Osborne's council tax freeze is an old announcement

The Chancellor promised to freeze council tax for two years in his 2008 conference speech.

You could be forgiven for thinking that George Osborne has pulled a rabbit out of a hat with his pledge to freeze council tax for a second year running. Indeed, most of the papers lead on the story this morning and treat it as a new announcement. "Tories find £805m for council tax bill freeze," says the Times, adding that Osborne, who will address the Conservative conference today, has offered "comfort" amid the "austerity drive".

But the truth is that this is merely a restatement of existing policy. Osborne first promised a two-year council tax freeze in his speech to the 2008 Conservative conference. "I can tell you today that the next Conservative Government will freeze your Council Tax for at least two years," he said.

The policy went on to feature in the Tories' 2010 election manifesto and the coalition agreement included a pledge to "freeze council tax in England for at least one year", and to "seek to freeze it for a further year."

With his growth strategy under attack from Tory backbenchers, it's no surprise that Osborne is talking up this measure. But it is indicative of the weakness of his plan that, with growth stagnant (the economy has grown by just 0.2 per cent in the last nine months), the best he can offer is a re-announced £805m council tax freeze. Families paying an extra £450 a year in VAT (owing to Osborne's decision to raise the tax to a record high of 20 per cent) will gain just £72 from the measure.

Were Osborne truly determined to stimulate growth, he would have announced an emergency tax cut such as a temporary reduction in VAT (as advocated by Ed Balls). A VAT cut would boost consumer spending, lower inflation, protect retail jobs and increase real wages. When Alistair Darling reduced VAT to 15 per cent during the financial crisis, consumers spent £9bn more than they would otherwise have done. A VAT cut today would be a similarly effective fiscal stimulus. As Boris Johnson wisely observed in his Telegraph column in July, "[I]f we were to cut taxes now, it might be best to start with VAT to get people shopping again." Osborne's decision to raise VAT (a measure he described as "permanent") by 2.5 per cent to an all-time high of 20 per cent automatically knocked 0.3 per cent off annual growth (OBR figures).

A council tax freeze will do little to stimulate growth and little to relieve families facing the biggest fall in living standards since the 1920s. We'll get a better idea of Osborne's plan when he addresses the Tories at 11:20am today (we'll be live blogging his speech on The Staggers). But so far, all the signs are that he will offer little to combat the growth crisis facing Britain.

George Eaton is political editor of the New Statesman.

Getty
Show Hide image

Progressive voters must ditch party differences to gain a voice in Brexit Britain

It's time for politicians and activists to put aside their tribal loyalties.

The status quo has broken. British politics lies shattered into pieces, and even Brexiteers look stunned. We are in a new landscape. Anyone who tells you they have the measure of it is lying; but anyone reaching for old certainties is most likely to be wrong.
 
Through this fog, we can already glimpse some signposts. There will be a leadership election in the Tory Party within three months. While it is still unclear who will win, the smart money is on a champion of Brexit. The Leave camp are in the ascendancy, and have captured the hearts of most Tory members and voters.
 
The next Conservative prime minister will lack a clear mandate from voters, but will need one to successfully negotiate our exit from the EU. They will also see a golden opportunity to capture the working-class Leave vote from Labour – and to forge an even more dominant Conservative electoral coalition. UKIP too would fancy their chances of dismembering Labour in the north; their financier Arron Banks now has almost a million new registered supporters signed up through Leave.EU.
 
In this context, it seems inevitable that there will be another general election within six to twelve months. Could Labour win this election? Split, demoralised and flailing, it has barely begun to renew, and now faces a massive undertow from its heartlands. In this time of crisis, a party divided will find it difficult to prevail – no matter who leads it. And amidst all today’s talk of coups against Corbyn, it is currently tough to envisage a leader who could unite Labour to beat the Brexiteers.  
 
From opposite ends of the political spectrum, I and my Crowdpac co-founder Steve Hilton have been testing the possibilities of new politics for years. In this referendum I supported Another Europe Is Possible’s call to vote In and change Europe. But it is crystal clear that the Leave campaigns learnt many of the lessons of new politics, and are well positioned to apply them in the months and years to come. I expect them to make significant use of our platform for crowdfunding and candidate selection.

Time to build a progressive alliance

On the other side, the best or only prospect for victory in the onrushing general election could be a broad progressive alliance or national unity platform of citizens and parties from the centre to the left. Such an idea has been floated before, and usually founders on the rocks of party tribalism. But the stakes have never been this high, and the Achilles heels of the status quo parties have never been so spotlit.
 
Such an alliance could only succeed if it embraces the lessons of new politics and establishes itself on open principles. A coalition of sore losers from Westminster is unlikely to appeal. But if an open primary was held in every constituency to select the best progressive candidate, that would provide unprecedented democratic legitimacy and channel a wave of bottom-up energy into this new alliance as well as its constituent parties.
 
In England, such an alliance could gather together many of those who have campaigned together for Remain in this referendum and opposed Tory policies, from Labour to Greens and Liberal Democrats. It might even appeal to Conservative voters or politicians who are disenchanted with the Leave movement. In Scotland and Wales too, some form of engagement with the SNP or Plaid Cymru might be possible.
 
An electoral alliance built on open and democratic foundations would provide a new entry point to politics for the millions of young people who voted to stay in the EU and today feel despairing and unheard. Vitally, it could also make a fresh offer to Labour heartland voters, enabling them to elect candidates who are free to speak to their concerns on immigration as well as economic insecurity. I believe it could win a thumping majority.

A one-off renegotiation force

A central goal of this alliance would be to re-negotiate our relationship with Europe on terms which protect our economy, workers’ rights, and the interests of citizens and communities across the country. Work would be needed to forge a common agenda on economic strategy, public services and democratic reform, but that looks more achievable than ever as of today. On more divisive issues like immigration, alliance MPs could be given flexibility to decide their own position, while sticking to some vital common principles.
 
This idea has bubbled to the surface again and again today in conversations with campaigners and politicians of different parties and of none. What’s more, only a new alliance of this kind has any prospect of securing support from the new network movements which I helped to build, and which now have many more members than the parties. So this is no idle thought experiment; and it surely holds out greater hope than another rearranging of the deckchairs in the Parliamentary Labour Party.
 
The alliance would probably not last in this form beyond one parliamentary term. But during that time it could navigate us safely through these turbulent referendum seas, and lay foundations for a better country and a better politics in the coming decades. Food for thought, perhaps.
 
Paul Hilder is co-founder of Crowdpac, 38 Degrees and openDemocracy. He has played leadership roles at Change.org, Avaaz and Oxfam, and was a candidate for general secretary of Labour in 2011. 

Paul Hilder is an expert on new politics and social change. He is the Executive Director of Here Now, a movement lab working with partners around the world. He co-founded 38 Degrees and openDemocracy, helped launch Avaaz.org and served as Vice-President of Global Campaigns at Change.org. He has worked on social change in the UK and around the world, including in the political arena and with Oxfam and the Young Foundation.