Leader: The wrong kind of economic recovery

Even the most depressed economies eventually recover. The return of growth in the UK, after three years of stagnation under the coalition government, is merely a reflection of this truth. With GDP still at 2.5 per cent below its pre-recession peak, in 2007, the economy has yet to make up the lost output from the crisis. In the US, by contrast, where the Obama administration maintained fiscal stimulus by cutting taxes and increasing infrastructure spending, the economy is now 5.2 per cent larger. But after convincing much of the public that the post-2010 downturn was inevitable, George Osborne has been the beneficiary of low expectations.

According to the Chancellor’s account, the surge in growth is a vindication of his decision to pursue austerity after entering office. This claim is faithfully echoed by a media that loudly endorsed his deficit reduction programme in 2010. Not only does this narrative ignore the tardiness of the recovery – the slowest for more than 100 years – it also obscures the sources of the growth we are now experiencing. It is not austerity but its reverse that explains the upturn.

To the extraordinary monetary stimulus provided by the Bank of England, in the form of quantitative easing and record-low interest rates, have been added large-scale state interventions such as Help to Buy. After imposing damaging policies such as the VAT rise and the dramatic reduction in infrastructure spending in 2010, Mr Osborne has also eased the pace of austerity. Rather than sticking to his original deficit reduction timetable, the Chancellor allowed borrowing to rise and extended his programme from four years to seven. Even under the most optimistic scenario, the deficit is still expected to be at least £100bn this year, £40bn more than forecast by the Office for Budget Responsibility in 2010.

When he entered office in 2010, Mr Osborne pledged to rebalance the economy away from its reliance on property and debt-financed consumer spending, cynically fostered by Labour, and towards investment and exports. But growth is again being driven by the former. Exports fell by 2.4 per cent in the most recent quarter, despite the continuing weakness of the pound, while business investment remains 6.3 per cent below its 2012 level. With wage growth (0.8 per cent) still lagging behind inflation (2.2 per cent), the recovery is being built on consumer credit and rising house prices. Like Gordon Brown before him, Mr Osborne has found the attractions of debt-driven growth impossible to resist. If the economy is not to become permanently reliant on ultra-low interest rates, he must act now to promote both public and private investment. Rather than risking the creation of another property bubble through Help to Buy, he should concentrate on increasing the supply and the affordability of housing.

A programme of the kind pursued by Harold Macmillan as housing minister in the early 1950s, when 300,000 homes a year were built, would stimulate growth (for every £100 invested in housebuilding, £350 is generated in return), create employment and reduce welfare spending. As some MPs in his own party have suggested, the Chancellor should also offer incentives to firms to pay the living wage in order to reduce consumers’ reliance on borrowing to maintain their living standards.

At present, GDP is rising but living standards are not. The north-south divide in England is widening, rather than narrowing. Meanwhile, household savings are falling at their fastest rate for 40 years. The economic cycle may finally have turned but the structural conditions for a repeat of the crash remain firmly in place.

Mark Carney, Governor of the Bank of England. Photo: Getty.

This article first appeared in the 04 December 2013 issue of the New Statesman, Burnout Britain

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The Tinder dating app isn't just about sex – it's about friendship, too. And sex

The lines between sex, love and friendship are blurrier than ever, as I found out quickly while using the app.

The first time I met someone using Tinder, the free dating app that requires users to swipe left for “no” and right for “yes” before enabling new “matches” to chat, it was an unqualified success. I should probably qualify that. I was newly single after five years in a committed relationship and wasn’t looking for anything more than fun, friendship and, well, who knows. A few weeks earlier I had tried to give my number to a girl in a cinema café in Brixton. I wrote it on a postcard I’d been using as a bookmark. She said she had a boyfriend, but wanted to keep the postcard. I had no date and I lost my page.

My Tinder date was a master’s student from Valencia called Anna (her name wasn’t really Anna, of course, I’m not a sociopath). When I arrived at the appointed meeting place, she told me I was far more handsome IRL (“in real life”) than my pictures suggested. I was flattered and full of praise for the directness of continental Europeans but also thought sadly to myself: “If only the same could be said about you.”

Anna and I became friends, at least for a while. The date wasn’t a success in the traditional sense of leading us into a contract based on exclusivity, an accumulating cache of resentments and a mortgage, but it had put me back in the game (an appropriate metaphor – people speak regularly of “playing” with the app).

According to Sean Rad, the co-founder who launched Tinder in late 2012, the service was invented for people like me. “It was really a way to overcome my own problems,” he told the editor of Cosmopolitan at an event in London last month. “It was weird to me, to start a conversation [with a stranger]. Once I had an introduction I was fine, but it’s that first step. It’s difficult for a lot of people.” After just one outing, I’d learned two fundamental lessons about the world of online dating: pretty much everyone has at least one decent picture of themselves, and meeting women using a so-called hook-up app is seldom straightforwardly about sex.

Although sometimes it is. My second Tinder date took place in Vienna. I met Louisa (ditto, name) outside some notable church or other one evening while visiting on holiday (Tinder tourism being, in my view, a far more compelling way to get to know a place than a cumbersome Lonely Planet guide). We drank cocktails by the Danube and rambled across the city before making the romantic decision to stay awake all night, as she had to leave early the next day to go hiking with friends. It was just like the Richard Linklater movie Before Sunrise – something I said out loud more than a few times as the Aperol Spritzes took their toll.

When we met up in London a few months later, Louisa and I decided to skip the second part of Linklater’s beautiful triptych and fast-track our relationship straight to the third, Before Midnight, which takes place 18 years after the protagonists’ first meet in Vienna, and have begun to discover that they hate each others’ guts.

Which is one of the many hazards of the swiping life: unlike with older, web-based platforms such as Match.com or OkCupid, which require a substantial written profile, Tinder users know relatively little about their prospective mates. All that’s necessary is a Facebook account and a single photograph. University, occupation, a short bio and mutual Facebook “likes” are optional (my bio is made up entirely of emojis: the pizza slice, the dancing lady, the stack of books).

Worse still, you will see people you know on Tinder – that includes colleagues, neighbours and exes – and they will see you. Far more people swipe out of boredom or curiosity than are ever likely to want to meet up, in part because swiping is so brain-corrosively addictive.

While the company is cagey about its user data, we know that Tinder has been downloaded over 100 million times and has produced upwards of 11 billion matches – though the number of people who have made contact will be far lower. It may sound like a lot but the Tinder user-base remains stuck at around the 50 million mark: a self-selecting coterie of mainly urban, reasonably affluent, generally white men and women, mostly aged between 18 and 34.

A new generation of apps – such as Hey! Vina and Skout – is seeking to capitalise on Tinder’s reputation as a portal for sleaze, a charge Sean Rad was keen to deny at the London event. Tinder is working on a new iteration, Tinder Social, for groups of friends who want to hang out with other groups on a night out, rather than dating. This makes sense for a relatively fresh business determined to keep on growing: more people are in relationships than out of them, after all.

After two years of using Tinder, off and on, last weekend I deleted the app. I had been visiting a friend in Sweden, and took it pretty badly when a Tinder date invited me to a terrible nightclub, only to take a few looks at me and bolt without even bothering to fabricate an excuse. But on the plane back to London the next day, a strange thing happened. Before takeoff, the woman sitting beside me started crying. I assumed something bad had happened but she explained that she was terrified of flying. Almost as terrified, it turned out, as I am. We wound up holding hands through a horrific patch of mid-air turbulence, exchanged anecdotes to distract ourselves and even, when we were safely in sight of the ground, a kiss.

She’s in my phone, but as a contact on Facebook rather than an avatar on a dating app. I’ll probably never see her again but who knows. People connect in strange new ways all the time. The lines between sex, love and friendship are blurrier than ever, but you can be sure that if you look closely at the lines, you’ll almost certainly notice the pixels.

Philip Maughan is Assistant Editor at the New Statesman.

This article first appeared in the 26 May 2016 issue of the New Statesman, The Brexit odd squad