Winter Statement of Discontent

Some have characterised the presentation of the Chancellor's autumn statement yesterday as a paradox of political theatre: how could a man who comes to the house to admit that he has failed in all the objectives he set himself possibly look so cheerful? And how can the opposition perform so badly in response? The key to the answer lies in the word theatre: what the Tories do so well is the debating they learned in their public schools, which they perform with the panache of those educated to know that they have the right to rule.

And from another perspective, of course, Osborne has been one of the Conservatives' most successful chancellors. He has used the financial crisis to advance the interests of capital in ways that would have seemed impossibly radical before 2008. The measures offer clearer evidence yet of the Tory strategy of using the debt to achieve long-desired political objectives.

Item 1 is the cut to corporation tax, now to be reduced by 3% in April rather than the promised 2%, meaning an official rate of 21% from 26% last year: a full 5% reduction in the contribution from business at the very time they are in the dock for avoiding the tax they are supposed to pay. Osborne boasted of his generosity to corporates: 'This is the lowest rate of any major western economy. It is an advert for our country that says: come here; invest here; create jobs here; Britain is open for business.' The headline UK rate has already been reduced from 26% to 24% this year. The rates of 40% in the US, 33% in France and 29% in Germany make it clear which Chancellor is really the capitalist's friend and help to explain why we can no longer afford to fund our public services.

Items 2 is cuts to welfare, with a three-year freeze meaning real reductions and real hardship for all except pensioners. It is basic arithmetic to explain why those on the lowest incomes can least afford to see their incomes squeezed by inflation since the marginal impact on them of rising prices is so much strong. The justice of this situation is about not depriving the poor of the means to survive, rather than some new conservative commitment to income differentials. And meanwhile the stigmatisation of all those who claim welfare (which is probably around 99% of us at some point in our lives) stokes the fires of prejudice and fear.

The best news in the budget is the retreat from an earlier announcement of an end to national public sector pay. In the poorer areas of the country, nationally negotiated pay rates for public-sector workers can keep local businesses afloat in desperate economic times like these. Negotiating deals for teachers and doctors that relates to local labour-markets would have sucked more money out of the regions, exacerbating the inequalities between regions that have already increased throughout this Recession. Presumably the U-turn here was a result of Liberal Democrat pressure.

The 'greenest government ever' banner now lies in tatters at the Chancellor's feet as he lures investors into the sorts of developments that will drive economic growth at any cost, threatens to abandon Labour's climate change targets, and offers subsidies to the frackers. With 30 gas-fired power-stations looming and the final abandonment of the fuel-duty escalator we can wave goodbye to any hope of doing out part to prevent carbon dioxide emissions from spiralling out of control.

The language used by the Chancellor is also deceptive and oppressive, although I find it helps to substitute the word 'capital' for the word 'business', making sense of Osborne's repeated claims to be 'prioritising the interests of business'. I am also intrigued by the constant repetition of the phrase 'the economy is healing'. Is the personification of a complex system made up of a mass of individuals supposed to win or empathy? Or to soften the perception of the stark economic news? It is fairly clear that, rather than healing, the economy is like a patient that has been stitched up leaving a festering wound inside. Proper healing would have required tackling the distorted financial and monetary systems rather than ignoring their flaws and hoping that they will somehow mend themselves.
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Green Welfare

Why should we look after each other? Why should we have a concern for each other's welfare? Today we launched Green House, an environmentally focused think-tank and one of our initial papers was on the theme of welfare. What we found is that welfare systems have a range of different motivations.

In Britain we have never had a welfare system that was motivated by our commitment to care for each other; rather our system is focused on the labour-market. Pensions reward people for service to the economy; sickness and unemployment payments support people while they are temporarily unable to work; and more recently child tax credits support women with children also being part of the labour market. Our welfare system is designed to support a growing economy rather than a happy society.

In the paper we re-imagine a welfare system designed to ensure real social security, while recognising that we have an ageing population and that our economy has to stop growing. This takes us to several controversial conclusions:

- the close historical connection between welfare and the labour-market should be broken;
- the idea of an official ‘retirement age’ should be abandoned, to be replaced with a more flexible approach to social contribution and dependence through the life-course;
- we should re-open the discussion about the usefulness of a relative definition of poverty in the context of a limited planet.

This is not a prescription for a nanny state: quite the reverse. We suggest that citizens should be given the skills and assets they need to provide better for their own security, either individually or within local communities. A green economy would be based on strong local economies and sustainable livelihoods and we argue that such an economy would, in many respects, reduce the need for a costly social support network.

Finally we welcome Iain Duncan Smith's suggestion of the need for a universal approach to welfare, but we take this suggestion more seriously than he dares to by proposing the introduction of a universal payment—a Citizens Income - paid to all citizens of the UK as a right and without work-based qualifications.

The debate about welfare is dishonest and divisive: commentators focus on the tiny number of so-called welfare scroungers when the overwhelming majority of welfare spending goes to the increasing number of pensioners. Most importantly, from a green perspective, we ignore the way that defining poverty assumes, as well as requiring, continuing economic growth which cannot be maintained within the fixed limits of the planet.
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