Budget 2016: Osborne's Sugar Levy will get the headlines, but he's presiding over a weak economy and a fractured society

Osborne's budget will grab headlines, but there is more moving beneath the surface. Photograph: Pound coins from Pixabay (License) (Cropped)

If there is anything you can take away from the UK government's 2016 budget statement, it's that the Chancellor George Osborne knows how to tick boxes. There was support for small businesses, a levy on sugary products and government help for savers (BBC, 2016).

The Chancellor gave these policies, gathered together, a budget for the next generation. Yet as ever, the headlines are only what Tim Farron called the 'political theatre' (ITV, 2016). There is much more to be found in the details - not least a revealing look at the Chancellor's approach to government.

Osborne admitted that economic growth forecasts suggest the economy is growing more weakly, and that the government has missed its own debt and deficit targets (BBC, 2016). Yet room was still found for cuts to corporation, raising the highest tax band and making cuts to capital gains tax.

Jeremy Corbyn's response was hostile. From the off he called the Chancellor's budget a legacy of failure, that was poor on equality (BBC, 2016{2}). The Labour leader argued that the breaks for the wealthy were being paid for by those who could least afford it.

Corbyn said that tax breaks for the wealthy were disgusting when they were accompanied by cuts to disability support. The poor attitude towards equality was epitomised in the continued existence of the tax on 'women's products', as in essentials like tampons and sanitary towels, and the patronising plan of distributing the proceeds to 'women's' charities.

As for the next generation, there was little in the budget to offer a tremendous amount of hope. Under-25s won't benefit from minimum wage rises - or increasingly from any kind of social security at all (BBC, 2013) - and savings help for under-40s won't do much to help deal with rising housing rents, let alone house prices.

There was also little information on how the Chancellor intended to find the funds to cut the deficit. Beyond the previously announced changes on tax credits and ESA, there were no other major spending cuts were outlined, beyond a vague commitment to finding around £4bn in government 'efficiencies' - and apparently raising an, astonishing, £12bn from closing tax loopholes.

From a progressive perspective, one thing that the budget did reveal was Osborne's attitude to government. The Conservatives have felt comfortable pitching themselves as supporters of limited government, the private sector and even pitching themselves as rendering the Liberal Democrats obsolete.

But the Chancellor's decisions reveal something different, highlighted in the way that he framed tax cuts for small business. In his statement, Osborne said they were made possible by higher revenue coming in from big business.

But what Osborne could not resist was to also take higher receipts as a signal to cut taxes. What this highlights, and the Chancellor himself alluded to, is the Conservative view of taxation as an incentive or disincentive. A mechanism to be used to manipulate social behaviour toward the governing party's interpretation of the 'national interest'.

What hasn't been asked by those handing out successive tax cuts is whether tax in itself has a role to play as a civic contribution, that goes towards the serving of the public good. Whether there is a contribution that ought to be made, back into the community, for the extraction of wealth in your own interest.

As Osborne cuts back government spending and the public sector he reveals something else. A vision of a small state, one that does little itself but interferes a lot: meddling and social engineering through the tax system, trying to shape society through supply and denial of small but crucial funds to devolved institutions largely bereft of funding.

The sum so far of Osborne's approach is an increasingly divided and unequal society. Taxes have come down but the economy remains weak. Burdens continue to pour onto the more vulnerable. Osborne will get the headlines, but they are only a mask that disguises a weak economy and a fractured society.

As the Conservative Welfare Bill goes to an activist House of Lords, progressives need to speak out for the alternatives

The House of Lords has become an ironically activist body in opposition to the Conservative majority in the Commons that is trying to substantially restructure social security in Britain.

On Tuesday the Conservative government's Welfare Reform and Work Bill returns to the Lords for its third reading. The bill is a key part of the Conservative pursuit of their roundly inspecific manifesto promise of billions in 'welfare savings' - including attempts to scrap child poverty measures, to introduce a total Household Benefits Cap, to freeze benefits and to restrict Child Tax Credits (Treloar, 2015).

In Autumn, the Chancellor dodged public criticism by dropping plans to make cuts to Tax Credits, aided by a gamble on positive economic forecasts (ITV, 2015). Yet, as was recorded at the time, this was only a matter of delaying the inevitable (Kuenssberg, 2015; Eaton, 2015). The intention was still, in time, to phase out Tax Credits and fold them into the Universal Credit.

Now its again the turn of the Universal Credit to face cuts (BBC, 2016). The Institute for Fiscal Studies has stressed that changes will leave many of the poorest people thousands of pounds worse off. Once more the burden of paying down the deficit and debt has been shifted around, disguised, and then left upon the poorest, on those who are struggling the most.

If other opposition has been quiet - with the Labour Party in its pre-Corbyn interim under Harriet Harman abstained in the bill's early phases (Guttenplan, 2015) - it may only be because the political system renders them powerless.

Its true that the government has already been defeated in an ironically activist House of Lords over its welfare plans on both Tax Credits (Morris & Grice, 2015) and the attempt to scrap Child Poverty measures (Mason, 2016; Mortimer, 2016) - with Liberal Democrats who in particular seem determined, weak though their mandate has now become, to use their, problematic but still considerable, presence in the House of Lords to oppose the cuts in Parliament. Yet with a Conservative Commons majority, any opposition could eventually be overcome.

One the biggest criticisms of the Conservative majority is that it has sought to balance the books without sufficient concern for the human cost in the present (Sikka, 2015; Boffey, 2014). The focus of the Conservative government on 'making work pay' has mostly been an exercise in relativism - making work seem relatively more profitable by punishing, hassling and impoverishing those in need of welfare.

For progressives there is a responsibility to look to other ways that do not accept the casualties of the present as an inevitable tragedy and to speak out, especially at a time when the most vulnerable are losing their voice by falling off electoral registration lists and so being under-represented (Mason, 2016{2}). At present, the most exciting alternative is the Basic Income.

On trial in the Netherlands and Finland (Perry, 2015; Unkuri, 2015), the Basic Income is a form of universal welfare, provided to all citizens unconditionally. It acts as a level of subsistence support that is always available, aiming to alleviate all citizens from the fear of falling into, and the desperation of being in, poverty.

On a practical level, it would replace most in-work benefits. From the personal income tax allowance - which might be seen to fulfil a similar role through a tax discount, only provided on the condition that you work for a wage, at a cost of an estimated £86bn - to tax credits and the jobseekers allowance - costing £30bn and £3bn, respectively.

The ongoing economic struggle continues to disproportionately hurt the most vulnerable. Austerity has little to offer them, depending more upon negative liberty, the removal of limitations, than positive liberty, providing a leg up to opportunities.

Laissez faire is not enough. Visibly rising homelessness and the need for food banks is not good enough. A civilised society should be able and prepared to take care of the most vulnerable. Progressives have to be prepared to look for and propose solutions, with more compassion, that act to end poverty.

Autumn Statement: Osborne's spending review takes risks & makes U-turns to dodge political storms - but only in the short term

George Osborne wants to be seen as a builder and as a friend to workers. Lower borrowing costs allow him to cut less this time around and tax rises offer more apprenticeships, yet it all rests on a series of gambles. Photograph: The Chancellor with guests at Port of Tilbury on 1 April 2014 by HM Treasury (License) (Cropped)

This was expected to be an announcement of ever deeper cuts than ever before, with £20bn needed to keep on course with Conservative fiscal targets (Kuenssberg et al, 2015). With George Osborne as Chancellor, however, it was never quite possible to be too sure.

The big unexpected move this time around was the Chancellor's decision to drop the proposed cuts to tax credits (Robinson, 2015). Announcing a better than expected fiscal situation, and saying he had listened to concerns, Osborne said it was easier simply to avoid the changes altogether (Politics Home, 2015).

That was accompanied by the announcement of no cuts to police budgets and the frontloading of NHS funding at £6bn next year (ITV, 2015; Dominiczak, 2015). In sum, these announcements gave the impression of a much less stringent budget, on the back of an Office of Budgetary Responsibility (OBR) assessment that more money would be available, with lower borrowing costs, and so less would need to be cut (Reuben, 2015).

These announcements followed the Osborne's habit from previous budgetary statements and announcements, of pulling out a surprise. And yet, for everything that Osborne hasn't cut, he is still gambling on the market bailing him out later by delivering the OBR's predicted strong economic conditions, rewarding him with higher tax receipts, if he is going to meet his own targets.

If expectations and receipts fall short then cuts will still have to be found later. In fact, the observation has been made that the backdown on tax credit cuts is only a temporary stay, as the cuts will still come with its phasing out to be replaced with the universal credit by 2020 (Kuenssberg, 2015; Eaton, 2015).

Burdens are once again being shifted by the Chancellor. Along with the private debts taken on over the last five years by students, joined now by student nurses (BBC, 2015), there will be caps on housing benefits (Peston, 2015). There was also no relief from the Tampon Tax, with the odd decision to maintain the tax but to use it to fund women's charities (Richards, 2015).

The burdens are also being stacked onto local government and the private sector - with new taxes on business to pay for apprenticeships and local government expected to raise local rates to cover certain services (ITV, 2015{2}; Wintour, 2015).

Full analysis of the line-item details will follow from all corners of the media and political world.

Yet the initial impression is that the Chancellor is once again taking a risk. Osborne is gambling on markets and the broader economy to perform well enough to buy him time and space until the political storms blows over - which allows him to wriggle around on the nose cuts, in favour of less dramatic phased changes.

Cameron & Osborne's long term plan for austerity is now deep into territory even Conservatives are finding hard to accept

David Cameron's long term austerity plan is starting to worry Conservatives, but he and ministers seem to be blissfully unaware of the human impact of cuts upon even working families. Photograph: Prime Minister David Cameron - official photograph by Number 10 (License) (Cropped)

With their defeat in the Lords on Tax Credit cuts, the Conservatives seem to be in a bit of a crisis (Morris & Grice, 2015). While Chancellor George Osborne has assured anyone who will listen that he has found his next round of cuts (BBC, 2015), a massive 30% from departmental budgets to be announced at the spending review, he has faced opposition from his own party.

Former Conservative Prime Minister John Major called for a rethink of the government's approach in light of rising inequality and the impact of policies upon the poorest (Quinn, 2015). There has even been opposition from the Conservative controlled work and pensions select committee.

The members of the select committee argued that cuts are at their limit and urged the Chancellor to take a pause and rethink his priorities (Wintour, 2015). Combined with the Conservative MPs who spoke out against Tax Credit cuts and those that would not back a slackening of Sunday trading laws (Dathan, 2015; Lansdale, 2015) - which led to that proposal being withdrawn (BBC, 2015{2}) - the government is under growing pressure to back down and change direction.

Yet it seems unlikely that, in the long run, David Cameron's Ministry will deviate from its general course. The broadest evidence for that is the Prime Minister's own bafflingly ill-informed letter to Ian Hudspeth, the leader of his native Oxfordshire county council, criticising cuts to services (Monbiot, 2015; Oliver, 2015).

Cameron's apparent ignorance of the depth of impact from his own economic policy is yet another example of the Conservative failure, or refusal, to address the human cost of their policies (Morse, 2015; Stewart & Elliott, 2015). According to the Joseph Rowntree Foundation, the burden of cuts has been falling almost squarely upon those least able to bear it (Hastings et al, 2015).

Essential services like social care are being stretched thin and, as Cameron himself notes, staples of British civil society like libraries and museums have already had their funding cut (The Independent, 2015). And yet, the most well off have been sheltered.

Opposing and mitigating the deeply negative impact of the cuts on citizens requires two things. First, the progressives on the opposition benches have to unite behind broad, common positions. And so, second, moderate Conservatives willing to rebel against government policy can move decisively to check negative plans. It has been seen before over the seven months of this government: only a broad Parliamentary effort can successfully defeat the government's, albeit thin, majority.

As John Major admitted, inequality isn't about skivers or scroungers. It's about those with opportunities and those without them - and that second category is at risk of being flooded with the 'working families' Conservatives have tried to make a staple of their support.

The key for progressives is to make sure concerned Conservatives see how much hurt austerity can and will bring down upon the very people they depend upon for votes in their constituencies - to show them just how toxic it can be to have a lack of compassion and consideration.

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.

The confrontation between government and opposition over Tax Credits is exposing the need to reform the House of Lords

David Lloyd George took on a Tory Landowner dominated House of Lords in his efforts to pass his Liberal 'People's Budget' of 1909. Photograph: Statue of David Lloyd George in Parliament Square by Matt Brown (License) (Cropped)

Attempts earlier this week by Labour, Liberal Democrat and Crossbench Lords to block the much derided Tax Credit cuts, where derailed yesterday due to fears of sparking a constitutional crisis (Wintour, 2015; Wintour, 2015{2}). Opposition parties where warned against threatening contravention of established parliamentary conventions by the Commons Speaker John Bercow (Wintour, 2015{3}.

The move marked an odd moment for progressive politics in the UK. Since Liberal Prime Minister David Lloyd George sought to take on the House of Lords in his attempt to pass his 1909 budget, the supremacy of the Commons over the Lords has been clearly defined: the Lords cannot impede the government's supply bills, which are concerned with taxation and government spending and, through the later establishment of the Salisbury Convention, the opposition should not block government manifesto promises for which their election is seen as a clear mandate.

The decision of progressives to use the Lords, against which Lloyd George had struggled when it was controlled by an overwhelming Tory majority, represents a severely pragmatic choice.

While the actual threat of constitutional crisis from the Lords blocking Tax Credit cuts has been called into question - on account of whether the changes actually counts as primary, budgetary legislation due to an election campaign promise not to cut them, and no reference to cutting them in the Conservative manifesto (Daily Politics, 2015) - there is a need to stop and consider the implications beyond the legal minutiae.

Both the Labour Party and the Liberal Democrats (in particular) have proposed, considered and attempted reform of the House of Lords in the past. Liberal Democrat attempts where foiled during the last government, due to obstinacy from Labour and Conservatives (BBC, 2015); and during the last election campaign Labour pledged to replace the Lords with a Senate of the Nations and Regions (Labour, 2015).

The willingness of the opposing parties to even approach a risk of crisis certainly shows is the depth of opposition to the Tax Credit changes, even growing with the Conservative Party itself (Watt, 2015), and the limited legitimate instruments available to the opposition to challenge their passage.

But the hypocrisy it engenders also marks out the need for reform. The UK has an entire, massive and expensive, unelected chamber that cannot act. Any of its votes, and the legitimacy of any of its actions, can be called into question because its assembled numbers are not elected. This is an unacceptable state of affairs.

Contrary to Prime Minister David Cameron's belief that the issue has passed by and should be left alone (Wintour & Watt, 2015), it remains of importance. Issues like Tax Credit cuts are too important for the legislative instruments through which they pass, or in which they are opposed, to be anything less than transparent, clearly purposed and above controversy.

Whether that means establishing a directly proportionally elected upper chamber, or one representative of the nations and regions - in either case holding a longer term view, as opposed to the shorter term community and municipality based Commons - change is needed.

The problem facing the progressive parties, is what to do with those institutions in the meantime. The pragmatic decision - that has clearly been made by Labour and the Lib Dems - is to continue using those instruments as they presently are, despite their problematic nature, because the policies they oppose demand a response and they are the only legal instruments at their disposal.

It is a pragmatic position that Lloyd George would likely have agreed with. Despite being a reformer, Lloyd George was prepared to flood the Lords with newly ennobled Liberals to get his way and, later, the Welsh Prime Minister was still prepared to go into coalition with the Conservatives to pursue his policies.

Their are alternative paths, such as the decision by Justin Trudeau - Liberal leader and newly elected Prime Minister of Canada - to withdraw the Liberal whip from unelected Liberal senators (Mackrael & Wingrove, 2014). Yet such idealistic statements risk getting in the way of practical politics, like opposing policies that have been alleged to risk impoverishing millions of people.

The only solution to this conflict between idealism and pragmatism is to reform the Lords, along with broader electoral reform - for which the necessity is demonstrated by the fact that the controversial Tax Credits policy can only be pursued by the government because the Conservatives hold an unrepresentative majority of seats. Unless there is real reform and clear representation, the policies of any government and the tactics of any opposition will continue to be challenged and undermined.