A Westminster discussion worth hearing would have acknowledged that Britain is recovering – then asked why that recovery is serving so few people
Two men came to the Commons chamber on Thursday to have a fight that neither of them really wanted to have. They were meant to be arguing about the economic recovery – the one that's finally turned up in Britain a few years later and rather shabbier than originally billed. Except George Osborne didn't want to trumpet an upturn, for fear of looking boastful and out of touch. And Ed Balls certainly wasn't going to talk up a rebound, lest that be taken as admission that his previous warnings about suicidal austerity were wrong.
Meanwhile, any voter who bothered to check in on proceedings in Westminster – rather than bracing for impending gales and rail hell – would have been forgiven for inquiring whether this recovery planned to spread anywhere outside a handful of estate agents in central London.
All this made the debates over the autumn statement both frustrating and fascinating. The conventional thing to say about mid-term budgetary statements, or "fiscal events" as wonks call them (yes, really) is that they chalk out the parties' battle lines for the next election.
But what politicians served up yesterdaywas a fake debate about a false recovery. One in which the typical family is still earning less than before the crash – and will continue to do so until 2018. In which London and the south-east have sped out of a slump, even while much of the rest of the country still feels like it's in recession.
A Westminster discussion worth hearing would have acknowledged that Britain is recovering – then asked why that recovery is serving so few people, and what that tells us about Britain's economy. Instead frontbenchers served up the usual stagefight, the kind of contrived display that Nigel Farage doubtless hopes we get a lot more of before next May's European elections, as they're so effective at driving voters away from the main parties.
In a day without any big winners, the shadow chancellor was the clearest loser. Standing up straight after the chancellor had just delivered his first upgrades to growth since moving into Number 11, Balls delivered the same attack lines he has been using since 2010. "Flatlining", "slowest recovery for over 100 years", "tax cut for millionaires": all were present and technically correct, just rather shopworn after three years of constant service. Responding to a budget statement is always tough for a shadow chancellor, who sees the numbers and policies at pretty much the same time as the rest of the country. And as the coalition MPs rose in one collective jeer, and Balls' face went as puce as a Saturday footballer, one was reminded of just why, of all metaphors for the Commons, "bearpit" is such a durable cliche.
But Balls has always had the dangerous tendency for a politician of wanting to win an argument, even if it means losing an election. As the man who rightly warned of the dangers of cutting public spending too fast, too soon in his Bloomberg speech of August 2010, he still wants to prove his point; even though events have moved on, and it's well past time for the argument to do so, too. However clapped out, economies do not stall forever – especially given huge injections of cheap mortgage and Bank of England cash. The danger here for Labour is that, just as they let Cameron and Osborne define the crisis (as being all Gordon Brown's fault), so they will also allow No 10 to frame the rebound.
Osborne certainly had a good stab at that task on Thursday. This was a "responsible recovery", he began. The Tories have overdone economics optimism before, such as when Cameron declared the UK "out of the danger zone". But there was a purpose to Osborne's caution. He wanted to ram home the message that when it came to cutting the deficit we were not "off the hook". For all the giveaways – free school meals, further relief for the British film industry (or, as it should really be known, the Richard Curtis tax break), there were takeaways, with even more public spending cuts. And he ended with words crying out for a poster: "Britain's moving again … let's keep going."
As slogans go, this one feels quite Buy One Get One Free. It warns that the patient's recovery would be endangered by the other side. But it also enables the chancellor to keep making the case for austerity even as the urgent economic danger recedes. Three years ago, the coalition's basic rationale for cuts was that without them Britain would go the way of Greece. But even with the euro crisis past its worst Osborne laid out plans to extend austerity all the way to 2019. By then, public spending as a proportion of the economy will be back to the levels of early 2000s. These are remarkable cuts, and they are being made because the Conservative believe in them.
Cameron made the ideological argument for a "leaner, more efficient state" at the Lord Mayor's banquet last month; Osborne wants to give that policy a pragmatic sheen. His ruse for doing so is the plan to enshrine the principle in law, to be voted on next autumn. This is an obvious trap for Labour – either assent to shrink-the-stateism, or be branded profligates – but it should also be a conundrum for the LibDems: do they really want to give Tory politicking coalition cover? But the great open goal left by Osborne that Labour really should be aiming at is just how lopsided this recovery looks.
As the Office for Budget Responsibility pointed out, our economy is growing sooner than expected, but not by more than forecast – there may well be a corresponding slowdown. The upturn is driven by households dipping into their savings, cheap credit, and what has all the makings of a propery bubble. According to the original forecasts, Britain should have seen business investment rise 35% by now; instead it's gone up only 1%. Go back to the initial promises made by the chancellor and the "responsible recovery" still looks like a dismal failure.
As shown by his autumn gamble on energy prices, Ed Miliband can think about a broader economic agenda than just tax and spend – and Labour has fresh things to say on when and how the state should intervene in markets. And when they say them, they work: a good chunk of Osborne's performance was spent trying to shoot Labour foxes.
It's just a shame there's not more. Over the past couple of years, I have been in meetings with party frontbenchers as they toyed with the idea of setting some benchmarks on what a real recovery would look like: rising wages, businesses investing more, banks lending to the real economy and so on. Everyone agreed it was a good idea, but it never got off the starting blocks. Yet now the recovery is here and Labour is still stuck on what to say about it.
Autumn statement 2013EconomicsBudgetConservativesLabourGeorge OsborneEd BallsEconomic growth (GDP)Economic policyAditya Chakraborttytheguardian.com © 2013 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds |
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