lapels and thrown him in the Thames.

British Finance Minister George Osborne poses for pictures outside 11 Downing Street. 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

Photo: Getty Images/AFP
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Is Yvette Cooper surging?

The bookmakers and Westminster are in a flurry. Is Yvette Cooper going to win after all? I'm not convinced. 

Is Yvette Cooper surging? The bookmakers have cut her odds, making her the second favourite after Jeremy Corbyn, and Westminster – and Labour more generally – is abuzz with chatter that it will be her, not Corbyn, who becomes leader on September 12. Are they right? A couple of thoughts:

I wouldn’t trust the bookmakers’ odds as far as I could throw them

When Jeremy Corbyn first entered the race his odds were at 100 to 1. When he secured the endorsement of Unite, Britain’s trade union, his odds were tied with Liz Kendall, who nobody – not even her closest allies – now believes will win the Labour leadership. When I first tipped the Islington North MP for the top job, his odds were still at 3 to 1.

Remember bookmakers aren’t trying to predict the future, they’re trying to turn a profit. (As are experienced betters – when Cooper’s odds were long, it was good sense to chuck some money on there, just to secure a win-win scenario. I wouldn’t be surprised if Burnham’s odds improve a bit as some people hedge for a surprise win for the shadow health secretary, too.)

I still don’t think that there is a plausible path to victory for Yvette Cooper

There is a lively debate playing out – much of it in on The Staggers – about which one of Cooper or Burnham is best-placed to stop Corbyn. Team Cooper say that their data shows that their candidate is the one to stop Corbyn. Team Burnham, unsurprisingly, say the reverse. But Team Kendall, the mayoral campaigns, and the Corbyn team also believe that it is Burnham, not Cooper, who can stop Corbyn.

They think that the shadow health secretary is a “bad bank”: full of second preferences for Corbyn. One senior Blairite, who loathes Burnham with a passion, told me that “only Andy can stop Corbyn, it’s as simple as that”.

I haven’t seen a complete breakdown of every CLP nomination – but I have seen around 40, and they support that argument. Luke Akehurst, a cheerleader for Cooper, published figures that support the “bad bank” theory as well.   Both YouGov polls show a larger pool of Corbyn second preferences among Burnham’s votes than Cooper’s.

But it doesn’t matter, because Andy Burnham can’t make the final round anyway

The “bad bank” row, while souring relations between Burnhamettes and Cooperinos even further, is interesting but academic.  Either Jeremy Corbyn will win outright or he will face Cooper in the final round. If Liz Kendall is eliminated, her second preferences will go to Cooper by an overwhelming margin.

Yes, large numbers of Kendall-supporting MPs are throwing their weight behind Burnham. But Kendall’s supporters are overwhelmingly giving their second preferences to Cooper regardless. My estimate, from both looking at CLP nominations and speaking to party members, is that around 80 to 90 per cent of Kendall’s second preferences will go to Cooper. Burnham’s gaffes – his “when it’s time” remark about Labour having a woman leader, that he appears to have a clapometer instead of a moral compass – have discredited him in him the eyes of many. While Burnham has shrunk, Cooper has grown. And for others, who can’t distinguish between Burnham and Cooper, they’d prefer to have “a crap woman rather than another crap man” in the words of one.

This holds even for Kendall backers who believe that Burnham is a bad bank. A repeated refrain from her supporters is that they simply couldn’t bring themselves to give Burnham their 2nd preference over Cooper. One senior insider, who has been telling his friends that they have to opt for Burnham over Cooper, told me that “faced with my own paper, I can’t vote for that man”.

Interventions from past leaders fall on deaf ears

A lot has happened to change the Labour party in recent years, but one often neglected aspect is this: the Labour right has lost two elections on the bounce. Yes, Ed Miliband may have rejected most of New Labour’s legacy and approach, but he was still a protégé of Gordon Brown and included figures like Rachel Reeves, Ed Balls and Jim Murphy in his shadow cabinet.  Yvette Cooper and Andy Burnham were senior figures during both defeats. And the same MPs who are now warning that Corbyn will doom the Labour Party to defeat were, just months ago, saying that Miliband was destined for Downing Street and only five years ago were saying that Gordon Brown was going to stay there.

Labour members don’t trust the press

A sizeable number of Labour party activists believe that the media is against them and will always have it in for them. They are not listening to articles about Jeremy Corbyn’s past associations or reading analyses of why Labour lost. Those big, gamechanging moments in the last month? Didn’t change anything.

100,000 people didn’t join the Labour party on deadline day to vote against Jeremy Corbyn

On the last day of registration, so many people tried to register to vote in the Labour leadership election that they broke the website. They weren’t doing so on the off-chance that the day after, Yvette Cooper would deliver the speech of her life. Yes, some of those sign-ups were duplicates, and 3,000 of them have been “purged”.  That still leaves an overwhelmingly large number of sign-ups who are going to go for Corbyn.

It doesn’t look as if anyone is turning off Corbyn

Yes, Sky News’ self-selecting poll is not representative of anything other than enthusiasm. But, equally, if Yvette Cooper is really going to beat Jeremy Corbyn, surely, surely, she wouldn’t be in third place behind Liz Kendall according to Sky’s post-debate poll. Surely she wouldn’t have been the winner according to just 6.1 per cent of viewers against Corbyn’s 80.7 per cent. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.