100 days ago, Britain woke up to a new coalition government. In that time they have already displayed extraordinary economic illiteracy and are beginning to champion a dangerous mix of cruelty and cheerful incompetence, perhaps already worse than any Government in living memory.
Only when I started to put this list together did I realise just how many really stupid decisions have been made in such a short space of time. Cuts to services, programmes abandoned, organisations disbanded – it’s been an astonishing 14 weeks in Whitehall. But the speed of the changes highlights the fact that this cut-and-shunt, pushme-pullyou of a government cannot possibly be thinking these cuts through. At the rate of one really bad idea every other day (and I have had to leave a lot of other cuts out of the list), the Government is outperforming even the worst case scenarios presented in the most virulent Labour leaflets of the General Election.
It’s almost as though Cameron is reliving his Bullingdon club days – only this time instead of getting blotto on Pimms and smashing up an Oxford kebab shop, he is drunk on (unearned) political power and swinging an empty, broken champagne bottle around Whitehall, randomly causing criminal damage to important programmes and policies. Clegg is playing the part of the loyal fag – holding Cameron’s coat.
Here are the top 50 things they have done wrong …. so far…
1. ABOLISHING THE UK FILM COUNCIL
On July 26th the coalition announced it would abolish the UK Film Council, the body which promotes the British Film industry, and through which many top British films have been funded.
Why is it a bad idea? Because it pulls the rug from under the British film industry, lots of independent cinemas and production companies will close. And it won’t save money – research suggests every £1 of lottery money invested in film generates £5 for the economy. Armando Iannucci explained in the Observer in wittier and grittier detail why this is something the sounds like it came out of “The Thick of It”.
2. RAISING VAT
During the election the Tories said they had “no plans” to raise VAT. The Lib Dems put out a poster attacking VAT and Simon Hughes called it a “regressive tax”. Of course when in power they immediately put it up as soon as they could. The Tories always put up VAT. Remember Labour cut VAT to help stimulate the economy during the recession.
When anyone asks in future why you can’t trust the Tories (or Lib Dems) on tax – remind them of these quotes:
• ‘There are no secret plans for an increase in the VAT rate.’ George Osborne, August 2009
• ‘Our plans involve cutting wasteful spending and stopping the National Insurance rise, our plans don’t involve an increase in VAT.’ David Cameron, April 2010
• ‘The tax increases are already in place, the plans do not include an increase in VAT.’ George Osborne, April, 2010
• ‘There are no plans in the Conservative Party to raise VAT. I think the Lib Dems can pipe down about this now.’ William Hague, April 2010
• ‘We will not have to raise VAT to deliver our promises. Their (Conservative) tax promises on marriage and jobs may sound appealing. But they come with a secret VAT bombshell close behind.’ Nick Clegg, April 2010
• ‘I think I would predict within a few months they [a Conservative Government] would have increased VAT to 22.5 to 25 per cent. We’re in a totally different place to where the Tories are.’ Vince Cable, September 2009.
Why is it a bad idea? VAT hits the poorest hardest. It will have a very bad impact on retailers and SMEs. It will encourage people to move business overseas. And it will choke off recovery. Economists including Professor David Smith of the Shadow Monetary Policy Committee say that the VAT rise will cost around 235,000 jobs and reduce GDP by 1.4% over the next decade. It’s generally a very bad idea.
3. ATTACKING THE FREEDOM PASS
During the election debates, David Cameron demanded that Gordon Brown apologise for leaflets produced by local Labour campains, saying that the Conservatives would put the Freedom Pass at risk. Gordon had to eventually say that they had not been authorised centrally. Within 60 days of taking power, the coalition started talking about raising the age at which people qualify for the freedom pass. The local leaflets from the Labour Party were true.
Why is it a bad idea? Well, apart from lying to people being a generally bad idea, the freedom pass is a lifeline for older people in London and around the country. The cost is relatively modest compared to the benefits it brings to pensioners. It also helps stimulate the economy by enabling older people to remain economically active and promotes better health by helping people get out of the house.
4. ENDING THE BUILDING SCHOOLS FOR THE FUTURE PROGRAMME
Education Secretary Michael Gove decided to cancel the Building Schools for the Future Programme, ending hopes for more than 700 schools around the UK to be refurbished or rebuilt. Schools are still unclear about how the list was made up, with some being told they were safe only to find out two days later that their funds had been cut after all. Many decisions appear completely arbitrary with one local council area getting all its projects cancelled and others having them all approved. Hundreds of schools remain in limbo waiting to find out if their work will be approved. The money saved is going to be redistributed to better off areas for the creation of “free” independent schools.
Why is it a bad idea? The BSF programme was popular and cost-effective. Hundreds of schools were rebuilt or refurbished around the country and finally British schoolchildren were being taught in buildings which were modern and did not leak. Now with money being diverted into the “free” schools programme for dogmatic reasons, many schools in deprived areas will suffer. There are schools which had got planning permission and contractors ready to move in this summer – who have arranged temporary accommodation for the school during the rebuilding – who have been told to put everything on hold. So in some cases, it’s actually wasting money rather than saving it.
5. CANCELLING THE LOAN TO SHEFFIELD FORGEMASTERS
The Coalition decided as part of its £6bn “efficiency savings” package to cancel an £80m loan to Sheffield company Forgemasters. The loan was to help them invest in new equipment to build parts for the next generation of power stations. That work is likely to now go abroad.
Why is it a bad idea? This was not a grant but a loan and was designed to help Britain keep a key piece of national infrastucture. It will cost jobs and lose us international standing, as well as losing the ability to deliver critical pieces of technology, but will not save a single penny of taxpayers’ money. Incidentally both Nick Clegg (on 22 June 2010 in the House of Commons) and David Cameron (on 7 July in the House of Commons) lied about the reason that the loan was not appropriate by saying that Forgemasters’ Directors had refused to dilute their shareholdings. This was not true.
Worse it turns out that the original request to Government that the company should not be given a loan apparently came from Tory Donor Andrew Cook who wrote to Ministers saying that the loan might breach EU competition law. Mr Cook was trying to make his own bid for a stake in Sheffield Forgemasters at the time. So in summary – a Tory Donor wants to see Government stop supporting a company so he can personally buy a stake in the company, the Coalition goes along with that idea and is even prepared to make unfounded allegations against the company directors to justify their decisions. Bad judgement calls all round.
6. INTRODUCING A CAP ON IMMIGRATION
The coalition says it will now set an annual limit for the number of people coming from outside the EU to live in the UK.
Why is it a bad idea? Let’s take a hypothetical example. Let’s say they set the limit at 20,000 for 2011. Let’s say the limit is reached. The 20,001st person comes up and is, say, a Russian billionnaire who wants to buy a British football club. Are we going to say no? What if it’s Beyonce Knowles who wants to move to the UK? What if it’s a Chinese director of a massive company investing in manufacturing in the North East? Do we say sorry, you are foreign, we don’t want your money? What if Kaka wants to come and play for a British club? Ah, well, say the coalition, there will be exceptions. So the limit is, effectively, only for poor people from outside Europe, and is not really a limit. Meanwhile it has a hugely negative impact on potential foreign inward investment to the UK – after all if it is going to be impossible to bring your key people here, why would you come? We’ll be letting anyone at all in from Romania or Poland but strict limits on the USA, China or Australia. Business Secretary Vince Cable knows this is a bad decision which is why he is opposing it in public. So does London Mayor Boris Johnson who called instead for an amnesty on illegal immigrants during the general election.
7. CANCELLING THE CHILD TRUST FUND
Trailed in the Conservative manifesto, this regressive cut tells you everything you need to know about the Con-Dem coalition’s attitude. CTFs are a progressive and univeral benefit designed to ensure that every 18 year old has a bit of money put aside to help them get a start in education or work. They encourage saving and parental responsibility. And they are really, really good value for money – £500 from the Government becomes more than £37,000 if parents put away the maximum amount.
Why is it a bad idea? CTFs are popular, progressive and now being copied around the world. A small industry has grown up around them. Cancelling them decreases social mobility, increases levels of student debt and removes a new generation of young entrepreneurs. The really stupid thing is that CTFs would be exactly the sort of policy David Cameron’s Big Society think tanks might come up with themselves.
8. FREEZING CHILD BENEFIT
Another regressive tax change is to freeze Child Benefit as announced in the Budget.
Why is it a bad idea? Child Benefit is one of the few universal benefits which goes directly to the mother of children. The whole point of the benefit is so parents can afford a bit more food and clothing for their children. Freezing it will have no impact on the wealthy who don’t really need it – it will however have a big impact on the poorest for whom it makes up a much bigger chunk of their income.
8. ABOLISHING THE HEALTH IN PREGNANCY GRANT
In the Budget, George Osborne announced he was cancelling the Health in Pregnancy Grant.
Why is it a bad idea? Those who have had a child – whatever your income level – know that it is a process with lots of unexpected costs. For an expectant mother, changing your diet, buying equipment for the baby and other costs may be overwhelming. Until now there has been a one off grant of a relatively modest £190 to help. Not any more. Both babies and parents will suffer the consequencies.
10. ABOLISHING THE FUTURE JOBS FUND
The Con-Dems abolished the Future Jobs Fund (FJF) in their first “efficiency savings” £6bn package of cuts. FJF was a Government programme to help get unemployed people back to work. It offered a job, assistance in training and skills and a guided path into other employment.
Why is it a bad idea? The FJF worked – by the end of March 2011 the existing bids will have funded over 100,000 jobs. With unemployment likely to rise as a consequence of the Con-Dems other policies cutting support to help people back into work like this is huegly short sighted. Abolishing FJF will have a direct impact on the chances of hundreds of thousands of people of getting back into work. The OECD said it was concerned about the impact on unemployment and predicted that the UK’s drive to get people into work would stall after this decision. This is not an “efficiency saving”.
11. MORE CRIMINALS SPARED PRISON AND LET OUT EARLY – WHILE REDUCING PROBATION SERVICESAND SLASHING THE COURTS BUDGET
Justice Secretary Ken Clarke has decided to let thousands of prisoners out of jails before their current sentences are complete. He says prison is “ineffectual” and that there are too many people locked up. He is looking to release thousands of the 85,000 in prison, and says he wants fewer sent to prison in the first place.
Now you might think that given that policy, now would be a good time to ramp up funding for the probation services to deal with this heavier workload and to help ensure these people who will now be freely walking around the streets do not reoffend.
Instead the coalition are doing the opposite: this year’s Probation Service cuts mean that a number of probation trusts are going to have to reduce their staff, whilst others will introduce a vacancy freeze. If probation service and CAF CASS cuts in future years are twice as large – as expected by the National Association of Probation Officers – the union believes that “neither service will be in a position to fulfil its statutory responsibilities.” NAPO research suggests that instead recruiting an extra 1,250 probation staff would produce net savings of £300 million a year – by avoiding lots of short repeat sentencing.
At the same time Clarke’s department is planning £2bn of cuts and the closure of 103 Magistrates’ Courts, and 54 County Courts. This will mean up to 15,000 job losses from the department.
Why is it a bad idea? Taken together, these decisions do not punish criminals, deter criminals or help them get back in society. They will lead to an increase in crime and will probably cost the Government more money in a relatively short space of time. They are a reversal of the policies which have seen crime falling over the last 10 years. The Met Police Commissioner doesn’t think much of Clarkes plans, either.
12. ABANDONING THE FIGHT AGAINST ANTI-SOCIAL BEHAVIOUR
On 28 July Home Secretary Teresa May abandoned Anti-Social Behaviour Orders, a crucial tool in the armoury of police and local authorities to tackle low-level anti-social behaviour.
Why is it a bad idea? ASBOs may not have been perfect but they worked for some councils and for some people – abandoning the whole thing now suggests the Con-Dems are returning to a mentality where low-level Anti-Social Behaviour will be tolerated and police will only act after a crime has been committed.
13. ATTACK ON PUBS AND CLUBS, END TO STAGGERED CLOSING HOURS
The Con-Dems have blamed pubs and clubs for the “binge drinking culture” and are moving to restrict licensing hours.
Why is it a bad idea? Binge drinking has been fuelled not by pubs and bars but by cheap booze in supermarkets. The so-called 24 hour licensing law brought in by Labour was at the request of the police among other experts who wanted to be able to suggest some bars open later and some close earlier, rather than having everyone thrown out, drunk, at 11pm. The Con-Dems are attacking the wrong target and this will have a negative impact on pubs without having any effect on off-licences and supermarkets where the real problems lie.
14. ABOLITION OF REGIONAL DEVELOPMENT AGENCIES
Labour brought in RDAs to help promote regional growth. They were part of the 10 years of unprecedented growth in the UK and helped deliver regeneration in places like Leeds, Manchester, Newcastle and Liverpool.They have been useful for business and have been successful in promoting the regions for investment. The Con-Dems, despite their claims to be decentralisers, are going to close them all down – except for the one Boris runs in London, of course.
Why is it a bad idea? This change will mean decisions taken centrally in London instead of in the regions, it will pull the rug out from under fragile regional economies, it will put the regions at a competitive disadvantage and stifle the recovery. Other countries in Europe and our international competitors are currently strengthening regional government and regional economic development, not dismantling it. It is exactly what Mrs Thatcher did during the 1980s with the abolition of the Metropolitan counties – a short-sighted and spiteful decision taken by London-based politicians who do not understand life beyond the Watford Gap.
15. SCRAPPING THE ID CARD PROJECT AND RESTRICTING USE OF DNA AND CCTV
The Con-Dems have scrapped ID Cards – which were a simple way of proving people’s identity useful in hundreds of situations. While ID cards had their critics, the coalition is also undermining the police’s use of DNA and CCTV. They do not want “innocent” people’s DNA kept on record ( for example if someone is accused of rape, but a conviction seems unlikley and the case is dropped, they don’t want the DNA of that person to be kept). They don’t want councils and companies to be able to keep CCTV images.
Why is it a bad idea? These measures will make it harder to prevent crime and catch criminals.
16. NO NEW RUNWAYS FOR GATWICK, STANSTED OR HEATHROW
The Con-Dems have decided to block any new runways at London’s main three airports. Yet they have not put anything in place – like high speed rail – to replace this lost future capacity. Expansion at Heathrow was controversial and became a big election issue in South West London – however blocking ALL air capacity expansion puts a limit on how much London can grow and will deter inward investment.
Why is it a bad idea? This makes London much less attractive as a place to do business and sends a signal that the Con-Dem government is prepared to put short-term political gain before economic growth.
17. RETURN OF THE INTERNAL MARKET IN THE NHS
The Con-Dem coalition have decided to bring back the discredited internal market system where GPs hold budgets and different hospital services compete for their resources. £80bn of spending will be delegated to GPs.
Why is it a bad idea? It did not work in the 1980s and 1990s and will not work now. It increases bureaucracy, it means lots of duplication of paperwork, and it increases health inequalities. GPs will end up having to take decisions not based on patient needs, but on how much is in their remaining budgets. Pharma companies and private sector providers will have a very profitable time picking off GP practices with clever marketing and deals.
18. ENDING TARGETS FOR WAITING TIMES IN THE NHS
Health Secretary Andrew Lansley has ended the right of patients to see a family doctor within 48 hours and axed the 18-week target covering the period from hospital referral to start of treatment. The maximum 4 hour wait in Accident and Energency will also be scrapped and the Government refuses to commit to Labour’s guarantee that you will see a cancer specialist within 2 weeks of being diagnosed with cancer.
Why is it a bad idea? These targets helped drive change and make the NHS more patient-focussed. Ending the targets is a way of cutting NHS funding and undermining the system by stealth. Professor Chris Ham, chief executive of health thinktank the King’s Fund, warned “targets have proved effective in driving down waiting times”.
19. ABANDONING HOUSE BUILDING TARGETS
Communities secretary Eric Pickles laid an order before Parliament in July to scrap house building targets with immediate effect. The move will do away with regional strategies put in place by the Labour government with the aim of seeing 3 million new homes built across England by 2020.
Why is it a bad idea? These targets helped deliver thousands of new homes. Pickles thinks local authorities can be bribed to build more houses with the right to collect more council tax. However Tory authorities will now be able to refuse to build new social housing. Coupled with the policy of removing tenure rights (see below) this is a massive assault on the whole principle of social housing.
20. KICKING TENANTS OUT OF COUNCIL HOUSING
The Prime Minister has decided that it is no longer appropriate for council and social tenants to have “security of tenure”. His proposal is to limit the time someone can live in a council house to 5 or 10 years. This will mean older people whose children have left home, for example, will have to give up the house and move to a small flat. And people who get a house because they are having a small child will be forced out of the house before the child grows up.
Why is it a bad idea? Council houses are not just houses, they are homes. Just as much as anyone else’s home. Tenants pay rent and also often invest thousands of pounds over the years decorating and improving their properties. The answer to housing waiting lists is to build more homes, not to kick people out of the ones we already have. Protecting tenure in social housing was also an election pledge from the Tories – which turns out to be another broken promise. This proposal will result in thousands of people joining the private sector housing market, forcing up rents (and housing benefit costs) and creating a new army of slum landlords. It will split families and create broken homes. Don’t just take my word for it – Lib Dems, Tory MPs and lots of other people think this is a stupid idea.
21. SLASHING DEFENCE BUDGET TWICE OVER – WHILE WE ARE STILL AT WAR
In July George Osborne said there “was nothing special about the defence budget” and that it would face like every other budget a cut of between 25% and 40%. This will affect the equipment and capability of our armed forces at a time when they are fighting in Afghanistan.
However, what’s worse is that he said the costs of renewing the Trident nuclear deterrent would ALSO come from the Defence budget, not from a separate fund as previously supposed. Defence Secretary Liam Fox was said to be furious. This means that the £20bn cost of the new submarines over the next few years will eat even further into the budget for army equipment such as helicopters. In fact the budgets for new helicopters – agreed by Labour – is now under threat of a £4bn cut.
Why is it a bad idea? Conservatives said they would protect the defence budget before the election – and central to their attacks on Labour was that we needed more helicopters. Now Defence seems to be facing bigger cuts than any other department. Safety and capability of our armed forces will inevitably suffer.
22. ABOLISHING THE FOOD STANDARDS AGENCY
In recent years the Food Standards Agency has become an active campaigner for better food labelling and against the promotion of unhealthy food to children. The Con-Dem coalition has decided to abolish the agency – the fear being that this will now give the major food companies free reign.
Why is it a bad idea? The FSA was tackling serious public health issues and battling for better consumer protection in food. The Food industry was trying to avoid being regulated. This hands victory to the food companies on a plte.
Andy Burnham, Labour’s health spokesman, said: “Getting rid of the FSA is the latest in a number of worrying steps that show Andrew Lansley caving in to the food industry. It does raise the question whether the health secretary wants to protect the public health or promote food companies.”
Tam Fry of the National Obesity Forum, said it was “crazy” to dismember the FSA. “It had a hugely important role in improving the quality of foodstuffs in Britain and it was vital to have at the centre of government a body that championed healthy food. This appears just the old Conservative party being the political wing of business.”
Patrick Holden, director of the Soil Association, said: “Many NGOs campaigning on food thought for a long time the food industry has an unhealthy degree of influence over the Department of Health so the great risk is the corporate vested interests of the food industry will have too strong an influence on future policy.”
23. TURNING THE ACADEMIES PROGRAMME ON ITS HEAD
Labour’s Academies programme was brilliant and simple. Failing schools in deprived areas would get the chance for an injection of new money and ideas by turning into academies. Charities and private sector sponsors would be able to come in and take on the challenge of turning around the school. Additional resources would therefore be targeted where they were most needed.
Michael Gove sees it differently. His policies are about helping schools in better-off areas (see number 24 below) so he is proposing that only the top performing schools – rated “Outstanding” by Ofsted – get to become Academies. Gove used fast-track legislation to force this policy through – normally reserved for emergencies like anti-terror measures – because he said (in the Queen’s Speech Debates) that over 1,100 schools wanted to apply for Academy status before September. He later said it was more than 1,700 schools.
Why is it a bad idea? The top performing schools are the ones which already have good leadership, resources and need least help. Under the Con-Dems resources are being targeted away from those who need them the most and towards those (mainly in better off areas) who need them the least. For a good illustration read what Gove’s Tory Ministerial colleague Teresa Villiers is saying about a top performing school in her area. Also the whole exercise seems to have become a damp squib with only 1 out of 10 eligible schools who expressed an interest finally going ahead and applying. Gove’s 1,100 schools turned out to be hopelessly exaggerated – in reality only 153 schools applied.
24. DOGMATIC INTRODUCTION OF FREE SCHOOLS
This is not a bad idea in principle – but could be very bad in practice. The Con-Dems want to anyone to be allowed to set up a school. Companies, parents, teachers, charities, religious groups. Anyone. They will get a special pot of cash from central government (which will have effectively have been top-sliced from the budget of the local education authority) and special help from the New Schools Network charity. Schools will need buildings, so new premises will be rented like ex-office buildings and industrial units, abandoned shops or large residential properties. The idea comes from Sweden.
Why is it a bad idea? Swedish teachers warned the Tories not to do it as it had not worked for them. Swedish Education Minister Bertil Ostberg said: “The free schools are generally attended by children of better educated and wealthy families, making things even more difficult for children attending ordinary schools in poor areas.” He added: “Most of our free schools have ended up being run by companies for profit.”
This policy is fraught with problems – the new schools will be able to exclude pupils who don’t fit their criteria. The new buildings may prevent disabled children from attending the schools. Provision for autism, dyslexia, deaf and visually impaired children or any special needs will be undermined. Local education authorities will lose the overview of education in their areas. And a new army of private consultants and school operating companies is waiting in the wings to make a massive profit out of this at our expense. It is an attempt to privatise the whole education system. Gove claimed in Parliament that there had been 700 expressions of interest in the policy – but it turned out that only 62 groups had actually applied to set up schools.
25. PICKLES CASTRATES LOCAL GOVERNMENT
Eric Pickles, the Secretary of State for Communities and Local Government, talks about how the Con-Dems are decentralising, and offering more powers to local authorities. He wants councils to be free to innovate and spend their own money. However he is stopping councils from raising council taxes (they will face a public referendum if they set a high rate), slashing budgets this year and then next year by 25% at least and bringing in rules to stop local councils from campaigning against the cuts ( by banning councils from lobbying government).
Why is it a bad idea? The Conservatives always talk about giving power back to local councils but when in government they take power away from elected local and regional government. Councils are going to face massive cuts but will not be allowed to lobby our new Coalition Government against the cuts.
26. GERRYMANDERING ON A MASSIVE SCALE
Perhaps wounded by their failure to win the election, the Tories have decided to change the system so they automatically win more seats. By reducing the number of constituencies to 600, they hope to split Labour-supporting towns in half and match them with large county seats ensuring that they win. It will also mean fewer MPs and less representation for a lot of areas in the UK. They have decided to hitch this shamelessly self-centred piece of political chicanery onto the referendum introducing the AV system.
Why is it a bad idea? Having failed to win a majority on a fair basis, the Tories are trying to skew Britain’s electoral system in their favour. That’s not democratic or fair.
27. TRYING TO CUT FREE SCHOOL MILK FOR UNDER-5s
In August Conservative Health Minister Anne Milton wrote to her opposite numbers in Scotland, Wales and Northern Ireland sounding out the idea of cutting school milk for under-5s. When this was leaked to the public, David Cameron rushed out a denial that the policy was even being considered. David Willetts was live on air at the time on the Andrew Marr show defending the cut – 15 minutes later Tory spokesmen were on TV saying it was never planned…
Why is it a bad idea? This episode shows a whole series of things wrong with the new Government. First of all, they haven’t got a clue what they are doing. Secondly, they are making up policy as they go and are prepared to drop things at the first sign of trouble – and to lie about their proposals, too. Thirdly, the people likely to face the impact of cuts first are the most vulnerable – here their plan was to remove school milk from the neediest young children. Finally they lied about the NHS budget being ringfenced and protected from cuts – if this goes ahead it will be one of a series of cuts to health spending we already know about.
28. CUTTING THE ROAD SAFETY BUDGET AND CUTTING FUNDING FOR SPEED CAMERAS
The Government has cut £38million of the £95million that had been due to go to local authorities this financial year for road safety. They are also not going to fund any more speed cameras.
Why is it a bad idea? Councils have been working through plans to put in new road safety measures – now these are all in jeopardy. After years which have seen fewer deaths on the road the Con-Dems will now sit by while safety schemes are axed. The Department for Transport’s own studies show that deaths and injuries are reduced by 42% where cameras are deployed. No-one likes speed cameras, but when they are installed and operated properly, they work.
29. MERGING THE FINANCIAL SERVICES AUTHORITY WITH THE BANK OF ENGLAND
When Labour came to power in 1997, regulation of financial services was split between different agencies and different government departments. Labour merged the agencies into a single powerful regulator, the Financial Services Authority (FSA) reporting to the Treasury. Now, in the middle of a financial crisis, while the world sets out a new regulatory framework, the Con-Dem government wants to abolish the FSA and split its powers between several different regulators.
Why is it a bad idea? There is no evidence whatsoever that having the same people doing the same thing under a different name would have had any impact on the recent financial crisis – in fact the secretive nature of the Bank of England compared to the open model of regulation used by the FSA might have made things worse. These proposals make no practical sense – they are political window-dressing to mask the fact that the Con-Dems do not really know what changes they want to make to regulatory policy. At worst, they will distract and destabilise our banking and financial services regulators just at the point when they need to have their time focused on the job. And the changes will cost £50m according to the Government’s own figures.
30. INCOMPETENCE IN FOREIGN AFFAIRS
As the summer started, both David Cameron and Nick Clegg made a series of serious gaffes over foreign policy. First Clegg, standing in for Cameron at Prime Minister’s Question Time, said that the Iraq war had been “illegal”. This is not Government policy and undermines 7 years of diplomatic work explaining what the UK was doing in Iraq. While Clegg opposed the war at the time, Cameron and the Conservatives supported it. Then Cameron said that Britain was the “junior partner ” of the USA and also that we had been the “junior partner” in 1940 against Nazi Germany. Quite apart from the question over whether the UK wishes to be seen as the “junior” sidekick of the USA in international matters, in 1940 the US had not entered the war and Britain was seen as the leader of the free world. His comments were an insult to the men and women fighting for Britain as she stood alone in 1940. Then Cameron went to India where he insulted neighbouring Pakistan, saying that their intelligence services were helping terrorists. Even if this is true – which is heavily disputed by Pakistan – it is the sort of issue raised quietly behind closed doors rather than as a throwaway comment to curry favour in a neighbouring and rival country. Finally Cameron said that Iran had nuclear weapons. If so, this is news to the rest of the world – even the CIA, who can normally be relied on to overstate the risk from various rogue states, doesn’t think Iran has nuclear weapons.
Why is it a bad idea? It’s becoming a bad idea to let Cameron – or Clegg – open their mouths on foreign policy issues without engaging their brains. More seriously, foreign policy gaffes like this can take years to repair.
31. ABOLISHING THE AUDIT COMMISSION
The Audit Commission was set up by the last Tory Government in 1983 as a way of improving and monitoring management of local government, the police, fire services and the NHS. Since it was founded it has proved to be exremely effective, helping councils benchmark their services, helping central government discover what works and what doesn’t work. It has practically eliminated some of the problems local government faced in the 1980s where councils would overextend themselves, borrowing and spending too much, and threatening local services. In recent years it’s anti-fraud drive has saved an estimated £600m of taxpayers’ money. Communities Secretary Eric Pickles has decided to abolish it.
Why is it a bad idea? The coalition says it wants to give local councils more freedom – and that abolishing the Audit Commission will take away a whole load of targets and bureaucracy. But the Audit Commission helps councils run more efficiently – if it is abolished Councils and central government will have to spend more money on outside consultants to find out the same things and to share good practice – and the government will have no-one checking that local councils are spending their money properly. Pickles has also said that private companies will do the auditing from now on – a huge bonanza for private accountancy firms who stand to make bumper profits at the expense of local tax payers – and the first stage in a wave of privatisation in local government. There may be a political angle to this, too – the Audit Commission was the body which uncovered and punished Tory Westminster Councillors responsible for the “homes for votes” scandal in the 1980s .
32. ABOLISHING THE NEW “GO ORDERS” PROTECTING WOMEN FROM DOMESTIC VIOLENCE
On Friday 16 July, addressing the Women’s Aid National Conference, Con-Dem Home Secretary Theresa May said, “Let me make clear: my ambition is nothing less than ending violence against women and girls”. She also said that achieving an end to domestic abuse “was a priority for me in opposition and it is a priority for me now I am in government. So have no fear – have no doubt – that your cause is my cause.” In August, she decided to scrap a new scheme which would protect women from domestic abuse by removing their violent partner. The scrapping of the so-called ‘go orders’ roll-out is part of a cuts package of £2.5bn from the Home Office budget.
Why is it a bad idea? David Chaplin, a spokesman for the NSPCC children’s charity, said the organisation was “deeply disappointed” by the move. He said: “We strongly supported the orders. They would have given some vital respite to the victims of abuse.” The Home Affairs Select Committee recommends ‘go orders’ as an “inexpensive” measure in protecting victims of domestic abuse and says similar schemes “have proved effective in other European countries”.
37. CANCELLING THE LONDON CHILDCARE AFFORDABILITY PILOT
The Childcare Affordability Pilot was supposed to run from May for a year and parents were invited to take part by the Child Poverty Unit. Some families had 100 per cent of their childcare costs paid by HM Revenue and Customs, which funded the scheme, and others were given a £500 advance to help them arrange childcare. But officials from the Department for Education have now written to participants telling them the pilot will end on September 15 and they must pay back any money they borrowed.
Why is it a bad idea? Both short-sighted and cruelly executed. It has left parents on low incomes – who volunteered to take part in a new scheme to help make childcare provision better – struggling to pay back hundreds of pounds.
According to the Evening Standard, single parent Michelle Burke, 37, signed up for the free childcare scheme a few months ago after being invited to take part. She works for an advice charity and her job often takes her away — costing her about £60 extra for overnight childcare. A low earner, she was given a £500 advance which she spent on childcare for her son Liam, eight, who has Asperger’s syndrome.
But at the end of last month, the Department for Education informed her the pilot was being discontinued.
Ms Burke told the Standard that she has been forced to borrow from her parents to repay the loan. She said: “I can’t afford this — it’s appalling.” She added that she knew if she left the scheme the cash had to be repaid, but that it was the Government which had effectively “left” the scheme – not her.
38. U-TURN ON HOSPITAL CLOSURES
During the election local Conservative and Lib Dem candidates claimed that Labour was closing local Accident and Emergency Units, Maternity Units and other hospital facilities. This was the result of the Picture of Health programme, which looked for savings in the NHS budget by centralising specialist facilities into separate hospitals rather than having lots of generalist hospitals. Marches like this one in Bexley and campaigns were run on “Brown’s NHS Cuts“. Andrew Lansley, then Shadow Health Secretary, said he would immediately halt the changes if elected. Indeed in some places he actually promised to re-open A&E units which had already moved.
Well, he did get elected. And now the NHS Chief Executive has written to all the hospitals saying they need to have a plan in place to implement the closures and changes by October this year.So they are going ahead with everything they campaigned against.
Why is it a bad idea? Because Lansley is again saying one thing and doing another. The Tories were happy to play politics with the issue in the run up to the election and then as soon as they are in, go ahead with the changes anyway.
39. ENDING THE “YOUNG PERSON’S GUARANTEE”
The Coalition has announced an end to the Young Person’s Guarantee, a promise to all unemployed young people that if they were out of work and claiming JSA for six months they would be guaranteed a job (via the Future Jobs Fund), a training place or work experience. This guarantee will now not be extended beyond the current financial year, and will cease to operate in March 2011.
Why is it a bad idea? The Young Person’s Guarantee was a commitment from Government to help unemployed young people get their careers on track – vital at the moment when jobs are few and far between. The Guarantee was easy to understand and brought together a good set of options for young people. Also, it worked: DWP/ONS figures show that, up to the end of May 2010, there had been 11,890 starts on training provided under the YPG.
40. CUTTING THE GOLDEN HELLO FOR NEW EMPLOYEES
The Coalition has announced cuts of £30 million from the ‘golden hello‘ scheme which offered a subsidy of £1,000 plus help with training costs for businesses that employ someone who has been unemployed for over 6 months. This scheme has now closed nine months early, and stopped at the end of June.
Why is it a bad idea? The scheme helped people get back into work and was sorely needed to help counter the impact of the recession.
41. CUTTING THE JOBSEEKERS’ GUARANTEE
The Con-Dems are cutting the two year Jobseeker’s Guarantee, which promised every adult who had been out of work and claiming JSA for two years a guaranteed offer of a job, internship, volunteering placement or work experience. It now appears that the Guarantee will now be completely cut.
Why is it a bad idea? Along with all the other measures to help people back into work which the Coalition has decided to cut, this scheme is vital right now. The Con-Dems have said they will put in a new programme of help for jobseekers by next summer – however this effectively condemns the 2.5m unemployed people to go without this structured help for the next year.
42. ENDING FREE SWIMMING FOR UNDER-16s AND OVER-60s
Labour brought in free swimming for children and older people to help keep the nation healthy and make sure these groups used their local pool. A cheap, popular scheme which helped drive business to local leisure centres, especially out of peak times. The Con-Dems have decided to end the scheme.
Why is it a bad idea? Along with a lot of their other cuts, this one may cost more in the long term. Swimming is good exercise and if making it free encourages people who otherwise would not go to their local pool, it helps reduce obesity and heart problems. The new Government’s own report on the scheme showed it has has a positive impact on the exercise levels of the target groups, and has also driven additional fee-paying customers into pools. A short-sighted and mean-spirited decision.
43. CUTTING SPORT FUNDING – AS LONDON 2012 APPROACHES
The Con-Dems, who made such a show of supporting England in the World Cup, have decided to make drastic cuts to the budgets of our sports bodies. UK Sport has had an immediate budget reduction of £1.7 million and Sport England is facing £4.254 million of cuts. Sport England have said they are going to try to achieve this through further reductions in administration and back office functions. However, their Chief Executive notes that this will be ‘challenging, given the £20 million savings we are already delivering in our administration costs over the current three-year spending period’.
Why is it a bad idea? Sport is already under-funded. Now we are about to host the Olympics and our national sports bodies are going to be scraping around to fund training and support for elite athletes, as well as being unable to capitalise on the huge explosion of interest in sport expected, when they should be building new facilities and funding new projects. A very short sighted decision.
44. YOUTH FACILITIES MONEY CUT AND GIVEN TO “BIG SOCIETY BANK” INSTEAD
Under Labour, the Government planned to use money lying in dormant bank accounts to fund a major expansion of youth facilities like youth clubs and skate parks. The Coalition has decided instead to use this money to fund a new “Big Society Bank” which will be used to promote Cameron’s pet Big Society schemes.
Why is it a bad idea? This effectively steals money which should be going to young people and hands it over to central government to be used in the promotion of pet projects. Shameful. What’s even worse is that Extended Schools and youth services are also facing big cuts so these vital facilities are going to be hit on day to day running costs as well as capital. Someone should tell Cameron that these projects help keep young people off the street and out of trouble…
45. CUTS TO LOCAL DEVELOPMENT FUNDING
Local authorities in deprived areas depend on funding from central government to pump prime regeneration and job schemes. This isn’t top-down bureaucratic waste – it’s essential seed-core funding. Thatcher and Heseltine understood this which is why they set up powerful and well-funded Development Corporations to revitalise the inner cities of the 1980s. But this Con-Dem Coalition is cutting most of the key schemes which help support business in our most needy areas. £49.9 million has been cut from the Working Neighbourhood Fund, which aims to tackle worklessness in deprived areas, £17.5 million has been cut from the Local Enterprise Growth Initiative (LEGI) which aims to stimulate economic development in deprived areas and £186 million has been cut from Regional Development Agencies.
Why is it a bad idea? This takes money away from deprived areas and will make it much harder to promote economic growth.
46. CUTTING EXTENSION OF FREE SCHOOL MEALS
The Coalition is planning to stop the proposed roll-out of free school meals to the children of low-paid families. The decision will cost families earning less than £307 a week about £600 a year, equivalent to a penny rise in their income tax for each child.
Why is it a bad idea? Children from low-paid families are, statistically, more likely to get ill, more likely to be obese, and more likely to have an unhealthy diet at home. Making sure they get one balanced, nutricious hot meal each day is a good idea. The Child Poverty Action Group said that it was “stunned” by the Con-Dems’move, which would have lifted 50,000 children out of poverty at a stroke.
47. CUTTING WINTER FUEL ALLOWANCES
On 18 August, as the 100th day of the coalition dawned, we learned that the Winter Fuel Allowance for pensioners might be cut, reduced or means-tested. A Government website is already advising that women will now only receive this benefit after the age of 65 (instead of 60 as at present), and this may rise to 66 in line with the increased pension age. Iain Duncan Smith is apparently advocating cuts to benefits which go to the middle-classes like the winter fuel allowance and child benefit, to help pay for other benefits he wants to bring in. This is exactly the opposite of what David Cameron promised during the general election debates when he categorically stated, in response to a question from Gordon Brown, that the winter fuel allowance, free bus passes, and free prescription charges would stay. We now know at least two of these benefits will be cut – we have to wait and see if he goes ahead and cuts prescription charges, too. In the Coalition document itself it says that the coalition will “protect” the Winter Fuel Allowance. Whatever that means.
Why is it a bad idea? The winter fuel allowance was brought in to save lives and stop older people suffering from fuel poverty over winter. Starting at £100 in 1998, it rose to £250 by last year and £400 for older pensioners. Being a universal benefit, the costs of administering the payment were very low, and this ensured that everyone who needed it, received it. This change may directly cost lives or contribute to ill health as pensioners who should get help with their fuel bills over the winter will go without, like they used to.
Osborne’s other problem is that even cutting £600m from Winter Fuel Allowance compared to Gordon Brown’s payments last year would not impact the deficit at all. The £2.7bn paid out last year included a £50 “bonus” for most pensioners and a £100 “bonus” for those over 80. So the figure in the budget for this year is only £2.1bn. To make any impact on the deficit, Osborne would have to cut the level further and / or means test the benefit. Means-testing the benefit will cost a lot of money – possibly even more than £200 per applicant meaning that there will be no real cost benefit in making this change. Our pensioners deserve this money – ALL of them.
48. PHILLIP GREEN, MULTI-MILLIONAIRE TAX AVOIDER, TO ADVISE ON CUTS
Philip Green, the owner of TOPSHOP and BHS, has been asked by George Osborne to advise the Goverment on cuts to Government expenditure. However Green is avoiding paying tax on all his income by putting key business interests in his wife’s name. She “lives” in Monaco. According to several newspapers, this arrangement is thought to have saved them tens of millions of pounds in tax.
Why is it a bad idea? Bringing in outside experts to help with policy ideas is not a bad idea. But in a Government and Conservative party packed with millionaires, some of whom (Lord Ashcroft for example) have a dubious record of schemes to avoid paying their fair share in tax, another offshore-tax-avoiding millionaire like Green seems a bit over the top. There is something fundamentally wrong about bringing in someone who doesn’t ever have to worry about money to help decide which cuts are going to be made affecting those on the lowest incomes for whom every pound is vital. And Vince Cable apparently agrees with me.
49. THE WHOLE JUSTIFICATION OF THE DEFICIT REDUCTION PACKAGE
The Con-Dems have based their whole economic policy on the idea that the economy is tanking, that there is no spare money in Government, but that growth is strong enough to cope with a massive reduction in public spending. In their analysis Britain’s deficit and debt puts us on a par with Greece and if we don’t take drastic action the whole economy will collapse. Labour’s plan to halve the deficit in 4 years, generally regarded as ambitious but workable by economists, is too slow. They want to halve it in two years.
Why is it a bad idea? The Con-Dems have their facts wrong, and on top of that have the wrong strategy as well. Despite being faced with the worst world-wide recession in decades, Labour took brave decisions to support the banks, stimulate the economy and keep spending under control. As a result, unemployment when Labour left office in 2010 was LOWER than when Labour came to power in 1997. Interest rates remain the lowest they have been for decades. Having got the economy out of recession at the end of last year, growth is now higher than expected – the economy grew by 1.1% from April – June. Unemployment fell in the last quarter and is lower in the UK than the EU average. Our banks have been stable and secure.
And what about our terrible, terrible debt – the reason the Tories keep talking about the “unavoidable” cuts? UK Debt as a percentage of GDP reached 68.7% earlier this year and is still rising. That’s not great. But it is comfortably lower than the other G7 countries like Germany, the United States, France, Canada, Italy or Japan. Last time the Tories were in power they put up our debt from 34% of GDP to 51% to help get through the recession of the 1990s. This time they are doing the exact opposite of what most countries around the world agree is the right way to get back into sustainable growth. For a comparison with our major international competitors see this graph. The “savage” cuts programme is not just wrong because it is not based on a real understanding of the economic position of the country, it is wrong because it may reverse the positive trend of growth.
The Bank of England says that the Con-Dem plans will lead to a slower recovery and higher inflation than previously expected with Labour’s plans.
Finally we taxpayers are already £5bn in profit on the Government’s investment in Lloyds and Royal Bank of Scotland. Within a year of the end of the recession Gordon Brown and Alistair Darling’s decision to step in with funding has been proved not just right but very profitable too. The Tories, incidentally, want to sell these shares off AT A LOSS to benefit their friends in the stockbroking and hedge fund industry.
50. THE COALITION – A BAD IDEA FOR THE LIB DEMS AND THE COUNTRY
Finally, the worst decision of all. The decision by the Liberal Democrats to go into coalition with the Conservatives in the first place. Speaking on Newsnight on 18 August, Peter Hyman was right. A minority Conservative Government, or one with a small majority, would have pulled to the centre, and been more cautious in its cuts, worried about Labour and the Lib Dems combining to bring it down. The inclusion of the Lib Dems (and even some Labour Advisers) in the coalition allows the Tories to be more radical and to dare to make cuts that they would have thought impossible before the election. With the Lib Dems locked in, the Tories have been able to cast off their centre-right manifesto and instead unleash the full force of the neo-Thatcherite cuts programme.
Clegg and perhaps most unfortunately of all Danny Alexander – who are both decent, honourable people – are being used as the smokescreen behind which the Conservative party can cut away savagely. When cuts are being announced it is Alexander who is asked to go in front of the media or to the dispatch box to face the questions. Originally David Laws was the fall guy for the first £6bn cuts package. While Dave jets off around the world, Clegg is forced to defend massive cuts to benefits and services, fighting off criticism from his own party as well as Labour and the media. The very presentation of the coalition – “in the national interest”, the rose garden photocall at Number 10, the mood music, has been used to hide the fact that we have, in the words of the economist, the west’s most radical government.
The Lib Dems are the crash-test dummies in a very dangerous and untested experimental vehicle – a government which ignores most advice and is trying the economic equivalent of fixing a car’s dented wing panel by crashing the whole car into a wall. It might work – conceivably – but the odds are it will break both the car and the wall.
While the majority of the public, and some media outlets, have so far swallowed the line that this is all Labour’s fault – and that Labour would have had to make exactly the same cuts, this is wearing very thin. A new Labour Leader will have to nail this lie very quickly. But they won’t have to do much to tell people about the services they are losing – that will become very clear from the end of this year as things start to disappear and people feel the difference in their pockets. The Party Conference season – especially the Lib Dem conference – followed by the Spending Review a few weeks later, will mark the end of the coalition’s honeymoon. It might mark the beginning of the end of the Lib Dems, too.
Why is this a bad idea? The Lib Dems have paid a high price for their seats in Government. Instead of being a critical friend and balancing factor to a progressive Labour party in a red-yellow coalition, they have become the patsies of a rampant and dogmatic Tory Party in a yellow-blue coalition. They are already paying the price in the polls. After the first General Election debate, Lib Dem support briefly rose to 34% in some polls. In the election they gained an impressive 23% of the actual vote. But by August their vote share was down to 12% in two polls, and as low as 8% in a less scientific Sky News survey. After all why vote Lib Dem if that just means you end up with a Tory Government anyway? And no-one likes a party which is showing signs of serious division. May 2011 and May 2012 will probably see Lib Dems massacred in local elections – if the coalition lasts that long. And the next General Election will be a disaster for them unless they can persuade the Tories to enter into an electoral pact in which they will not stand against each other and instead run as the coalition seeking re-election.
What have the Lib Dems actually got out of the Coalition apart from their arses on the seats of some ministerial cars? They are not going to get voting reform – the Tories have given them a referendum on a system the Lib Dems do not really want (AV), but most Conservatives will campaign against it. It will almost certainly not get through even with some Labour support. They haven’t got the green policies they wanted. They won’t get the education spending they wanted. They did not get the £10,000 tax exemption they wanted although they did secure a promise to “work towards it”. They aren’t even getting those ministerial cars, either, they have been cut too and the Lib Dem Ministers are being expected to travel by tube and rail. What can any Lib Dem point to in the coalition’s programme and say, “we are proud to say that this policy is something we brought in and it would not have happened without us being in the coalition”? According to Tory peer and campaign adviser Lord Ashcroft, even in Liberal Democrat held seats, only a quarter of voters think the Lib Dems are having a significant impact on the policies of the coalition. (See PDF of report here)
The Tory negotiators played the game well – they were much better prepared than anyone else – and the Lib Dems have been seduced into a position where they will get all the negatives of being in Government without any of the positives. The real decisions are being taken not by Cabinet, but by smaller cabinet committees. Only Clegg himself and Danny Alexander have any real influence – and they are both only deputies to senior Conservatives. The Star Chamber, the crucial committee of the Spending Review process, which chooses what programmes will stay and which will be axed, is made up of four of the Tories’ top brains: Oliver Letwin, Francis Maude, William Hague and George Osborne and just one Lib Dem – Danny Alexander. It is difficult to shake off the impression that Alexander sits in that room to pour the coffee and write the minutes.
There always comes a time when a politician has to make a choice – do I want to be in Government, but sacrifice some of my principles? Or be in opposition with my principles intact, but powerless? By entering into the coalition, the Lib Dems are about to learn that some Governments are so extreme, and their actions so wrong, that principled opposition would have been the better choice.
For more detail on cuts and other stupid decisions see the TUC’s excellent “Cuts Watch” site.