Osborne won the battle on austerity, now Labour must look to the future

Rather than re-running the arguments of 2010, the party must start and sustain a debate about what a good, healthy economy looks like.

Earlier this week, George 'Slasher' Osborne gave a speech from a not-so-carefully chosen building site at One Commercial Street, London, E1, in the centre of the City, where he claimed that the economy was 'turning the corner'. Presumably he couldn’t find a suitable site to give the speech from in Newcastle, Birmingham or Liverpool; maybe he was afraid to venture north?  His choice of venue speaks volumes giving the growing disparities between north and south.  

Over the last few months, there have been several positive indicators, including the recent Purchasing Manager Indices (PMIs) as well as data on consumer confidence, retail sales, production and exports.  The recent poor export data suggests that there is still a long way to go before any recovery hits 'escape velocity'. There remain risks to the downside, including from the eurozone, but also from the consumer, who is currently dis-saving, and investment seems unlikely to take off. The rise in bond yields to over 3% also represents a major risk to recovery and may, in the end, force the MPC to engage in further quantitative easing.  It amounts to what the committee called an "unwarranted" monetary tightening.  If, as Osborne claimed, falling bond yields reflected the success of his policies then rising yields should reflect badly; he can’t have it both ways. Moreover, the deficit reduction plan has stalled for the last two years and there is little prospect of it improving.

We need to put all of this in context. Osborne has been responsible for the slowest recovery for more than a century. GDP per capita is now around 7% below its starting level. Four of the last 11 quarters have seen negative growth and we have had two quarters in a row of growth - 0.3% in Q1 2013 and 0.7% in Q2. The chart below illustrates that, 66 months in, the UK economy is still approximately 3% below its 2007 peak. This compares with the recessions of the 1920s and 1930s when at a similar point GDP was just under 7% higher. GDP after the shallow recession of the 1990s was 10% higher. In the period 2009 Q4 - 2010 Q3, output under the Labour government’s policies rose by 2.4%. I start from Q4 2010 on the basis that it took some time for the coalition's policies to take effect. The OBR even had to upgrade its estimate of how strong growth was. In the 11 quarters since then, 2010 Q4 - 2013 Q2, the economy has grown by a total of 1.8%, of which 0.7% occurred in 2012 Q3 because of Labour’s investment in the Olympics. 

The UK is still 2.9% below its 2008 starting level, whereas all of the other major countries, with the exception of the Netherlands and Italy, are above it. The UK has grown 1.8% since 2010 but this is markedly slower than the United States, Canada, Australia and Germany. So under Osborne, the UK has performed worse than France, which does not have its own currency and is unable to engage in quantitative easing. The UK has done worse than the EU, the euro area and the OECD.

Slasher went on to claim that the recent sharp pick-up in the PMIs and some better housing data meant he had been vindicated. He argued that what he called the "fiscalist" story - that spending cuts and tax rises have had a large impact on output - was wrong. Sadly for him, on the same day he claimed this the prestigious National Bureau of Economic Research published a major study of the impact of Osborne himself on the economy, and the news wasn’t good.

In this important new paper, Òscar Jordà of the Federal Reserve Bank of San Francisco and Alan Taylor of the University of California Davis, argued that the adverse impacts of austerity have been underestimated. They examined Osborne’s post-2010 austerity to determine the share of responsibility that should be borne by the decision to instigate austerity in a slump. The answer, they concluded, is "about three fifths...By 2013...the cumulative effects of these choices amounted to about 3.0% of GDP…Our model also suggests that additional drag from the 2010–12 policies will also continue to be felt into 2014–16, even not allowing for any further austerity." They also argue that, in all likelihood, this may well be an underestimate of the true effect. They concluded that "the vast majority of the difference between the actual UK recovery and what the OBR forecast can be attributed to the Coalition’s austerity policy choices in 2010–13."

The chief political problem for Labour remains the effectiveness of the Tory contamination of the idea of debt; that 'the money ran out' and that it was spent by Labour, and that the boom was a party fuelled by debt. It follows that austerity is a necessary antidote to excess. By extension, say the Tories, the solution to a problem caused by debt cannot possibly be more debt. The challenge for Ed Miliband and Ed Balls, then, is not just that people don't trust them on the economy, it is that they have lost control of what it means to be economically competent. They can talk all they like about living standards, under-employment and wage stagnation. But it sounds as if they are talking about social symptoms, not the essential judgments that underpin sound economic management.

Labour failed to pin the post-2010 stagnation on Osborne - that period is seen by too many people as a continuation of suffering made inevitable by the 2008 crash - and now the two Eds are facing an election campaign where something they see as self-evident - who is really responsible for the past three years of suffering - is too easily portrayed as self-serving partisanship and denial.

Ed Balls is now in a very difficult position. It is bad enough in politics to say 'I told you so' when, deep down, everyone knows you called it right. It is much worse to say it when there is a concerted campaign to say that, actually, you were wrong all along.

The task, then, is to start and sustain a debate about what a good, healthy economy looks like. What kind of jobs? What kind of society does the economy support? Who benefits? Only the south east? What about the workers? That allows Labour to capitalise on the plausible perception that the Tories have just about scraped together enough expansion to keep them and their friends in clover while, as usual, the rest of us fall behind.

Labour has to come up with a coherent plan that appeals to the median voter. Focusing on unfairness and the fact that the coalition has presided over declining living standards is a good idea. But being Osborne-lite won’t work. So many people are hurting and need some hope. Coming up with credible plans to raise real wages, create jobs and reduce youth unemployment looks like the way forward. 

George Osborne astonishingly claimed in his speech "our economic plan is the only sustainable way to raise living standards." This is Labour’s chance to show that simply isn’t the case. There is a lot of work to do.

Ed Miliband and Ed Balls at the Labour conference in Manchester last year. Photograph: Getty Images.

David Blanchflower is economics editor of the New Statesman and professor of economics at Dartmouth College, New Hampshire

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Harmful gender stereotypes in ads have real impact – so we're challenging them

The ASA must make sure future generations don't recoil at our commercials.

July’s been quite the month for gender in the news. From Jodie Whittaker’s casting in Doctor Who, to trains “so simple even women can drive them”, to how much the Beeb pays its female talent, gender issues have dominated. 

You might think it was an appropriate time for the Advertising Standards Authority (ASA) to launch our own contribution to the debate, Depictions, Perceptions and Harm: a report on gender stereotypes in advertising, the result of more than a year’s careful scrutiny of the evidence base.

Our report makes the case that, while most ads (and the businesses behind them) are getting it right when it comes to avoiding damaging gender stereotypes, the evidence suggests that some could do with reigning it in a little. Specifically, it argues that some ads can contribute to real world harms in the way they portray gender roles and characteristics.

We’re not talking here about ads that show a woman doing the cleaning or a man the DIY. It would be most odd if advertisers couldn’t depict a woman doing the family shop or a man mowing the lawn. Ads cannot be divorced from reality.

What we’re talking about is ads that go significantly further by, for example, suggesting through their content and context that it’s a mum’s sole duty to tidy up after her family, who’ve just trashed the house. Or that an activity or career is inappropriate for a girl because it’s the preserve of men. Or that boys are not “proper” boys if they’re not strong and stoical. Or that men are hopeless at simple parental or household tasks because they’re, well...men.

Advertising is only a small contributor to gender stereotyping, but a contributor it is. And there’s ever greater recognition of the harms that can result from gender stereotyping. Put simply, gender stereotypes can lead us to have a narrower sense of ourselves – how we can behave, who we can be, the opportunities we can take, the decisions we can make. And they can lead other people to have a narrower sense of us too. 

That can affect individuals, whatever their gender. It can affect the economy: we have a shortage of engineers in this country, in part, says the UK’s National Academy of Engineering, because many women don’t see it as a career for them. And it can affect our society as a whole.

Many businesses get this already. A few weeks ago, UN Women and Unilever announced the global launch of Unstereotype Alliance, with some of the world’s biggest companies, including Proctor & Gamble, Mars, Diageo, Facebook and Google signing up. Advertising agencies like JWT and UM have very recently published their own research, further shining the spotlight on gender stereotyping in advertising. 

At the ASA, we see our UK work as a complement to an increasingly global response to the issue. And we’re doing it with broad support from the UK advertising industry: the Committees of Advertising Practice (CAP) – the industry bodies which author the UK Advertising Codes that we administer – have been very closely involved in our work and will now flesh out the standards we need to help advertisers stay on the right side of the line.

Needless to say, our report has attracted a fair amount of comment. And commentators have made some interesting and important arguments. Take my “ads cannot be divorced from reality” point above. Clearly we – the UK advertising regulator - must take into account the way things are, but what should we do if, for example, an ad is reflecting a part of society as it is now, but that part is not fair and equal? 

The ad might simply be mirroring the way things are, but at a time when many people in our society, including through public policy and equality laws, are trying to mould it into something different. If we reign in the more extreme examples, are we being social engineers? Or are we simply taking a small step in redressing the imbalance in a society where the drip, drip, drip of gender stereotyping over many years has, itself, been social engineering. And social engineering which, ironically, has left us with too few engineers.

Read more: Why new rules on gender stereotyping in ads benefit men, too

The report gave news outlets a chance to run plenty of well-known ads from yesteryear. Fairy Liquid, Shake 'n' Vac and some real “even a woman can open it”-type horrors from decades ago. For some, that was an opportunity to make the point that ads really were sexist back then, but everything’s fine on the gender stereotyping front today. That argument shows a real lack of imagination. 

History has not stopped. If we’re looking back at ads of 50 years ago and marvelling at how we thought they were OK back then, despite knowing they were products of their time, won’t our children and grandchildren be doing exactly the same thing in 50 years’ time? What “norms” now will seem antiquated and unpleasant in the future? We think the evidence points to some portrayals of gender roles and characteristics being precisely such norms, excused by some today on the basis that that’s just the way it is.

Our report signals that change is coming. CAP will now work on the standards so we can pin down the rules and official guidance. We don’t want to catch advertisers out, so we and CAP will work hard to provide as much advice and training as we can, so they can get their ads right in the first place. And from next year, we at the ASA will make sure those standards are followed, taking care that our regulation is balanced and wholly respectful of the public’s desire to continue to see creative ads that are relevant, entertaining and informative. 

You won’t see a sea-change in the ads that appear, but we hope to smooth some of the rougher edges. This is a small but important step in making sure modern society is better represented in ads.

Guy Parker is CEO of the ASA