The recession: Osborne's mess
The chancellor's predictions of how Britain would cope with an unprecedented round of austerity are now proven to be disastrously off-track
All sorts of reasons were offered for the news that Britain's GDP collapsed by 0.7% this spring. It was the rain, government loyalists claimed. It was all Gordon Brown's fault (still). It was the diamond jubilee and all those extra holidays. The euro crisis. The figures were wildly out. Some of these reasons are worth mentioning; but none of them are of primary importance in explaining Britain has gone from a tepid recovery to being deep in a double-dip recession – the only G20 country apart from Italy to be in this much trouble. The prime responsibility for this calamitous state of affairs must rest with George Osborne.
It is the chancellor's predictions of how Britain would cope with an unprecedented round of austerity that are now proven to be disastrously off-track. His was the choice to identify the government so closely with spending cuts that any adjustment would look like disastrous political retreat. He ploughed on with an unparalleled programme of tax rises and spending cuts even as the euro crisis escalated, the global economy stalled and countless economists (including those at the IMF) sounded warning noises. The outcome is an economy whose performance even the chancellor acknowledged as "disappointing"; but that is in reality desperately worrying – not only for the growing army of chronically unemployed, but even for Mr Osborne's officials, whose deficit reduction plans are now veering off course. And the inevitable result of all this is that the chancellor must now answer serious questions about his own judgment. The GDP figures cap a terrible four months for David Cameron's closest cabinet ally: everything from the omnishambles budget, to trying to blame the Libor-rigging scandal on Ed Balls, to steering the country into its longest double-dip recession in half a century.
For the first time in two years at Number 11, Mr Osborne now has to make the case for why he is chancellor: what he will do now that his economic blueprint of just two years ago is in tatters and, most importantly, how best he can insulate the economy from an ever-growing crisis in the eurozone.
The bedrock assumption of what we might call Osbornomics was that Labour's bloated public sector was "crowding out" private businesses. Hack at state spending and companies would have room to grow. That was the great gamble that underpinned the fiscal consolidation plans unveiled in 2010; and it has simply not paid off. Chaos in the eurozone has further blackened the outlook, but Britain's economy was already flatlining before market jitters reached Madrid and Milan. And amid the welter of bad news in the GDP report was a 5.2% slump for the construction sector – among the most domestically focused industries. A simple version of what has happened under the coalition is that a very small recovery has effectively been snuffed out by ministers first likening Britain to Greece, then talking up their austerity plans, then imposing their austerity plans. All the while, the banks refused to lend or grant non-punitive overdrafts to small businesses. It would be a brave company that pushed ahead with a massive investment programme in this environment. The £325bn that the Bank of England has chucked at the financial system has had little benefit. The chancellor's recent attempts to try stimulus on the cheap – giving banks taxpayer money to lend, underwriting infrastructure projects – are too little, too late.
The economic model inherited by the coalition was severely rickety – that is why it came apart so quickly during the banking crisis and has proven so difficult to put back together again. But the promises from Mr Cameron and Nick Clegg that they would "rebalance" the economy have come to naught: they require investment and public direction that this coalition is unwilling even to countenance. Economic conditions for Britain are unlikely drastically to improve any time soon; and Mr Osborne gives no indication of having a plan to face the coming squall.
Gay marriage: Scotland the brave
The church was on the wrong side of history over the equal age of consent, civil partnerships and same-sex adoption and is set to be on the losing side again
Ms Sturgeon spoke on the close of a consultation which confirmed that the Catholic and, indeed, many other churches retain their power to chivvy their faithful into picking up a pen: two-thirds of a record-breaking 77,000 respondees registered resistance to the change. This power of the postbag has awed parliamentarians in Holyrood and Westminster, sometimes cowing ministers into backing down, as when Labour dropped plans to force faiths schools to offer some places to irreligious pupils. Ms Sturgeon, however, shrewdly refuses to measure public opinion through letters alone, pointing instead to representative surveys which show a rough two-to-one margin in favour of same sex marriage, which is broadly mirrored across the generality of Catholics who have better things to do than respond to consultations.
She is thus pressing ahead with legislation more radical than that being considered in London. Whereas Holyrood plans to enable both civil and religious ceremonies, with the necessary opt-outs for churches which could not bless gay marriage in good conscience, the coalition will only allow civil gay weddings. This is bizarre, seeing as the same coalition recently moved to allow civil partnerships in synagogues, meeting houses and chapels that are keen to host them. The bar on religious weddings was meant to reassure the faithful, but the Church of England has twisted the weird and novel distinction between religious and secular marriages into an excuse to oppose the whole reform, while it is left to Labour's Yvette Cooper to speak for liberal Jews and Quakers who resent the continuing bar on them offering ceremonial equality.
The Scottish National party has a far from spotless record on gay rights. It backed the right of Catholic adoption agencies to snub gay couples, and took funds from the evangelical businessman, Brian Souter, who made such a noise about clause 2A (Scotland's section 28). This time, however, Scotland is calling the cardinal's bluff. London could learn from that.
In praise of … Ratan Tata
It's not the Tata philosophy to strip and sell, but instead to invest and grow
The global workforce of a shy septuagenarian from Mumbai got a little bigger on Wednesday, with the announcement that around 1,000 extra staff will soon be churning out Range Rovers at Halewood. But Ratan Tata's empire ranges further than any vehicle, taking in telecoms, agrichemicals, IT and plain tea. As a businessman, of course, he's in it for the money. But then so too were Joseph Rowntree and Titus Salt, yet that didn't stop them approaching their companies and their employees differently. The antithesis of the glitzy Indian entrepreneur drives around in one of his outfit's own Indigo Marinas, a frugal choice by super-rich standards, which fits with his more patient, less showy strain of capitalism. Businesses do not always live up to what they preach, but it's not the Tata philosophy to strip and sell, but instead to invest and grow. It is no surprise that it is he – and not Bob Diamond – who is offering the jobs.
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