This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.guardian.co.uk/commentisfree/2013/may/22/lure-of-fake-recovery

The article has changed 2 times. There is an RSS feed of changes available.

Version 0 Version 1
George Osborne may not be dead in the water after all. What will Labour do then? George Osborne may not be dead in the water after all. What will Labour do then?
(4 months later)
It has been a truth universally acknowledged for some time in politics that George Osborne is a busted flush. After all, the chancellor is relentlessly hammered from left and from right these days, by those who want less austerity and those desperate for more of it. Tellingly, polling shows voters now go cool on an idea if they discover he's behind it. Judging by the acrimonious infighting over next month's spending review, some of his coalition colleagues probably know the feeling.It has been a truth universally acknowledged for some time in politics that George Osborne is a busted flush. After all, the chancellor is relentlessly hammered from left and from right these days, by those who want less austerity and those desperate for more of it. Tellingly, polling shows voters now go cool on an idea if they discover he's behind it. Judging by the acrimonious infighting over next month's spending review, some of his coalition colleagues probably know the feeling.
But whenever something becomes an accepted truth in politics, that's usually the time to challenge it. Could the chancellor be slightly less dead in the water than he looks? He's certainly been curiously perky of late for a man undergoing the economic equivalent of having the Ofsted inspectors in. The buzz in Whitehall is that today's crucial IMF assessment of the economy, compiled by a team that has spent weeks embedded in the Treasury, won't be without criticism but will be less devastating than initially feared. After several false alarms, the Treasury finally thinks it spies light at the end of a very dark tunnel.But whenever something becomes an accepted truth in politics, that's usually the time to challenge it. Could the chancellor be slightly less dead in the water than he looks? He's certainly been curiously perky of late for a man undergoing the economic equivalent of having the Ofsted inspectors in. The buzz in Whitehall is that today's crucial IMF assessment of the economy, compiled by a team that has spent weeks embedded in the Treasury, won't be without criticism but will be less devastating than initially feared. After several false alarms, the Treasury finally thinks it spies light at the end of a very dark tunnel.
After all, business confidence is having at least a dead-cat bounce: inflation fell slightly yesterday, the FTSE is rising and house prices are somehow, insanely, galloping upwards again. One of the many reasons Downing Street so resents the swivel-eyed loon tendency is that lurid headlines about gay sex and Europe have obscured what could be the first good economic news in ages.After all, business confidence is having at least a dead-cat bounce: inflation fell slightly yesterday, the FTSE is rising and house prices are somehow, insanely, galloping upwards again. One of the many reasons Downing Street so resents the swivel-eyed loon tendency is that lurid headlines about gay sex and Europe have obscured what could be the first good economic news in ages.
We've been here often enough to be suspicious, of course. Remember David Cameron boasting in 2010 somewhat less than presciently that Britain was out of the danger zone? These new green shoots may not survive the spring, let alone the summer. But if they do take hold any time between now and 2015, it would be undeniably harder to argue that Ed Balls told us so about austerity, or that Ed Miliband still needs to remake the economy from scratch. Labour needs its own political Plan B, which is why shadow cabinet ministers are now actively debating how to cope if the worst doesn't actually happen.We've been here often enough to be suspicious, of course. Remember David Cameron boasting in 2010 somewhat less than presciently that Britain was out of the danger zone? These new green shoots may not survive the spring, let alone the summer. But if they do take hold any time between now and 2015, it would be undeniably harder to argue that Ed Balls told us so about austerity, or that Ed Miliband still needs to remake the economy from scratch. Labour needs its own political Plan B, which is why shadow cabinet ministers are now actively debating how to cope if the worst doesn't actually happen.
What that doesn't mean, as Ed Miliband and Ed Balls will make very clear in the coming weeks, is throwing caution to the winds. The two Eds will shortly begin carefully lowering expectations of what a future Labour government might do to reverse the coming cuts, arguing that even if things are indeed picking up a bit, they would still inherit a fragile economy with serious underlying structural weaknesses and painful choices to be made over tax rises and spending. The message will be that the next Labour government won't be anything like the last one, although practical details of what exactly that means will still be thin on the ground.What that doesn't mean, as Ed Miliband and Ed Balls will make very clear in the coming weeks, is throwing caution to the winds. The two Eds will shortly begin carefully lowering expectations of what a future Labour government might do to reverse the coming cuts, arguing that even if things are indeed picking up a bit, they would still inherit a fragile economy with serious underlying structural weaknesses and painful choices to be made over tax rises and spending. The message will be that the next Labour government won't be anything like the last one, although practical details of what exactly that means will still be thin on the ground.
We can also expect to hear more of the argument Polly Toynbee made in the Guardian yesterday, that if this really is a recovery it's the worst possible kind: just another bubble, perhaps even more dangerous than the last, inflated by cheap money and the cynical luring of first-time buyers into a sort of housing Ponzi scheme. And for those outside the home-owning, share-buying southern classes it probably won't even feel like a recovery at all, with wages expected to stay flattish perhaps for another decade, and spending cuts continuing to gouge huge chunks out of ordinary lives. Plenty of people are still likely to answer the classic election question, "Do you feel better off now than five years ago?" with a resounding "no".We can also expect to hear more of the argument Polly Toynbee made in the Guardian yesterday, that if this really is a recovery it's the worst possible kind: just another bubble, perhaps even more dangerous than the last, inflated by cheap money and the cynical luring of first-time buyers into a sort of housing Ponzi scheme. And for those outside the home-owning, share-buying southern classes it probably won't even feel like a recovery at all, with wages expected to stay flattish perhaps for another decade, and spending cuts continuing to gouge huge chunks out of ordinary lives. Plenty of people are still likely to answer the classic election question, "Do you feel better off now than five years ago?" with a resounding "no".
Yet since modest earners began to feel the squeeze years before the coalition came to power and long before the banking crash, there's no guarantee they will automatically blame the Tories when life gets no better. Some may well decide that no mainstream party has the answers for people like them, leaving an alarmingly Ukip-shaped gap in the market. This squeezed middle have much in common with the Ukip voters described in John Denham's recent thoughtful analysis of the local election results: driven towards Nigel Farage as much by gnawing job insecurity, or resentment of bankers and corporate tax avoiders, as by hostility to immigration or Europe.Yet since modest earners began to feel the squeeze years before the coalition came to power and long before the banking crash, there's no guarantee they will automatically blame the Tories when life gets no better. Some may well decide that no mainstream party has the answers for people like them, leaving an alarmingly Ukip-shaped gap in the market. This squeezed middle have much in common with the Ukip voters described in John Denham's recent thoughtful analysis of the local election results: driven towards Nigel Farage as much by gnawing job insecurity, or resentment of bankers and corporate tax avoiders, as by hostility to immigration or Europe.
And after five miserable years, better-off swing voters may well be tempted to treat even fake prosperity much as Britons traditionally do the first sniff of sunshine, by getting out there and frying while it lasts. They're going to take some convincing that it's a bad thing for their pension funds to be growing again in a bullish stock market, or for their houses to be worth stupid amounts – even if they are worried about their own children being forced off the property ladder. The challenge for Labour, then, may soon be persuading voters to look this dubious economic gift horse in the mouth.And after five miserable years, better-off swing voters may well be tempted to treat even fake prosperity much as Britons traditionally do the first sniff of sunshine, by getting out there and frying while it lasts. They're going to take some convincing that it's a bad thing for their pension funds to be growing again in a bullish stock market, or for their houses to be worth stupid amounts – even if they are worried about their own children being forced off the property ladder. The challenge for Labour, then, may soon be persuading voters to look this dubious economic gift horse in the mouth.
Our editors' picks for the day's top news and commentary delivered to your inbox each morning.