The trouble with "Wonkspeak"

So the GDP figures are out and they show what Labour must have been dreading—that the British economy is growing. Slowly, and somewhat feebly, but it is growing nonetheless. According to the Office for National Statistics, growth was up by 0.6 per cent in the second quarter of this year, and with that, the Tory summer cake received its cherry on the top.

However, as wise heads indicate, outright celebration would be premature and in an important piece in today’s Financial Times, Richard Lambert explains why in present circumstances, GDP should not be taken as the ultimate barometer of economic progress. It is a metric that “fails to capture the economic wellbeing of most citizens,” says Lambert, and as such should be viewed with a critical eye.

But this will come as little comfort to Labour. GDP is the single economic metric that can be translated from Westminster Wonkspeak into language digestible in the outside world and despite its shortcomings, it is the most significant political economic number that exists.

This is bad news for Labour—and in particular for Ed Balls, who now has to confront the agonising fact that the Government’s policies are yielding growth. It’s weedy and no more in economic terms than a rounding error, but it’s growth all the same.

His response today is bullish: “After three wasted and damaging years of flatlining, this economic growth is both welcome and long overdue,” said Balls in a statement. “But families on middle and low incomes are still not seeing any recovery in their living standards. While millionaires have been given a huge tax cut, for everyone else life is getting harder with prices still rising much faster than wages.”

The ONS figures mean that the debate about growth has become a problem for Labour; so will it's economic attack now switch to living standards? It may well yield better political results for Labour than the economic debate that has raged so far. The argument between Keynesians and Hayekians—of fiscal multipliers and crowding out—is enormously offputting for normal human beings, for whom the word “fiscal” acts as a sleeping draft.

But if the argument is now to shift away from abstruse economic grappling and across to the subject of hardship, to focus on those people who work full time but who cannot afford to feed their children, then this begins to feel like much more natural Labour territory. When Parliament returns after the summer recess, the economic debate might have a very different character— conversations with Labour insiders suggest that this is the line the party will be taking in the autumn. In the course of that argument, there is one point on which Labour must be clear: “GDP” and “the economy” are not the same thing.