This Budget is about ideology as much as fiscal responsibility

It was Maggie Thatcher who stole milk from schoolchildren. Now this government will take money from

The Budget showed that, for the Conservatives, the problem facing the country is one of government rather than of the market. The Tories believe that the problem lies with the state, the size of which should be reduced, and not with the banks which collapsed.

That much is clear from how the burden of the Budget will fall: of the £40bn additional fiscal tightening being proposed, it looks as though £13bn will be achieved by raising VAT and £11bn by an attack on welfare. In contrast, £2bn is being raised by the banking levy. This reveals the priorities of this Conservative-led coalition.

The burden of the changes introduced will fall particularly heavily on the poorest and on working people more generally. The Chancellor said that he had a choice between raising income tax or VAT. About £1 of every £7 that poor people spend goes on VAT, while for the rich, the figure is about £1 in every £25. It is highly regressive and that it was increased reflects the right-wing agenda being elaborated by this government.

People have reason to fear other elements of the Budget. It was Margaret Thatcher who stole milk from schoolchildren. Now this government will take money from poorer mothers.

According to the TUC, the announcements made show that poorer mothers will lose about £1,200 a year. This may not affect the 22 millionaires sitting around the cabinet, but it can make a difference to many children and families. Whatever my differences with them, I do not believe people joined the Liberal Democrat party to attack poorer mothers, but that is what this Budget does.

It would not be my priority at this time to go for further fiscal tightening, given the fragility of the economy and the lack of demand elsewhere in the world. This view has been expressed by others, including President Barack Obama in his letter to the G20. The chief economist at KPMG, Andrew Smith, has described the Budget as a "kill or cure" plan, and went on to say:

The aim is to eliminate the structural deficit over this parliament, but it risks choking off the recovery. There is no guarantee that private demand will rebound just because the government retrenches.

Paul Krugman, the Nobel Prize-winning economist, asked how hard it could be to understand that governments can save economies rather than destroy them. Yet, as he said: "politicians seem determined to do the reverse. They're eager to short-change the economy when it needs help."

We are taking a huge risk with the future of our economy. Two million private-sector employees work for companies that are dependent on government contracts. Further damage will inevitably be done to the private sector by cuts aimed at the public sector.

When we look at the performance of the private sector, we see that it, rather than the public sector, has brought about the reduction in GDP, especially in investment. People may not like to use the word, but if there is a strike going on at the moment: an investment strike in the private sector. We can understand why it happened, but nonetheless, £6 of every £10 of the reduction in GDP is down to the decline in private-sector investment.

It is not clear to me how cuts now will suddenly lead to growth in private-sector investment. Furthermore, the Budget shows a decline in public-sector investment from £47bn in 2008-2009 to £21bn by 2014.

The underlying economic philosophy of the Budget is that, by reducing the state, the private sector will flourish. The reverse is true, as we know from J M Keynes and from what happened in the Great Depression of the 1930s. Roosevelt's New Deal rebuilt the American infrastructure and economy. The private sector was able to revive through expenditure, not cuts.

The May election gave no legitimacy for the course the government has set. Inevitably, there will be resistance both in parliament and outside. It is for the Labour Party to reflect carefully on how we respond. It will want to react responsibly, but we should place ourselves alongside people and communities who are resisting the cuts.

Jon Trickett is the Labour Party MP for Hemsworth.

Jon Trickett is the shadow minister without portfolio, Labour deputy chair and MP for Hemsworth.

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The 11 things we know after the Brexit plan debate

Labour may just have fallen into a trap. 

On Wednesday, both Labour and Tory MPs filed out of the Commons together to back a motion calling on the Prime Minister to commit to publish the government’s Brexit plan before Article 50 is triggered in March 2017. 

The motion was proposed by Labour, but the government agreed to back it after inserting its own amendment calling on MPs to “respect the wishes of the United Kingdom” and adhere to the original timetable. 

With questions on everything from the customs union to the Northern Irish border, it is clear that the Brexit minister David Davis will have a busy Christmas. Meanwhile, his declared intention to stay schtum about the meat of Brexit negotiations for now means the nation has been hanging off every titbit of news, including a snapped memo reading “have cake and eat it”. 

So, with confusion abounding, here is what we know from the Brexit plan debate: 

1. The government will set out a Brexit plan before triggering Article 50

The Brexit minister David Davis said that Parliament will get to hear the government’s “strategic plans” ahead of triggering Article 50, but that this will not include anything that will “jeopardise our negotiating position”. 

While this is something of a victory for the Remain MPs and the Opposition, the devil is in the detail. For example, this could still mean anything from a white paper to a brief description released days before the March deadline.

2. Parliament will get a say on converting EU law into UK law

Davis repeated that the Great Repeal Bill, which scraps the European Communities Act 1972, will be presented to the Commons during the two-year period following Article 50.

He said: “After that there will be a series of consequential legislative measures, some primary, some secondary, and on every measure the House will have a vote and say.”

In other words, MPs will get to debate how existing EU law is converted to UK law. But, crucially, that isn’t the same as getting to debate the trade negotiations. And the crucial trade-off between access to the single market versus freedom of movement is likely to be decided there. 

3. Parliament is almost sure to get a final vote on the Brexit deal

The European Parliament is expected to vote on the final Brexit deal, which means the government accepts it also needs parliamentary approval. Davis said: “It is inconceivable to me that if the European Parliament has a vote, this House does not.”

Davis also pledged to keep MPs as well-informed as MEPs will be.

However, as shadow Brexit secretary Keir Starmer pointed out to The New Statesman, this could still leave MPs facing the choice of passing a Brexit deal they disagree with or plunging into a post-EU abyss. 

4. The government still plans to trigger Article 50 in March

With German and French elections planned for 2017, Labour MP Geraint Davies asked if there was any point triggering Article 50 before the autumn. 

But Davis said there were 15 elections scheduled during the negotiation process, so such kind of delay was “simply not possible”. 

5. Themed debates are a clue to Brexit priorities

One way to get a measure of the government’s priorities is the themed debates it is holding on various areas covered by EU law, including two already held on workers’ rights and transport.  

Davis mentioned themed debates as a key way his department would be held to account. 

It's not exactly disclosure, but it is one step better than relying on a camera man papping advisers as they walk into No.10 with their notes on show. 

6. The immigration policy is likely to focus on unskilled migrants

At the Tory party conference, Theresa May hinted at a draconian immigration policy that had little time for “citizens of the world”, while Davis said the “clear message” from the Brexit vote was “control immigration”.

He struck a softer tone in the debate, saying: “Free movement of people cannot continue as it is now, but this will not mean pulling up the drawbridge.”

The government would try to win “the global battle for talent”, he added. If the government intends to stick to its migration target and, as this suggests, will keep the criteria for skilled immigrants flexible, the main target for a clampdown is clearly unskilled labour.  

7. The government is still trying to stay in the customs union

Pressed about the customs union by Anna Soubry, the outspoken Tory backbencher, Davis said the government is looking at “several options”. This includes Norway, which is in the single market but not the customs union, and Switzerland, which is in neither but has a customs agreement. 

(For what it's worth, the EU describes this as "a series of bilateral agreements where Switzerland has agreed to take on certain aspects of EU legislation in exchange for accessing the EU's single market". It also notes that Swiss exports to the EU are focused on a few sectors, like chemicals, machinery and, yes, watches.)

8. The government wants the status quo on security

Davis said that on security and law enforcement “our aim is to preserve the current relationship as best we can”. 

He said there is a “clear mutual interest in continued co-operation” and signalled a willingness for the UK to pitch in to ensure Europe is secure across borders. 

One of the big tests for this commitment will be if the government opts into Europol legislation which comes into force next year.

9. The Chancellor is wooing industries

Robin Walker, the under-secretary for Brexit, said Philip Hammond and Brexit ministers were meeting organisations in the City, and had also met representatives from the aerospace, energy, farming, chemicals, car manufacturing and tourism industries. 

However, Labour has already attacked the government for playing favourites with its secretive Nissan deal. Brexit ministers have a fine line to walk between diplomacy and what looks like a bribe. 

10. Devolved administrations are causing trouble

A meeting with leaders of Scotland, Wales and Northern Ireland ended badly, with the First Minister of Scotland Nicola Sturgeon publicly declaring it “deeply frustrating”. The Scottish government has since ramped up its attempts to block Brexit in the courts. 

Walker took a more conciliatory tone, saying that the PM was “committed to full engagement with the devolved administrations” and said he undertook the task of “listening to the concerns” of their representatives. 

11. Remain MPs may have just voted for a trap

Those MPs backing Remain were divided on whether to back the debate with the government’s amendment, with the Green co-leader Caroline Lucas calling it “the Tories’ trap”.

She argued that it meant signing up to invoking Article 50 by March, and imposing a “tight timetable” and “arbitrary deadline”, all for a vaguely-worded Brexit plan. In the end, Lucas was one of the Remainers who voted against the motion, along with the SNP. 

George agrees – you can read his analysis of the Brexit trap here

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.