Beyond doubt that Osborne has made a hash of economy
George Osborne has had, he might admit, a fair crack at the whip. Most chancellors don’t get too long in the job. Historically, five years in charge of the poisoned Treasury chalice is as much as flesh can bear. But a man (“with a plan”) who hopes to lead his party might want more.
That’s a pity. However they might be spun, yesterday’s economic data were woeful. They say that Mr Osborne has failed, and failed badly, to convert his boasts of “two million jobs” into real, measurable productivity. They say claims of a surging recovery are dodgy, at best. And they ask us to wonder what five years of austerity have really been about.
Such is the heart of it. There was some nasty economic medicine, they said, but it had to be swallowed. We would feel all the better for it.
A couple of weeks ago, an entire Tory re-election campaign, not to mention Mr Osborne’s career plans, rested on the claim that it, whatever “it” happened to be, was “working”. That’s not what the numbers say. A mere 0.3 per cent monthly increase in GDP, with further evidence of falling UK productivity, counts as a refutation.
It says that, if Mr Osborne has no housing bubble, he has nothing. It says Britain still depends utterly on services. And it reminds us that the advertised jobs miracle looks like a paper exercise, a statistical shuffle to conceal mass underemployment.
Mr Osborne doesn’t see things that way. Yesterday, in Cheltenham, he was in the wrong place to blame unseasonable snow. It was not open to him to claim a drop in oil prices as a benefit of his stewardship, far less of Union. He could not say that a halving of the national growth rate was all part of his cunning plan. So he talked of “finishing the job”. Inept surgeons, if you’re lucky, are less bold.
For the Tories, the claim that corners have been turned is a key piece of rhetoric. When they are not blaming Scottish voters for using their votes, “fixing Labour’s mess” has been their only offer. Hitherto, they have adored the affected impartiality of “official statistics”.
But the office that takes care of those on behalf of UK plc says – or its numbers say – that Mr Osborne is in a mess. So why should anyone believe that another dose of his patent medicine is just the ticket?
What with his new haircut and his new smile, the Chancellor has been working hard lately to tell voters how much he understands and shares their mood. He has cut your cloth for you, but says it suits you, sir or madam. While juggling – and refusing to justify – a ton of spending pledges, Mr Osborne will simultaneously carve a little more from the poorest once the dust has settled. You, his target (non-Scottish) voter will never notice. It’s all good old-fashioned Tory common sense.
But rubbish. In fact, the closest reading of the numbers from the Office for National Statistics (ONS) says that the UK could be heading back into a big crisis, having spent £1.5 trillion trying to escape the last “blip”. The numbers say trusting Mr Osborne on the prospects for a small independent northern country would be ill-advised. But looming above all is the basic challenge for the Chancellor: austerity economics. He has made matters worse, not better.
Sound theory, despite all the lessons of the 1930s? Just cover for ideologues with new hairdos to put the state back in its place? Another excuse – let’s take Lloyds Bank as an example – to find more tidbits with which to feed the City? You can take your pick. On the ONS numbers, Mr Osborne’s claims as a steward of the economy wouldn’t get him a job clearing tables after a boardroom lunch.
On that note, be of good cheer: in “hotel, restaurant and distribution”, UK plc is perky. That’s always good to know. It’s not something to be spurned, either, if things are otherwise prospering.
But somehow I doubt it’s the first item on Angela Merkel’s list when she reviews the German economy. Should you want to get Britain back to work, as Mr Osborne and David Cameron claim, a dessert does not come before the main course.
Austerity has hurt a great many people very badly. It has been as brutal as it has been simplistic. Its only political justification was the claim of the greater good. As Mr Osborne used to allege, we were all “in it together” to avert a shared crisis.
Yet what the ONS numbers say is that Britain has only avoided another visit to recession thanks to the falling oil price that, recently, gave some British patriots such weird pleasure.
Austerity doesn’t work. This used to be textbook stuff. Until apologists tried to find excuses for 2008, no one doubted the idea that trying to take demand out of an economy in crisis is either stupid or malevolent. Now we have an election in which those “big” Westminster parties offer to show us their surpluses. All the while, productivity shrinks and an economy withers again. So, chaps: more cuts all round?
This has to be stopped. Luckily, no one is voting for me, but the ONS figures say clearly enough that Mr Osborne has made quite a hash of things. Simply attempting a nicer version is not, I think, addressing the argument. Getting people to work, in real jobs paying real wages spent on goods and homes they can afford, is the key to a functioning economy.
The 2008 event is sometimes depicted as a kind of tsunami. It comes, it goes, and things get back to normal. It was my suspicion that, instead, things might have been changed permanently. It seems to me we are living through a long, generational crisis while the little political generals refight the old battles. Mr Osborne would be – wishes himself to be – a case in point.
People who talk of food banks in terms of marketing will not be the first to the scene of economic disaster. People who boast of job creation when the productivity numbers are on their desks might have yet to get the point. I say “might” only because I was well brought-up.
If you notice that austerity has proven its failure at the expense of millions of lives, fiasco is a useful word.
Putting demand into an economy is not easy. Enabling the creation of productive jobs is no mere technical exercise. If, however, you start from the assumption that these things are impossible, pointless, or dangerous in themselves, you’d best take your ball away and go home. In fact, offering yourself as the next Tory leader in waiting will not be persuasive.
The ONS, without comment, gives bad numbers. Mr Osborne has seen plenty of those. Still he says that a United Kingdom for which “fiscal responsibility” is key can only prosper with him in charge. It is, in basic meaning, not true.
Five years was a bad enough sentence for all of us. Another five would only prove that none of us can count.
‘‘ Britain has only avoided another visit to recession thanks to a falling oil price that gave British patriots such weird pleasure