David Cameron at the annual Confederation of British Industry (CBI) conference on 10 November. Photo: Getty
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Leader: David Cameron has no answers to the global crisis he describes

While highlighting dangers abroad, Cameron ignores those at home, including the long decline in living standards, the lack of investment and an overheated London property market.

Even before the damage from the last economic crisis has been repaired, the danger is growing of another. After briefly showing signs of recovery in 2013, the eurozone has slumped back into stagnation. Meanwhile, Japan has entered recession again, growth in China is slowing down and geopolitical threats proliferate.

David Cameron’s warning that “red lights are flashing on the dashboard of the global economy” was justified, even if his motives were primarily political. It is in the interests of the Conservatives for voters’ attention to be concentrated on this issue, rather than immigration, on which Ukip leads, and on the NHS, on which Labour does. By alerting the electorate that the storm has not passed, Mr Cameron aims to persuade them not to take a chance on the opposition at the general election. The hope is that a vote for Labour will appear too risky and that a vote for Ukip will appear too frivolous.

But if the Prime Minister’s jeremiad was politically astute it was also disingenuous. Having blamed the 2008 crisis on Labour’s profligacy, rather than global forces, he cannot now reasonably cite the same conditions as an alibi for the coming UK slowdown. While highlighting the dangers abroad, he ignores those at home, including the long decline in living standards, the lack of public and private investment and an overheated London property market.

Mr Cameron is correct to note the harm inflicted on Britain by the parlous state of the eurozone, our largest trading partner, but refuses to add that this results not from an absence of austerity (the policy he promotes for growth) but from a dangerous excess. As Mehdi Hasan writes on page 33, Europhiles should question their faith in an EU that has done so much to choke off demand in member states and so little to support it.

In these circumstances, voters in the UK and elsewhere are easily susceptible to populists and demagogues who seek to demonise immigrants. Politicians have spent a decade complaining that we do not talk about the issue. The truth is that many voters hear about little else. By too often reinforcing the myths about immigration, rather than challenging them, the two main parties jointly ensure that Ukip is the main beneficiary. No voter who heard Labour’s panicky pledge to ban migrants from claiming out-of-work benefits for two years after their arrival and to limit tax credits for those in employment would be reminded that migrants contribute considerably more in taxes than they receive in welfare payments. An OECD report last year, for instance, found that they make a net contribution to the UK of 1.02 per cent of GDP or £16.3bn, because they are younger and more economically active than the population in general.

The truth, which almost no politician will dare utter, is that Britain will need more, rather than fewer, immigrants in the future to meet the challenge of an ageing population. The Office for Budget Responsibility forecasts that should the UK maintain net migration of roughly 140,000 a year (significantly higher than the government’s target of “tens of thousands”), debt will rise to 99 per cent of GDP by 2062-2063. But should it cut net migration to zero, debt will reach 174 per cent.

The Conservatives never miss an opportunity to boast of their “long-term economic plan” and their commitment to balanced growth. But the gap between rhetoric and reality has seldom been greater. Fixated on their ideological commitment to achieve a budget surplus by the end of the next parliament, the Tories offer none of the innovative thinking required to remake the British economy for this new insecure era. After Mr Cameron’s cynical promise of £7bn of tax cuts, even their devotion to fiscal restraint is now questionable.

Rather than managing decline, both Britain and the eurozone need an ambitious programme for growth. In the absence of economic leadership, the world is likely to remain at best trapped in what Keynes called “the long, dragging conditions of semi-slump” and at worst caught in the rapids of another global crisis. 

This article first appeared in the 20 November 2014 issue of the New Statesman, The deep roots of Isis

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PMQs review: Theresa May shows how her confidence has grown

After her Brexit speech, the PM declared of Jeremy Corbyn: "I've got a plan - he doesn't have a clue". 

The woman derided as “Theresa Maybe” believes she has neutralised that charge. Following her Brexit speech, Theresa May cut a far more confident figure at today's PMQs. Jeremy Corbyn inevitably devoted all six of his questions to Europe but failed to land a definitive blow.

He began by denouncing May for “sidelining parliament” at the very moment the UK was supposedly reclaiming sovereignty (though he yesterday praised her for guaranteeing MPs would get a vote). “It’s not so much the Iron Lady as the irony lady,” he quipped. But May, who has sometimes faltered against Corbyn, had a ready retort. The Labour leader, she noted, had denounced the government for planning to leave the single market while simultaneously seeking “access” to it. Yet “access”, she went on, was precisely what Corbyn had demanded (seemingly having confused it with full membership). "I've got a plan - he doesn't have a clue,” she declared.

When Corbyn recalled May’s economic warnings during the referendum (“Does she now disagree with herself?”), the PM was able to reply: “I said if we voted to leave the EU the sky would not fall in and look at what has happened to our economic situation since we voted to leave the EU”.

Corbyn’s subsequent question on whether May would pay for single market access was less wounding than it might have been because she has consistently refused to rule out budget contributions (though yesterday emphasised that the days of “vast” payments were over).

When the Labour leader ended by rightly hailing the contribution immigrants made to public services (“The real pressure on public services comes from a government that slashed billions”), May took full opportunity of the chance to have the last word, launching a full-frontal attack on his leadership and a defence of hers. “There is indeed a difference - when I look at the issue of Brexit or any other issues like the NHS or social care, I consider the issue, I set out my plan and I stick to it. It's called leadership, he should try it some time.”

For May, life will soon get harder. Once Article 50 is triggered, it is the EU 27, not the UK, that will take back control (the withdrawal agreement must be approved by at least 72 per cent of member states). With MPs now guaranteed a vote on the final outcome, parliament will also reassert itself. But for now, May can reflect with satisfaction on her strengthened position.

George Eaton is political editor of the New Statesman.