George Osborne leaves10 Downing Street on October 7, 2013. Photograph: Getty Images.
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Osborne is rewriting history on austerity

The Chancellor's criticis never said that there would be no recovery, only that it would be painfully slow. And they were right.

George Osborne is in Washington today to deliver what has been billed in advance as his "I told you so" speech. With the IMF forecasting that Britain will grow faster than any other G7 country this year, the Chancellor has decided to round on his critics. In a preview of his AEI speech in the Wall Street Journal, he writes: "pessimistic predictions that fiscal consolidation was incompatible with economic recovery have turned out to be comprehensively wrong."

To the extent that growth last year was stronger than expected, Osborne can claim some vindication (almost alone, his chief economic adviser Rupert Harrison predicted that the economy would be "going gangbusters"). But in claiming that his critics have been proved "comprehensively wrong" (who could he possibly have in mind?), he is engaging in a crude rewrite of history. Contrary to the Chancellor, his Keynesian opponents never said that there would be no recovery, only that it would be painfully slow. 

And they were right. More than five years after the financial crisis, GDP is still 1.4 per cent below its pre-recession peak. The US, by contrast, is more than 5 per cent above. To this, the Conservative riposte is that the UK suffered a bigger crash than any other major country, with output falling by 7.2 per cent from peak to trough. But as Larry Summers noted during his recent face-off with Osborne at the World Economic Forum, "The deeper the valley you are in, the more rapidly you are able to grow." 

The tardiness of the recovery cannot be blamed on the Chanceller alone. The eurozone crisis, the rise in global commodity prices and the fragility of the banking sector have all constrained growth. But it is precisely for these reasons that wise minds counselled him against austerity. As Ed Balls warned in his Bloomberg speech in 2010, Osborne was "ripping out the foundations of the house just as the hurricane is about to hit". Hippocrates’s injunction to "first, do no harm" should have been his watchword. Instead, with the private sector already contracting, he chose to tighten the squeeze. VAT was raised to 20% and infrastructure spending was slashed by 42% (an act even coalition ministers now concede was reckless). 

We are still paying the price today. The double-dip may have been revised away (growth was 0% in Q1 2012 rather than -0.1%; only an economic illiterate would celebrate that) but the austerians didn't only promise that Britain would avoid another recession, they promised, in the words of Osborne's first Budget, "a steady and sustained economic recovery". What we got was the slowest recovery for more than 100 years. To meet the OBR's original 2010 forecasts, the economy would need to expand by 1.6 per cent each quarter between now and the election. That there is now growth is in spite of austerity, not because of it. Despite his unflinching rhetoric, the Chancellor has adopted his own "plan B" in the form of Help To Buy (the largest-ever state intervention in the mortgage market), higher capital spending and deferred deficit targets. 

Even judging by the flawed metrics he adopted in 2010, Osborne has failed. Britain has lost its AAA credit rating and borrowing is forecast to be £48bn higher this year (£108bn) than promised in his first Budget. Having originally vowed to eliminate the structural deficit by 2014-2015, he has been forced to extend this pledge by three years to 2017-2018. 

But despite this track record, Osborne is still offering his services as a forecaster. He predicts that those who argue that "the link between living standards and economic growth has broken, will also be proved wrong" (again, who could he possibly have in mind?) The Chancellor's boast is not just that wages will finally crawl above inflation this year (after falling for the longest period since 1870) but that the proceeds of growth will be fairly shared. 

He may well be right (and let us hope he is). But the experience of the US, where the wealthiest 1 per cent have captured 95 per cent of the proceeds of post-recession growth, shows why it would be complacent to assume as much. Even after real wages start to increase, there will be no rise in living standards for the millions of public sector workers who have had their salary increases capped at 1 per cent (nearly half the rate of inflation) and for those most reliant on benefits. That Osborne knows all of this (indeed, as Chancellor, he's responsible for it) makes his sanguinity all the more puzzling. Having recovered from his "omnishambles" low, the Chancellor is setting himself up for a fall all over again. 

George Eaton is political editor of the New Statesman.

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The dog at the end of the lead may be small, but in fact what I’m walking is a hound of love

There is a new, hairy face in the Hovel.

There is a new, hairy face in the Hovel. I seem to have become a temporary co-owner of an enthusiastic Chorkie. A Chorkie, in case you’re not quite up to speed with your canine crossbreeds, is a mixture of a chihuahua and a Yorkshire Terrier, and while my friend K— busies herself elsewhere I am looking after this hound.

This falls squarely into the category of Things I Never Thought I’d Do. I’m a cat person, taking my cue from their idleness, cruelty and beauty. Dogs, with their loyalty, their enthusiasm and their barking, are all a little too much for me, even after the first drink of the day. But the dog is here, and I am in loco parentis, and it is up to me to make sure that she is looked after and entertained, and that there is no repetition of the unfortunate accident that occurred outside my housemate’s room, and which needed several tissues and a little poo baggie to make good.

As it is, the dog thinks I am the bee’s knees. To give you an idea of how beeskneesian it finds me, it is licking my feet as I write. “All right,” I feel like saying to her, “you don’t have to go that far.”

But it’s quite nice to be worshipped like this, I have decided. She has also fallen in love with the Hovel, and literally writhes with delight at the stinky cushions on the sofa. Named after Trude Fleischmann, the lesbian erotic photographer of the Twenties, Thirties and Forties, she has decided, with admirable open-mindedness, that I am the Leader of the Pack. When I take the lead, K— gets a little vexed.

“She’s walking on a loose lead, with you,” K— says. “She never does that when I’m walking her.” I don’t even know what that means, until I have a think and work it out.

“She’s also walking to heel with you,” K— adds, and once again I have to join a couple of mental dots before the mists part. It would appear that when it comes to dogs, I have a natural competence and authority, qualities I had never, not even in my most deranged flights of self-love, considered myself to possess in any measurable quantity at all.

And golly, does having a dog change the relationship the British urban flâneur has with the rest of society. The British, especially those living south of Watford, and above all those in London, do not recognise other people’s existence unless they want to buy something off them or stop them standing on the left of the sodding escalator, you idiot. This all changes when you have a dog with you. You are now fair game for any dog-fancier to come up to you and ask the most personal questions about the dog’s history and genealogy. They don’t even have to have a dog of their own; but if you do, you are obliged by law to stop and exchange dog facts.

My knowledge of dog facts is scant, extending not much further beyond them having a leg at each corner and chasing squirrels, so I leave the talking to K—, who, being a friendly sort who could probably talk dog all day long if pressed, is quite happy to do that. I look meanwhile in a kind of blank wonder at whichever brand of dog we’ve just encountered, and marvel not only at the incredible diversity of dog that abounds in the world, but at a realisation that had hitherto escaped me: almost half of London seems to have one.

And here’s the really interesting thing. When I have the leash, the city looks at me another way. And, specifically, the young women of the city. Having reached the age when one ceases to be visible to any member of the opposite sex under 30, I find, all of a sudden, that I exist again. Women of improbable beauty look at Trude, who looks far more Yorkie than chihuahua, apart from when she does that thing with the ears, and then look at me, and smile unguardedly and unironically, signalling to me that they have decided I am a Good Thing and would, were their schedules not preventing them, like to chat and get to know me and the dog a bit better.

I wonder at first if I am imagining this. I mention it to K—.

“Oh yes,” she says, “it’s a thing. My friend P-J regularly borrows her when he wants to get laid. He reckons he’s had about 12 shags thanks to her in the last six months. The problems only arise when they come back again and notice the dog isn’t there.”

I do the maths. Twelve in six months! That’s one a fortnight. An idea begins to form in my mind. I suppose you don’t have to be a rocket scientist to work out what it is. But no. I couldn’t. Could I?

Nicholas Lezard is a literary critic for the Guardian and also writes for the Independent. He writes the Down and Out in London column for the New Statesman.

This article first appeared in the 28 April 2016 issue of the New Statesman, The new fascism