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End of Term Report

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You might think it is a little early to be writing an end of term report on the current government, but in the coming months little is going to be achieved. The coming months are going to be electioneering with claim and counterclaim, gossip (some true some untrue), promises and boasting about what has been done (or being berated for what has or has not been done). Now is the time for us to think about how we are going to cast our votes for the following five years. I have no doubt that all the daily papers and not a few channels, not to mention Twitter, Facebook (plus whatever is the current innovation) will all seek to inflict their own assessment of the coalition.

In 2010 is was unimaginable that Labour after 13 years in power could have come so close to forming the next government, albeit with the support of the LibDems. We can all recall those cosy joint press conferences with Dave and Nick declaring the coalition. Rather like a royal couple announcing their engagement with witty loving comments passing back and forth. Four years later it is hard to see whether what promised so much can be repeated. They have explored the things they have in common and perhaps all that now remains are the things that divide and distinguish them. One partner having to emphasise their Euro scepticism to fight off the rise of UKIP, the other wondering whether the potential annihilation in the next General Election (if the Euro and local elections are anything to go by) has made the brief taste of power for a few ministers worthwhile. One can see the jockeying for position going on, with promises of mansion taxes and a referendum on Europe being the most obvious differences between the two.

There is no doubt that we, as a country, were in serious trouble before 2010, overspending and living on borrowing both individually and as a nation. Practically the whole world suffered the downturn and the result of that needed us to be more competitive. Either we had to improve our productivity dramatically or our costs had to be cut, again dramatically. The reality needed to be something between the two, so employees who were not productive had to go.

So what has the Coalition achieved? Financial stability is probably the answer. Unlike our European friends being outside the Eurozone has been used to great advantage. Effectively a devaluation by cutting interest rates at an early stage, though this was done under the previous government. The cuts to public expenditure, whether real or not have bolstered confidence in our economy. The southern Europeans have suffered similar cuts but these were imposed upon them from the Euro zone and investors in their economies have not been entirely convinced by their efforts. So from that point of view, particularly as we have now returned to growth in our economy the great plan has succeeded.

Undoubtedly the coalition will point to changes to our tax system, making us more attractive to overseas investors. That is true but the majority of us will probably suffer in the longer term from HMRC being allowed greater powers in the form of the GAAR and the new power to deny the cash benefit of tax schemes until the reliefs have been upheld in court. In theory these are both valuable to the state, but only as long as they are used sparingly by HMRC. None of us relishes the thought of having to wait years for tax benefits we currently take for granted. And what happened to tax simplification? Regretfully our system is so complex and successive governments can never resist granting additional reliefs to meet perceived needs. Those reliefs become the "fiddles" of later years.

According to your political point of view the current government has been a success or an abject failure with each of the parties in the coalition having pleased or irritated their individual supporters in one way or another. Almost certainly the political experiment will not be repeated as each party seems to have gone as far as possible upholding the other's policies without entirely alienating their support. So we may see a LibLab pact or even a Tory/UKIP alliance if one or the other of the main parties is unable to gain a working majority at the election.

How would I mark the coalition, probably a B+, having given stability for the past 5 years when we badly needed it but the negatives are the failures to resolve the future of the House of Lords, the failure to deliver an opportunity for the British people to come to a conclusion on Europe, the naivety of a supposedly business orientated government in its dealings with HMRC and the proposals for grand infrastructure schemes at a times when families are still having to watch every penny. There are still many challenges to face and we can only hope that political doctrine is not used instead of hard headed common sense.

Better than most recent governments but is it still good enough for the British people?

David Ingall

Past President

UK 200 Group

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