The British Coalition Government - Month One

The coalition has gone well so far. Two parties who are political opponents have formed a coalition government. There are people in both parties who are unhappy about the coalition, but as explained in the previous article a coalition is the least bad option.

The first casualty was the Lib Dem brought in to oversee the cuts. He is a merchant banker, and highly regarded for his knowledge of the economy, political skills, work capacity and lightning intellect. It seems that he was renting premises from his partner using Parliamentary expenses. When the rules were changed so that it had to be declared if you were using public money to pay your partner, he did not make the declaration because he did not want to declare his sexual orientation. £40,000 was not declared. He had to resign as a Minister.

He was replaced by the Liberal Democrat who had recently been appointed Secretary of State for Scotland. This man is able, but was not the first choice for any of the important jobs..

The Coalition knew they would have to make savage cuts. They have tried to avoid some mistakes that are easy to make. An example of this is that it is a local authority responsibility to provide metal railings and steps to enable old people to remain at home. That is a very easy item to cut, but the knock on effect is that old people then have to be re-housed in expensive accommodation which may cost more in a week than the railings would have cost to install.. The local authorities have been told not to cut this budget.

Some of the “easy” savings have been announced. The scheme for National Identity Cards was never popular, and both parties were against it. However, the computer companies involved have long term contracts, and are entitled to compensation. The savings were not going to be great, and they may be negative – but less negative than going along with a scheme that everyone regards as pointless. The Third runway at Heathrow has been abandoned, and air travel will be taxed as part of a green “polluter pays” policy.

Tens of thousands of local government workers are going to lose their jobs, and there will be cuts in services. Tens of thousands of civil servants will lose their jobs, with some departments facing 20% budget cuts.

There is a long term problem with the Defence budget. It is expensive to have the forces

· to defend Germany and France against the Russian Red Army,

· to retake the Falklands if Argentina invades again,

· to conduct a desert war in Iraq,

· to run a cold mountain war in Afghanistan,

· to keep the peace in Sierra Leone,

· to defend Kosovo against the Serbs,

· to be able to move back into Northern Ireland if peace breaks down, and

· to have troops to spare for the next international problem.

We only have a small Army, and so the good units are being used again and again. Even when not on active service they are often on standby as reserves for some war or other.

The high casualty rates also have an effect on morale. Army married accommodation is often in poor repair, which does not help. Intelligent young soldiers are deciding to leave after 12 years or often sooner because their family lives are under strain.

On top of that our “independent” nuclear deterrent is old and needs replacing! The recent behaviour of the Russians shows that they still have aggressive intentions against the West. It will not be long before the Iranians are able to send nuclear rockets to Britain. Given the lead time to prepare a new nuclear weapon, we have to authorise a replacement now to have it ready in 10 years time. The Liberals suggested abandoning or scaling down the British independent nuclear deterrent. One problem is that it is not independent, because the Americans can prevent the missiles being fired. The system is old, and needs to be replaced by something. The Conservatives have insisted that we go ahead with it, essentially to keep Britain’s place among the nuclear powers.

Military procurement is a constant issue. Eight Chinook helicopters stood idle in a hangar for 8 years while a dispute over software and airworthiness based on the software problems was resolved. Meanwhile, British soldiers have died because of a shortage of helicopters. Ordinary soldiers are spending their own money on protective equipment the Army does not supply. It seems that every procurement project the military run comes in well over budget and well over timetable.

The top Defence civil servant and the top military officer have been thanked for their loyal and lengthy service, and their early departures have been announced.

The difficulty is that our Defence forces are taxed with too many tasks. The knock on effects are that people are trying to do too much with too little and this involves changers of plan and extra costs. A Defence Review is being conducted, and something will have to give. We will probably abandon our bases in Germany, but that is only a small saving. There are no easy answers.

Not that this would affect our high minded politicians, but a lot of defence supply companies are based in marginal constituencies. Cuts there would lose votes.

The other question is how long will the coalition last? The pretend story is that this is a coalition for a full five year government. The truth is that if the Conservatives believe they can win a proper majority in an election they will have an election. Liberal Democrat party members are already getting stick on the doorsteps because so many of them campaigned that people should vote for them to keep the Conservatives out, and then the Liberal Democrats promptly joined a coalition with the Conservatives. These activists will be blamed for the cuts and for every unpopular thing the Coalition Government does. Morale in the Liberal Democrat party will plummet.

Labour will have a new Leader soon, and Labour will become popular in the polls as the Government cuts bite.

The Coalition has had a fair wind from the press, but if the Coalition supporting Sun loses readers to the pro Labour Daily Mirror, the Sun may stop supporting the Coalition. The problems of the British economy are overshadowed by the problems of the Euro, but high Government debt has financiers concerned that Britain could become another Greece.

Although order books are higher than in the past, David Cameron’s talks about cuts intended to reassure the international finance community are damaging business confidence in the UK, and growth forecasts are being reduced. This could diminish the tax “take” and increase unemployment, making the recession worse. He is damned if he does and damned if he doesn’t.