And winner of the worst government policy of the year is . . .

There have been plenty of contenders for the year’s worst (UK) government policy.  The coalition seems to have inherited Labour’s desire to meddle, fiddle and tweak and the uneasy marriage of Lib Dem lefties and nominally right wing Tories has been a recipe for fudge and confusion. 

This has led to a bumper crop of terrible policies including:

-          George Osborne’s “tax cuts for employment rights” policy was designed to please right wingers but was just another politician’s wheeze which backfired at the taxpayer’s expense (and confirmed that George’s scary similarity with Gordon – see “Oh No it’s Geor-don!”);

-          Ed Davey’s horrible energy bill which slaps an extra £100 onto fuel bills for a hotchpotch of measures which will damage the UK economy but do nothing to “combat climate change”.  In a world where India and China are building new coal-fired stations every week, the UK messing around with wind farms and subsidising loft insulation is an expensive irrelevance.  Davey’s bald-faced assertion that his measures will eventually reduce bills by £94 (compared to what they would have been without the bill) was political lie of the year ;

-          Separately the £2bn “climate aid” pledge to assist with climate change projects in the developing world had massive-waste-of-money written all over it;

-          The way the Treasury rowed back on the child benefit cuts for rich people was also depressing.   The original cut, announced last year, was the right thing to do but was badly botched from the start, penalising single-wage households.  The efforts to undo the damage have watered down the savings and added another huge layer of complexity to the tax system (see this if you don’t believe me see Couples face “who buys toys” quiz by taxman to get a flavour of the madness);

-          Kicking Heathrow airport expansion into the long grass (yet again) while simultaneously making UK air passenger tax the highest in the world, was a great example of political expediency trumping the long term economic interest of the country; and

-          Getting control over Labour’s crazy “open door / open wallets” immigration policy is important but the coalition have set an arbitrary target of limiting non-EU immigration and Theresa May is trying to reach it by clamping down on students from abroad and skilled workers business needs.  Leaving the EU and restricting welfare payments to citizens who have earned it would be a better bet (see EU’s migrant rules prove the referendum case).

So what could be worse than this lot?  Well my nomination as worst government policy of the year is Minimum Alcohol Pricing.  It’s at the White Paper stage now so not law but it will be soon, particularly given that the PM has thrown his weight behind it (so we can’t blame the Lib Dems for this one).  It may not be the policy with the most serious bad consequences but it is truly awful for lots of reasons which I describe here:  Minimum alcohol price: Cameron’s dodgy dossier

From our website:  Do you need to submit a Spanish tax return?

Oh no, Brown and Osborne have morphed into Geordon

They reportedly hate each other but the current and former Chancellor are increasingly merging into one.

No one was more fiercely critical of Brown as Chancellor than me and that was in the boom years as well as the the recession which followed.

I hoped George Osborne would draw a line under the Brown years and set Britain on the right course.  But increasingly it seems there is little to choose between the current Tory economic policies and the Labour ones that left the UK in ruins.

Read these five criticisms of recent Treasury policy and decide who they apply to, George or Gordon:

Out of control public sending - The Chancellor has allowed public sector spending to rise remorselessly as a % of GDP to the point where half of the UK economy is taken up by government spending, 20% of that financed by borrowing which never seems to come down, making a mockery of the "austerity" or "iron" Chancellor reputations.

Blame the foreigners - once it was the US for the sub - prime crisis which had the temerity to burst the UK's bubble and now it's the Eurozone for slowing demand for British exports.  Convenient scapegoats for a disastrous performance by the UK economy and its chancellors.

Laissez faire monetary policy - The decision to farm out responsibility for monetary policy to the Bank of England was widely-praised but it looks to me like an abrogation of responsibility.  How can you claim to be running the economy when the most important policy decisions (QE, interest rates) are made elsewhere?      The B of E has a government set inflation-target of course but this is deeply flawed and takes insufficient account of asset bubbles, money supply, the exchange rate and absolute levels of indebtedness.  The unspoken rule of the Chancellor seems to be that the B of E is free to adopt whatever monetary policy it likes . . . as long as it is loose.

Tricks and wheezes  -  There used to be a time when Chancellors announced programs which changed the face of the country - think Lawson's tax reforms in the late 80s and Healey's change of course in the late 70s.  Now we get short term fiddling and little games to try and "wrong foot" the opposition.  Lots of knockabout political point scoring and short term initiatives, nothing substantial for the long term.

As a footnote there are two members of the government who ARE making important reforms with long term economic ramifications  they are just not in No 11 (Gove - Education, Duncan Smith - Welfare).

Off balance sheet finance - why raise money transparently and honestly through the tax system when you can finance pet projects on the never never via dubious PFI schemes, Infrastructure Banks?  These schemes look like they are giving the taxpayer something for nothing but, as we are finding out with PFI-financed hospitals, they will come back to bite us in the end.

Can't decide which criticism belongs to whom?  It's because increasingly they  apply to both equally. Brown and Osborne have morphed into one terrifying being.  Heaven help us.

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