David Blanchflower: The facts aren't going the Coalition's way, so it has resorted to spin

Economic Outlook: Misleadingly, Danny Alexander suggests the government has created 634,000 jobs

As I had long predicted, the UK has fallen into a double-dip recession. The preliminary estimate for GDP growth for the first quarter of 2012 came in negative, at an appalling -0.2 per cent. Given that there was negative growth in the fourth quarter of 2011 of -0.3 per cent, this means that the UK had fulfilled the technical definition of a double-dip recession which occurs when there are two successive quarters of negative growth.

Click here to see the 'World economics: UK lags behind' graphic

And this is not just a technical recession given that three of the last four quarters and four of the last six have actually been negative. In contrast, over the preceding five quarters the economy grew 3.1 per cent under Alistair Darling and Gordon Brown. Disastrously, Slasher Osborne reversed policies that were working and replaced them with the new ones of slash and burn that were always doomed to failure, and fail they have.

The table presents GDP cumulative growth across forty countries in the five quarters between Q4 2010 and Q4 2011. The UK over this period under Osborne had no growth at all, ranking it 35th out of 41. Strikingly, under Osborne the UK grew less than Spain. The UK is the first country to produce an estimate for 2012 and the -0.2 per cent will inevitably lower our rankings further. So much for being "out of the danger zone".

It is not as if the out-of-touch posh boys weren't warned at the outset that they were taking an unnecessary and reckless gamble with ordinary people's lives. On 24 June 2010 just after Osborne announced his big austerity budget I wrote that "I am now convinced that as a result of this reckless Budget the UK will suffer a double-dip recession". Slasher sneered and snipped that he knew best, but sadly for the rest of us he did not.

Fiscal retrenchment through deep public spending cuts to reduce the deficit has not boosted private sector investment; quite the opposite. Ed Balls of course is vindicated in a big way. Recall his Bloomberg speech in August 2010 when he said "the danger of too rapid deficit reduction is that it proves counter-productive: tipping us back into recession, unemployment rising and the deficit and debt getting worse into the medium term".

This has now happened. My biggest concern right now is that there is little sign of growth anywhere; more of the same won't cut it. The majority of the cuts are still to be implemented, firms show little sign of hiring or investing and the strengthening of the pound hasn't helped. Falling real wages, rising job insecurity and weakening finances have helped to scare the consumer away.

As the Bank of England's Trends in Lending Survey made clear last week, net lending to UK businesses continues to fall, so it really is hard to see where any growth comes from given that the majority of cuts are yet to be implemented.

The Prime Minister cannot be allowed to continue to claim, as he did at PMQs last week, that it was Labour's fault for "getting us into this mess" as the economy was growing when his lot took over. In any case he backed all Labour's spending up to 2008 and wanted more not less deregulation. Cameron's assertion that borrowing more isn't the answer is disingenuous in the extreme given that is what the coalition is having due to the lack of growth; borrowing is up. Incompetence seems to reign supreme at both ends of Downing Street.

Once again there were claims that the numbers couldn't possibly be right and will all be revised upwards as the business surveys, especially the PMIs, have been strong. Well not all the surveys are bullish, especially the most recent from the Bank of England's agents. Plus the PMIs exclude retail and energy sectors, which have been weak.

The likelihood these numbers will be substantially revised upwards is actually slim given that the average revision over the last 20 years has been +0.1 per cent and -0.1 per cent since the start of the recession. It is more plausible that revisions will be down as they were in 2008 as the economy entered recession the first time.

The revisions by quarters in 2008 were as follows with the preliminary estimate first followed by the latest: Q1=0.4 per cent to 0 per cent; Q2=0.2per cent to -1.3 per cent; Q3= -0.5 per cent to -2.0 per cent; Q4= -1.5 per cent to -2.3 per cent.

Another approach is to play fast and loose with the truth. In a speech at the Institute for Fiscal Studies on 23 April the Chief Secretary to the Treasury Danny Alexander argued that "fiscal discipline is the vital precondition of growth....It is that credibility that is the essential precondition for private sector investment, growth and job creation – 226,000 new private sector jobs in the last year, 634,000 since we came into Government." Sadly this hapless coalition's fiscal discipline has turned out to be a "vital condition" for destroying growth.

Misleadingly, Alexander suggests that the coalition has created 634,000 private sector jobs. But it has not, as a significant chunk of these jobs were actually created before the coalition took office. Data on the number of private sector jobs are reported quarterly by the ONS for March, June, September and December. Between March 2010 and December 2011, the latest data currently available, 634,000 jobs were created, but if we start in June 2010, that number halves to 320,000. Alexander is trying to take credit for jobs that were created under Labour.

It is true that 226,000 private sector jobs were created over the last year but 270,000 public sector jobs were destroyed, so the number of jobs fell. Unsurprisingly, Alexander, the ex-Head of Communications for the Cairngorms National Park Authority, failed to mention that since May 2010 unemployment is up 185,000. If the facts aren't going your way, spin. Plan A has failed. It's time for a new team at the Treasury.

David Blanchflower is professor of economics at Dartmouth College, New Hampshire, and a former member of the Bank of England's Monetary Policy Committee

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Joe Cocker performing on the Stravinski hall stage during the Montreux Jazz Festival, in Montreux, Switzerland in 2002
musicHe 'turned my song into an anthem', says former Beatle
News
Clarke Carlisle
sport
Sport
footballStoke City vs Chelsea match report
Arts and Entertainment
theatreThe US stars who've taken to UK panto, from Hasselhoff to Hall
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Life and Style
Approaching sale shopping in a smart way means that you’ll get the most out of your money
life + styleSales shopping tips and tricks from the experts
News
newsIt was due to be auctioned off for charity
News
Coca-Cola has become one of the largest companies in the world to push staff towards switching off their voicemails, in a move intended to streamline operations and boost productivity
peopleCoca-Cola staff urged to switch it off to boost productivity
Environment
Sir David Attenborough
environment... as well as a plant and a spider
Voices
'That's the legal bit done. Now on to the ceremony!'
voicesThe fight for marriage equality isn't over yet, says Siobhan Fenton
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

SThree: Trainee Recruitment Consultant - LONDON

£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

SThree: Graduate Recruitment Consultant

£20000 - £25000 per annum + OTE £35000: SThree: SThree are a global FTSE 250 b...

Day In a Page

Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there
The 12 ways of Christmas: Spare a thought for those who will be working to keep others safe during the festive season

The 12 ways of Christmas

We speak to a dozen people who will be working to keep others safe, happy and healthy over the holidays
Birdwatching men have a lot in common with their feathered friends, new study shows

The male exhibits strange behaviour

A new study shows that birdwatching men have a lot in common with their feathered friends...
Diaries of Evelyn Waugh, Virginia Woolf and Noël Coward reveal how they coped with the December blues

Famous diaries: Christmas week in history

Noël Coward parties into the night, Alan Clark bemoans the cost of servants, Evelyn Waugh ponders his drinking…
From noble to narky, the fall of the open letter

From noble to narky, the fall of the open letter

The great tradition of St Paul and Zola reached its nadir with a hungry worker's rant to Russell Brand, says DJ Taylor
A Christmas ghost story by Alison Moore: A prodigal daughter has a breakthrough

A Christmas ghost story by Alison Moore

The story was published earlier this month in 'Poor Souls' Light: Seven Curious Tales'