The NS Leader: The Chancellor is making growth less likely, not more
As yesterday’s Autumn Statement confirmed that George Obsorne’s economic programme has triggered negative growth and delayed the deficit recovery until at least 2018, the New Statesman’s leader demands an end to the Chancellor's destructive regime.
The results of Mr Osborne’s strategy were both predictable and predicted. In October 2009, when he was being hailed by much of the British press as the country’s economic saviour, the New Statesman warned that “the only economic plan he seems to have is for attempting to balance the books. He does not have a plan for growth. He has a plan for a lack of growth.” But Mr Osborne caricatured his opponents as “deficit deniers” and dismissed calls for a “plan B”, led by our economics editor David Blanchflower, as Keynesian dogma. He is now paying the price for doing so.
The Chancellor offered a series of familiar explanations for his failure – the eurozone crisis, higher oil prices and the slowdown in emerging markets – but the UK remains the only G20 country apart from Italy to have suffered a double-dip recession. With its own currency, its own independent monetary policy and the ability to borrow at historically low rates, Britain could and should be doing better. Four years on from the beginning of the crisis, GDP remains 3.1 per cent below its pre-recession peak. In the US, by contrast, where the Obama administration maintained fiscal stimulus, it is 2.3 per cent above.
In light of top rate income tax cuts and a poverty inducing 1 per cent raise in benefits levels, Osborne’s pledge of a “shared austerity” rings hollow:
In addition to promising sustained growth and deficit reduction, Mr Osborne vowed that the burden of austerity would be shared, a pledge encapsulated in the mantra “we’re all in this together”. His words were honourable. There are important political, social and economic reasons for ensuring that individuals contribute according to their means. But the Chancellor has consistently failed to make sure that they do. The cut in the top rate of income tax from 50p to 45p, worth an average £107,500 to the country’s 8,000 income-millionaires, will proceed as expected next April. At the same time, benefit levels will be raised by just 1 per cent, a real-terms cut in income for the UK’s poorest citizens, many of whom are already dependent on charity. As Daniel Trilling notes (in his report from Athens, also in this week's NS), one of the few growth industries in the UK, as in Greece, is food banks. The number of people reliant on them has risen from 26,000 in 2008 to 100,000, and is expected to reach 200,000 over the next year.
Daniel Trilling: A warning from Athens
In a special investigation this week, the New Statesman’s assistant editor and author of Bloody Nasty People: The Rise of Britain’s Far Right Daniel Trilling reports from the Greek capital. Trilling interviews politicians, activists, refugees and voters, and asks how the austerity measures in Greece are leading to the rise of fascism and the far-right Golden Dawn:
For now, mainstream politicians follow the same logic as in other countries when faced with a threat from the far right: they compete on its territory. The government’s most recent move on immigration, for instance, has been to suspend all applications for Greek citizenship. Since August, a major police operation has been in progress to round up undocumented migrants and put them in detention centres. Yet such moves have only further legitimised Golden Dawn, which now positions itself as the real defender of the Greek people against austerity, taking a strong anti-bailout line and staging “Greeks-only” food distribution, blood donations and soup kitchens.
He meets a member of the right-wing party who confirms its "National Socialist" ideology:
Through an intermediary, I contact “John”, a member of Golden Dawn who would speak to me only on the condition of anonymity. Now 32 and working for a banking group in Athens, he joined the movement at 16, convinced that politicians had “betrayed” Greece over the territorial dispute with Turkey. He tells me he was attracted by the “total discipline” of the group. “There was mutual appreciation and, of course, respect towards higher-ranking members.” There were frequent meetings and talks aimed at “ideological orientation”, towards the ideas of what John describes as “National Socialism”. His main task, he says, was to spread these ideas among his friends and classmates, handing out fliers and selling copies of the party newspaper.
Because of family and work commitments, John is no longer an active member but he still votes for the party. What, I ask, would Golden Dawn do if it got into government? “We’ll do what others don’t dare . . . I think about how many times people have laughed at us [during election counts] – and now half of them feel intimidated and half consider us the only solution.”
He goes on to note that austerity has led to the rise of food banks in Britain, too:
A week after visiting the clinic in Elliniko, I go to see another project, supported once again by donations and staffed by volunteers. This time, it’s food, not medicine, to provide for those who are unable to feed themselves or their families. Staff tell me that they have been overwhelmed by donations from the local community: shoppers at the nearby supermarket drop by with anything from a few tins of tomatoes to whole carrier bags full of supplies.
However, this isn’t Greece. It’s London – just down the road from my house. Some 13 million people live below the poverty line in Britain and as austerity forces more out of work or on to part-time wages, a growing number of people are struggling to cover the basic necessities.
Since 2008, when 26,000 people used food banks, the number has soared: more than 100,000 used them between April and September this year and the Trussell Trust, which operates the largest network of food banks in the UK, estimates that 200,000 people will use them in the year to come.
Greece’s crisis may be acute but it is not unique. In Britain, its effects have so far been easier to hide, while outbreaks of dissent have been more spasmodic: the student occupations of 2010; the 2011 summer riots; last autumn’s Occupy movement. And fortunately, the far right is in decline, even though victim-blaming and xenophobia are rife in our media. None of this has to happen; but to stop it, we need each other.
ELSEWHERE IN THE MAGAZINE
George Eaton: Danielle Allen – Labour’s new heavyweight
Our Staggers editor George Eaton meets the Obama campaigner, amateur boxer and Ed Miliband’s newest policy adviser Danielle Allen. They discuss Allen’s social activism, racial segregation in the US, how she met Miliband and her big plans for turning Labour’s “one nation” into a “connected nation”.
On 27 November, while most of Westminster was preoccupied with the imminent publication of the Leveson report, a group of Labour MPs, think-tankers and academics gathered in a House of Commons committee room to listen to Allen deliver a seminar on the “connected society”. The following day, shortly after Prime Minister’s Questions, Ed Miliband met her to discuss how her ideas could aid his party’s renewal. “Your ‘one nation’ should also be a ‘connected nation’,” Allen told her audience at the Commons. But what is a “connected nation”? And why is Labour so intrigued by the concept?
...When I asked Allen for some examples of connected societies, she replied: “In the modern context we don’t really have any good examples. What we have are examples of failure, so one has to take the failures and from that point imagine the positive version.” Allen, who is mixed race, cited present-day racial segregation in the US as an “extreme” case of disconnection.
Allen believes the left’s focus on fiscal and monetary policy has obscured the role of social organisation in reducing inequality. It is easy to see why her conclusions appeal to the Labour leader. While pledging to narrow the gap between the rich and the poor, Miliband has emphasised that there will be less money available for redistributive measures such as tax credits. “A lot of progressive politics is focused on compensatory or remedial approaches. What I am thinking about is how to solve resource situations so that the outcomes are more egalitarian in the first place,” Allen said, welcoming Labour’s recent emphasis on “predistribution”.
...“It takes work,” Allen said. “I don’t think it’s going to happen spontaneously. It’s about a mixture of incentive, persuasion and regulation. It requires conscious thought about the concept.” And she maintained that it was a task only Labour could accomplish. “Building a connected society is about empowering the disempowered – and that has to be a cause of the left.”
Rafael Behr: George Osborne has strewn the government’s path with landmines
In his Politics Column on the Autumn Statement , Rafael Behr points out that the government’s dignity rests upon avoiding the smell of “burning rubber” that hung about after the U-turns of the last Budget report. He continues:
Yet the whole thing was an epitaph for buried economic promises. None of the things that the Chancellor said would happen to growth, to the deficit or to the national debt is happening as forecast. His plan was to fix the public finances and restore prosperity before an election in 2015. Now he pleads for time, like a cowboy builder, surrounded by the rubble of a bodged repair, explaining to the appalled homeowner that the job is more complicated than it looked.
The policy makers at No 10 now turn their attention to winning back the middle classes , merging their electoral agenda with Labour’s in an appeal to the “squeezed middle”:
Despite much polarised public polemicising, Labour and the Tories are converging on the same electoral terrain. Senior strategists in both parties are scouring data from a new online tool that maps public anxiety about household finances and confidence in the future. They know the election can be won with the right message for voters who feel pressed for time, strapped for cash and ripped off on all sides.
The Chancellor glosses over the fact that working people feel the brunt of his benefit cuts as much as the jobless. In so doing, he has strewn the government’s path ahead with policy landmines – nasty fiscal traps that will detonate under the voters who already suspect the Tories are not on their side. They are unlikely to be persuaded by the Chancellor’s occasional, ostentatious displays of charity for the many and confiscation from the few.
Steven Poole: Invasion of the cyber hustlers
In this week’s NS Essay, author Steven Poole lambasts the upsurge in “cybertheorists”, “cyberswamis” and “internet gurus” – prophets of the web who often hand down garbled predictions to everyday users, while giants such as Google and Apple jealously guard the secrets of web profitability:
Like every other era, the internet age has its own class of booster gurus. They are the “cybertheorists”, embedded reporters of the social network, dreaming of a perfectible electronic future and handing down oracular commandments about how the world must be remade. As did many religious rebels before them, they come to bring not peace, but a sword. Change is inevitable; we must abandon the old ways. The cybertheorists, however, are a peculiarly corporatist species of the Leninist class: they agitate for constant revolution but the main beneficiaries will be the giant technology companies before whose virtual image they prostrate themselves.
... The cyber-credo of “open” sounds so liberal and friendly that it is easy to miss its remarkable hypocrisy. The big technology companies that are the cybertheorists’ beloved exemplars of the coming world order are anything but open. Google doesn’t publish its search algorithm; Apple is notoriously secretive about its product plans; Facebook routinely changes its users’ privacy options. Apple, Google and Amazon are all frantically building proprietary “walled-garden” content utopias for profit.
In the Critics
Highlights from the critics this week include:
Sarah Churchwell on The Redgraves: a Family Epic by Michel Spoto.
Helen Lewis on Grace: a Memoir by the creative director of US Vogue, Grace Coddington
Claire Lowdon on Infrared by Nancy Huston, the novel that this week won Literary Review’s Bad Sex in Fiction award
“The Coup”, a short story by Tom Rachman
Ryan Gilbey on Seven Psychopaths, directed by Martin McDonagh
Rachel Cooke on Christmas television adverts
and much more. Read all about it in our "In the Critics" feature here.
Purchase a copy of this week's New Statesman in newsstands today, or online at: www.newstatesman.com/subscribe