Budget 2018: Chancellor does the minimum to avoid austerity deepening, but this was no windfall budget to undo the hurt

By the end of the next five year period, the government will be spending £30 billion more a year - the largest rise in public spending since 2010. That's the headline that the government will want to see rolling out.

But that is only the surface appearance. The reality is - as Institute of Fiscal Studies Director Paul Johnson said - £30 billion was the minimum to stave off deeper cuts. And the benefit of that spending goes squarely to the NHS.

While no one is going to dispute the NHS feeling the benefit of increased public spending, in this budget the increased spending on healthcare disguises the reality underneath of public spending stagnating - the cuts of the past decade are not being undone and departments may face more cuts ahead.

Measures in this budget were plentiful, but it was money spread thin. Just £800 million for local government, £1.0bn for Defence, £160 million for counter-terrorism policing, £400 million one-off emergency fund for schools, £420 million for highway repairs.

There was a range of handwaved increases for tech and infrastructure to the tune of £1.6bn plus. A mixed bag of measures for apprenticeships worth £650 million. A package of complex investment incentives made up of reliefs and loans.

A 'co-funded' £650 million to renovate high streets. The headline Business Rates cut (said to cost £900 million) - a policy where it is still unclear who will bear the burden, the Treasury or local councils, as the Chancellor has already announced the intention to let councils keep larger percentages of the rates. There was a few hundred million to speed up housing developments and around £4bn for the city regions and the devolved administrations.

For households, there was a £200 million a year increase to 'transition support' for those moving over to Universal Credit and the work allowances were to be relaxed to, at a cost of £1.7bn, to mitigate the impact of the new welfare system on the poorest for which the government had been criticised - but only once the roll out is completed, which could be deferred for a long time at this rate.

There is also the cost to be calculated of tax cuts, including the freezes to a series of duties and the further increase in the personal income tax thresholds - up to £12,500 for earnings before tax applies and a higher rate threshold increased to £50,000.

In total, there was about £7bn spread over the next few years, plus the cost of tax cuts, with perhaps less than £4bn in new one-off spending - and a little under £2bn deferred until the rollout of Universal Credit has been completed. It appears the NHS will get an amount reaching more than £20bn a year by 2023.

The economic forecasts, and tax receipts, gave the Philip Hammond what he wanted: the ability to achieve a surplus and completely wipe out the deficit, so the debt could begin to come down at a faster rate. However, the needs of the NHS in crisis seem to have pressed the Chancellor to action.

Otherwise, Hammond stayed true to form. He preferred to use his room for new measures on tax cuts - to 'keep money in pockets' - than funding public services in plight. In fact, to keep in track, how the Chancellor used his headroom means that there will probably be more department funding cuts to come.

Austerity is not over. At best, the Chancellor Philip Hammond has stumped up the bare minimum cash to stop austerity further deepening. Even then it is a temporary measure, as the Spending Review he announced for next year will likely reveal that there are still more cuts to come.

Budget 2018 Preview: Chancellor Philip Hammond will try to patch together competing demands to present a positive vision - which must be closely scrutinised

So, Prime Minister Theresa May announced austerity will come to an end. The Chancellor Philip Hammond told Conservative members they must not surrender the 'party of change' label. Their right-wing colleagues want a bold, positive statement with Brexit just around the corner.

Where does that leave the government ahead of the Budget?

When the Chancellor stands at the dispatch box on Monday, he will have meet a number of commitments and all of them will require him to open the public purse and spend money - something anathema to Hammond's own favoured fiscally conservative approach.

So beware of the narrative. Whatever the Tories in the Treasury have cooked up, take careful notice of how it is being framed. Hammond needs to carefully wrap up his policy announcements in a positive vision, promising a bright future that brings money to spend.

To spend 'sensibly', of course - the note of fiscal responsibility won't be going away. It's how the Conservatives like to paint themselves (despite the way the national debt has ballooned) and they have spent a decade marking it as separating them from Labour.

But something will have to change if the Conservatives are to find £20 billion for the NHS. To find the more than £8 billion a year needed to keep the various taxes and duties from rising. To at least bring a halt to cuts for long enough for it to seem like austerity has stopped - if not been reversed. Is there any room for movement to find this money?

Well there is pressure to bring the tech giants to heel with a tax - though it's not a move without complications. And the Chancellor has already set out his stall, with a brand new narrative, to increase National Insurance contributions from the self-employed - a policy that went down in flames less than a week after last year's Budget.

The other targets for more taxes are only the rich - the main constituents of the Conservatives. From Pensions to private school fees, there are reliefs and loopholes aplenty. But will the Chancellor be willing to close them?

Far more troubling for almost everyone else is that local councils fear even further cuts to their funding are on the way. That would be devastating for essential frontline services, that are already under pressure - as the government forces local communities to raise money in their own neighbourhoods, even those with few resources.

If the Chancellor decides to hold off on these further cuts, it will likely depend more upon halting or deferring various tax cuts, rather than raising taxes in a more direct or conventional sense. But even then, it trimming one advantage for ordinary workers to protect those same people for a new disadvantage. Hardly a progressive pitch.

Hammond will try to dress up these trade offs as the hard-won rewards of decades of hard times and the promise of better to come. Progressives can't let him present that narrative unchallenged, because these measures will be little more than a government that imposed austerity trying to ride the wave of discontent their policies have stirred up.

Conference round-up: What are the main takeaways from party conference season?

The time of austerity is coming to an end. Or at least that is the overaching message of party conference season. It invites the bigger question of whether the Conservatives would actually be willing and able to deliver it's end.

Last year's election showed the Tories that even a coordinated media bashing of Corbyn wasn't enough to dampen enthusiasm for the content of the Labour manifesto and their call for a step change away from the time of austerity.

The Conservatives know they have to adapt. But they will start only by changing their message, rather than reinforcing that with any particularly drastic change in funding - hence Theresa May telling Prime Ministers Questions that austerity was going to end, but not 'fiscal responsibility'.

The Chancellor Philip Hammond used his conference speech to hint at a change of message, telling party members the Conservatives couldn't afford to be a party of 'no change'. The Prime Minister followed that up by saying austerity was coming to an end.

Opposition scepticism is entirely appropriate.

The Tories will be reluctant converts to the anti-austerity cause (except, perhaps those in local government), and the move was probably forced Labour's unabashed commitments to higher taxes, more spending and a definitive end to austerity.

In fact, Paul Johnson at the Institute for Fiscal Studies (IFS) called the Labour proposals the most radical in a long time, capable of deeply affecting the UK economy, and transforming expectations and assumptions about how the economy will work.

The other main lesson of conference season was, obviously, Brexit. As it has taken over every other aspect of politics in Britain, so it has taken over party conference season.

The Tories were, as usual, mired in their three way factional splits - hard right Brexiters, moderate Remainers and Theresa May's split the difference

However, Labour took a step towards laying out in more certain terms their position - with the party more or less all onboard. The party's red lines, particularly a customs union agreement, were supplemented by a commitment to a People's Vote second referendum in the event that final deal fails to pass muster.

The party's preference remains to force an election on Brexit, but the concession Labour's Remainers, to support a People's Vote to ensure the public get a say, is a step towards bringing the party to a (mostly) united position.

Meanwhile, as would be expected, the Liberal Democrats lambasted all who would oppose a People's Vote second referendum. But beneath the business as usual, it was good to see the party's radical liberal factions put some progressive ideas on the table - such as a sovereign wealth fund and more support for cooperatives.

The Greens had the same mix of Brexit and domestic policy at their conference. On the domestic front, they pushed for wellbeing - particularly relating to free time - to get a higher place in our measurement of the UK's economic and living standards.

Finally, the SNP joined their push for a second referendum on Scottish Independence with opening the way for their MPs to support a second referendum on Brexit. While it isn't a straightforward piece of arithmetic, opposing Brexit is consistent with how people in Scotland have voted and may prepare better ground for their own ambitions.

The onrolling Brexit steamroller aside, the end of austerity was the biggest headline. It would seem that Theresa May is right, that austerity coming to an end - but in spite of them, not because of them. The Tories seem to sense the mood is shifting.

There is a big opportunity ahead for the progressive parties, to undermine the case for austerity and drag out into the light the ideological choices that enforced it and the consequences of the Conservative choice to impose it.

Universal Credit: Labour say no to universal credit, leaving the future of welfare uncertain

Photograph: Job Centre Plus by Andrew Writer (License) (Cropped)

Labour's Shadow Chancellor John McDonnell has let it be known that Universal Credit, the government's controversial revamp of welfare, faces being scrapped. McDonnell called the system unsustainable, as he finally appeared to move the party off the fence on welfare.

Universal Credit was the flagship Conservative policy and was intended to merge a range of benefits into one, simpler, payment - with better tapering and stricter limits - in theory to 'make work pay'. However, the rollout of the policy has been a disaster.

The policy rollout has gone over budget; it has created delays in processing applications and making payments, leading to individuals running up debts and turning to foodbanks; and with the full rollout, even single parents could be over £2000 worse off.

For the government, welfare reform has been a constant hazard. It's approach, dubbed 'workfare', has been picked apart at every step. Scandals like welfare claimants finding themselves farmed out for unpaid labour - a practice that was challenged and criticised through the courts, though continues - has undermined reforms.

So has the Tories' handling of disability welfare claims. Causes ranging from maladministration to deeply flawed fitness to work assessments have left many claimants with disabilities thousands of pounds out of pocket and denied crucial support.

The government has done itself no favours with revelations that officials were given targets to reject 4 out of 5 applications, and through spending tens of millions in legal action to avoid having to meet denied disability welfare payments.

Funding issues have undermined the policy too. The policy's architect, and former Tory leader, Iain Duncan Smith eventually quit as the Minister responsible with a flurry of criticism - at the core, furious that funding was not were he wanted it to be for the reforms to work.

It is unsurprising that Labour doesn't want to handle this shambles.

However, for Labour this marks a significant change in their stance. In their 2017 manifesto, the Labour Party barely touched the subject of welfare. The limits of their interest had seemed to be in getting the Conservative system working - not even committing to more funding.

Labour have not proposed a replacement system. For that, it may be necessary to wait for a new manifesto. But it seems unlikely that either the old system nor Universal Credit will now remain in place under a Labour government.

Without tacit opposition support, the policy's days are numbered. The questions now is what comes next? Where does Britain go next in search of a fair and sustainable social security safety net?

Chancellor Hammond begins constructing the Tories framing for their budget

Chancellor Philip Hammond took to the stage at the Conservative Party conference to tell his party that they had to make the case of capitalism - and must first and foremost always be the party of business.

On the one hand, this was the latest barrage in a war of words within the Conservative ranks - torn by Brexit and the deep reservations of the business community. On the other, it's also laying the groundwork for the budget.

Hammond told the conference that the party couldn't afford to be seen as the party of the status quo. The Chancellor trailed the possibility of some tax rises to increase spending, but warned against trying to match Labour penny-for-penny.

We've heard this before.

The budget is coming up and the party delivering it are positioning their pitch, delivering up framing devices for the media to use in the coming weeks. For the Tories, they cannot afford to lose control of the message.

In recent months, even senior ministers have been defying the government with a whole barrage of comments to the media. It's making PMQs a whole lot easier for Corbyn and forcing No 10 and No 11 to waste their time running around putting out fires.

For instance, when the Confederation of British Industry (CBI) felt the need to express it's dismay about Brexit - and the danger of leaving the EU without a deal - a former government Brexit minister labelled them a 'grave menace' to the UK's prospects.

That's not a good look for a party that sees itself as the true representative of business. No wonder the Chancellor is calling for the party to get back on message. But there's more.

The Chancellor is also dropping little hints that there might be some tax rises - though these aren't yet more than hints - with an eye to some slight increases in spending.

Hammond finally loosened some of the purse strings this year, with a slight relaxing of public sector pay restrictions. But they were only very slightly relaxed and spending measures in the last budget were far below the kind of intervention for which the UK economy is crying out.

The consensus on the economy - and on Brexit - seems to be moving away from the Conservatives. Conceding the possibility of a spending increase lays the groundwork for framing the measures Hammond will announce on budget day.

In previous budgets, Hammond has talked up restricted spending and paying down the deficit only to deliver up, at times uncosted, spending increases - even if only small ones. The order of the day was austerity, but spending was needed.

Now, the consensus is shifting towards much larger public investment than Conservatives are prepared to meet. And so the Chancellor is preparing the ground to present the next budget as one that will deliver responsible spending.

Yet behind the narrative, there is little reason to expect anything but more of the same from the Treasury. Brexit is a hinderance and while the deficit has been reined in, the debt has ballooned under the Conservatives.

And who is going to be happy with Tories raising taxes? The last time Hammond tried to make a major tax adjustment, he had to withdraw his self-employed National Insurance fix within a week of presenting it.

In politics, the next best thing to delivering policies in line with the consensus is to get every believing that you're doing just that - without having to go to the trouble of spending the money. Expect this narrative to build through October.