What's so bad about a Blue Peter economy anyway?

If Cameron was referring to an economy that takes apart the assumptions and bad habits which led to the problems of the past, that might be seen as a sign of progress.

I wasn't a huge fan of any of the leaders' speeches this year. Miliband attempted grand and defining statements with all the vigour of a schoolboy revolutionary. In response, Cameron seemed to deliberately take a more restrained tone – the result being one part 'statesman', two parts 'grandad'.

But, speechcraft and delivery aside, the real issue was that the speeches pandered to the same old partisan debates: "Red Ed" vs. economic stoicism, public spending vs. public taxes, hard workers vs. other hard workers. In their predictableness, neither caused much of a stir beyond the dwindling numbers of party members present.

As usual, the most innovative debates were on the fringe. One of the most vibrant discussions took the form of the social economy alliance, a movement of entrepreneurs, activists, investors and campaigners. While such a consortium might sound like the material for a bad joke, the effect was that the re-hashed divisive policy debates were cast aside in favour of fresh approaches to the social and economic problems that have been found to be the most pressing of our generation. From energy to public spending, banking to local services, the discussions highlighted the successes of these high-growth, profitable and investment-ready enterprises that work not only in the interests of society (which any job-generating business purports to do), but for tangible social impact. Together they form economic solutions that are genuinely different to the tedious left-right refrains.

Rather than being devoid of tradition and ideology, however, I would argue that the growing social economy movement draws on proud heritage from across the political spectrum, from principles of economic subsidiarity to the lessons from the 1980s venture capital market, the Rochdale pioneers to pre-enlightenment virtue ethics and gift exchange. Again, a counter-intuitive combination, but at a time when trust in the ‘business as usual’ models has hit rock bottom, these ideas are at the very least a curious alternative.

It is clear the old models aren’t working, so what is wrong with crafting new models and new structures? This is why I failed to appreciate Cameron’s point in deriding a "Blue Peter economy". Is it even an insult? If it is an economy which takes apart the assumptions and bad habits which led to the problems of the past, then I don't see anything wrong with that. Perhaps a Blue Peter metaphor would do better to highlight a high trust base, creativity and pursuit of fulfilment, or the values that inspire young people to be active citizens?

The social economy has the potential not only to capture but to realise these ideals, and whilst it is increasingly recognised by and inspiring a generation of young people (university graduates in particular), the parties are missing a trick by not talking about it.  Because living standards are not something passively received by people. The Reaganite tack of comparing people's circumstances to how they were five years ago is fundamentally flawed in that, when asked to consider their living standards, it the personal things which people remember: achievement and loss and grief and celebration, on a local scale which factors in social networks and relationships, not what the state does or doesn't do. And for the right, ambition and opportunity is not just about tax cuts, it is also about personal opportunities and the opportunities to change your lived experiences from one day to the next. Profit is good, but only if that profit makes a social and economic difference on a local, tangible level. This is a leader’s speech-in-waiting.

In terms of the agenda for social economy movement itself, there is still a lot to be done to achieve coherence and public recognition. Ed Miliband had it right in practice but not in principle when he produced clearly packaged retail offers for the 2015 election that describe the added value for people as consumers. This is what this movement should be working towards, and the party that capitalises on this potential for fresh and genuine approaches is one that will find themselves having struck electoral gold.

Caroline Macfarland is the founder of CoVi (Common Vision), a new visual think tank which uses film and interactive media to produce innovative, shareable ideas about politics, economics and society

David Cameron delivers his speech at the Conservative conference in Manchester earlier this week. Photograph: Getty Images.

Caroline Macfarland is manging director of ResPublica

Photo: Getty Images
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Autumn Statement 2015: George Osborne abandons his target

How will George Osborne close the deficit after his U-Turns? Answer: he won't, of course. 

“Good governments U-Turn, and U-Turn frequently.” That’s Andrew Adonis’ maxim, and George Osborne borrowed heavily from him today, delivering two big U-Turns, on tax credits and on police funding. There will be no cuts to tax credits or to the police.

The Office for Budget Responsibility estimates that, in total, the government gave away £6.2 billion next year, more than half of which is the reverse to tax credits.

Osborne claims that he will still deliver his planned £12bn reduction in welfare. But, as I’ve written before, without cutting tax credits, it’s difficult to see how you can get £12bn out of the welfare bill. Here’s the OBR’s chart of welfare spending:

The government has already promised to protect child benefit and pension spending – in fact, it actually increased pensioner spending today. So all that’s left is tax credits. If the government is not going to cut them, where’s the £12bn come from?

A bit of clever accounting today got Osborne out of his hole. The Universal Credit, once it comes in in full, will replace tax credits anyway, allowing him to describe his U-Turn as a delay, not a full retreat. But the reality – as the Treasury has admitted privately for some time – is that the Universal Credit will never be wholly implemented. The pilot schemes – one of which, in Hammersmith, I have visited myself – are little more than Potemkin set-ups. Iain Duncan Smith’s Universal Credit will never be rolled out in full. The savings from switching from tax credits to Universal Credit will never materialise.

The £12bn is smaller, too, than it was this time last week. Instead of cutting £12bn from the welfare budget by 2017-8, the government will instead cut £12bn by the end of the parliament – a much smaller task.

That’s not to say that the cuts to departmental spending and welfare will be painless – far from it. Employment Support Allowance – what used to be called incapacity benefit and severe disablement benefit – will be cut down to the level of Jobseekers’ Allowance, while the government will erect further hurdles to claimants. Cuts to departmental spending will mean a further reduction in the numbers of public sector workers.  But it will be some way short of the reductions in welfare spending required to hit Osborne’s deficit reduction timetable.

So, where’s the money coming from? The answer is nowhere. What we'll instead get is five more years of the same: increasing household debt, austerity largely concentrated on the poorest, and yet more borrowing. As the last five years proved, the Conservatives don’t need to close the deficit to be re-elected. In fact, it may be that having the need to “finish the job” as a stick to beat Labour with actually helped the Tories in May. They have neither an economic imperative nor a political one to close the deficit. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.