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?

Autumn Statement: Austerity hasn't worked, yet Chancellor's response is much smaller than Britain's big problems demand

House building pledge typifies problems with Chancellor Philip Hammond's Autumn Statement - it's too little action to tackle a much bigger problem. Photograph: Regency Houses from Pixabay (License) (Cropped)

John McDonnell, the Labour Shadow Chancellor, described the Autumn Statement as a budget that does not make up for six wasted years. That after all of the sacrifice, over more than half a decade, despite continuous failures, austerity will continue.

That is not an unfair assessment. For this statement, Chancellor Philip Hammond had to juggle the policy inheritance from George Osborne, meeting the promise of Theresa May to help those just getting by, and the economic pressures that are depressing growth, disincentivising investment and pushing up debt.

The result has been a budget statement that sticks close to the status quo, with only some token, already scheduled, easing measures: the personal allowance advancing to £11,500, the 'national' living wage to £7.50, and the welfare withdrawal taper rate down by just two pence in the pound.

The Chancellor's focus remains upon the broader economy, not least with tax cuts continuing for big business as Corporation Tax falls again to 17%. The promise that these subsidies, and policies like the productivity fund, make to people is that if they help the economy, that prosperity will extend to them.

Yet many of the Chancellor's announcements were effectively cancelled out by the facts. He lauded the fact that the UK has its highest employment and lowest unemployment, with a labour market recovery serving everyone. Yet much of the new work has already been reported as being unstable, insecure and precarious.

Despite confirming plans to increase public investment, that comes on the back of years of delayed, stalled or unfunded infrastructure investment plans that have been shifted from announcement to announcement. Meanwhile economic growth is depressed, private investment remains low and debt is still rising.

And on house building, a necessary step to tackling the damaging housing crisis, Hammond has said he will lead a step change in progress on getting them built. Yet his commitment extended to just 40,000 new homes - a long way short of the hundreds of thousands needed, let alone tackle prices and rents escalating beyond what could be credibly referred to as affordable.

While Conservative spokespeople on the cycling news coverage are keen to deflect their failures onto the uncertain circumstances of the times, the reality is that six years of fiscally conservative government has led to a rise in borrowing and a vast increase, even a doubling, of the national debt. Austerity hasn't worked.

Those 'just about managing', as the Tory government labels them, have made huge sacrifices - with less welfare support, with their frontline services embattled, with work that is more precarious for lower pay. But after six years, there is still no pay off. There is no easing. There is still no succour for falling living standards.

If the Government is serious about helping the poorest, the most vulnerable, those most distant from opportunities and living precarious lives, it needs an alternative plan. Fiscal discipline, bringing down debts to reduce the cost of servicing them, is important. But no major economy is working well enough to provide prosperity for the people they're supposed to serve without help from public funds.

Progressives have to construct an alternative plan, that can return more prosperity to the communities that have made big sacrifices to achieve it, but have been alienated from the rewards by austerity. That means getting on with the work that has been put off, like building homes and infrastructure, tackling the cartels that lock communities out of the product of their own resources, with ideas like community energy co-ops, and doing more to support the most vulnerable with healthcare, social care and welfare.

Chancellor quietly drops yet another target, but Labour infighting means chance to pitch positive alternative case will be missed

Under Chancellor George Osborne's stewardship, the Treasury is going to miss another of its fiscal targets. Photograph: Pound Coins from Pixabay (License) (Cropped)

On Friday, at the quiet end of the week and under the cover of the Labour and Conservative leadership wrangling, Chancellor George Osborne announced that he was relaxing the fiscal rules demanding that the government deliver a budget surplus by 2020 (Ahmed, 2016).

Paul Johnson of the Institute of Fiscal Studies immediately stressed that the measure, though it would allow for more borrowing and so less spending cuts or tax rises to cover the shortfall caused by the post-Brexit downturn, would not mean the end of austerity (BBC, 2016).

On Sunday that was confirmed when the Chancellor announced his intention to further accelerate the reduction of the Corporation Tax rate down to a new low of just 15% (Monaghan, 2016) -  a move entirely consistent with Chancellor's M.O. of managing the economy by creating seductive conditions for major firms.

With targets being quietly missed and dropped, and sweetened tax deals for major corporations being announced, it is disappointing that Labour MPs are too busy completely embroiled in their own mess to take the opportunity for a big public 'We Told You So'.

Labour are also in no position at present to step up the argument for seizing this opportunity to push for the much needed public investment plan that Shadow Chancellor John McDonnell has argued the Chancellor's fiscal rule did not allow for (Treanor & Allen, 2016).

While the first announcement was buried beneath other news on a Friday, where missed targets are often hidden, it was a move that brought the policies of Osborne and Tory leadership candidate Theresa May into alignment - as May said in her campaign announcement that she would put aside the aim to get a surplus by 2020 so as to avoid disruptive tax rises (The Independent, 2016).

While suspending the fiscal rule aligns with May's position, the decision to cut Corporation Tax may have a more complicated effect on the Tory leadership contest. Brexiter candidates have been keen to downplay the negative economic impact of the vote to leave and will seize upon any sign that life goes on as usual.

The Chancellor using the new freedom for a tax cut rather than as the first in a package of measures that include the rise in taxes that he previously warned might follow a vote to leave, could play into the hands of the Brexiter candidates. The idea that Britain still has room to manoeuvre, to make a pitch to international businesses that it is still a place to invest, will likely embolden Brexiters who accused the Remain camp of 'Project Fear'.

However, the reality is that public revenue in the UK is already tight and suspending fiscal rule only confirms the fact. Public spending is still in deficit and key benefactors like the NHS still suffer from shortfalls. Abandoning the rule means an admission by the government that only by borrowing more can it now keep up with spending demands - for now.

The big question remains as to whether borrowing, for public investment, or limiting and even eliminating borrowing, cutting public outlays and seeking private investment to cover instead - ie austerity, represents the sounder fiscal policy. Which will help produce growth and revenue?

From the OECD to the IMF (Elliott, 2016; Summers, 2014), the argument that the UK needs to borrow and increase public investment, because boosting public investment can drive the growth that delivers the tax receipts (Stewart & Asthana, 2016), has strong support. The economists who have joined John McDonnell on his New Economics tour have also made broadly the same case.

The argument from the Left is that the Chancellor's focus is on entirely the wrong part of the economy with his tax cuts, benefiting the richest in the hope that they see past their short-termist to invest with a longer view (Sikka, 2016). They also warn against the short term focus of austerity, which looks for gains by selling off parts of the government to would be rentiers, as flawed and likely to only increase problems in the longer run (Mazzucato, 2016).

The alternative is to instead start directing investment into ordinary people - whether that be through education, in skills through apprenticeships and training, through jobs repairing roads and other transport infrastructure or building thousands of much needed new homes - with every penny spent multiplying in value as it boosts the economy.

These are all long term projects, aimed at providing a stable and prosperous future. A progressive economic alternative needs to do more - from reforming welfare towards a compassionate Basic Income and improving workers' say and stake in the work they do - but public investment is the starting point.

The Chancellor has taken a step back but the pressures of austerity are not yet relieved. Progressives have to overcome their divisions so they can start building the arguments for a more prosperous future with the common good at its heart.

Alternative political thinking is alive and well, but Britain's political system makes that hard to believe

Paul Mason gives a lecture in Manchester on the economic downturn, as part of Labour Party Shadow Chancellor John McDonnell's New Economics tour.

Last night in Manchester, John McDonnell's New Economics tour came to town with Paul Mason to discuss the global downturn and how to solve the problems that austerity is not and can not. What that lecture showed, as the others on McDonnell's tour - including economists such as Mariana Mazzucato, Yanis Varoufakis and Joseph Stiglitz - is that alternative thinking is alive and well.

Yet Britain's political system makes that hard to believe. When, last month, Caroline Lucas attempted to put forward a bill from the backbenches aimed at putting the opposition views on the NHS before Parliament, a Conservative filibuster ensured she didn't have time (Stone, 2016).

Lucas' NHS Bill was scheduled for a return to Parliament on Friday for another day of backbench, non-governmental, business. During the course of this week, the Commons will have only debated two bills, for short periods of two days - the third reading of Harriet Baldwin's "Bank of England and Financial Services Bill [HL]" and the consideration of Lords amendments to Amber Rudd's "Energy Bill [HL]".

And yet, the NHS Bill sits on a list of more than two dozen backbench bills - including Norman Lamb's "National Health Service and Social Care (Commission) Bill", calling for an independent review into the future of the NHS, and a second by Caroline Lucas, the "Public Services (Ownership and User Involvement) Bill", that promotes "accountability, transparency and public control" over public services - which will not even be debated as Parliament isn't even scheduled to sit on Friday.

Time is monopolised by the government, which receives extraordinarily stacked advantages for 'winning' elections. This smothers alternative thinking, squashes legitimate debate, and keeps Parliament firmly stuck to the narrative set by central government.

But legislatures elsewhere in the UK show that politics doesn't have to function quite so dramatically this way. In Wales and Scotland, the more pluralistic assemblies have allowed for coalition and minority governments, and for a broader kind of party representation.

In these legislatures, under those conditions, alternative voices can make themselves heard. In particular, the Liberal Democrats have shown that a small party can punch above its weight, and make policy achievements (Masters, 2016). These have included securing major investment in education, in the Welsh budget, by working with the Welsh government (Coles, 2016), and speaking up for citizens' civil liberties against increased police powers and identity cards in Scotland (Macwhirter, 2015).

It is the mark of a vibrant and mature democracy that small parties can give voice to citizens' rights, to hold the government to account on matters like civil liberties or the environment and present a narrative counter to that set by the governing administration.

In Manchester, Paul Mason argued that the times may determine that the next government will be a coalition government, a progressive alliance in which, not least the Labour Party, will have to learn to embrace pluralism, cooperation and compromise. But in that necessity, lies an opportunity - a chance to push for a more grown up, more inclusive political system.

Cameron & Osborne reached Easter Recess having survived another tough short term battle, but longer term dangers linger unaddressed from failure to invest

Approach of UK Conservative and Canada Liberal governments to their respective 2016 budgets were worlds apart. Photograph: Parliament of Canada in Ottawa from Pixabay (License) (Cropped)

As Parliament went into its Easter Recess on Friday, it appeared that the Cameron Government had weathered the political storm caused by the budget. Controversies had weakened the government's position, but had not toppled it. Yet Prime Minister Cameron and Chancellor Osborne have only won the week, as tends to be their criticised focus (Kuenssberg, 2016).

While they manage the short term, there are larger, longer term, dangers they're not addressing - not least of which is the long term danger of failing to invest. Cameron and Osborne like to talk of not leaving our debts to the next generation, yet there are debts other than fiscal to leave to the next generation. One deficit they are sure to leave behind is infrastructural (Yalnizyan, 2016).

It is interesting how different priorities can be on either side of the Atlantic. In Canada, their new Prime Minister Justin Trudeau unveiled his first budget. As promised during the election, it involved deliberately running deficits in order to fund public investment in rebuilding Canada and setting it up for the future (CBC News, 2015).

John McDonnell's focus as Shadow Chancellor has been to try and undermine the perception of the Conservatives as the economically competent party, that can be trusted with the national finances. In his response to the budget, he paid special attention to the Conservative habit of over-promising and under-delivering, especially when it comes to public investment (McDonnell & O'Connor, 2016).

McDonnell has expressed particular and repeated concern that the Conservatives keep sending out press releases launching projects and yet, as argues McDonnell, don't provide or secure adequate funding. Meanwhile, against the recommendations of the OECD and the IMF, Osborne has continued to let investment consistently fall as he pursues a budget surplus (McDonnell, 2016).

What is interesting this is not a trend that Osborne began, but is rather just fitting into. Public investment in the UK has been falling steadily for the better part of fifty years (Thornsby, 2016). At the last election, both Labour and the Lib Dems wanted to put aside money for public investment, exempt from the efforts to balance the budget, but their efforts were timid due to lingering doubts about ignoring the debt or deficit in the short term to pursue a longer view.

While these doubts are being harboured in the UK, in Canada the situation couldn't be more different. At the last election the Conservatives were defeated by the Liberals coming from third place into a sweeping majority while promising to run deficits in order to fund economy growing public investment (CBC News, 2015).

Now there were certainly other aspects of the Liberal approach that helped them over the finishing line - not the least the fact that none of the parties leaders were Stephen Harper. The Trudeau campaign was open, relaxed and friendly with the public and the offer of limited-deficit funded public investment in infrastructure cannot be discounted as a factor (The National, 2016).

Yet it would seem to have only been possible to propose those deficits because the Liberals did not have the weight of a reputation for fiscal irresponsibility on their shoulders. Pre-election polls suggested that the public not only trusted the Liberals the most on the economy, but also believed they would be the most likely to have a positive impact on the economy (CTV News, 2015) - and aligned more with their promise to invest in infrastructure rather than simply cut taxes and balance the books.

While tackling the Conservative reputation, Shadow Chancellor McDonnell has also been trying to rebuild one for Labour. Bringing on a team of advisors, he has taken them on tour where, speaking across the country, they have explained how negative austerity has been and what might be possible in its place.

No one has typified this more than economist Mariana Mazzucato. In her own work, and in her work advising Labour, Mazzucato has consistently argued that the private sector is too risk averse and too short term in its thinking to handle the kind of positive long term investment that the public sector excels at (Mazzucato, 2013{2}).

In fact, if anything, she suggests that the private sector leeches off of public investment - privatising the rewards (Mazzucato, 2013). For those wedded to the fear of progressives forever being labelled as high spending, controlling statists, Mazzucato's call if not for a bigger state, but for a much easier to stomach smarter state (Mazzucato, 2014). A state that promotes growth by making smart investments where the private sector only hinders or won't take the risk; a state that promotes justice by seeing more of the reward for public efforts returned to the public.

The second, and maybe harder, part that follows the building of a reputation, is maintaining it. In Canada, the Liberals have been smart, deliberately managing expectations (Evans, 2016). While every $1 of infrastructure spending can lead to much bigger revenue returns - what Willie Rennie, leader of the Scottish Liberal Democrats, refers to as a virtuous cycle of investment (Taylor, 2016; Gray, 2016) -  they have nonetheless managed their forecasts down, leaving themselves plenty of headroom for showing the positive impact of their policies.

Public investment is important. In infrastructure, in education, in housing, in healthcare. All of these materially benefit everyone, even tackle inequality. Yet despite the Chancellor's obvious pleasure at announcing investment projects, there has been little to back it up (Pidd, 2015; Boffey, 2015) - with announcements seemingly serving as publicity to encourage private investment instead of the making of public commitments.

Sooner or later, the public will have to face the reality of the Conservative failure to invest - in education; in affordable housing; in technology, science and research. Long term public investment will be missed when the reality of selfish, short term, private investment is grasped. In the meantime, progressives have to do what they can, building the credibility of the argument for a smarter state that invests in the common good.

Budget 2016 Preview: Will the Chancellor again produce an ace in the hole that lets him to put off unpopular cuts?

George Osborne's Autumn Budget Statement promised the UK a bright future. Osborne took the chance offered by predictions of an economy looking more healthy to be a little less conservative with the national finances and drop controversial cuts to the police budget and to tax credits (ITV, 2015).

This time around Osborne is warning of dark clouds and the need to prepare for the worst (BBC, 2016). The Chancellor has been at pains to stress that there will be cuts in order to meet his fiscal targets. There might be some sugar coatings, but the medicine is still predicted to be sour.

However, the Chancellor will surely be hoping to be able, once again, to defy all expectations and match his Autumn reprieves. Yet those reprieves were themselves only temporary. They could only be delays of self-imposed hard choices that Osborne had undertaken to make.

Theresa May stressed that the police would still be expected to find efficiency savings (Travis, 2015) and the dropping of Tax Credit cuts were a diversion, as they were still set to come in later with the Universal Credit (Kuenssberg, 2015). They were also a gamble.

Osborne's Autumn Statement took positive forecasts as an opportunity to not make the unpopular choices, while still working on closing the deficit - betting on the forecasts panning out and with slight tax increases, around the fringes. Attempts were also made to temporarily ease the way for the middle class with the Conservatives' colourfully branded array of saving and house buying assistance - that buys time for much delayed house building (Wright, 2016) by siphoning homes from housing associations, depended on by the least well off, to increase competition in the private markets.

Wednesday's budget might reasonably be expected, by the opposition, to be the overdue reality check for those who voted Conservative last May, with the implementation of all of the delayed austerity measures. All of Osborne's public comments certainly seem to be preparing the ground for the further cuts - 50p in every £100 of government spending as he put it to Andrew Marr on Sunday (BBC, 2016).

Yet its hard to ever be too sure what the Chancellor is planning. Osborne managed expectations in the Autumn towards his plans for cuts to tax credits (Kuenssberg et al, 2015). Yet when the time came, he still found a way to avoid what would have proven a deeply unpopular cut.

This time around, with so much riding on the EU referendum including his own chances of succeeding Cameron as Conservative leader, Osborne is again unlikely to go antagonising voters if it can be avoided. Yet time is undeniably running out to meet his own deadline for eliminating the deficit (Verity, 2016), and small shifts in forecasts could lead to the need for drastically larger cuts to meet those goals.

Hints being dropped about new policies, to be announced on Wednesday, at the least suggest a wish to dampen the impact of announcing cuts. Yet the proposed new savings top-up scheme for the least well off seems to be little but a thin veneer (Mason, 2016) - as it's only likely to help a sixth of those who are supposed to be eligible, with Labour criticising the policy for its unrealistic appraisal of what people can actually afford to save.

Across the floor, Labour's Shadow Chancellor John McDonnell has said he wants to see more investment (BBC, 2016{2}) - putting money into building up domestic industry as a way to rebalance the economy. McDonnell's advisors, like Mazzucato and Stiglitz, have certainly been making the argument that the state has a role to play in rebuilding the economy.

It is certainly hard to see a way forward without a lot of investment from somewhere. Osborne's own hope has been for investment in Britain to come from 'emerging markets', like India and particularly China (The Economist, 2015). For these private and foreign state investments to take the slack and pump money into sectors of the UK economy and infrastructure, according to market needs, so that the Chancellor can cut government spending.

Considering that, while defending the European Union, Osborne argued it was the UK, not the EU, that was responsible for the 'red tape' that puts off investment (Bloom, 2016) - and the Chancellor's desire to stimulate these private and foreign state investments - it might not be a long shot to suggest some sort of deregulation will be included in the budget. It would certainly offer some 'efficiency' cuts in terms of reduced bureaucracy.

If George Osborne has an ace up his sleeve, he has yet to let slip what it will be. The implementation of the National Living Wage (a higher minimum wage for over 25s), very limited savings assistance and the regular increase in the Personal Income Tax Allowance (introduced by the Liberal Democrats), do not amount to much of an offset to the expected large departmental cuts.

Will the Chancellor play some hidden card, or will the full weight of his targets finally begin to fall? He doesn't have much room for manoeuvre. His fiscal deadline is approaching, neither deficit nor debt are under control and his own outlook sees global economic struggles. And yet, after so many other sleights of hand, it would be foolish to rule out the possibility of one more gamble.

Labour need to start winning battles on the airwaves if their anti-austerity policies are going to win on the ground

At some point John McDonnell has to turn his academic focussed New Economics tour into well publicised campaign events, for audiences both live in the flesh and live online, if his counter-narrative is going to take hold. Photograph: John McDonnell MP with Grow Heathrow in London in 2012, by Jonathan Goldberg/Transition Heathrow (License) (Cropped)

Yesterday evening, Labour Shadow Chancellor John McDonnell made the latest stop on his New Economics tour at the London School of Economics (Kirton, 2016). As with previous events, the audience was packed out to hear his arguments, not just against austerity but for an alternative.

The first New Economics tour stop saw Mariana Mazzucato argue, at the Royal Society, for a smarter state (Mazzucato, 2016) - defending the state as an often abused innovator that takes the risks that the private sector won't, but which shares little of the rewards. The second saw several speakers tackle how technology will affect work in the future (Srnicek et al, 2016).

At the LSE event, McDonnell spoke directly against austerity as an ideologically motivated policy - as a choice made by Conservative politicians in pursuit of a their own political goals (Kirton, 2016). The Labour Shadow Chancellor said that his priorities were to put democracy and decentralisation at the heart of his economic approach (Sheffield, 2016) - and positive statements that Labour were giving serious consideration to backing a basic income (Sheffield, 2016{2}).

What has been missing, however, is promotion. Beyond those in the loop or paying close attention, there has been little pomp and ceremony to draw attention to the Shadow Chancellor's efforts. In the face of apparent media hostility to the Corbyn-McDonnell project, the low key approach might well be understandable.

The trouble is that these are precisely the battles that Ed Miliband lost as Labour leader. Labour lost control of their own message, of their own identity, and left it to others to define them.

Economics has been the outstanding issue. The key to getting Labour back in power, according to many commentators both internal and external over the last six years (Umunna, 2015; Eaton, 2015), is to rebuild Labour's reputation as an effective and reliable manager of the economy - to regain their economic credibility. The Shadow Chancellor himself has acknowledged that reality (The Herald Scotland, 2016).

John McDonnell's idea of bringing on the world's most famous, rockstar, anti-austerity economists as advisors was a bold move. Taking them on tour to make their arguments, to build a counter-narrative in opposition to austerity, was bolder still. But the low key, low profile, approach can only reach so far.

Right now, the Corbyn-McDonnell team is fighting battles within small circles of onlookers. Scrapping for party policy positions, introducing an alternative narrative by increments to interested and sympathetic audiences at cosy events. Yet, sooner or later, the boots of campaigners will have to hit the ground and bring them face to face with the voters who live far outside of those circles.

The Corbyn-McDonnell team have shown that, within their own party, they have a pitch that appeals to a broad cross-section of society - from young to old, from poor to wealthy (Sayers, 2016). As with Bernie Sanders in the United States, there is the potential for a winning coalition. But that won't automatically translate into public sympathy.

To reach those people, New Economics will have to start winning battles on the airwaves. Promotional ideas like the New Economics tour will have to be prepared to put a spotlight on its rockstars, promote them and get them playing to bigger crowds - crowds that are maybe more sceptical and who need the grand ideas distilled and condensed.

John McDonnell and his advisors are presenting a compelling vision of a very different, more humane, economy and society - not least in their acknowledgement of the basic income. The next step is to turn up the volume and stop conceding control over the airwaves.

If Labour is going to compete with the SNP in Scotland, it needs to address its own complicated and confusing politics

Labour have a lot of work to do in Scotland if they are to recover from the landslide defeat that cost Jim Murphy his job. Photograph: Jim Murphy and Eddie Izzard meeting retailers in East Renfrewshire by Scottish Labour (License) (Cropped)

In his speech to the Scottish Labour Party conference, Jeremy Corbyn made clear his intention of facing the SNP head on in Scottish Parliamentary Elections in May (BBC, 2015). Corbyn pulled no punches in the speech, which contained barely veiled criticism of SNP. He referred to Labour as the true democratic socialist party, in both "words and in deeds".

Along with new Scottish Labour leader Kezia Dugdale, the Labour leadership face an undoubtedly uphill task. Even accounting for the 'Corbyn Effect' and 'Corbynmania', the general election in May was only the culmination of years of alienation - during which time the popularity of the SNP soared.

If Corbyn wants to outright defeat the SNP, he has to get to grips with Labour's long term Problems. At the last election, Labour lost support in every direction: they lost their base on the Left and amongst the working class by making those supporters feel abandoned; and they lost amongst their targets on the Right because the Tories convinced voters that their abandonment of the Left was not genuine.

Their unclear, inconsistent, positions - that sought to string the Left along without having to pursue Left policies - only led to alienation.

Ahead of Corbyn and Dugdale is the task of making Labour credible again. But rather than how this is usually interpreted - vis a vis embracing mainstream neoliberalism - the renewed credibility requires consistency: clear beliefs, backed by clear motivations, that support clearly communicated stances and policies.

That means Labour has to be very careful of U-turns and wavering - the choice to delay tax credits cuts rather than to kill them outright (BBC, 2015{2}), or Shadow Chancellor John McDonnell's shifting position on George Osborne's fiscal responsibility charter (Perraudin & Wintour, 2015), both being prime examples.

Along with establishing their own position, they also seem determined - if the thinly veiled criticisms from Corbyn's speech tells us anything - to shake the impression people have of the SNP as a true party of the Left.

There certainly are, undoubtedly, some legitimate criticisms to be made with regards to SNP governance (Macwhirter, 2015). And it isn't a departure from reality to suggest that the SNP could be more comfortably described as a broad tent party of the Centre. But the SNP under Nicola Sturgeon is no flash in the pan protest vote, to be undone by the simple bursting of a bubble.

The SNP used disaffection on the Left with Blair and Brown's long rule of Labour to first establish themselves, through Alex Salmond's Scottish minority administration, as a credible party of government. As Labour's credibility sank, the SNP converted that position into a majority in Scotland in 2011 and then a virtual sweep of Scottish seats at Westminster in 2015 under Nicola Sturgeon.

The position of the SNP has been at least a decade in the making. It is a well organised, with visible support that wields distinctive branding and a clear sense of themselves as the opponents of conservatives. Theirs is a formidable position.

If they're to compete, Labour need consistency, clarity and clear communication. Without addressing the complicated and confusing politics with which they alienated supporters as New Labour, they stand little chance of being seen as a credible alternative to the SNP.

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.

What kind of economy would Labour's new economic advisory council build?

Photograph: John McDonnell MP, with residents and supporters of Grow Heathrow outside Central London County Court in 2012, by Jonathan Goldberg/Transition Heathrow (License) (Cropped)

John McDonnell, Labour's new socialist shadow chancellor, has moved to rebuild the party's economic reputation by appointing an economic advisory council (BBC, 2015). The council is, by all estimations, a supergroup comprised of the rockstar economists of anti-austerity thinking: Thomas Piketty, Joseph Stiglitz, Mariana Mazzucato, Anastasia Nesvetailova, Ann Pettifor and David Blanchflower.

There are two clear aims to this move. The first is to show that, not only is austerity thinking flawed, but that there are clear alternatives. The second is win back for Labour the credibility on economic policy that they had lost, fairly or not, by 2010.

It has been argued, seemingly endlessly, that without both credibility and a clear alternative, Labour's reputation - and so its ability to win elections - will not recover (Elliott, 2012; Kendall, 2015; Reid, 2015). So it is important to know what kind of alternative Labour's new advisors would have them construct.

The resumes of Labour's new advisors

Thomas Piketty is a French economist who had a large impact, in political and economic circles, with his 2013 book Capital in Twenty-First Century. In that work, he puts forward a simple premise and explores it in depth.

Piketty's thesis is that the concentration of wealth, resulting from the rate of return on capital being in the long term in excess of economic growth, is as much a political problem as an economic one. In his assessment, the access to capital brought by inherited wealth and the 'rentier' power it gives, prevents the competition and distribution for which the free market is lauded.

That is an assessment agreed with by the OECD, the Organisation for Economic Co-operation and Development. They argue that their findings show that income inequality in fact strangles growth, with countries that have a more even income spread actually performing better (OECD, 2014).

Piketty's proposed solution is for progressive taxes to be levied upon wealth and coordinated globally to suit the globalisation of capitalism. The failure to pursue this, in the French economist's eyes, means standing by as the rich consolidate control over society, crushing democracy in their wake by leaving the poor dispossessed and powerless (Naidu, 2014).

This concern with regards to inequality is shared by Joseph Stiglitz, former Clinton advisor and critic of the management of market globalization (Stiglitz, 2000). Stiglitz's work The Price of Inequality argued that inequality was as much the concern of the 1% as the 99%, as 'their fate is bound up' with how the other side live (Roberts, 2012).

To tackle inequality, Stiglitz argues that there needs to be a change in norms. He argues that free markets in fact need the protection of strong regulations and transparent accountability (Edsall, 2012), in order to break the monopolies on power that are used to influence selfish terms - to, in essence, reclaim capitalism.

For Mariana Mazzucato, reclaiming capitalism begins with reimagining the role of the state (Mazzucato, 2013). Mazzucato envisions the state as a risk-taking innovator, the creator and shaper of markets, and the natural agent to act in the 'common good' where privatisation is poorly suited and will not stop public subsidy (Mazzucato, 2013{2}).

She argues that this includes the provision of essential public services like education or health; investments in public infrastructure; investment and support for entrepreneurs, whether in business, for research, or for science and technology - all areas where steady, engaged, long-term investment commitments are needed.

Yet Mazzucato is not arguing for nationalisation or a growing of the state, but rather for a smarter state (Mazzucato, 2014) - bold and able to take risks. Quoting Keynes, she argues for a state that opens up new markets and regulates them:

"The important thing for government is not to do things which individuals are doing already, and to do them a little better or a little worse; but to do those things which at present are not done at all."

As for the others on Labour's select list of economists?

Ann Pettifor predicted the severity of the economic crisis with her 2006 book The coming first world debt crisis and, in a very Keynes-esque manner, has worked hard to make clear the dangerous role that debt has played in events (Cooper, 2015). She has also argued that the debt crisis exposed dangerous collusion between governments and the finance sector that broke the 'link between risk and reward' and so chained 'free' markets (Pettifor, 2014).

David Blanchflower, a former member of the Monetary Policy Committee of the Bank of England, has spoken out against the idea that Labour 'caused' the 2008 financial crisis and against the economics of austerity (Blanchflower, 2015). Blanchflower was amongst the signatories of a letter during the Labour leadership campaign - along with Mazzucato - that argued Jeremy Corbyn's economic policy was in fact the moderate, mainstream response and it was instead George Osborne's austerity that was extreme (Blanchflower et al, 2015).

And finally there is Anastasia Nesvetailova, whose work Fragile Finance warned in 2007 of the fragility and instability of the finance-based economy, upon which the whole political and globalised economic house of cards was based (Nesvetailova, 2007).

The respectable face of economic opposition

So what kind of economy do these ideas combine to form?

In a definite stance of opposition to the dominant, and austere, conservative approach, the consensus running through Labour's new advisors is for the state to have a strong role - though not through nationalisation. The emphasis is placed upon the work the state does to create a framework for society - on infrastructure, on social security, on regulating market activity.

In fact, looking over the recommendations is almost like a review of German economics in the late twentieth century during the time of Germany's Wirtschaftswunder - its 'economic miracle'. The social market, so-called Rhine Capitalist, system that underwrote that economic boom was plush with public-private partnerships.

Inspired by German Ordoliberalism, the state was to act as regulator and facilitator in the Rhenist system (Guerot & Dullien, 2012). The aim was to ensure greater equality, and widely enjoyed prosperity, all while retaining an appreciation for free markets - so attempting to get the social aims and a vibrant market to go along hand in hand.

The ideas also bear some resemblance to those of Liberals and Liberal Democrats in the UK over the decades. Setting themselves apart from the Conservatives and Labour, their approach was to argue that it was not about a large or a small state, but about what the state is and what it does (Brack et al, 2007) - so Liberals might pursue the most efficient solution with the least interference with the individual.

In these similarities with liberal ideas, the approach of Labour's new advisors marks a kind of sharp change for the party, away from the centralised and overbearing managerialism it has pursued since the Second World War. But what stands out most is that, if we can accept that austerity represents a purely right-wing form of economics, the vision these economists are putting forward represent the mainstream - the democratic economics of the centre.

Building an alternative

With these very much mainstream, Keynesian-esque, ideas - based on broad analysis critical of austerity but friendly to markets - accomplishing the task of recovering Labour's credibility should not be such a long shot. Even reaching out to reintegrate the unhappy New Labour-ites should not be impossible.

For restoring their respectability, it is now a matter of building that model and presenting it to the public, which - if done right - could create the base from which the Conservative approach can be disassembled.

That would mean embracing Keir Hardie as Jeremy Corbyn did, in his first speech to the Labour Party conference as leader (Kennedy & Grierson, 2015). The existence of a credible alternative to the rigours of austerity allows the party to challenge the necessity of the suffering it has caused, and to try to 'stir up divine discontent with wrong'.

And yet, while the dry and balanced macroeconomic mainstream vision is the economist's dream ticket to government office, it is not hard to imagine these technical reforms falling short of progressive expectations.

There are radical ideas with not touched on here.

Citizen's income (Razavi, 2014), mutuals and co-ops (Webb, 2015), shorter working hours and the possibilities that automation are bringing (Mason, 2015) - these are all ideas tied closely to questions of equality, accountability and innovation.

However, there is likely more to come from the team of Corbyn & McDonnell - not least the pursuit of rail renationalisation (BBC, 2015{2}) and community owned energy companies (BBC, 2015{3}) - than is being accounted for here. Those extra measures are needed.

If we are to have more equality and accountability in the economy, there needs to be more co-operation. Which means more say for workers in the running of their workplaces and a greater mutuality of aims.

And if people are to enjoy full balanced lives, they also need enough time to embrace more than just their universal human rights to fair paid work and 'rest and leisure'. They need the resources and time to study, to raise families, to assemble, to debate and to act.

And if people are to have both of the above with freedom, from both want and coercion, they need the basic guarantee against poverty and homelessness afforded by a Citizen's Income.

As it says in the old Liberal Party's Yellow Book (1928), written under the deep influence of David Lloyd George and John Maynard Keynes:

'We believe with a passionate faith that the end of all political and economic action is not the perfecting or the perpetuation of this or that piece of mechanism or organisation, but that individual men and women may have life, and that they might have it more abundantly.'

A true progressive alternative to conservative economics needs to embrace big ideas. It needs to reform, it needs to challenge and it needs to spark hope of a new way forward.