The real message of Osborne's Budget: as you were, only poorer

The Chancellor's gamble remains that the growth will come, that the pain will be followed by gain. But he has been wrong every time so far.

It always takes a few days for a clear picture to emerge of the economic measures that the Chancellor puts in his Budget. The Treasury is in the business of pushing its preferred analysis to the front; journalists and opposition parties are in the business of ferreting around for buried bodies out the back.

In this case we’ll have to wait even longer than usual because George Osborne’s fourth budget is really the first half of a story to be continued in the spending review in June. Today’s measures are advertised as fiscally neutral – meaning any tax cuts are balanced with rises elsewhere or equivalent cuts to spending. The Treasury says there is money available for some of the Chancellor’s giveaways from departmental “underspend”, from a crackdown on “aggressive tax avoidance” and from previously announced adjustments to the inheritance tax threshold. But the reality is that Osborne wanted to finish his Budget speech with the overall level of taxation lower than when he started, which he did – corporation tax, beer duty, fuel duty, the income tax threshold and employer national insurance contributions are the headline reductions. And in the absence of growth and no certainty that Excehquer revenues will rise any time soon, the pressure of desperately chasing a receding deficit-reduction target necessarily falls on the departments whose budgets are not “ring-fenced”.

The spending review will impose another £11.5bn in cuts on top of savings made in previous spending rounds and budgets. The negotiations between the Treasury and ministers and between the two coalition parties over what that means in practice and who takes the pain will dominate politics over the next three months. Tory ministers as much as Lib Dems are starting to get seriously Bolshie in resisting the axe blows raining down on their heads.

So what we heard today was above all a statement of political positioning by the Chancellor. He has no intention of conceding that his own policies are in any way responsible for the parlous state of the national finances (deficit reduction stalled; debt rising) so he is obliged to pretend that the broad outline of the strategy is the right one and that only extraneous and transient factors are to blame for disappointing economic performance.

Osborne was careful in his preamble to make sure the latest round of turbulence in the eurozone was well advertised. The mangy dog of a continental crisis, he seemed to be saying, ate his growth homework. This is consistent with conversations I’ve had with people in the Treasury in recent months who insist that the measures taken by the coalition so far are exactly the right ones to “create the conditions for growth” and that the only problem is that the growth itself is just a bit later arriving than they had hoped. I think a lot of them genuinely believe this to be the case and that good times – or at least better times – are around the corner. Then, like passengers queuing for a bus in the freezing rain, British voters will be so grateful for the arrival of a nice warm recovery that they will sink happily into their seats, forget the anger they were nursing just moments before and thank the Tory driver on polling day.

With that scenario in mind, the Chancellor was today sending signals of encouragement to people whose support the Tories desperately need but who might be losing faith. That is, in essence, people on low and middle incomes, struggling to get by on stagnant wages, with onerous childcare costs, worrying about how they might look after ageing parents and generally weighed down by the rising cost of living.

What Osborne’s study of opinion polls and focus groups will have told him is that many of these people are surprisingly stoical about the economy. They accept the Tory argument that Britain collectively “lived beyond its means” and they see honesty about the need for painful restraint on spending as the starting point for any politician wanting to be taken seriously as a manager of the economy. But separately, confidence in the coalition to run anything at all is slipping badly. The general aura of policy reversal, shambles, disunity and the gloom of prolonged stagnation has seen voters drifting away from the Tories, some to Labour, some to Ukip, many to floating abstention.

In particular, Osborne has his eye on voters who once flocked to the Thatcher message of self-reliance and enterprise – the “aspiration nation”. He wants to revive the idea that the Tory party is primarily for people who want to get on in life (as opposed to the current hazardous perception that it is run for people who have already arrived and are rolling in privilege). Hence the emphasis on mortgage underwriting devices to help people both get onto the property ladder and advance further up it; hence accelerating the rise in personal income tax allowance; hence also the emphasis on helping small enterprises take on more staff; hence the mini-favours on beer duty and fuel. This is a budget that is meant to feel like the Chancellor buying a pint for a family man with a van in a marginal seat in Essex and saying “I know it’s hard, but we’ll get there in the end.”

The problem, of course, is that there is no evidence that we are going anywhere at all. The underlying gamble is the same is it has been in Osborne’s previous three budgets – that the growth will come, that the pain will be followed by gain. He has been wrong every time so far and each time the net effect of cuts in services, freezes in wages and rising inflation is to make life that bit harder for the people the Chancellor is supposed to be wooing. The real message to most British people is bleak and simple: as you were, only poorer.

George Osborne poses for pictures outside 11 Downing Street in London, on March 20, 2013, as he prepares to unveil the Budget. Photograph: Getty Images.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

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Momentum vice chair Jackie Walker calls claims of antisemitism in Labour “a weapon of political mass destruction”

The issue was also compared to a “monstrous soufflé” during a tense and often bizarre Momentum debate at Labour party conference.

A two-hour debate hosted by Momentum – asking whether there is antisemitism in the Labour party – grew heated on Sunday evening of the Labour party’s annual conference.

The packed out room, at the campaign movement’s fringe called The World Transformed, was warned beforehand to avoid “bitter incivility of discourse”. Which, translated from the language of Labour conference, means: “Don’t say anything dreadful.”

Jackie Walker, the vice-chair of Momentum, argued that antisemitism claims have been “exaggerated for political purposes”, and “the most fundamental aim of such allegations, I suggest, is to undermine Jeremy Corbyn”, and “silence” his supporters.

She claimed that there is “little if any hard evidence” that Labour has a problem with antisemitism, and blamed a “rabidly, anxiously anti-Corbyn” media for using antisemitism claims as a “weapon of political mass destruction”.

“Being offended is not the same as experiencing racism,” Walker added. “Claims of racism have been weaponised . . . Both the chair and the vice-chair [referring to herself] of Momentum are Jewish, and many leading members of Momentum are Jewish.”

(Later an audience member picked up on this theme perhaps a little too zealously. “Trotsky the Jew? Lenin the Jew? What about Zinoviev? What about Kamenev?” he cried, concluding that therefore claims of left-wing antisemitism are “nonsense”.)

Jeremy Newmark, head of the Jewish Labour Movement, clashed with Walker, accusing her of having “perpetuated” the “antisemitic myth” of slave trade collusion (referring to a comment she made on Facebook for which she was briefly suspended from Labour).

She hit back by saying she was “disappointed” in his comment, and had “simply repeated the defamation of his friends in the Jewish Chronicle”, accusing them of racism towards her as a black woman.

Newmark lamented that, “the relationship between our community and the Labour Party has deteriorated”, and “it pains me that a once historic natural alliance [should] dissipate, dilute and disappear”.

He warned those who “want to criticise someone for over-egging” the issue of antisemitism in the party should look no further than Jeremy Corbyn, who called for Shami Chakrabarti’s inquiry into the subject. “Perhaps you should criticise him.”

It was a tense exchange, which elicited gasps and heckles from the audience. But perhaps less predictable was the description of the Labour antisemitism row as a “monstrous soufflé” by Professor Jonathan Rosenhead, an LSE academic involved in boycotting Israeli universities.

He called it “a monstrous soufflé of moral panic being whipped up”, and warned the audience: “We need to ask about this soufflé”.

“Who are the cooks? Where’s the kitchen? What are the implements?” he asked, before the killer rhetorical question: “Why has this soufflé been cooked?”

Anoosh Chakelian is deputy web editor at the New Statesman.