Picking Losers

Cutting red tape

Tony Blair outlined 500 measures to cut the £14bn cost of red tape to individuals, firms and charities yesterday. The aim is to save up to £2bn a year from measures which include simplifying forms for planning applications and rules covering fire certificates.

MoD spending

The MoD has faced an increased criticism over the last couple of weeks, the most prominent critic being Gen. Sir Michael Jackson. While the troops in the front line have to cope with poor equipment and little pay, the MoD has spent

  • Over £71m in the year 2005-6 on consultancy fees; and
  • £40m in 2006-7 (an increase of 60% from 2003-4) on Civil Servant bonuses.

Carbon credit card

David Miliband, the Environment Secretary, is expected to announce a proposal for carbon "credit cards" for every citizen. People would receive an annual allowance to use on food, travel and energy and it would be possible to buy or sell credit. This, as carbon quotas on businesses, will not be the solution to climate change. It will only enforce the current situation.    

Bankrupt NHS trusts

The Guardian reports that 13 NHS trusts are "technically bankrupt with no chance of meeting a legal obligation to balance their books." The deficits are mainly caused by a financial regime known as Resource Accounting and Budgeting (RAB). RAB has caused deficits to escalate and for example, Queen Elizabeth Hospital in Woolwich culmulative deficit by end of March is predicted to stand at over £65 million.

The Government is only now promising to look into the problems caused by RAB. It should have been clear from the first few years that the system is not working for trusts and should have changed it then and not now as some of the trusts are in deep deficits.

Gordon's tax crab

  • The Chancellor has raised taxes by £6bn since the 2005 general election
  • A family pays £200 per year more taxes


  • He promised £200 for every pupil in the PBR but only £20 is new money
  • He promised £36bn for education in the PBR but only £100m is new money

Independent reviews

The Chancellor has commissioned 39 indpendent reviews since 1997 and most of them have quickly disappeared without making any impact. At first it seemed a good idea to bring in outside expertise but increasingly such reviews only justify what the Chancellor has already decided to do. Labelling them as independent can easily be questioned as the support and advice comes from the civil service.   


Yesterday's Pre-Budget Report was another example of Gordon's nannying. Now mothers will receive child benefits even before their baby is born and more worryingly the Government will provide books to children up to the age of 11. The Chancellor should concentrate his efforts on improving the education instead of deciding what books children should be reading.  

Green Cameron Tories?

According to the Lib Dems, the Conservative's "may have started to talk green but are continuing to act dirty":

  • David Cameron switched to a supposedly green hybrid Lexus GS, but it is so big that it is more polluting than the 10 best selling models in the UK.
  • The Conservatives were silent or critical during the debate on the recent Finance Bill on fuel duty, vehicle excise duty, climate change levy, land fill tax and aggregates levy. Their year long tax commission did not come up with a single proposal for David Cameron on green taxes, stating that this was "beyond their remit".

NHS reform

The PM has defended the NHS reform and is convinced that it will lead to a better patient care. It comes as an IPPR report supports the closure of local A&E departments to be replaced by a network of specialist units. But a vast majority of public and practicioners are not convinced of the changes, which was demonstrated at the last week's rally. And the Guardian reports that ministers have accepted in private that they have failed to sell NHS reform effectively to the public.

Dancing to fitness

The NHS is likely to give dance classes to tackle declining fitness levels and counter a national obesity crisis according to the Independent. Trials have been carried out costing £2.5 million and the DoH said that dance classes have proven to be very successful. It is not clear how the people who can dance on the NHS' cost will be chosen. Can anyone wishing to avoid paying for their dance classes or gym membership sign up? What if some people do not like dancing and will demand their exercise costs to be paid by the NHS?

Law and order?

According to the Guardian the Home Office is considering to offer the public a chance to purchase shares in new prisons under a "buy to let" scheme. The Treasury has refused to find extra funding to sort out the prisons crisis and that has led John Reid resorting to such extreme measures.

Wise investment?

Tony Blair is planning to double the number of new city academies from 200 to 400 by 2010. The PM is pointing to the improved exam results to justify the move. But only a month a ago, an Ofsted report found that a few of the small number of exisitng academies have cost the taxpayer almost double the amount that was originally planned and some of them are still lagging behind with no real improvements.

DfT and rolling stock

The government asked the Office of the Rail Regulator (ORR) to investigate lack of competition for train rolling stock this June. The report, published yesterday (29 Nov) found that the industry is inefficient but a number of the problems arise from government's own policies.

The main problem is that there are only three companies providing rolling stock and the market is very uncompetitive. This has led to higher prices for passangers and lower quality of service. One factor keeping the market as it is, is the DfT policies. Very often the award of a rail franchise is so specific, that the choice of stock is very limited.

Small firms and FSA

Smaller companies' support to the FSA has decreased over the last two years. The main reasons are the continued high cost of regulation and a confusion over FSA's strategic and policy work. The FSA's recent announcement that it will switch to a principle-based rulebook has increased smaller business' fears. Bigger companies are able to pay for consultants to advise on regulations but smaller ones will have to spend a huge amount of their valuable time on getting to grips with the new changes.


MOT and red tape

The government has decided to look at scrapping the annual MOT test in favour of one every two years, a move that could save motorists millions of pounds. Currently the UK motorists are checked more frequently than their European counterparts. Heavy regulatory burden is often blamed on the EU and on the incomprehensible amount of rules that emerge from Brussels. But in the case of MOT, the UK government has undertaken more regulations than requird by the EU. Maybe the government just finds it easier to blame the EU for its own fascinations with red tape?

Another bureaucratic improvement?

There is more bad news for the Home Office - today's jail watchdog's report reveals the extent of mismanagement of the largest immigration removal centre. The government has promised to respond by a detailed action plan. But there have been such action plans before and nothing has improved. Will the next one be another "purely bureaucratic exercise with no impact on the centre's practices" (from the report)?

Planning regulations

According to the Times the Government will announce this week that council will have to assess children's needs before granting planning permission for new homes. This means housing developments will have to include access to gardens, parks and playgrounds. Also, the move is to boost family homes after an increase in the building of one and two bedroom flats.

Cutting red tape

Tony Blair promised to cut red tape for business by 25% yesterday (28 Nov) in his speech at the CBI conference. In his address today, Gordon Brown is expected to announce reforms desinged to deliver a "more modern, simpler and consistent" tax system. The PM said that bureaucracy cost almost £15 billion a year and they have identified annual savings of £2.2 billion. And Gordon's announcement comes as a response to growing criticism that the tax system has become uncompetitive.