George Osborne pictured during the Conservative conference in Birmingham last month. Photograph: Getty Images.
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Falling wages are still spoiling Osborne's boasts on growth

The Chancellor is still confronted by the awkward truth that for most people there is no recovery at all. 

In the current global economic climate, growth of 0.7 per cent in the third quarter, as announced by the ONS today, is more than respectable. Output is down from the 0.9 per cent recorded in the previous three months but George Osborne can still boast that "[we] lead the pack in an increasingly uncertain global economy." 

The problem for the Chancellor remains how unevenly the proceeds of this growth are being shared. When wages briefly drew level with inflation earlier this year, many claimed that what Labour called the "cost-of-living-crisis" was over. The Tories argued that wages were a "lagging indicator" and that higher output would translate into higher salaries. As Osborne remarked after the publication of last year's third quarter GDP figures, "If Britain is growing then the finances of Britain’s families will start to grow." 

Yet a year later, real wages are still falling. Inflation stands at just 1.2 per cent but pay growth is even weaker at 0.7 per cent. Even after six years of falling wages, the longest squeeze on living standards since the 1870s goes on.

When confronted with this fact earlier today by ITV News, which warned there was no "feel good factor" in the UK, Osborne replied: "I simply don't accept that", adding that growth in GDP meant "more economic security, it means more jobs, it means a brighter future". By this, the Chancellor means that those who are now in work (albeit on low pay) are better off than they were when they were unemployed. But while the near-record level of employment should be welcomed, this doesn't conform to most people's definition of a recovery. Even the GDP figures are less impressive than they might appear. Output is now 3.4 per cent above its pre-recession peak but the population has grown by 4.5 per cent over the same period. In other words, GDP per capita is still more than 1 per cent lower than before the crash. 

It's for this reason, among others, that while the Tories lead Labour by 16 points on economic management, they still trail them on living standards (as Mitt Romney did Barack Obama). By posing the "Reagan question" in May 2015 - "Are you better off or worse off than you were five years ago?" - Miliband hopes to trump the Conservatives' advantage on the deficit and growth. 

Even more worryingly for the Tories, the slowdown in GDP, which is likely to continue in the months ahead, means that wages could fall further still. The one hope for them, perhaps, as I write in my column this week, is that the darkening global economic climate will convince voters that it's too dangerous to change captain when the storm is still raging. As Labour's poll boost during the financial crisis demonstrated, turmoil can be good for governments. It's with this in mind that Osborne framed himself today as the man to shield voters from the vicissitudes of the global economy. He said: "The UK is not immune to weakness in the euro area and instability in global markets, so we face a critical moment for our economy. If we want to avoid a return to the chaos and instability of the past then we need to carry on working through our economic plan that is delivering stability and security.”

George Eaton is political editor of the New Statesman.

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The EU’s willingness to take on Google shows just how stupid Brexit is

Outside the union the UK will be in a far weaker position to stand up for its citizens.

Google’s record €2.4bn (£2.12bn) fine for breaching European competition rules is an eye-catching example of the EU taking on the Silicon Valley giants. It is also just one part of a larger battle to get to grips with the influence of US-based web firms.

From fake news to tax, the European Commission has taken the lead in investigating and, in this instance, sanctioning, the likes of Google, Facebook, Apple and Amazon for practices it believes are either anti-competitive for European business or detrimental to the lives of its citizens.

Only in May the commission fined Facebook €110m for providing misleading information about its takeover of WhatsApp. In January, it issued a warning to Facebook over its role in spreading fake news. Last summer, it ordered Apple to pay an extra €13bn in tax it claims should have been paid in Ireland (the Irish government had offered a tax break). Now Google has been hit for favouring its own price comparison services in its search results. In other words, consumers who used Google to find the best price for a product across the internet were in fact being gently nudged towards the search engine giant's own comparison website.

As European Competition Commissioner Margrethe Vestager put it:

"Google has come up with many innovative products and services that have made a difference to our lives. That's a good thing. But Google's strategy for its comparison shopping service wasn't just about attracting customers by making its product better than those of its rivals. Instead, Google abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors.

"What Google has done is illegal under EU antitrust rules. It denied other companies the chance to compete on the merits and to innovate. And most importantly, it denied European consumers a genuine choice of services and the full benefits of innovation."

The border-busting power of these mostly US-based digital companies is increasingly defining how people across Europe and the rest of the world live their lives. It is for the most part hugely beneficial for the people who use their services, but the EU understandably wants to make sure it has some control over them.

This isn't about beating up on the tech companies. They are profit-maximising entities that have their own goals and agendas, and that's perfectly fine. But it's vital to to have a democratic entity that can represent the needs of its citizens. So far the EU has proved the only organisation with both the will and strength to do so.

The US Federal Communications Commission could also do more to provide a check on their power, but has rarely shown the determination to do so. And this is unlikely to change under Donald Trump - the US Congress recently voted to block proposed FCC rules on telecoms companies selling user data.

Other countries such as China have resisted the influence of the internet giants, but primarily by simply cutting off their access and relying on home-grown alternatives it can control better.  

And so it has fallen to the EU to fight to ensure that its citizens get the benefits of the digital revolution without handing complete control over our online lives to companies based far away.

It's a battle that the UK has never seemed especially keen on, and one it will be effectively retreat from when it leaves the EU.

Of course the UK government is likely to continue ramping up rhetoric on issues such as encryption, fake news and the dissemination of extremist views.

But after Brexit, its bargaining power will be weak, especially if the priority becomes bringing in foreign investment to counteract the impact Brexit will have on our finances. Unlike Ireland, we will not be told that offering huge tax breaks broke state aid rules. But if so much economic activity relies on their presence will our MPs and own regulatory bodies decide to stand up for the privacy rights of UK citizens?

As with trade, when it comes to dealing with large transnational challenges posed by the web, it is far better to be part of a large bloc speaking as one than a lone voice.

Companies such as Google and Facebook owe much of their success and power to their ability to easily transcend borders. It is unsurprising that the only democratic institution prepared and equipped to moderate that power is also built across borders.

After Brexit, Europe will most likely continue to defend the interests of its citizens against the worst excesses of the global web firms. But outside the EU, the UK will have very little power to resist them.

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