By Matthew Barrett
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The Financial Times this morning reports (£) the news that the two Coalition party leaders will conduct a "mid-term" review in order to revitalise the government and move on from the present bickering over Lords reform.
Yesterday, my colleague Peter Hoskin set out five solid reasons why a new Coalition Agreement could be a good idea. This came from a line in the FT's Janan Ganesh's column (£), which argued for "another coalition agreement; a fresh package of big policies to take the government to the end of the parliament in 2015".
However, today's FT suggests the Lib Dems are pushing for a more modest set of aims for the Coalition. The mid-term review will set out what the Coalition has achieved, and what it can go on to achieve. There appears to be no ideological examination or any grand plan for the parties after the next election. The FT says the Lib Dems will push for banking reform, implementation of the Dilnot proposals on social care for the elderly, and more work programmes for the young unemployed.
One of Nick Clegg's advisors is quoted as saying "This will be a midterm review. Everyone agrees there needs to be a new drive on the economy, jobs and growth", and a senior source adds: "A lot of people have been thinking hard about what do we do now to have a more positive period. … This won’t be a second coalition agreement."
This is both welcome and unwelcome.
The welcome element of a "mid-term review" would be the recognition that the Coalition should not procede with great constitutional reforms. Paul Goodman has argued that the most natural alliance in British politics is between Liberal and Labour, because they agree on the "gut issues" of pro-Europeanism, liberal crime policies, constitutional reform, and so on. It was never likely that the Conservatives and Liberals would be able to embark on a programme of reform without one party being severely unhappy with the proposals of the other, and Lib Dem sources not including any such reforms in their demands is sensible.
However, there is also something deeply troubling about such a modest set of proposals. Clegg's aide is quoted as wanting "a new drive on the economy, jobs and growth", yet the proposals Lib Dems tell the FT they will push for are banking reform and another set of work programmes for young adults. Banking reform is undoubtedly necessary, but I find it hard to believe it will improve the economy, create jobs or spur growth in the short-term.
Today, the Bank Of England is expected to cut growth forecasts to close to zero from the 0.8% predicted in May as the double-dip recession intensifies. Last year, growth for 2012 was predicted at 2%. Banking reform is unlikely to do anything to help that. Work programmes are, again, necessary and noble. But they don't do anything to help tackle the underlying weaknesses in the British education system which dump so many young people on the dole queue in good times or bad.
Benedict Brogan reports in his column that "an Economic Regeneration Bill is being drawn up – it’s a working title – that will be introduced in place of Lords reform to take advantage of the time now available in the parliamentary timetable. It is likely to include a new attempt to relax planning laws, which is already causing Cabinet strains, and will act as a push for major infrastructure projects and deregulation." This new legislation will mean, Brogan says, "a third runway at Heathrow, new nuclear power stations, and more road-building". This is rather more welcome, but it still doesn't help the economy now. It might help the government which succeeds this one, or perhaps the next Conservative government, but it is unlikely to help, in any significant way, the economy or the fortunes of the Coalition before 2015.
The Coalition obviously has a two-pronged problem. Firstly, it needs growth, or the appearance of trying to create growth, by 2015. It also needs a longer-term plan to fix some of the underlying structural problems in the economy. The Lib Dems, in their "mid-term review" have modest proposals for the long-term. The Conservatives, in this "Economic Regeneration Bill", have one decent proposal for the long-term. Nevertheless, it is disappointing that the Coalition appears unlikely to attempt any radical reforms to help get the economy going again for the short-term, or a comprehensive set of measures to get the economy competitive again in the long-term, as ConservativeHome has consistently argued for.