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Can the Tories hold out to 2015?

david cameronIt is now touch and go on at least three accounts whether Tory plans can hold up till May 2015. In the NHS cuts are now forcing twice as many mental health patients to travel out of area as 2 years ago.

GP surgeries are approaching crisis with millions left without a doctor. One in 5 hospitals is currently facing a deficit. A quarter of walk-in centres are closing. Half the senior posts in A&E are now left vacant, which is pushing emergency wards beyond capacity. The public are left wondering whether the scandals at Morecambe, Colchester and now Panorama’s Old Deanery are one-offs or setting a trend.

Even top administrators in the NHS are speaking out and castigating politicians for wasting years on reform and being responsible for the NHS’ inefficiency. Jeremy Hunt’s job was to keep the NHS out of the headlines till the election and keep it ticking over at all costs.  As waiting times before seeing your own GP steadily lengthen and as waiting lists before access to hospital grow remorselessly, the Tory facade of a smooth transition to privatised healthcare with £20bn cuts may well not survive a year.

Already the lights are flashing red predicting a property bubble out of control ending in yet another housing crash. Osborne is loathe to call in his Help to Buy spending spree, but if he does not, the housing market is fast being set up to collapse. The instruments to prevent this are few and unlikely to be effective. The Bank of England could tighten up the capital requirements for banks and building societies, but this probably won’t have much effect. After £375bn cash injected into the UK financial system via quantitative easing (the electronic printing of money on the grand scale) plus Help to Buy, there’s plenty of momentum in the property market now that several years of pent-up demand are being unleashed and the demand for new homes far exceeds the supply.   Already the proportion of the population taking out mortgages with a loan to income ratio is excess of 4.5 has doubled to 8%. The Bank could try to deal with this by tightening loan to value or loan to income ratios, but that too might well not be enough. The only option then left is to jack up interest rates, and it’s anybody’s guess whether that can be avoided before one year from now.

The there’s the economy.  If Help to Buy is restricted (as 2 Tory ex-Chancellors are publicly urging) and consumer borrowing reaches the end of its run (as it must), can the current temporary surge long survive? If business investment remains flat, wages still falling, productivity on the floor, and net export growth still hugely negative, it’s difficult to see how the fanfare of a great recovery can be maintained for another year.

2 Comments

  1. Syzygy says:

    Additionally, Gove’s free schools are draining 73% of the education budget and he has just raided the 400m Basic Need budget which ensures that LAs can provide sufficient school places for all children in their area. A budget which will be needed for all those children where there are not enough school places because Gove has spent the money on free schools.

    Then there is Universal credit which is hitting the fan; the abandoned plan to integrate social care; the inability of the state to prosecute big fraud cases like Libor because of the withdrawal of legal aid etc – which are all as well as the uncertain timing of a new banking credit crunch and another eurocrisis.

  2. swatantra says:

    Yes. They’ve signed up to a Coalition Agreement. If the Lib Dems break it, their word won’t be worth the paper its written on (not that it ever was). And Dave wants to complete a full term. I honestly believe that he’s not too bothered whether he gets another term or not.

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