Tories finally return to an Energy Price Cap with measure that is tentative first step on road to easing cost of living burden for many

Photograph: Twilight power lines from Pixabay (License) (Cropped)

Finally, a piece of domestic legislation from the government emerges. After a year of prevaricating, the government's promised energy price cap seems to have at last begun it's journey through Parliament.

The energy price cap had been a feature of the Conservative manifesto at the last election, but was jettisoned along with most of their agenda in the aftermath - sacrificed on the Brexit altar.

The opposition has been pressing the government of late to return to the measure. There are many households burdened by the high cost of living and any help extended to them is to be welcomed - and hopefully that is what the Domestic Gas and Electricity Bill will do.

The government had chosen to pursue a less interventionist, less confrontational, approach in the form of promoting how customers could switch tariffs and companies to get a better deal. But customers just weren't playing the markets.

So, with prices continuing to rise more than wages, squeezing households month on month, the government has been forced to take action to tackle the cost of living. But it won't be an easy sell to either the energy industry or to all Conservatives.

When the Tories first announced their interest in a energy price cap, the government's approach was to follow the system for capping pre-payment - with a maximum figure, an absolute cap, based on the lowest regional price that is reviewed biannually.

Energy firms have already expressed discontent. When the layoff of two thousand workers in Britain was announced, Centrica blamed them on the impending prospect of a price cap. Others have been calling for any cap to have 'headroom' to allow competition.

Such arguments are accompanied by the opinion of right-wing think tanks like the IEA, who argue a price cap will give minimal help to those who don't switch, end the benefit that switchers get, and entrench the Big Six - who benefit from the support of government subsidies - at the expense of their smaller competitors.

The progressive view on energy costs anchors on the essential nature of energy - along with other utilities like water. People simply cannot live without their utility supply. That creates an easily exploitable monopoly that must be closely monitored - at the least.

However, there isn't always agreement on how to actually run these services among progressives. But there are plenty who are unconvinced by either extreme - nationalised or privatised. Making switching suppliers easier and capping prices is a sort of middle ground.

So too is the Corbyn-era Labour proposal, to reconstitute municipal and regional public run - whether by cooperatives, non-profits or local authorities - utility companies to establish a basic, baseline affordable supply for everyone to compete with the corporate Big Six.

With Theresa May's admiration for Joseph Chamberlain, she should have little consternation at the prospect of municipal services. As the mayor of Birmingham, he was among the pioneers of local government as an active participant in improving the services for local people.

And for all the arguing back and forth, there is a lot of common ground between Labour and the Conservatives here. In fact, the Tories have pretty much adopted the policy wholesale from Ed Miliband, who had campaigned hard for an energy price freeze.

For this reason, when it comes down to it, the Domestic Gas and Electricity Bill may have a quick passage through Parliament - with the govt able to rely on opposition support to fend off any backbench concerns about interfering with markets.

What is clear is that households are under a lot of pressure - not least those forced to pay upfront for utilities because of poor credit scores. This situation just reinforces the absurd debt-traps that surround those with insecure work and low pay.

Drastic reductions in the price of a basic supply of energy is one move. Making that permanently available through a municipal energy supplier would be a complimentary second. A third would be removing the credit score entry qualifications, to help people get away from expensive, exploitative, pay upfront deals.

Pay caps may very well not be a long term solution. But the more pressing concern is to, on every front possible, unpick the nets cast into the churning water surrounding the poorest and most vulnerable.

The Budget: Hammond's budget all about tweaks - spending headlines mostly in the millions rather than the billions

Philip Hammond delivered his first budget today. Photograph: NATO Summit Wales 2014 by the Foreign and Commonwealth Office (License) (Cropped)

Philip Hammond looked relaxed, even made jokes, as he delivered his first - and apparently Britain's last - Spring Budget. The Chancellor's budget was one tweaks, all framed as adjustments to increase fairness. He began by summarising current economic trends, noting the highest number of women in employment ever. Growth projections are up slightly, but a projected drop in borrowing is only short term.

The long term economic plan of his predecessor George Osborne, to eliminate the deficit and produce a surplus to whittle away the national debt, was much delayed. Its aims where pushed back again by Hammond today. The promised fiscal surplus now not likely be seen until a long way into the 2020s - at least.

As for spending, the numbers he was pitching were all notably in the millions rather than the billions. £200 million for school repairs. £100 million for A&Es. A few hundred million for devolved administrations. £700m for councils to tackle urban congestion. The one exception appeared to £2 billion for Social Care - yet that was immediately qualified as being spread over three years.

Those spending commitments were companied by big companies seeing Corporation Tax fall again, as planned, to 17%. Perhaps as a counter to the criticism Conservatives have faced for their tax cuts for those at the top end, Hammond did however announce a halving of Director-shareholders' tax-free dividend allowance - noting it as a very generous tax break for investors.

For income taxes and wages that affect the overwhelming majority of people, the Personal Income Tax Allowance and the National Living Wage will both increase, to £11,500 and £7.50 respectively. The Universal Credit taper rate will also be reduced from 65% to 63% for earnings over allowances. Yet the overall positive impact of these is likely to be slim.

It is not surprising then that Jeremy Corbyn attacked the Chancellor's budget as one of "utter complacency". Corbyn painted a picture of people in precarious work - unsure of where they'll find work or what money they may make tomorrow, queueing at food banks and one of a million working households getting housing benefit because working pay doesn't cover the rent - for whom there were few measures.

The Labour leader expressed anger that public servants have still seen no pay rise in seven years, due to the Government's freeze on pay, and that no funding security has been given to the NHS despite there being an obvious crisis, despite the fact that corporations are still going to get their year on year tax cut.

The Chancellor's budget has offered only a range of small spending increases, in a very concise series of measures, and it is hard to see them as sufficient. Analysts, such as Kamal Ahmed at the BBC, have characterised the budget as representing 'pain delayed' - taking advantage of the short term boost that Government finances are experiencing this year.

This is not the start of a public investment led drive to build a path out of austerity. With the debt and deficit still hanging heavily over Britain, these feel like stop-gap measures to assuage certain political pressures in the present, and to ease the way to the further austerity that waits ahead.

Around the World: Renzi, Last Man Standing

Matteo Renzi, Prime Minister of Italy, speaking at a university in October 2015. Photograph: Matteo Renzi a San Giobbe by the Università Ca' Foscari Venezia (License) (Cropped)

In Italy, the Left-Right dynamic that emerged over the last two decades finally seemed to have broken in favour of the Left. Silvio Berlusconi's powerful populist Centre-Right groupings lost ground at the 2013 elections and have struggled in the polls since - falling below even the anti-establishment party Movimento 5 Stella (M5S).

Meanwhile, polling had put the party of the Centre-Left, Partito Democratico, consistently ahead as the only party with a truly national mandate. Even despite having had three separate leaders since the election, Pierluigi Bersani, Enrico Letta and now Matteo Renzi, the Democratici have remained the only stabilising force in Italy's political mainstream.

Matteo Renzi, as leader of the Democrats, is the centre point for what little stability remains. Yet he has staked it all on winning a controversial constitutional referendum - with opposition to be found in all corners of Italian politics - making the plebiscite a vote of confidence in his continued leadership and job as Prime Minister (Politi, 2016).

If that were not enough, on top of Renzi's struggle to change the political and electoral systems, he also faces a battle with the European Union over the rules regarding how he can tackle Italy's National banking crisis (Sanderson & Alex Barker, 2016) - a crisis which, if it where ever to fully unravel, would dwarf the chaos into which Greece has been plunged.

Italy's major national banks are drained of funds, burdened by impossible debts - €400bn in bad loans - and need recapitalisation. EU rules say, however, that the government cannot buy out the banks of their debt (Guerrera et al, 2016), despite support for the policy from the European Central Bank (Jones, 2016), unless the burden falls first on investors.

But in Italy that is all but impossible. The largest share of the debts now weigh heavily upon its citizens, thanks to retail bond and investment schemes. That state of affairs has already caused tragedies, when problems at regional banks led to suicides after families lost hundreds of thousands in savings (Poggioli, 2016).

To force creditors to take the burden is to invite the collapse of Italy's biggest banks and destroy the lives of and impoverish its people. Renzi has expressed his intention to defy the EU and save Italy's banking sector, to protect particularly the country's ordinary savers.

Renzi's government also has ambitious and extensive welfare plans in the works to help those in poverty. Intended to begin in September, after a significant trial period, a programme would extend support for hundreds of thousands of families with children living in poverty, covering a million people to €320/month (Conte, 2016).

The €750mn/year investment, to be doubled as the programme goes forward is conditional on meeting educational and job searching objectives, to spread the governments aim of increasing 'income inclusion'. But it could make a massive difference for the most vulnerable.

But future action depends upon Renzi and the mandate of the Democrats surviving the referendum, which looks to be taking place in increasingly heated circumstances. Anti-establishment and anti-European sentiment seem to be rising hand in hand. The banking crisis and the intransigence of European institutions is not helping. It's no big surprise then that September's vote is being touted as the next big turning point for the future of European institutions after Greece and Brexit.

In that toxic atmosphere, Renzi has staked his efforts against his own position - not the Prime Minister's first act of brinkmanship as he tries to reorganise Italy, having made a similar move to pass same-sex unions (BBC, 2016). But the move stakes more than just his own career on the vote: Renzi is virtually the last man standing in the Italian political arena.

The Democrats are internally divided (La Repubblica, 2016) and only the anti-establishment, anti-elite and Eurosceptic populists M5S, who sit with UKIP in the European Parliament, have something approaching the national mandate to take over.

Making the matter personal by making it a vote on Renzi as well is a dangerous move, not least in this political climate - as former President Giorgio Napolitano stressed (Politi, 2016). It clouds motivations, particularly when Renzi is the central figurehead of the establishment, pushing through reforms that are each time controversial to some large group - from labour reforms (BBC, 2014) to same-sex unions, to the banking crisis currently unfolding - and likely only to feed anti-establishment populism.

Europe finds itself now, once more, with a crisis on it hands. The only leader with a modicum of a mandate is risking his position and the country's stability each time he tries to push through a reform. And yet even as Renzi takes on that task, he finds himself also pressured by the EU that would force him to act punitively against citizens by nullifying their investment savings.

The institutional rules themselves are in essence intended as pro-market anti-trust regulations, aimed at preventing state-corporate collusion, as a bulwark against corruption. For progressives - who want to see an open Europe where all parts cooperate in mutual support for the common good - to see them deployed to prevent the state from performing its basic duty to the people is disappointing.

If Renzi falls, Italy risks falling back into political paralysis, much as Spain has been by its electoral deadlocks. The fact so much has come to rest on the career of one politician should be a disconcerting warning to Europe of the need to find stable ground for all of its member states. Yet at present, Europe institutions seems unwilling or unable to respond positively. Europe's present system of legal authority without sufficient democratic accountability has alienated.

Reform is needed. The need is pressing to argue the case against the flaws of the present system and for the building of a better one. The Democrats were elected in Italy on the slogan 'Bene Comune' - the Common Good. It is long overdue time to start rebuilding Europe under the same words.

Oldham will be the first preview of who is winning the political battles in the public eye

Oldham will host the first by-election of this parliament, triggered by the death of Labour MP Michael Meacher. It will be a set piece political event that might just offer some small insights into whether party ideas are capturing the public imagination. Photograph: Oldham Town Hall by Mikey (License) (Cropped)

On Wednesday the Conservative fiscal plan for the next four and a half years was laid out by the Chancellor. Complete with politically considered back tracks and U-turns, George Osborne's spending review laid out the cuts, caps, and the phasing out and shifting of burdens that we should expect.

Yet, even with all of this information now on the table, the question of how to oppose the Conservative approach is putting Labour in a bind. Labour are trying, though not too hard, to avoid fall into a civil war - the result of which would almost be that the New Labour faction would be forced to leave the party and could even taking a majority of Jeremy Corbyn's party MPs with them.

These events are all very poignantly timed, as the first test for all sides - an important trial run, almost - is coming on the 3rd December in the form of the Oldham West and Royton by-election. From its result, it will be admittedly difficult to extrapolate anything particularly substantial.

Not until April, and the National Assembly and London Mayoral elections will we see a full appraisal of the response of the country to the election of a Conservative majority, its policies on human rights and austerity, and Jeremy Corbyn's new approach as leader of the Labour Party. Yet next Thursday's by-election might just provide a small preview.

Voters in Oldham will be the first to pass direct comment on what was, effectively, Osborne's third budget of the year. Those that turn out at the polls for the by-election will get a chance to say what they think of the Chancellor's offerings.

Despite the fact that the focus for most people will be on the headline of Osborne's likely-to-be-popular U-turn on Tax Credits (BBC, 2015) - and the U-turn on cuts to police budgets that he tried to pass off as a Labour idea - there were other policies to be found in the spending review.

These policies include the gradual phasing out of tax credits, to be replaced with the less supportive universal credit (Allen et al, 2015); a new cap on housing benefit (Cross, 2015); and the replacement of grants for student nurses with loans (Sims, 2015).

According to the assessment by the independent Institute of Fiscal Studies (IFS), the poorest will be the most heavily impacted by these changes (Allen et al, 2015) - although that is disputed by Conservatives. Critics have also been sure to point out that austerity is far from over (Wearden, 2015). Further cuts or tax rises may even be necessary if Osborne's gamble on the OBR's positive outlook fails to pay off (Peston, 2015).

Osborne's domestic reforms also appear to match the ideas in his recent speech laying out his plan for the European Union - another issue that may well be on voters' minds. For the Conservatives, the aim is clearly for a deregulated EU that is for business (Sparrow, 2015), rather than citizens - reserving free movement only for trade and money.

Leading the progressive opposition at this point should be the Labour Party. However, Jeremy Corbyn's opposition to intervention in Syria (Wintour, 2015), at least in the present terms and under the present conditions, is proving to be just the latest opportunity for a divide to open up between Corbyn, along with his supporters, and the party's mainstream - particularly in the parliamentary party.

It doesn't seem to be helping to quell the dissent of the few - at the moment, at least - in the Labour Party who support intervention, that even Conservative commentators are saying that the UK's most powerful role right now may well be diplomatic rather than military (Davis, 2015).

There is also the likelihood of a hugely significant event on Tuesday, just days before the by-election, when NHS doctors go on strike, to be followed by two more days of action later in December, if renewed negotiations do not achieve enough ground (Tran, 2015).

Politically, ideologically, there is a lot of pressure building. Yet it won't all be about objective analysis of the impact of policies. Politics is also a contest over the popular perception fought in, and often with, the media. In that game, the Conservatives have tended to fare best, and Osborne has managed to make all of the headlines about how he is protecting, for now at least, those already in the system.

What it is essential for progressives to get across, and rally support behind, is that this is something the Chancellor has only achieved through the shifting of burdens and letting new entrants be hit by the deepest cutbacks (Allen et al, 2015, Cross, 2015). Yet it is always difficult to make heard the narrative based on those who will be hurt in theory, when up against a narrative of those will not now be hurt in the present.

As for other progressive opposition parties, like the Greens and the Liberal Democrats, they will just want to be heard and to see a decent turnout. They both risk being drowned out by the larger narratives coalescing around the two big parties, yet there is room for them to still make an impact. For the Greens, the UN climate change summit in Paris puts the environment and clean energy in the public eye (Vaughan, 2015), while the Lib Dems have been vocal in their opposition to the government over human rights and the rights of refugees (Riley-Smith, 2015) - a key pillar in their plan for a 'Lib Dem Fightback'.

However, set piece events like Thursday's by-election only offer a snapshot impression of where the different factions and parties are, relative to each other, and who is hearing the message sent out by who. The big question - which will likely only be answered in subtle shades of grey - will be whether Osborne has succeeded in getting out the message he wants heard, and whether Corbyn's approach can produce in terms of practical results.

Osborne's Fiscal Charter: Keynes argued both a surplus and deficit should have a clear purpose in a balanced economy

George Osborne has succeeded in getting his charter of fiscal responsibility through Parliament, though it has faced opposition. Photograph: The Chancellor with guests at Port of Tilbury on 1 April 2014 by HM Treasury (License) (Cropped)

On Wednesday night, George Osborne succeeded in passing his Fiscal Charter through the Commons - in theory committing governments to achieving a fiscal surplus in 'good times' (BBC, 2015). Labour, after some twists and turns and with some abstentions, opposed the charter alongside other opposition parties as simply being a parliamentary tactic rather than a commitment to the principles under discussion (BBC, 2015{2}).

The move to introduce the charter has faced criticism, in particular from Green MP Caroline Lucas. Lucas has argued that a surplus simply siphons money out of the economy, that is then patched over with private debt, and that borrowing to invest could stabilise an economy by increasing jobs and tax revenues (CarolineLucas.com, 2015; Sparrow, 2015).

As for the economic theory behind the move? Well, John Maynard Keynes may have had something to say about that.

Keynes clearly agreed with the idea that a national debt was a major obstacle to a healthy economy, with an impact so wide that creditor countries aught to think very carefully about the level of repayments they insist upon (Miller & Skidelsky, 2012). However, he also believed that creditors, as well as debtors, aught to settle their accounts (Inman, 2012).

While not wanting to weaken the commitment of debtors to honouring their debts, Keynes believed that pressure needed to be applied to creditor countries to not build up excessively 'positively' imbalanced trading accounts - even going so far as to suggest large interest payments be paid, into an international investment bank, on a trade surplus.

Keynes' ideas have implications for the broader economy beyond the fiscal, and the obscure world of international trade relations.

The OECD has stressed that income inequality damages an economy, strangling growth by vampirically draining wealth from circulation in the broader economy (OECD, 2014). The money extracted in the accumulation of wealth needs to be replaced. That can lead to the ever accelerating pursuit of economic growth and to an obsession with making an economy 'competitive'. It can also lead to escalating private debt.

When looking to build an economy, the key word to take from Keynes is balance. For Keynes, both a surplus and a deficit should have a clear purpose and an idle commitment to either would be a reckless course to take. Keynes would have agreed with the idea of budgetary and fiscal responsibility, but he would have included within that remit a government using deficit spending to rebuild or improve the economy - rather than the strictly austere contraction of government that the Chancellor is pursuing.