Will this be Osborne's worst week yet?

A higher deficit and a triple-dip recession could make this week even worse for the Chancellor than the last one.

Even by recent standards, last week was not a good one for George Osborne. Unemployment was found to have increased by 70,000, the IMF's chief economist warned that he was "playing with fire" by persisting with austerity, Carman Reinhart and Kenneth Rogoff, two of the economists that the Chancellor leant heavily on to justify his economic approach, had their research on debt and growth discredited, and Fitch became the second credit rating agency to strip the UK of its AAA rating

But worse could be to come this week. Tomorrow, borrowing figures for March will be released, the final set for the 2012-13 financial year, and, for the first time since Osborne entered office, they could show that the deficit has risen in annual terms. At the Budget, the OBR forecast that borrowing would be £120.9bn in 2012-13, £100m less than in 2011-12, after the Treasury forced government departments to underspend by an extraordinary £10.9bn in the final months of this year and delayed payments to some international institutions such as the UN and the World Bank. But that £100m difference leaves the Chancellor with little room for error if tax revenues fall short or spending is higher than expected. Whether the deficit marginally rose or fell in 2012-13 is of little economic significance, but it is of immense political significance. Until now, even as growth has disappeared, the Chancellor has been able to boast that borrowing "is falling" and "will continue to fall each and every year". A higher deficit would make it far harder for him to claim that Britain is "on the right track".

Then, two days later, we will learn whether the UK has suffered its first-ever triple-dip recession when the ONS releases its estimate for GDP in Q1 of this year. Again, the Chancellor is expected to have a lucky escape, with most forecasters, in common with the OBR, predicting output of around 0.1 per cent. But that also leaves Osborne with little room for comfort if growth undershoots expectations (as it done so often has in recent history). IPPR's senior economist Tony Dolphin comments: "It is touch and go whether we triple dip, I would say 50/50. Retail sales were up a fraction in March, but manufacturing is expected to be flat and ­construction down. Services will be positive, but the question is whether it will be positive enough to offset construction." Again, whether output slightly grew or slightly shrank in the first quarter is of little economic signifinance. The broad picture is one of prolonged stagnation, with periods of growth alternating with periods of contraction. But as Osborne will know, it's the politics that matter. An unprecedented triple-dip would intensify the calls from all sides - Tory backbenchers, Vince Cable, Labour - for a change of approach, be it Keynesian stimulus or a supply-side revolution. 

There is one way that Osborne could avoid a triple-dip even if the economy is found to have shrunk in Q1: the preceding double-dip could be revised away. After previously estimating that output fell by 0.3 per cent in the final quarter of 2011, the ONS now says it fell by just 0.1 per cent. The number could be further upgraded this week. But such technicalities will count for little if the economy is reported to have shrunk again. 

Tory MPs previously suggested that they would demand the removal of Osborne if the economy failed to show signs of recovery by this time, with one telling the Daily Mail: "You wouldn’t get 80 people supporting Adam Afriyie for leader but you might get 80 or 100 people saying get rid of George." There is little prospect of Cameron acquiescing to such demands. The Prime Minister and his closest political ally continue to rise and fall together. But with the local elections just over a week away and Labour showing signs of strain, a renewed bout of Tory infighting would be unwelcome for Cameron. 

Chancellor of the Exchequer George Osborne attends a press conference at the Treasury in Whitehall on February 6, 2013. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Getty
Show Hide image

The joy of only winning once: why England should be proud of 1966

We feel the glory of that triumphant moment, 50 years ago, all the more because of all the other occasions when we have failed to win.

There’s a phrase in football that I really hate. It used to be “Thirty years of hurt”. Each time the England team crashes out of a major tournament it gets regurgitated with extra years added. Rather predictably, when England lost to Iceland in Euro 2016, it became “Fifty years of hurt”. We’ve never won the European Championship and in 17 attempts to win the World Cup we have only won once. I’m going to tell you why that’s a record to cherish.

I was seven in 1966. Our telly was broken so I had to watch the World Cup final with a neighbour. I sat squeezed on my friend Colin’s settee as his dad cheered on England with phrases like “Sock it to them Bobby”, as old fashioned now as a football rattle. When England took the lead for the second time I remember thinking, what will it feel like, when we English are actually Champions of the World. Not long after I knew. It felt good.

Wembley Stadium, 30 July 1966, was our only ever World Cup win. But let’s imagine what it would be like if, as with our rivals, we’d won it many times? Brazil have been World Champions on five occasions, Germany four, and Italy four. Most England fans would be “over the moon” if they could boast a similarly glorious record. They’re wrong. I believe it’s wonderful that we’ve only triumphed once. We all share that one single powerful memory. Sometimes in life less is definitely more.

Something extraordinary has happened. Few of us are even old enough to remember, but somehow, we all know everything that happened that day. Even if you care little about the beautiful game, I’m going to bet that you can recall as many as five iconic moments from 50 years ago. You will have clearly in your mind the BBC commentator Kenneth Wolstenholme’s famous lines, as Geoff Hurst tore down the pitch to score his hat-trick: “Some people are on the pitch. They think it’s all over. It is now”. And it was. 4 - 2 to England against West Germany. Thirty minutes earlier the Germans had equalised in the dying moments of the second half to take the game to extra time.

More drama we all share: Geoff Hurst’s second goal. Or the goal that wasn’t, as technology has since, I think, conclusively proved. The shot that crashed off the cross bar and did or didn’t cross the line. Of course, even if you weren’t alive at the time, you will know that the linesman, one Tofiq Bakhramov, from Azerbaijan (often incorrectly referred to as “Russian”) could speak not a word of English, signalled it as a goal.

Then there’s the England Captain, the oh-so-young and handsome Bobby Moore. The very embodiment of the era. You can picture him now wiping his muddy hands on his white shorts before he shakes hands with a youthful Queen Elizabeth. Later you see him lifted aloft by his team mates holding the small golden Jules Rimet trophy.

How incredible, how simply marvellous that as a nation we share such golden memories. How sad for the Brazilians and Germans. Their more numerous triumphs are dissipated through the generations. In those countries each generation will remember each victory but not with the intensity with which we English still celebrate 1966. It’s as if sex was best the first time. The first cut is the deepest.

On Colin’s dad’s TV the pictures were black and white and so were the flags. Recently I looked at the full colour Pathe newsreel of the game. It’s the red, white and blue of the Union Jack that dominates. The red cross of Saint George didn’t really come into prominence until the Nineties. The left don’t like flags much, unless they’re “deepest red”. Certainly not the Union Flag. It smacks of imperialism perhaps. In 1966 we didn’t seem to know if we were English or British. Maybe there was, and still is, something admirable and casual about not knowing who we are or what is our proper flag. 

Twelve years later I’m in Cuba at the “World Festival of Youth” – the only occasion I’ve represented my country. It was my chance to march into a stadium under my nation’s flag. Sadly, it never happened as my fellow delegates argued for hours over what, if any, flag we British should walk behind. The delegation leaders – you will have heard of them now, but they were young and unknown then – Peter Mandelson, Trevor Phillips and Charles Clarke, had to find a way out of this impasse. In the end, each delegation walked into the stadium behind their flag, except the British. Poor Mandelson stood alone for hours holding Union Jack, sweltering in the tropical sun. No other country seemed to have a problem with their flag. I guess theirs speak of revolution; ours of colonialism.

On Saturday 30 July BBC Radio 2 will commemorate the 50th anniversary of the 1966 World Cup Final, live from Wembley Arena. Such a celebration is only possible because on 16 occasions we failed to win that trophy. Let’s banish this idea of “Fifty years of hurt” once and for all and embrace the joy of only winning once.

Phil Jones edits the Jeremy Vine Show on BBC Radio 2. On Saturday 30 July the station celebrates the 50th anniversary of the 1966 World Cup Final live from Wembley Arena, telling the story of football’s most famous match, minute by minuteTickets are available from: www.wc66.org