In the age of information, it is both infinitely more amusing and maddening to see how our political class use spin and misinformation to conceal their failures and lie to those who employ them – that is, us, the voters. This morning produced a classic of the genre.
The Chancellor’s minions put out the line that there would be “no miracle cure”. That line led the BBC for four hours. It is stupid on two counts. First, it fails the test of all news stories: could the opposite ever be true? Of course not. No Chancellor would ever stand up and say he or she has a miracle cure. Second, if anyone at the Treasury or the BBC had read David Hume, they would know that miracles by definition cannot happen.
It follows that the line put out this morning was a euphemistic attempt to conceal the grim news within the Autumn Statement. Unfortunately for the Chancellor, the numbers cannot lie. Before coming to why they are bad, let’s hear the case for Osborne.
Broadly, he has three principal boasts. These cover the deficit, confidence, and jobs. First, the deficit has come down by a quarter since the May 2010 General Election. Good. Second, the government’s austerity programme has kept interest rates low which, together with our low corporation taxes and other incentives for entrepreneurs, makes Britain attractive to investors. Better. Third and related, the private sector has created over a million new jobs since the May 2010 General Election. Best of all.
Let us also, in a spirit of yuletide generosity, grant that other external factors which Osborne says were unforeseeable have made life more difficult for him than he could have anticipated. The Eurozone, our main trading partner, is a catastrophe without end. America’s fiscal cliff footsie is holding back the world’s biggest economy, mainly because of Republican intransigence. And developing economies are showing signs of overheating, with growth dampened by fear of inflation and, in India, a corrupt elite.
How, given those arguments and generous allowances for external factors, does the Chancellor’s case stack up? My answer is: very poorly.
All of those external factors were not as unforeseeable as the Chancellor and his legion of propagandists allege. Only a fool could have looked at the Eurozone two years ago and presumed anything other than interminable stagnation. As to America’s economy, it has been positively galloping along compared with ours. And though those developing economies are indeed a drag, blaming them for our own failures would be akin to England’s cricketers blaming the weather for their useless batting.
And what of Osborne’s three boasts? The best news is on jobs. Though we are behind Switzerland, Norway, Sweden, Germany, Canada, Austria, New Zealand and the Netherlands in terms of job creation, we are ahead of France, Italy, America, and of course Spain and Greece.
He said that 600,000 more jobs than expected have been created, with 1.2 million new jobs in total since 2010. Employment is at a record high, youth unemployment is coming down, and for every one job lost in the public sector, two new ones have been created in the private sector.
On the confidence issue, the evidence of investment is limited, and if you want a measure of the confidence in our economy, you need only look at the ongoing paucity of bank lending to see through the Chancellor’s claims. And on the deficit, the numbers from the Office for Budget Responsibility are painful. The Chancellor will miss his target by a hefty margin. He said today that the forecast will not be eradicated in this parliament at all; in fact, it will go on until 2017 at least. The year in which debt falls relative to GDP has been deferred by one year, to 2016-7. In plain English, that means another year of austerity.
Finally, what would do most to create jobs, boost confidence, and reduce the deficit is some economic growth. David Cameron said recently that on this front “the good news will keep on coming”. He must have regretted that remark while sat next to George Osborne today, because his comrade’s basic message was “the bad news will keep on coming”.
The quarter on quarter growth in Britain’s gross domestic product since May 2010 has been: 0.7, 0.6, -0.4, 0.5, 0.1, 0.5, -0.4, -0.3, -0.4 and 1. That is an economic atrocity, the more so since it is caused by the Coalition’s utter failure to do what is right and necessary. It is a record of incessant dismal drudgery, which makes Osborne’s pathetic and tedious claim that “we cannot turn back now”, which he repeats ad infinitum, an offence to common sense and decency.
What he calls turning back others – including, increasingly, his Coalition partners – call salvaging our economic future, and so ending by urgent action the long winter of discontent into which Coalition policy has plunged us. Alas for him, nothing Osborne said in his statement can conceal the fact that he is a failure as Chancellor. Nobody expected or voted for miracles, but we deserve better than this.
- More about:
- Euro Area
- Loans And Lending Market
- Stock And Equity Market And Stock Exchange
- The Netherlands