Deborah Orr: What's wrong with us needing to grow a whole new economy?

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Britain's economy is shrinking at its fastest rate for 30 years. There is no alternative but to embark on state spending cuts on a scale unseen since the 1970s. The grim condition of the public finances marks Britain out as one of Europe's "sick men". Blimey. It's almost exactly three decades since Margaret Thatcher became Prime Minister, and yet it feels like none of it ever happened.

But this isn't the 1970s. Describe a 1970s childhood to those who weren't there to see it, and they are agog, disbelieving. The national anthem at 9.30pm, signalling the end of telly for the night. Petrol coupons arriving in the post. The three-day week. Putting wicks in pots of margarine, because the power cuts had cleaned the shops out of candles.

All of the above was a consequence, in one way or another, of the oil shock. If only we'd had the sense to wean ourselves off oil back then. Instead, successive 1970s governments waited for Britain's own oil to come on stream, which it finally did just as Thatcher came to power. The sun may not have been shining during her first administration. But by the end of the 1980s there was enough oil revenue and enough cash from a string of privatisations to mend the roof.

David Cameron may consider the irritating if accurate phrase, "They didn't mend the roof while the sun was shining" to be his very finest soundbite now. But he knows that the Conservatives were ousted in 1997 precisely because they insisted on leaving the electorate's roof to rust and rot and buckle, in the hope that the majority of citizens would turn to the private sector for a decent education or a prompt operation. Some free marketers continue to argue that if that course had been pursued, then everything would be just lovely now. To which you can only reply, somewhat wearily, that the strategy doesn't seem to have worked out brilliantly for the US.

The most astounding piece of nonsense to have been bandied about this week is that, due to the 50p tax rate, "politics" or even "class war" is back. Yet Cameron, for whom spending on health and education is relatively sacrosanct, has been quick to explain that while he does not much like the new rate, it is not particularly high on his tax-reform agenda, which concerns itself first with relieving the tax burden on the poorest.

That attitude, perhaps, marks the most telling return to the social democratic consensus of the 1970s of all. While reading Andy Beckett's fabulous new book, When the Lights Went Out: Britain in the Seventies, I marvelled at quite how "left wing" the architect of the "lights out" policy, Ted Heath, had actually been.

That the unions ever thought it was so important for them to "bring down" this Keynesian, Jack-Jones admiring, Thames-barrier-building Tory is the best possible explanation of why they had to be "brought down" themselves. (And it shouldn't be forgotten that Labour had tried to bring in some of the restrictions on the unions eventually driven through by Thatcher as early as 1969.) Certainly the Conservatives are not now Keynesian. But they are far closer to their old post-war consensus views than the brand of free-market Conservatism that thrived so much in the late 20th century, unchallenged by the Blairite political mainstream until it came crashing down around us.

Alistair Darling's predictions of a trampolining return to economic growth are, one survey says, believed by nine per cent of the population. Who are these credulous fools? All those factors that drove growth most – financial services, the housing market, credit card consumerism – have been savagely curtailed. It is going to take quite some time and effort for Britain to grow itself a whole new economy. This is not a recession. It is a necessary and long-term structural adjustment.

The economy has shrunk and the state must shrink in proportion, even as it has more to do. The Government – any government – has to find money to support those sectors with "strong future demand", and at the same time offer a welfare safety net to individual victims of the collapse. And it has to do that by saving elsewhere.

One perversely happy thought is that Labour has wasted much public money until now that there is much to cut without a backward glance. Foolish plans for Titan prisons have gone already. Only the Cabinet now believes that the ID card programme must continue. And while we're meditating on how Britain's boom merely postponed the reckoning it should have faced in the 1970s situation, surely we can see that Trident is a vanity project, a sop to the idea that the UK can still be "a superpower".

As for the Sats system, there's a massive cut in the education budget that will improve it at a stroke. All that loony targeting, testing and bureaucratic tick-box inspection can go across the board. Let's just send the inspectors into organisations that show the usual signs of poor management – high staff turnover, inability to fill positions, lots of staff on the sick – common-sense indicators that are presently, unbelievably, discounted.

Britain might never again see a "designer decade" or marvel that its capital is "the richest city in the world". But it can still be a fair, sound, solid, decent and ecologically sophisticated place to live. What's wrong with that as an aspiration?

Keep things civilised

Oh no. I hadn't even had time to bring myself to say or write the awful neologism Brangelina before it was out of date. I know that it's wrong and intrusive to consume and spread gossip about unhappy couples, but I'm all too human, and therefore blame Grazia's cover shouting: "Split Latest – Did Angelina CHEAT on Brad?"

The answer to the question is, in essence: well, we don't know, but the couple didn't spend Easter together and Brad's been to their house in France already, and we've been told it was to pick out the furniture and art that he wants back now that they are about to separate ... Only spread over three handsome and confident pages. Grazia has a very good record on being right about this kind of thing.

I understand that stars are stars and civilians are civilians. But isn't this news of a break-up still literally incredible? How can any couple, no matter how pampered and unused to compromise, spend a brief couple of years creating a family of six children only to end up not even talking? You'd think that the prospect of having to expose such reckless emotional incontinence to the world would alone be enough to prompt them to keep things civilised, for the sake of their many children.

You won't stop the bullies with a load of woolly words

Fourteen-year-old Tom Daley, has been taken out of school by his parents because his success as an Olympic diving champion has attracted the attention of bullies. It's shocking that this boy got picked on precisely because he is incredibly talented, instead of being respected for his achievements. One would imagine that it is pretty easy to tell children, and their parents, that they are being ignorant and destructive trolls whose behaviour is not tolerable in such a situation.

But instead there are plenty of other parents who will attest that this is not how things are done. It is not so very uncommon for parents to end up having to take their child out of schools that seem unable to persuade or discipline the perpetrators of victimisation to stop. Effectively children get punished for being bullied, and bullies end up having their behaviour more or less vindicated by those in authority.

The headmistress at the school, Eggbuckland Community College in Plymouth, says: "Meetings have been held between college staff, parents and Tom's friends in which appropriate strategies were discussed. Certain students have been sanctioned. We take the well-being of students extremely seriously and have a very clear policy for dealing swiftly and firmly with any incidents of conflict that arise. This involves working in close partnership with parents and other agencies where appropriate." Nice that there's a clear policy. Shame that it's quite patently elaborate nonsense.

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