Around Westminster, the joke goes that the only pre-election pledge the Conservative government has kept this summer was George Osborne’s promise to give Tory election supremo Lynton Crosby a kiss for delivering an unexpected majority.
A bet is, after all, a bet. And a general election pledge is, well, finesse-able.
Every modern government returned with a majority looks to take advantage of its first few months when the opposition is in disarray by ditching some impractical pledges (“taking out the trash” in the parlance of special advisers), pushing through unpopular measures, maybe adding some nasty ones, while seeking to establish a narrative that will cause their electoral rivals difficulties once they have finished mourning the poll win that never came. This government needs to do it before byelections, and the inevitable rows over Europe before an in/out referendum cut into its 12-seat majority. But, by George, has the chancellor done it, say observers.
From welfare to the fire sale of the Royal Bank of Scotland, and the decision to drop social care reforms that health secretary Jeremy Hunt had made such a key part of his government’s plans for dealing with an ageing population, the speed at which the small-state narrative has been reinforced and awkward bits of the manifesto dropped has startled some.
However, Duncan O’Leary, a research director at Demos, believes that, as with much in the Tory tactical playbook, New Labour was a source of inspiration. “I think the Conservatives have always looked back at Tony Blair and how he took advantage of his mandate early on,” he said. “They have taken that to heart. And it is a lesson from the last parliament, when the coalition established the narrative about the main economic problem facing the country. They framed it as deficit reduction rather than economic stimulus and that is still the idea that is dominant.”
Some of the moves since the election, in the words of Sean Kemp, the former Downing Street adviser to Nick Clegg, have been “shameless”. The decision to shelve key transport policies that were supposed to construct Osborne’s so-called “northern powerhouse” comes to mind. Others have been so exquisite in their tactical nous that they almost deserve praise. The “national living wage” announcement caught many on the hop, and despite some initial claims that it was a con it did much to ameliorate the perception that the government didn’t care about those on low pay. But there were other measures that Labour – if it had not been distracted by Jeremy Corbyn’s prominence in the leadership contest – could have exploited, Kemp argued.
Asked in April by a concerned young mother whether the Conservatives would cut tax credits for families with children, a nervous David Cameron, chasing votes on the BBC’s Question Time special, sounded clear enough before the general election. “No, I don’t want to do that,” Cameron said. A sceptical David Dimbleby wondered if he could guarantee it would not happen. “It is not going to fall,” the Tory leader responded.
So that young mother may have been surprised by an announcement a couple of months later in George Osborne’s “emergency” budget (the emergency that prompted it has never really been explained) that cuts would be made to families with more than two children.
“We are always told that Cameron doesn’t go back on his promises. Well, he certainly wasn’t 100% honest that day,” said Kemp. “If Labour had just narrowly missed out [at the polls], they would have hammered Cameron for stealing the election: ‘You said this in the televised debate but you have ripped it up’.
“But actually all there have been are a few Labour press releases. That always happens to an extent when the party leader resigns after losing an election. All of the spokespeople in the various roles are probably not going to be there in a few weeks’ time.
“There is no motivation to really pile in. They are all more worried about who wins the campaign, and what that means for their jobs, so it becomes flat. So the government does a bit of taking out the trash.”
As Labour self-obsesses, it is Cameron’s own backbenchers who are threatening to be the most troublesome element of this parliament. O’Leary believes this is the reason for much of the government’s urgency. “There is a sense among the backbenches that the government should and could be more radical. There was the expectation on human rights that the government would do something in the first 100 days of the parliament. But it only featured very vaguely in the Queen’s speech.
“And you look at Europe and the renegotiation, and it is the government backbenchers that are causing trouble rather than across the house. Part of that can be explained by the fact that on the government backbenches there are some quite big beasts: Dominic Grieve, Ken Clarke, David Davis, Andrew Mitchell, the former chief whip, all putting the other side of the arguments, or raising concerns.
“It was an unexpected and extraordinary victory, but it is a small majority. If the opposition has got its act together it only takes a few MPs to cause trouble. The last parliament was the most rebellious in postwar history. The 2010 intake are very independent-minded. There have already been bumps in the road and there will probably be more as parliament progresses.”
For Cameron, it is possibly now or never to make his mark.
Conservative drive to reshape Britain
CUTTING TAX CREDITS: Osborne is limiting child tax credit to just the first two children. Currently the system pays up to £2,780 per child for an unlimited number of children. The impact: Influential thinktank the Institute for Fiscal Studies said that 13 million families would lose an average of £5 a week as a result of extending the freeze in working-age benefits, tax credits and the local housing allowance until 2020. The logic: Unravelling Gordon Brown’s redistribution of money to the worst-off. The government is asking the private sector to step in – and to an extent forcing it, through increasing the minimum wage – and is delivering the goal of a smaller state.
POVERTY TARGETS SCRAPPED: Scrapping the main official measure of poverty – which defines being poor as living in a household with a disposable income of less than 60% of the contemporary median. It will be replaced with a new measure of the “root causes” of hardship, such as worklessness, debt and addiction. Impact: Critics say the purpose is to cloud accountability – to create so many indicators that there is bound to be some nugget or other of good news to point to, even in a land where the poor are getting very much poorer. Logic: The poverty target has its limitations. A recession may actually appear to rescue poor people from penury, simply by dragging down the benchmark of typical pay. But more significantly it redefines government goals away from greater equality of outcome.
TAX-FREE CHILDCARE: Tax-free childcare to households where both parents work, and where neither earns more than £150,000 a year, was due to begin in 2016. The introduction of the subsidy has been postponed by more than a year, until 2017, with the government blaming a legal challenge for the delay. Impact: The delay means that 1.9 million families who were expected to benefit will miss out on more than a year of support, worth 20p for every 80p spent on childcare. Logic: It appears this was a simple mistake in formulation. The new government scheme promises to pay 20% of working parents’ childcare bills, offering savings of up to £2,000 per child. But it was challenged by providers of childcare vouchers, who will be forced to close schemes to new members once the government’s system is launched. The supreme court overruled the challenge, but the government will not be able to get its scheme up and running in time for the planned autumn launch.
NHS TARGETS DROPPED: Two 18-week referral-to-treatment waiting times targets are to be abolished. They are the target for 90% of patients who need treatment to be given within 18 weeks, and the target for 95% of people needing outpatient appointments to be seen within 18 weeks. Impact: The latest figures from NHS England show that the target of giving 90% of admitted patients consultant-led treatment within 18 weeks of referral was missed in nine of the last 12 months. Doctors will no longer be under pressure to correct those failings. Logic: The move came following recommendations by NHS England national medical director Sir Bruce Keogh, who said that a “confusing set of standards” was leading to “perverse incentives” regarding the 18-week target from GP referral to treatment. The government has quite successfully sought to depict targets as an evil inflicted upon patients. But critics say the government is now moving the goalposts to avoid being held to account.
NO GREEN DEAL: David Cameron – who once promised to create “the greenest government ever” – has ended funding for the flagship green deal. It had been hailed as “transformational” and the “biggest home-improvement programme since the second world war” by ministers when it was launched in 2013. Impact: The home insulation industry says it will create huge uncertainty for firms while the government works out what the replacement policy should be. And experts say there is no doubting the need for a scheme to finance improvements in home energy. The UK has some of the worst-insulated housing stock in Europe, and saving energy is by far the cheapest way of the UK cutting carbon emissions and bringing people out of fuel poverty. Logic: The number of householders taking out the loans at the heart of the energy-efficiency scheme was much lower than had been hoped, with just over 15,000 issued or in progress, according to statistics. However, the policy is not being replaced and it suggests that Cameron has lost interest in what was once a key plank of his attempt to modernise the Conservative party and is quietly “getting rid of the green crap”, as he once called the extra costs attached to heating bills to subsidise energy efficiency. Ministers announced the U-turn as parliament went into recess.
STATE SELLOFF: The chancellor sanctioned the first sale of the stake in RBS to cut the taxpayer shareholding from 79% to just below 73%. The impact: A loss of £1bn. The £2.1bn of shares were sold at 330p – less than the average of 502p that the taxpayer paid for them. The logic: Osborne issued a statement in which he said: “This is an important first step in returning the bank to private ownership, which is the right thing to do for the taxpayer and for British businesses.” While the sale may prove to be highly controversial, it is ideologically important to Osborne for the size of the state to be reduced. In June the government sold off half of its remaining stake in the Royal Mail to institutional investors, just months after a flotation which has shortchanged taxpayers by billions of pounds.
POWERHOUSE UNPLUGGED: In June the government shelved plans for the electrification of the Midland mainline and TransPennine routes, projects it promised to deliver before the election as part of delivering George Osborne’s “northern powerhouse” vision. The government insists that transport links are only part of its powerhouse plan. But it is looking pretty hollow. Impact: Experts said the decision will widen the north-south divide and damage the regional economy. The Midland electrification had been described as “critical to maintaining a reliable railway”, and the Conservative party’s manifesto said the work would “put the Midlands at the centre of a modern, interconnected transport network for the UK”.
Logic: The government knew before the election that the policy was not deliverable because of Network Rail’s poor performance and the delayed admission was regarded as “shameless” by many.
UNIONS BASHED: The aim is to criminalise picketing, permit employers to hire strike-breaking agency staff and choke off the flow of union funds to the Labour party. At least 40% of union members balloted must vote to support a strike in key public services. The bill will also require all unions, not just those affiliated to Labour, to ask each existing union member whether they wish to pay the political levy and then repeat the question every five years. Impact: This is potentially disastrous for the Labour party’s finances and breaks an unwritten understanding at Westminster that no party would introduce partisan reforms to party funding without cross-party consensus. If 100 teachers were asked to strike, the action would only be lawful if at least 50 teachers voted and 40 of them backed the strike. The bar has been set very high and it is difficult to see how any strikes will occur in the future. Logic: The government says it feels forced to act due to the number of strikes called on the London Underground, railways or in schools that it says were based on small turnouts or two-year-old ballot mandates. It has the benefit of cutting off funds to the Conservative party’s main political rival.
TUITION FEES RAISED: Osborne announced in the budget that some universities would be able to raise tuition fees from 2017-18. At present, most universities are charging the full £9,000 a year. The chancellor has said that institutions with “good quality” teaching universities will be able to increase their fees still further. Impact: Greater student debt. Academics have predicted that this move, coupled with the decision to axe maintenance grants and replace them with loans, could be the last straw for young people from disadvantaged backgrounds fearful of debt in deciding whether to apply to university. Logic: It is the next step in creating a genuine market in the higher education sector. Pushing this change through now, before the Tory majority recedes over time through byelections, is crucial, given that some Conservatives in university towns will be nervous of the reaction.
SOCIAL CARE U-TURN: In July the government announced it was delaying until 2020 plans to limit bills for residential care to £72,000 – a key measure to protect people from huge bills. The Department of Health said it was still “firmly committed” to the cap, but questions are now being raised about whether the policy needs rethinking. Impact: Currently those with assets above £23,250 do not get any help from councils towards their costs. That was to have risen to £118,000 under the changes. It means that many people will still be left with catastrophic care costs in old age. Logic: The move came after councils wrote to ministers asking for a delay because of the “enormous financial pressures” they faced and that more cash from central government was essential. It was never felt that the Treasury was happy with the expensive reform and it was driven in large part by the Lib Dems. Quietly dispensing with it now is politically advantageous.
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