Annual Policy Review - 2015

ANNUAL POLICY REVIEW 2015

ANNUAL POLICY REVIEW 2015

CONTENTS

Introduction

07

Overview

08

Constitutional Reform

12

Jobs & Welfare

16

Transport

20

Economy

24

Education

28

Health

32

Media & Communications

36

Crime & Justice

40

Energy

44

Equalities

48

Defence & National Security

52

Immigration

56

Foreign Affairs

60

Localism

64

Working with You

68

IN A FEBRILE POLITICAL ENVIRONMENT, UNDERSTANDING POLICY IS MORE IMPORTANT THAN EVER

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INTRODUCTION Oliver Pauley, UK Managing Director

Welcome to Portland’s third annual policy review, which wraps up the final year of proper government business before we go into the long general election campaign.

In some of our other work, like Road to the Manifestos, we’ve looked closely at the politics of the situation. But in a febrile political environment, understanding policy is more, not less, important than ever.

Our chief policy adviser James O’Shaughnessy has provided an overview of all policy issues, but each of the policy areas has been researched and written by a member of our team working day-to-day with our clients.

Clients come to Portland for communications advice because they recognise the quality of our guidance, the reach of our networks, and the depth of our analysis.

This gives you a flavour of how closely we follow and understand the UK political scene.

I am proud that all of this applies across the Portland team. We have an unparalleled set of experts with experience across politics, the media and corporate communications.

In the months to the general election we will be working with clients to understand better what the outcome will mean for them, and how to get the best results. If you would like to know more about what we can offer, please do not hesitate to get in touch.

The quality of work we produce for clients is a tribute to the skills we have throughout our UK business. So this year we decided our policy review should demonstrate that.

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OVERVIEW James O’Shaughnessy, Portland’s Chief Policy Adviser

When David Cameron signed up to five-year fixed-term Parliaments in the Coalition Agreements, critics argued that by this stage in the Parliament there would be a fagend government short of activity and purpose.

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As Portland’s expert team outline in our policy review, by and large this has not been the case. The frequency of public rows and stagemanaged disagreements has increased, for sure, but the final 18 months of the Coalition has seen some major policy announcements.

The biggest political event of 2014 was the Scottish referendum, the tremors of which will continue to be felt for decades to come.

The hastily made ‘vow’ to the Scottish people, brokered by Gordon Brown and signed up by all three main party leaders, possibly helped turn the vote against independence, but the implementation of the devolution that it promised could still break the Union in the long run.

The leaders at Westminster now find themselves caught between two stools – offering enough powers to Scotland to fulfil their promises, while answering the growing clamour for equal powers for England (and Wales and Northern Ireland, too). Navigating these troubled waters will be central to each party’s manifesto and will dominate the agenda of whoever forms the next government. Ed Miliband is struggling most with this tension, and his worries are further amplified by a resurgent SNP that could take enough seats to scupper Labour’s chance of a majority.

Following closely behind the referendum has been the continued rise of UKIP especially their victory in the European election and the election of their first two MPs. Previously we have wondered how ‘sticky’ the UKIP vote would be – that is, come the general election, would they peel off back to the Tories? The answer so far seems to be ‘very’.

Indeed the flypaper of English populism is proving increasingly attractive to working class and socially conservative Labour voters too. Consequently, an unprecedented amount of political attention has been paid to immigration. Attempts by the major parties to neutralise the issue have not yet succeeded.

The elephant in the room is the UK’s membership of the European Union and the free movement of labour it demands: this is the principal cause of the Prime Minister’s failure to achieve his goal to limit net migration to the tens of thousands each year. British citizens will have their say on whether to remain in the EU, but not until 2017 and seemingly only with a Conservative-led government. This remains the biggest carrot Mr Cameron has to dangle in front of UKIP waverers at the election.

Ed Miliband has had a difficult year as leader of the Labour Party, but managed to hold his party together by shifting onto more comfortable territory. His conference speech, harmed by major omissions on immigration

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OVERVIEW

To eradicate the deficit, each party will have to reimagine the state.

and deficit reduction, nevertheless refocused the party onto its strongest suit – the NHS – paid for by clobbering the rich with a mansion tax. This is a major area of shared interest with the Liberal Democrats and would form the bedrock of any discussions between the two after the general election. The huge pressure on health services that have manifested themselves this winter will only add to Labour’s confidence that the NHS will be their trump card.

The economy is, of course, where the Conservatives want to fight the general election, and George Osborne has achieved the remarkable feat of missing – by some margin – all of his deficit reduction targets while maintaining a notable poll lead over his shadow, Ed Balls, on economic competence. The reason for that is not only strong economic growth and positive employment figures, much of the latter being due to Iain Duncan Smith’s ‘tough love’ welfare reforms, but the also continued ambiguity over Labour’s spending plans and public concern over whether they have learnt the lesson of the great recession.

The Autumn Statement revealed that whoever is in charge after May will have to implement “colossal cuts” to public spending to eradicate the deficit, and the respected Institute for Fiscal Studies has said that a reimagining of the

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state will be needed to achieve this goal. That is a decent yardstick by which to judge each party’s manifesto. The fear so far is that they will all be found wanting.

The Chancellor has a knack of pulling rabbits from the hat, such as the genuinely radical pension reforms announced in the Budget and the rather more timid (though politically well-directed) stamp duty changes in the Statement, both of which mostly benefit what Ed Miliband used to call the “squeezed middle”.

But come election time average real incomes may still be lower than before the crash – the Coalition’s Achilles’ heel – and Labour intend to take advantage of this issue.

One area where Labour has pledged to spend more money is on infrastructure, prompting the government to bring forward a number of big projects, including a £15 billion roadbuilding target, Crossrail 2, and proposals for HS3 in the North. Infrastructure has traditionally been an area of cross-party agreement, and while the levels of proposed spending might vary, the pipeline of projects is unlikely to change much, whoever is in charge.

in which the threat from terror has never been greater. The Islamist attack on satirical magazine Charlie Hebdo in Paris will serve to further cement this broad cross-party agreement. Limited military engagement in Iraq against ISIS was initiated with crossparty support, though Syria is still out of bounds for British forces. The withdrawal from Afghanistan was finally completed, and we await history’s judgement as to whether the gains in stabilising the country were worth the 453 British military deaths that occurred on its soil.

So the Rose Garden romance is long gone, and the Coalition Government is now transactional rather than trusting in nature, but the last year shows that both parties have a continued desire to reform and can still work together when the going gets tough. This will be important in the aftermath of the general election: if no party gets a majority, as seems likely, then history and personality will be even more important than policy when it comes to forging the next government. Might the representatives of each current governing party look across the negotiating table and say to themselves: ‘better the devil you know?’

After the debacle of the Syria vote in 2013, foreign and security policy has also seen consensus this year as all parties – especially the Liberal Democrats – adjust to a world

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CONSTITUTIONAL REFORM Alex Mitchelmore

ACHIEVED

MORE TO DO

• ‘No’ vote in the Scottish referendum

• Substantive visible progress with Scottish devolution

• Smith Commission recommendations delivered • EVEL options presented

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• Reach cross-party agreement on settlement for English devolution

THE UNEXPECTED

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• More calls for English regional devolution following the Scottish referendum • Labour’s Scottish collapse and rise of the SNP

LEGACY • The continuation, for now, of the Union • The rise of the Scottish nationalist and independence movements as major UK political forces

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CONSTITUTIONAL REFORM

2014 has been a year in which the political battle lines have been redrawn completely, and no issue has had more defining than constitutional reform.

Whether the issue is Scottish independence, the ‘democratic deficit’ or English regional devolution, the UK’s traditional political class is facing the prospect of a significant challenge to the constitutional status quo, driven by widespread public disenchantment and the rise of previously fringe populist parties.

Following the failure of the Coalition to deliver Lords reform, and the public’s rejection of a new electoral system, a much more powerful drive for constitutional reform arose from outside the centre of power.

The Scottish referendum encapsulated the challenge facing the main three Westminster parties. The final weeks of the campaign in Scotland were jittery and uncertain, and the polls swung back into safe territory only as the result of hasty-seeming promises of unprecedented devolution.

Even having lost the vote and their talismanic leader, the SNP remain on the front foot. If current polling holds up, Scotland will become virtually a one-party state: Labour has been predicted to lose all but four Scottish seats in Westminster on the back of 52% of Scots saying they will vote for the SNP in 2015.

Public anger in Scotland at perceived inaction on constitutional reform in Westminster is fuelling a boom in SNP membership; around 64,000 people have joined the party since

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The late conversion to devolution by the Conservatives is probably a pragmatic decision to adapt to the moment. the referendum, increasing the party’s size threefold and confirming it as the new third party in the UK. It is a bitter irony for the Liberal Democrats that they, the party that has been most consistently vocal on the need for UK constitutional reform, risk being relegated to the status of a historical footnote as a result of the issue taking centre political stage.

Nonetheless, the momentum is with the SNP, and despite the Smith Commission offering a much bigger package of further powers than was thinkable a few years ago, nationalist accusations that Westminster is dragging its heels are resonating with Scottish voters.

The late conversion to devolution by the Conservatives is probably just a pragmatic decision to adapt to the moment. They may also have concluded that devolution is a relatively cheap policy for the early years of the next Parliament, leaving the newly installed local executives to make difficult spending decisions. Nevertheless, there is a strong logic to their plan: with the Barnett formula protecting public funds for Scotland at the same time as handing greater powers to Holyrood, for England the deal looks pretty poor if it does not get something in return.

The only losers, of course, would be the Labour party.

What this means for the UK and its future is uncertain. During the campaign, the three Westminster parties presented a united front and signed up to the devolution timetable.

The risk for those in Westminster is balancing the difficulty of managing the complex issues involved with the electoral and political damage that any hint of stalling will cause.

This is particularly important given how little parliamentary time is left in the calendar.

Labour is furious that the Prime Minister has seized the moment to secure future electoral advantage, but it is Labour that has the bigger problem explaining its position. Ed Miliband’s initial response to the Tory gambit, announced at conference, was to pledge a constitutional convention. This feels very much like stalling tactics, and will have to play out after the decisive moment for Scotland, adding to the sense of unfairness in England.

Adding to the fallout is a piece of deft political manoeuvring from the Conservatives, who have attempted to tie concessions on Scottish devolution to greater English (and Welsh) home rule and an answer to the West Lothian question.

In the face of all these forces, the status quo seems utterly indefensible. The two questions for 2015 are whether a new Scottish devolution package can be made to stick, and what that means for the rest of the UK.

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JOBS & WELFARE Libby Smith

ACHIEVED

MORE TO DO

• Unemployment figures falling to 1.96m, the lowest since the financial crash

• Overcoming lingering doubts and problems to achieve any sort of scale on Universal Credit

• The most significant pension reforms for almost a century

• Implementing further curbs on migrant welfare entitlement

• Introduction of a three month time limit before EU migrants can claim benefits

• A further £12 billion of welfare savings demanded by the Chancellor after the election

• Annual cap on welfare spending, with a £119.5bn limit next year

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THE UNEXPECTED

!

LEGACY

• The rapid pace and scale of the fall in unemployment

• Frustrated ambition over Universal Credit

• Increasing Coalition divisions over further welfare reform, in particular the ‘bedroom tax’

• The lowest unemployment figures since the financial crash and highest employment numbers on record

• Labour’s Rachel Reeves’s tough stance on welfare, especially that available for EU migrants

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JOBS & WELFARE

2014 saw all parties talk tough on welfare, driven by the need both to reduce the deficit and to address voters’ concerns over immigration.

The Government implemented further measures to tighten up access to benefits, coupled with pension reforms and moves to curb ‘benefit tourism’.

Secretary of State Iain Duncan Smith endured a tough year as the government’s flagship Universal Credit program experienced further delays. The scheme, which originally promised to have one million people on board by April 2014, has again had its timetable pushed back, this time to 2018.

Welfare has been a hugely divisive topic in the Coalition with the ‘bedroom tax’ providing arguably the biggest fall out. In September, Liberal Democrat and Labour MPs united to vote on a limit to the scope of the policy. Nick Clegg and Danny Alexander also signalled their opposition to the planned £12bn benefit cuts sought by the Chancellor.

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Given these difficulties, many expected the Secretary of State to lose his job in the July reshuffle. However Mr Duncan Smith survived and will plough on with his universal credit mission.

Not all DWP initiatives have foundered. In March, MPs overwhelmingly voted in support of the Chancellor’s plans to introduce an annual limit on welfare spending. Expenditure will be capped at £119.5bn in 2015. While that represents grim news for many, the government has continued to aim to delight pensioners. Last year the Chancellor announced the most drastic pension reforms for almost a century. From April 2015, millions of people will be able to spend their pension pot in any way they want, with no requirement on those with defined contribution pensions to buy an annuity, giving retirees far more flexibility.

Indeed, the government has signalled more than one shift in philosophy. The Chancellor’s endorsement of a higher minimum wage in January 2014 was a hint of how the Conservatives – typically averse to labour market regulation – are moving into a preference for making employers give the lowpaid more, rather than the government helping them through benefits.

Restricting benefits to new arrivals is partly about immigration, but also tries to make the system seem more fair.

Cutting the deficit hasn’t been the only driving force behind the Government’s welfare crackdown. In the wake of mounting concerns over immigration and UKIP’s growing popularity, the Government has taken a tough stance on ‘benefit tourism.’

This will include £3 billion to be raised by freezing working age benefits from 2016.

He has pledged that a future Conservative government will reduce the benefit cap from £26,000 to £23,000 and implement further curbs on JSA payments.

New rules on how long EU jobseekers will have to wait to claim benefits came into force at the beginning of the year. EU migrants will now have to wait three months before they can claim benefits and can only claim beyond six months if they have a realistic chance of work.

The Prime Minister’s statement of ambition to restrict many benefits for many years after claimants arrive in the UK is first of all an immigration policy, but also sits within a view of what is fair – those who claim should first pay something in.

Such signals will be heeded by the Opposition, which cannot afford to look soft on welfare.

Ed Miliband has committed Labour to a cap on welfare spending and stated that his party would block access to in-work benefits for EU migrants for two years, going one step further than the Conservatives.

2014 saw encouraging labour market figures.

Unemployment has fallen below two million for the first time since 2008 and employment figures reached a record high of 30.7 million with the ONS stating that 600,000 jobs have been created over the past year. The pace and scale of the Government’s achievement is especially notable when compared to the rest of Europe.

After four and a half years of coalition, we have not seen the hoped-for transformation of welfare culture. But a decent British jobs record, coupled with a public mood set strongly against welfare largesse means Mr Duncan Smith has still managed to set the course for the years ahead.

If re-elected in May, the Chancellor George Osborne has announced that he wants to identify a further £12 billion of welfare savings.

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TRANSPORT Lewis Mackinnon

ACHIEVED

MORE TO DO

• Electrification of several rail routes

• Make decisions on UK airport capacity

• Earmarked funds for large future infrastructure spending

• Completion of upgrading existing infrastructure

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THE UNEXPECTED • HS3 and a ‘Northern Hub’ • Plans to privatise Eurostar stake

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LEGACY • Major transport project announcements • Upgrade of the existing rail network

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TRANSPORT

If the Coalition is to be remembered as the government of cuts, it will certainly not be because of its policy on transport.

The Department for Transport’s spending is now £3.5 billion a year more than 2010, and is one of the only places where the government seems keen to announce extra spending for the next Parliament. Transport is seen as an area where the Government can leave a lasting legacy and one of the few where it can sensibly target public money.

It is on issues of rail that the current Government was perhaps most active in 2014.

The Coalition has, in its own words, committed to “the biggest investment in rail infrastructure since the Victorian era”, and is pushing for an overall modernisation of all existing lines.

Claire Perry replaced Stephen Hammond as Rail Minister in July 2014. She has adopted a harder line with rail operators. In line with this, George Osborne capped rail fare increases at 2.5% for the second year running. While this has given some relief to rail users, the bill for

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long-overdue investment means average fares have now increased by nearly a quarter since the beginning of the Coalition Government’s time in charge.

The consultation over the major investment project, HS2, rumbles on. Despite solid government backing, the Bill will not become an Act before this Parliament ends, and the Government’s legacy on high-speed rail may not emerge quite so quickly as it hoped. As for rail industry structure, the government has not sought any great reform. It stuck to its guns in letting the East Coast mainline franchise to a private operator, while it was an accounting decision that saw Network Rail reclassified as a public sector body.

While rail has become a priority for the Government, airport expansion has dropped down the pecking order. The Airports Commission, headed by Sir Howard Davies, was set up precisely to stall the big decision on where to build a new runway until after the General Election, and continues with its consultation process. However the commission has ruled out plans for a new hub to be built on the Thames Estuary. ‘Boris Island’, the plan backed by the London Mayor, was dropped from consideration in September. Only three proposals remain in contention (two are designed for Heathrow, one for Gatwick).

Transport is seen as an area where the Government can leave a lasting legacy and sensibly target public money.

A more definite legacy on aviation came in the 2014 budget, with the decision to scrap the highest Air Passenger Duty (APD) tax bands on long-haul flights. The announcement brought an end to a system which saw flights of a similar distance vastly vary in price. The move was roundly welcomed by the aviation industry, but received little publicity elsewhere. Abolition of APD for children in the Autumn Statement was a more eye-catching measure.

In the North of England, the Government is pushing ahead with huge transport infrastructure spending to create a regional hub, with Manchester at its heart. Plans for HS3, a high-speed link across the Pennines, is the latest big project to be green-lighted by the Government, though details about routes, costs, and feasibility are still scarce.

The Government has even scrapped the ban on cruise ships docking in Liverpool, in a bid to open a new ‘Atlantic Gateway’. The Autumn Statement added further road projects to the list, and spread the benefits to the South West.

If success was measured on announcements, this Government’s record on transport would be revered. But there are vocal critics of the Government’s progress. Big organisations representing engineers and businesses have voiced concerns that headline-grabbing projects like HS2 and Crossrail 2 are coming at the cost of less grand but more immediately needed spending on roads and runways.

As the work on most of the announced infrastructure schemes will not start for years to come, the legacy of these projects is likely to be associated with those who cut the ribbon, rather than the ministers who issue the project green light.

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ECONOMY Thomas Nguyen

ACHIEVED

MORE TO DO

• Return to steady growth, strong and rising employment, and low inflation

• Stimulate earnings growth to avoid aggravating a cost of living crisis

• Delivery of tax cuts through business rates for SMEs, corporation tax and the raised personal allowance

• Ongoing efforts to find £25 billion worth of public spending cuts in a bid to reduce the structural deficit

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THE UNEXPECTED • IMF U-turns to revise upward UK growth forecasts • The Government’s Help-to-Buy scheme stoking fear of a housing bubble

!

LEGACY • An economic recovery half-done, but a policy argument won

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ECONOMY

With the election a matter of months away and policy business all but finished, George Osborne will have hoped that by now the trends in growth, jobs and pay figures would be enough to sell his long term economic plan to the public.

And indeed he enjoys a huge lead in economic competence ratings. But the job is not done: instead of a fully healthy economy and closed deficit, the Chancellor will make a case for his economic competence based on the right decisions in a tough environment.

Unlike earlier stages of the Parliament, where international judgement seemed to be against him, in October the Chancellor was able to brandish IMF forecasts for UK economic growth at a healthy 3.2% (the Office of Budget Responsibility was slightly less bullish but in the Autumn Statement revealed it had a good outlook for 2014 and expected growth of 2-2.5% for the following five years).

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The public also seems broadly supportive.

An ICM poll found that public confidence of the Tories’ handling of the economy has lent them a 20 point lead on economic competence – the biggest gulf between the parties in the polls for three years.

In response, the Shadow Cabinet has trudged back to safe territory, accusing the Conservatives of relying on “one or two sets of figures” and railing that the cost of living has broken the link between the wealth of the nation and family finances. This battle for feelings, rather than headline figures, is still just about alive.

Yet for all the economic indicators that have fallen in Osborne’s favour – or have been dressed to do so – the UK economy is not out of the woods.

Inflation has dropped to 0.5%, its lowest level in 14 years. Triggered by plummeting oil prices and a supermarket price war, the trend is welcome relief to struggling households and fulfils the Office of Budget Responsibility earlier forecasts that earnings can now reliably out-pace costs. For Mr Osborne, the latest results are a chance to tout his much-promised ‘feel-good’ factor but beyond May, possible deflation and fears of weak spending could yet derail his core argument.

Instead of a fully healthy economy, the Chancellor will make a case for his competence based on the right decisions in a tough environment.

Monetary policy remained in something of a grey area in 2014, with a strong independent Bank of England governor seeming to follow a political agenda which is much broader than the inflation target established in the Labour years. Mark Carney’s second set of forward guidance, issued in February, implied low interest rates for longer, even if unemployment came down at the same time as inflation.

Decisions would instead be made taking into account spare capacity in the economy thought to sit at around 1.5% of GDP.

economy. What’s more, unaffordable homes, particularly in the South East will continue to gift Labour the ability to point out the uneven effects of the recovery. However, a rise before the election is highly unlikely.

It is certainly in the government’s electoral interests if mortgages stay cheap, even if that comes at the expense of a predictable or even comprehensible policy. One other effect, though, is a further surge in house prices, with the effect of making the housing ladder less accessible and prompting fears of a bubble. During the summer, the Chancellor handed the Bank new powers to cap high street mortgages, in the process exposing his help-to-buy policy to charges of stoking a housing bubble and overheating the recovery.

Subsequent changes in stamp duty will lead to more stories of surging house prices, except for the very top of the market.

Ultimately, this will have a significant legacy, but in political terms the fact that the government’s economic strategy was so explicitly based around deficit reduction means that public spending will be the focus.

On this, the government’s record is less than convincing. The deficit was again adjusted upwards in December for 2014/15 and 2015/16.

Cheap mortgages remain a political conundrum. Despite resistance from homeowners, a rise in the interest rate would signal a return to normality for the British

Overall, the structural problems in the British economy remain. While unemployment has remained low, it is at the cost of uninspiring productivity rates, meaning businesses may not grow as quickly as Treasury officials anticipated.

This leaves an awful lot more work to do. Mr Osborne’s victory, though, is that the job halfdone merely strengthens the likelihood of the Chancellor making exactly the same offer all over again.

EDUCATION Sirin Kamalvand

ACHIEVED

MORE TO DO

• Further emphasis on vocational education

• Regaining trust whilst continuing legacy of the Gove reforms

• Computer coding introduced in schools • Progress in rebuilding the relationship with teachers

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THE UNEXPECTED

!

• Need for strong intervention in the ‘Trojan Horse’ affair • Increasing influence of civil servants/ bloggers • Outspoken policy interventions from Ofsted

LEGACY • Free Schools and a reformed curriculum

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EDUCATION

2014 will be remembered in educational circles as the year in which David Cameron dispatched one of the most controversial Secretaries of State for Education this country has ever seen.

The surprise culling of Michael Gove in a midsummer reshuffle, and his replacement with Nicky Morgan, was partly an effort to rebuild the Government’s fractured relationship with teachers, but partly an acknowledgement that the minister, rather than the policy, had become the story.

Despite his departure, Mr Gove’s scorn for the ‘the blob’, a disparaging term for opponents of educational reform first used in the States under the presidency of Ronald Reagan, has influenced government policy in a way that continues to be felt.

In an effort to repair the fractious legacy of the Gove years, the new Secretary of State has launched measures aimed at strengthening relationships with the teaching community.

Following a conciliatory speech from Mrs Morgan at Conservative party conference in which she pledged to “do everything I can” to reduce the workload of teachers, DfE launched the ‘Workload Challenge’ in October this year. A consultation asking teachers to give feedback on issues to do with excessive workload (long a bugbear), the Workload Challenge is intended to initiate a more collaborative working approach with the unions and teachers than has been seen in recent years.

In an interview with the Times Educational Supplement in September, Mrs Morgan stressed that any further reform would be a “two-way process”, and revealed that she had

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Despite the hopes of some, Mrs Morgan has not reversed unpopular Gove-era reforms.

sent an email to every teacher during their first week back at school, thanking them for the work they had put in. However, despite the Secretary of State’s conciliatory tone, most of the unpopular government reforms had already been instituted by Mr Gove prior to her arrival, and she is not about to undo any of his work.

Despite the hopes of some, Mrs Morgan has not reversed unpopular Gove-era reforms, such as scrapping national curriculum levels, decoupling AS-levels and A-levels, and introducing tougher GCSEs. In fact, she has introduced a freshly controversial policy that would mean that no school could be graded good or outstanding by Ofsted unless every child is entered for the English Baccalaureate performance measure.

In policy terms, 2014 can be seen as the year in which vocational education and STEM were pushed to the forefront of the Government’s priorities. Apprenticeships continue to be name-checked in all education speeches, and BIS ran a consultation on apprenticeship funding models (PAYE versus credits). Labour has attempted to steal ground on vocational education, announcing they would institute vocational degrees and consider introducing a requirement for all apprenticeships to be level 3 and above.

Computer coding was officially added to the national curriculum in September, with support from major industry players such as Google and Microsoft.

The former ICT curriculum, scrapped by Gove for being “too dull” for teaching students how to use Word and Excel, rather than to create their own computer programs, was replaced with a renewed focus on industry-led STEM skills such as programming and coding.

However, not all within the industry have been supportive, and Jimmy Wales of Wikipedia raised the prospect that the new curriculum, which is compulsory for all children aged between 5 and 14, might be too demanding.

2014 also saw the spectre of Islamic extremism in British schools become a major point of concern. In Birmingham, the Council revealed that it was investigating 25 schools over the alleged ‘Trojan Horse’ plot by some extremist Muslim groups to install governors at schools.

In July Peter Clarke’s report for the DfE was officially released: it found no evidence of extremism, but it did find that “there are a number of people in a position of influence who either espouse, or sympathise with or fail to challenge extremist views”.

With Michael Gove no longer its figurehead, the Government will look at the end of its five-year education policy as radical and far-reaching, but far less toxic than it threatened to become. A quiet end to the Parliament would represent a good result for Nicky Morgan.

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HEALTH Rebecca Rollinson

ACHIEVED

MORE TO DO

• Publication of the Five Year Forward View

• Review of NICE processes to address accusations that it is no longer fit for purpose

• Finalisation of the 2014-2019 PPRS agreement • CCGs now fully operational with significant and growing commissioning responsibilities

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• Required efficiency savings to bridge the £30billion NHS deficit

THE UNEXPECTED

!

LEGACY

• Drastic changes to the Cancer Drugs Fund operating procedures

• An increasing emphasis on dementia and Alzheimer’s

• Barker report calling for ‘well-off retired’ to shoulder responsibility for bridging the £5bn gap in social care funding

• Uncertainty and controversy around the funding of cancer drugs

• Cancer and A&E waiting time scandals

• Further NHS upheaval

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HEALTH

2014 was a year of ups and downs for the NHS and the wider health and social care sector, with much change stemming from the appointment of ex-Labour adviser Simon Stevens as Chief Executive of NHS England.

His appointment demonstrates a continuing shift in responsibility away from the Department of Health.

Mr Stevens has spent his first seven months making waves both internally and externally; from scrapping and creating new directorates, to hiring old friends to head them up. There has been a middle management cull with a shift to regional leadership, potentially paving the way for his recent five-year plan.

The Nine Year Forward View is being hailed as the definitive plan for the future of the NHS, with everything we can expect in the coming years alluded to in this sizeable document. The more exciting headlines include an emphasis

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on the role of technology; new care models; the rise of multispeciality providers and small hospitals; prevention, and empowering patients to take responsibility for their own care.

Arguably the plan’s key role is to outline the savings required to bridge the £30billion deficit the NHS is facing. However, what appears to be another statement of planned bureaucracy could be seen as the start of Mr Stevens’s ‘big revolution’, with the upheaval to come. We should expect a pro-competition stance to feature in coming years, despite no official mention of the ‘c-word’. Whatever happens, we know that pressures on NHS resources will only continue into 2015.

The 2014 Pharmaceutical Price Regulation Scheme (PPRS) has also been a source of controversy with the battle between NICE and the pharma industry raging on. There has been a clear split between those that believe rejecting new drugs on cost grounds is the right thing to do, and those that believe these decisions are stifling innovation. Whilst pharma insist that price should no longer play a part in NICE’s assessment of new drugs due to the hefty rebate system, NICE has continued to press on pricing, becoming increasingly vocal.

We should expect a pro-competition stance in the NHS, despite no official mention of the ‘c-word’.

The Department of Health, meanwhile, announced controversial changes to the operating procedure for the Cancer Drugs Fund, effectively duplicating the role of NICE by introducing an assessment of drugs’ suitability based on price. Patient groups and industry have been up in arms and we can expect an ongoing and robust dialogue on the issue.

While it is clear that the CDF is one sticking plaster that can’t last for ever, it remains to be seen if an agreement can be reached on funding of future cancer care.

The long standing ‘problem’ issue of social care received its fair share of the limelight in 2014 following the Barker Report, which aimed to ‘confront the injustices of long term care’. The report unveiled plans to extend free care into social services, so that patients with long term conditions are not penalised by a fragmented system. It suggested raising the £5m estimated cost through measures aimed at wealthy older people, such as stopping winter fuel payments and free TV licenses for the ‘well-off retired’. The perceived burden on pensioners led to a mixed response, but there has been no clear statement of intent outlining whether or not the plans will come into effect.

Pay and workforce issues have also been in the news, with Labour calling for care staff to be paid the Living Wage, with a view to driving up better standards of care.

Politically each party has begun aligning themselves with the NHS, and setting out their battle lines ahead of the election. Throughout 2014 Labour continued to champion the theme of integration and joined up services across both health and social care, whilst the Liberal Democrats have successfully driven the mental health agenda.

The Conservatives have started pushing the ‘strong economy equals strong NHS’ line, which if communicated correctly has the potential to be a very compelling message as we move closer to the election. As for Jeremy Hunt, he will be raising a glass to the mild winter and praying for a smooth, NHS-crisisfree run-up to the election (or as crisis-free as can be achieved), when his record, and that of his boss, will be judged.

MEDIA & COMMUNICATIONS Charlie Reith

ACHIEVED

MORE TO DO

• Opt-out ISP filter

• Closing digital skills gap

• Way forward on post-Leveson settlement

• Reform of surveillance legislation

• Big strides in broadband rollout and agreement on mobile coverage

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• Licence Fee and BBC governance reform

THE UNEXPECTED • DRIP Act • Resignation of Maria Miller

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LEGACY • Position of Minister for Digital Industries • Digital Infrastructure Strategy • Momentum to complete broadband roll-out

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MEDIA & COMMUNICATIONS

Although a unified communications and media strategy still evades policymakers in DCMS, progress on longstanding debates like press regulation, along with impactful changes to broadband coverage mean the Department has earned its status under this government.

Maria Miller’s protracted departure in April was initially embarrassing for the Government. Ultimately her decision to go was due less to mis-claimed expenses than her reluctance to apologise. However, her successor has presided over a period of much more dynamism within the Department, with his aims more attuned to the Prime Minister’s.

The Leveson Inquiry was the big media story of 2013 and in 2014 the Government went some way to implementing its recommendations. An Independent Press Standards Organisation (IPSO) was set up in September to replace the widely discredited Press Complaints Commission. It may be too soon to judge but to many commentators this was simply a rebrand of the same tired institution. They have a point - the new body performs many of the same functions as its predecessor but sits under the auspices of the new Royal Charter for the Self-Regulation of the Press.

Although elements of the phone hacking investigations remain ongoing, the biggest episode was resolved with the jailing of Andy Coulson and the acquittal of Rebekah Brooks.

David Cameron, close to both defendants, was pushed to apologise for ever employing his former Director of Communications. Labour efforts to tie Mr Cameron to the scandal in the public mind have petered out although they might well be resurrected in the general election campaign.

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Mr Javid has presided over a period of much more dynamism within DCMS, with his aims attuned to those of the Prime Minister.

Elsewhere in media policy, Mr Javid has set up a review of how authorities enforce payment of the television licence fee. This is likely to lead to decriminalisation of non-payment but the Culture Secretary has ruled out any change before the General Election, with the inquiry set to report in June 2015. Further reform of the Corporation seems inevitable but will wait for the charter review rather than being rushed through as it was at the licence fee review in 2010.

In communications policy, the impact of the Edward Snowden affair still hangs over Westminster and — in an industry which thrives on individuals’ information — technology companies are keen to demonstrate commitment to greater customer privacy.

However, the reluctance of some firms to store or surrender user data continued to bump up against government and law enforcement agencies’ expectation that the industry should do more to help.

In response, the Government enacted emergency legislation in order to maintain the previous legal framework and compel companies to surrender data. In return for their agreement, the Liberal Democrats ensured that the legislation expires in 2016, setting a timetable in which to have a fuller debate about surveillance powers, although this has recently re-erupted with the fallout from the murders in Paris.

As part of the July reshuffle, a new post was created for junior DCMS minister Ed

Vaizey, who has become the UK’s first Minister for the Digital Industries. He has launched a consultation to determine a digital infrastructure strategy for the next 10-15 years and a scheme to help young people train for jobs in gaming.

The rollout of superfast broadband, a key DCMS priority, progressed well in 2014. The Government claims that 40,000 additional homes are being connected every week, the fastest rollout anywhere in the world.

Moreover, 3,000 businesses have already benefited from grants to improve their internet access.

Internet coverage outside the home has also improved with greater investment promised for public Wi-Fi improvements to mobile coverage. And as virtually his first act, Mr Javid declared his intention to force the UK’s mobile operators to share networks so as to increase rural coverage. While the threat of regulation was probably always an empty one, it provided enough leverage to get the operators to strike a deal on a voluntary basis.

DCMS remains a small department without huge weight within the government. But many of the issues it addresses continue to make the front pages. Mr Javid’s success probably rests on the extent to which he can continue the strategy – well-executed by Jeremy Hunt before him – of choosing a few priority issues and focussing hard on delivery.

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CRIME & JUSTICE Isabel Collinson

ACHIEVED

MORE TO DO

• Privatisation of the probation service to tackle reoffending rates

• Appointment of the Chair of the Government’s child sex abuse inquiry after two resignations

• More stringent measures for violent offenders within prisons • Agreement to allow limited access to the UK’s DNA data by European police • £85m Secure College to be built to educate young offenders • Tabling of the Modern Slavery Bill

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• Win round the legal community on the effects of legal aid cuts • Improve standing of Police and Crime Commissioners with the general public

THE UNEXPECTED • Challenge in finding a suitable Chair for the child sex abuse inquiry • Increase in threat level from international terrorism

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LEGACY

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• Cuts to legal aid • Tougher regimes for violent prisoners • Overhaul of the youth justice system

CRIME & JUSTICE

It is undeniable that crime and justice policy will look very different in 2015 compared with 2010, regardless of your view on the merits of the Government’s work.

Justice Secretary Chris Grayling has overseen some of the most fundamental reforms of the system in memory in an attempt to reduce inefficiency and the department’s £6.8 billion budget.

The youth offenders system was one area ripe for overhaul when the Coalition came to power. With the Transforming Youth Custody programme finally underway, a new emphasis is being placed on education and mentoring within youth offender institutions.

High-profile jail closures and an increase in security measures within prisons have been followed by the controversial privatisation of large parts of the probation services.

As the ‘plebgate’ case continued (and concluded), fractions between the police and the Government remained an important

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backdrop. This peaked with the launch of a Home Affairs Committee report, which called for urgent reform after it revealed an apparent culture of bullying and money-wasting procedures within the police force.

The Conservatives’ traditional tough outlook towards crime and justice stands at odds with the Liberal Democrats’ belief in the power of rehabilitation. This juxtaposition in political ideology was inevitably going to cause significant issues and has reared its head on numerous occasions.

In the wake of the classroom stabbing of a Leeds teacher, infighting erupted between the coalition partners. A Tory proposal to impose a mandatory six-month jail term for any adult convicted of a second offence involving a knife was met with opposition from senior Liberal Democrats who argued that judges should be trusted to use their discretion in these cases.

The most public spat came with Lib Dem minister Norman Baker’s resignation. This was triggered by Home Secretary Theresa May allegedly delaying the publication of a study demonstrating that tougher enforcement of drug laws did not lead to lower levels of drug use. The paper was supported by the Liberal Democrats, with Mr Baker hailing it to mark the end of “robotic, mindless rhetoric” on drug enforcement.

For some in the legal professions, the reforms go beyond an issue of budgets.

The Prime Minister however publicly shot down the report. In a direct dig at his coalition partners, he stated the Liberal Democrat policy “would see drug dealers getting off scot-free”.

Mr Baker returned the favour by describing working under the Home Secretary as like “walking through mud”.

These personal clashes aside, the impacts of grand promises and money-saving measures promised at election time have begun to seriously bite. No more so is this true then with legal aid. Cuts to the £2bn annual budget are on course to result in savings of £215m by 2018-19. The impacts of this have caused much despair to the legal professions. For them, the reforms go beyond an issue of budgets and mark a fundamental shift in the principles of the British legal system. To date, 600,000 people have lost access to legal aid since the cuts began.

Justice Minister Simon Hughes has defended the Government’s position by highlighting that this phenomenon is nothing new and judges are experienced in helping persons with no legal representation. However, it is difficult to ignore the startling figures from The Bar Council who estimate that 68,000 children annually are being affected by the removal of legal aid for family contact and finance disputes.

The defence for the reductions remains the same: that tough decisions had to be made to reduce the “most expensive legal aid system in the world”. However, in the first three months of 2014, the number of private law cases where both parties were represented by lawyers had halved compared to the same period last year.

As a British judge said before the advent of legal aid, “the law, like the Ritz Hotel, is open to rich and poor alike”. Many of the coalition’s critics may feel those days are dawning again.

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ENERGY Mandy Caplan

ACHIEVED

MORE TO DO

• Roll out of rural community energy fund for renewable energy projects

• Encourage take up of renewable heat incentive

• Green deal home improvement fund

• Convince public of potential of shale gas

• CMA investigation into energy firms • EU approval for Hinkley Point C

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THE UNEXPECTED • Continued public appeal of Ed Miliband’s energy price freeze pledge • Severe storms in winter 2013/14

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LEGACY • Major investment in renewables • Investment in energy efficient technology • Deal for Hinkley Point C

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ENERGY

The energy market remains a highly political matter and is set to be a dividing issue at the 2015 election.

Labour dramatically gained the upper hand in Autumn 2013 and much of the last year has seen the Government working to catch up.

The debate sparked by Mr Miliband’s price freeze promise prompted Ofgem to refer the sector to the Competition and Markets Authority for a full investigation in June.

However, no credit can be claimed by Labour until post-election, with the final report not set to be published until November 2015.

To help tackle rising energy costs in the home, the Government launched the Green Deal Home Improvement Fund and rolled out the first Rural Community Energy Fund projects. The first of these was forced to temporarily close after six weeks as one year’s worth of funds were already spent. While this could be read as a sign of the scheme’s popularity, it also provided ammunition for Labour who accused the Government of gross incompetence in managing the programme.

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The Opposition has continued to focus closely on proposals which would help consumers improve the energy efficiency of their homes.

Among these, Shadow Energy Secretary Caroline Flint announced a pledge to facilitate half a million free home energy audits, revealing that UK homes are some of the least energy-efficient in Europe.

The generation of energy remains problematic as well. The government has managed to steer the deal for new nuclear generation at Hinckley Point C through European scrutiny but doubts still persist over cost control and the robustness of the supply chain. On renewables, divides in the Coalition have opened up once again. Disputes on capping the number of new onshore turbines exposed the long-term relationship strains, with the Lib Dems blocking the ‘disastrous’ Tory proposal. Mr Miliband unsurprisingly responded stating the need for the UK to embrace onshore wind, hinting to such a commitment in Labour’s election manifesto (and highlighting one area of Lib-Lab harmony).

The Tories have also turned their attention to shale gas, in light of increasing concerns about energy security. The introduction of the Infrastructure Bill in the Queen’s speech suggested a level of coalition solidarity in this regard. Even rumours of the Bill had a predictably divisive reaction, including

Labour dramatically gained the upper hand in 2013 and the Government spent much of the last year working to catch up.

Greenpeace turning Cameron’s home into a make-shift ‘shale site’ before the Queen’s Speech.

Although the most controversial aspect – reforms which would allow companies to drill for shale gas below people’s homes - did not make it into the Bill, this has since been confirmed as the Government’s intention. This was despite a remarkable 99% of consultation respondents declaring themselves in opposition to the policy.

The Tories’ support for the shale gas ‘revolution’ in particular has shown no signs of slowing, even following Prime Minister’s mini reshuffle. New energy minister Matt Hancock, emulating his predecessor Michael Fallon as a key player in the shale agenda, gave the nod to the first national UK shale college. Likewise, newly elected DEFRA Secretary of State Liz Truss has spoken out in favour of the industry.

Labour and the Lib Dems have both signalled a more cautious approach, though in different ways. The Opposition tabled an amendment to the Infrastructure Bill which would force companies undertaking shale gas exploration in the UK to meet a number of extra regulatory burdens. The Lib Dems have offered cautious support for fracking, stressing it must be driven by an evidence-based approach.

The British winter brings its own challenges. A select committee inquiry on power disruption due to severe weather placed the government and industry under scrutiny, following widespread blackouts in December 2013. Given this, the media and Opposition will be keeping a close eye on how the Government responds if more winter storms cause serious damage.

Last year, all the leaders tried to show their commitment to flooded regions, wading through underwater villages and pledging their solidarity. Mr Osborne’s cuts programme came under huge scrutiny, as did the behaviour of insurance companies in the immediate aftermath. Ed Miliband and Nigel Farage both sought to score political points out of the occasion. However, the risk is that such catastrophes, and the damage they inflict on individuals’ lives, shows simply the limits of national government altogether, rather than the failings of one party.

EQUALITIES Monomita Raksit

ACHIEVED

MORE TO DO

• More women in Cabinet

• Women and BME representation on FTSE 100 boards

• Progress in number of women on boards • £2 million fund to prevent homophobic bullying in schools

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• BME representation in Parliament and government • Answering Labour’s criticism of a “recovery for the few, not the many”

THE UNEXPECTED • Operation “Trojan Horse” in Birmingham

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LEGACY • Increased media profile on FGM and forced marriage • Married same-sex couples

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EQUALITIES

The Coalition Government came to power with the prospect of a far more tolerant and inclusive approach than previous Conservative-led administrations.

In attitude, it has to a large degree delivered.

But in policy outcomes, it presents a more complex picture.

The Coalition and particularly Lib Dems have worked hard to improve the position of women in the workplace, including through reforms to paternity and maternity leave policy. Likewise, the Davies recommendations have focused attention on the percentage of women on boards. At the latest measurement, women’s representation on boards was at 22.8%, an increase on 2011, but likely to fall short of Davies’ original target of 25% by 2015.

In the same vein, Employment Minister Jo Swinson announced additional support for women business owners, committing £150,000 to mentoring events. The Government has also been vocal on closing the gender pay gap, with a commitment of £2 million to help women out

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of low-paid, low-skilled work through additional training and mentoring. Finally, since Nicky Morgan became Education Secretary, the Your Life campaign has entered full swing – building on efforts to encourage girls into STEM subjects and careers.

Mrs Morgan has been a leading figure in the group of women who made it into David Cameron’s cabinet in July, if at times a controversial one. She notably voted against same-sex marriage in 2013, although she claims to have since changed her mind on the issue. Mrs Morgan also recently ordered that Britain’s faith schools actively teach pupils to respect lesbian, gay and transgender relationships, following snap Ofsted inspections which showed this was too often not the case.

However, gender is not the only measure of diversity to consider. To reflect the UK’s racial make-up, the Commons would need 117 black and minority ethnic MPs. Currently only 27 are non-white. Even Labour, the party which tends to focus attention more on race issues, is dominated by 93.8% white MPs - despite almost a fifth of their constituents belonging to BME groups.

The Lib Dems recently confronted a similar story in the UK’s boardrooms, with Vince Cable calling on businesses to plug the ‘diversity

There is no going back on same-sex marriage, and the shrill tone of Tory rhetoric is much more confined to the backbenches than before. deficit’. He argued it was inexcusable not to have one in five FTSE 100 directors from nonwhite groups within five years. While conceding “race is an ambiguous concept”, he reminded businesses of the importance of targets in measuring progress.

The Tories too are struggling with numbers, especially following the departure of Baroness Warsi who was one of two BME front benchers, and who warned the party of this very issue upon her departure in August. With BME voters 33% more likely to vote Labour in 2015, the Tories have yet to convince in their efforts to woo non-traditional voters.

Baroness Warsi’s resignation left the faiths and communities brief in an uncertain place with Communities and Local Government Secretary Eric Pickles. In April Pickles described Britain as a Christian nation, telling “militant atheists” to “get over it”. When Cameron echoed Pickles’ claim, 50 leading scientists, writers and academics penned a shared letter to claim that calling Britain a Christian country sows seeds of dangerous division.

Finally, class remains an issue, no matter how uncomfortable politicians are discussing it.

Labour’s former Shadow Attorney General Ms Thornberry fell foul of this in the Rochester & Strood by-election, where her crime was to be seen as condescending towards working

class patriotism. Likewise, the Opposition have sought to paint the Tories as a party for the rich, arguing their recovery programme reflects this.

Ultimately, the nicer side of Conservatism which David Cameron has done his best to represent has undoubtedly had an effect.

There is no going back on same-sex marriage, and the shrill tone of Tory rhetoric is much more confined to the backbenches than before. But Mr Cameron’s record is complex.

Disabled people and poorer women may feel the years of austerity have affected them disproportionately. And the backlash against gay marriage does seem to have contributed to some Tory defections to UKIP, a party whose popularity is contributing to a mood which is less tolerant of difference. Finding a positive response to this mood will be a challenge for 2015 and beyond.

DEFENCE & NATIONAL SECURITY Ed Leech

ACHIEVED

MORE TO DO

• Withdrawal of troops from Afghanistan

• Counter-Terrorism and Security Bill

• Defence Reform Bill passed • New UK/France defence agreement • Three new Royal Navy offshore patrol vessels (OPVs) ordered • ‘Flooding up’ and naming of the first new aircraft carrier, HMS Queen Elizabeth

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• Communications data • Further reductions to the regular Army and increased recruitment to the Army Reserve • Trident renewal programme

THE UNEXPECTED • Emergence of ISIS and air strikes in Iraq • Ukraine • Islamist attacks in Paris

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LEGACY • Balanced books, including major reductions in the size of the regular Army • No major new deployment of troops abroad • Private sector expertise introduced to Defence Equipment and Support (DE&S) • Major investment in new defence equipment including F-35

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DEFENCE & NATIONAL SECURITY

The first duty of any state is to keep its citizens safe, a challenge made harder each year as the nature of the threats to the UK becomes more dispersed and harder to identify.

Following the July reshuffle and the surprise move by Foreign Secretary William Hague to Leader of the House, ultimate responsibility was passed to Michael Fallon as the new Defence Secretary. Just two months into the job, he found himself at the heart of planning air strikes in Iraq following the Government’s decision to take action against Islamic State.

However, unlike the UK’s previous incursion in 2003, the action enjoyed cross-party support in large part on the proviso it was limited to air strikes with no ‘boots on the ground’.

Of greater long term significance was withdrawal of the final British troops from Afghanistan, bringing to an end the protracted 13-year deployment. Not only that, it could well be the last major deployment of British ground forces abroad, given the prevailing political consensus against using ground troops following the human and monetary cost of the Afghanistan and Iraq campaigns.

Back home, Mr Fallon has continued the work of his predecessor Philip Hammond in bringing greater financial discipline to the MoD. Progress has been made on a number of important strands of this work, principally the passing into law and implementation of the Defence Reform Bill and further reductions in the size of the regular army. On the former, the MoD offered a set of contracts to private sector providers at the start of November, bringing private sector expertise into Defence Equipment and Support (DE&S) for the first

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There will have to be a broader debate about the balance between security and privacy in the next Parliament. time. This did though fall short of the full privatisation of DE&S favoured by Philip Hammond.

In terms of progress in reducing the headcount of the armed forces, the MoD announced in June that 1,060 military personnel had been made redundant. This takes the total reduction in personnel since 2011 to 12,130.

However, the National Audit Office has been heavily critical of the MoD’s performance in this regard, concluding that the savings had been overestimated and the feasibility of the restructuring the army misjudged.

Furthermore, the Government is struggling to recruit the number of reservists needed to bridge the gap.

Meanwhile, the build of HMS Queen Elizabeth, the Royal Navy’s flagship new aircraft carrier progressed a step further this year with the ship ‘flooded up’ and named by HM The Queen in July. The carrier is expected to be in commission by 2017 with David Cameron confirming that the second carrier, HMS Prince of Wales, will be commissioned if he remains Prime Minister after the next election. Whether there will be any planes operate from them remains to be seen, given the ongoing delays in the F-35 programme.

Away from traditional defence matters, the fall-out from Edward Snowden’s revelations continues to pervade discussion of national security. Debates over the appropriate balance

between the privacy of the individual and the ability of the state to protect its citizens now occur regularly in Parliament and the media.

Intelligence officials are under greater public scrutiny than before, but there will have to be a broader debate about the balance between security and privacy in the next Parliament.

In light of the ongoing instability in the Middle East and the emergence of ISIL, the Government decided to introduce a CounterTerrorism and Security Bill to bolster the powers of the police and security services.

The wide-ranging legislation is described as urgently needed by the Home Secretary and includes greater powers to seize passports and a requirement on communications service providers to retain data to enable IP addresses to be matched to individuals.

Looking towards the next Parliament, given the MoD remains an unprotected department, it will again likely be subject to severe cuts.

In this regard, the Strategic Defence and Security Review (SDSR) due to be carried out next year will be crucial in setting the future direction of UK defence and national security policy. An important question here is whether a Labour ‘zero-based’ spending review would come before or after the SDSR. If it came first, the defence budget would appear particularly vulnerable.

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IMMIGRATION Joanna McGowan

ACHIEVED

MORE TO DO

• Restrictions on EU immigrants claiming benefits straight after arrival

• Reduce net immigration to under 100,000, as promised in 2010

• Measures to deter ‘health tourism’, including charging non-EU patients 150% of the cost of NHS treatment

• Reform the EU’s immigration rules

• Streamlining the appeals system to speed up the removal of illegal immigrants

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• Regain the electorate’s trust on immigration issues

THE UNEXPECTED

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LEGACY

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• The extent of UKIP’s success and their resulting influence over policy

• The establishment of net migration as a benchmark to measure immigration

• The resignation of immigration minister, Mark Harper following the revelation that his cleaner did not have permission to work in the UK

• The extent to which UKIP can dominate the political agenda and stoke public concerns about immigration

• New powers to strip citizenship from naturalised British terror suspects

• Restrictions on EU immigrants’ access to benefits

IMMIGRATION

Over the course of 2014, the Government repeatedly struggled with the politics of its immigration policy.

The year began with the lifting of work restrictions on Romanian and Bulgarian migrants, and has ended with the Prime Minister announcing new rules to curb the rights of migrants in Britain.

At the outset of the coalition, the Conservative Party committed to reducing net migration to ‘tens of thousands’ a year by 2015. However, it became clear in mid-2014 that this target would be missed, prompting Home Secretary Theresa May to water down the proposal to a longer-term goal.

A few months after Mrs May’s comments, the ONS revealed that net migration had surged to more than double the Government’s target.

To add to the Government’s troubles, immigration policy has long been a bone of contention between the Coalition partners.

The net migration target was written into the Home Office business plan back in May 2010,

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but it was not in the Coalition agreement, meaning the Liberal Democrats never formally signed up to it. Business Secretary Vince Cable has been particularly critical, branding the target meaningless, impossible to enforce and ‘ludicrous’ in principle.

The issue facing Mr Cameron is that freedom of movement rules place EU immigration (which accounts for around half of total immigration) beyond the Government’s control. As such, the Government must content itself with trying to curb immigration indirectly by altering the rules on welfare benefits, such as housing benefit and tax credits – believing this will make the UK a less attractive option.

The Prime Minister’s alternative is convincing his EU partners to introduce conditions to the freedom of movement principle – a proposal which has been met with little warmth.

The success of UKIP has been the most influential factor in hardening the Government’s stance on immigration. For each UKIP triumph, from the European elections to the recent byelection, the Government has ramped up its rhetoric.

This began in January with Iain Duncan Smith’s proposal that housing benefit would no longer be available to migrants claiming jobseeker’s allowance. It continued with Jeremy Hunt’s

It is thanks to UKIP that the need for EU reform is now entirely bound up with the issue of immigration. pledge to charge non-EU patients 150% of the cost of NHS treatment, and was swiftly followed by the announcement that EU migrants will only be able to claim jobseeker’s allowance for three months, down from the six-month limit that came in to force just four months previously.

There followed the Prime Minister’s longanticipated announcement that new EU immigrants must wait four years before they are entitled to in-work benefits. While Mr Cameron’s speech was less radical than expected, there can be no doubt that it was intended to neutralise the threat of UKIP following their victory in Rochester & Strood.

Much to the dismay of party strategists, there is every possibility that party members could indeed spend a large proportion of the next five months ‘banging on about Europe’. This is increasingly possible now that marginal MPs worry about campaigns by UKIP candidates in their constituencies, while those at the top worry about how to prevent further MPs breaking rank.

Either way, the lasting immigration legacy of the Coalition Government’s time in office will be largely down to how they choose to perceive, and react to, the threat from UKIP.

It is thanks to UKIP that the need for EU reform is now entirely bound up with the issue of immigration. As Mr Cameron declared in October ‘at the heart of EU renegotiation we need to address people’s concerns about immigration.’

This presents a particular problem for Mr Cameron given what an extraordinarily divisive issue Europe is within the Conservative party.

There are clear and largely irreconcilable differences of opinion between Mr Cameron’s socially liberal end of the party, and their counterparts sitting much further to the right.

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FOREIGN AFFAIRS Rosie Bate-Williams

ACHIEVED

MORE TO DO

• European Union referendum commitment

• Ensuring political and economic stability in the period of uncertainty leading up to the EU referendum

• Successful culmination of military intervention in Afghanistan • Humanitarian aid in areas of war and health crises, including Syria and West Africa • Progress in nuclear deal with Iran • Continuation of 0.7% aid commitment

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• Greater clarity on the UK’s position towards immigration • Ensuring the completion of nuclear deal with Iran • Enshrining commitment of 0.7% aid commitment into law

THE UNEXPECTED

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LEGACY

• Rise of UKIP

• EU reform made a national priority

• Islamic State

• Aiding the recovery of war-torn state of Afghanistan and withdrawal of troops • Fight against sexual violence in conflict

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FOREIGN AFFAIRS

The Government’s foreign policy continues to be dominated by the ongoing debate around the UK’s membership of the European Union.

The Conservatives have committed to a referendum in 2017, while all parties talk of reform and treat the prospect of further integration very cautiously. The Government’s stance is increasingly straining relationships with European allies, and has created an air of uncertainty among the business community, with a possible knock-on effect on investment.

As UKIP have risen in visibility and popularity, the Tories and increasingly Labour have struggled to find a means of out-manoeuvring them. Immigration and EU membership have become crucial battlegrounds.

The Prime Minister hopes to outflank UKIP through delivering reform of the UK’s relationship with the EU. Some sort of control on free migration and reducing the UK’s financial contributions are particularly high on Mr Cameron’s agenda in order to resonate with wavering Tory voters, as well as quelling

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dissatisfaction amongst his own backbenchers.

But neither seems a likely prospect, with Mr Cameron being told in no uncertain terms by his Scandinavian counterparts that limits to migration would be a difficult pill for EU members to swallow. And the ‘surprise’ £1.7 billion EU bill for the UK has served only to remind voters of the vast sums of money involved in EU membership (despite that the UK has previously received payments from the EU) and the UK’s apparent powerlessness to resist them.

Beyond the European Union, the UK has had to respond to new global threats. The rise of Islamic State has shifted foreign policy towards anti-terrorism and protecting UK interests in the face of increasing threats to our national security. With the continued escalation of the conflict in Syria and Islamic State’s dominance in Iraq, the UK has been under pressure from the international community to join military action against the group.

The rise of UK nationals travelling to Iraq and Syria to join military factions and take part in violence or extremism has seen the government introduce new powers to combat this trend. The Home Office have begun seizing the passports of those considering travelling to these areas, and police have been given extra powers to arrest those suspected of participating in terrorist activities overseas.

Beyond the European Union, the UK had to respond to new global threats in 2014.

With the appointment of a new Foreign Secretary, the government’s commitment to spending 0.7% of GDP on foreign aid was again called into question. Shortly after his appointment, Foreign Secretary Philip Hammond argued there was no need to enshrine this target into law because the government is already meeting the United Nations target, with the comments attacked by his coalition partners. However, in the short term at least the government remains fully committed to aid spending, and has provided humanitarian assistance in Syria, as well as joining the fight to combat ebola in West Africa.

Ongoing negotiations with Iran over its controversial nuclear programme have continued, with Iran agreeing to curb the programme in exchange for United Nations sanctions being lifted. While the deadline has already been extended once this year, Mr Hammond has suggested a further extension may be possible if there is evidence of enough progress.

The UK government has increased its fight against sexual violence in conflict, hosting the Global Summit to End Sexual Violence in Conflict in June. Former Foreign Secretary William Hague was appointed as the Prime Minister’s Special Representative on Preventing Sexual Violence in Conflict, and emphasised the importance of firm action following the conference.

The Government came to power hoping for a steadied foreign policy: less of the traditional Tory headbanging on Europe, and fewer of the energy-sapping military entanglements of the Labour years. Things have not quite gone to plan, though, and defining the UK’s position in Europe and indeed the world remains as big, a task for this Foreign Secretary as any. It will remain a major job in the years ahead.

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LOCALISM Alex Ross

ACHIEVED

MORE TO DO

• Promises of a more substantial devolution settlement in 2015

• Significant steps to encourage housebuilding

• Creation of Greater Manchester Combined Authority with a budget of £1 billion

• Finding a sustainable devolutions settlement

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• Balanced economic growth across the country

THE UNEXPECTED • The huge impact of Scottish devolution on the localism debate

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LEGACY • Hugely increased power outside Westminster • Increased strength of Scottish national identity as a political force

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LOCALISM

Localism in firmly back on the agenda. This year saw all the main parties commit to a greater form of regional and local devolution following a promise of greater powers for Scotland and an unbalanced economic recovery.

The 2010 Coalition Programme for Government proclaimed a radical vision for localism. It promised reforms which would “end the era of top-down government” by devolving a range of powers to local councils, neighbourhoods, communities and individuals. However, while this has had some degree of success, we have not seen the radical devolution promised.

Whitehall has held on to a lot of spending powers, while directly elected mayors and Police and Crime Commissioners have had a lukewarm response at best.

This year, we have seen the debate shift.

The Scottish referendum debate unleashed an unexpectedly powerful wave of Scottish nationalism. In addition, the Opposition have

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increased the volume on their concerns about a geographically unbalanced economy. The combination of these two factors has placed localism firmly back on the agenda.

Starting with the latter, these concerns are understandable. Unemployment in the North East has risen to 9.9% and remains high in the North West at 6%,with economic performance lagging well-behind the SouthEast and London. This is hardly a new problem – between 1992 and 2007 London’s economic growth was double that of the North – but as the City regroups and the economy pulls out of recovery mode, the gap is widening once again.

George Osborne’s solution is to transform the North of England into an economic ‘powerhouse’ with investment of up to £15 billion. In particular, he backed a report by local authorities in Manchester, Liverpool, Leeds, Sheffield and Newcastle, which proposes a series of transport improvements to complement the new High Speed railway line linking the cities.

Meanwhile, Nick Clegg has launched the northern Futures project, calling for the views of members of the public, civic leaders and businesses on how to create a ‘Northern hub’.

The Deputy Prime Minister has hinted at a more substantial devolution, implying that for him Coalition reforms have not gone far

As the City regroups and the economy pulls out of recovery mode, the geographic gap is widening once again. enough. He has particularly noted that powers enjoyed by the Department for Work and Pensions need to be “radically devolved”.

in commissioning health and social care – a substantial transfer of powers from what currently exists.

Finally, the particular economic, infrastructure and housing needs of London have seen unlikely bedfellows such as Boris Johnson and Diane Abbott call for greater autonomy for boroughs.

As leader of Manchester City Council Sir Richard Leese puts it, “the genie is now out of the bottle”. Whether it is Ed Miliband’s English Devolution Act or George Osborne’s Northern Powerhouse, leaders have an increasing understanding of the importance of localism to voters.

The hastily promised ‘devo-max’ settlement, pledged by the frantic party leaders to sway indecisive voters in the referendum, has added urgency to the debate. The Prime Minister promised legislation on the issue by Burns Night, an eye-wateringly tight timeline considering the weight of the constitutional questions involved.

The first stage of this, the Smith Commission, has recommended devolving tax powers, VAT receipts and certain areas of welfare to Scotland. However, the attention on localism elsewhere means this immediately led to calls from local government for a comparable package of measures to be rolled out at the same time for the regions.

For Labour, the answer to the so-called ‘English question’ is greater devolution. Ed Miliband has pledged to pass an English Devolution Act, giving local authorities the power to manage funding for transport, housing and further education as well as a more substantial role

The question which no one knows the answer to is how much the United Kingdom in 2020 will resemble that of 2015.

WORKING WITH YOU If you want to be confident about what the next political year holds for you, you need to understand where you stand.

But you also need to understand where politics is going and the people who will make a difference.

Portland’s insight and understanding of the UK political scene is unparalleled. Our team, drawn from the highest levels of Westminster, Whitehall and Fleet Street, designs and implements communications programmes for businesses and organisations across all sectors of the economy.

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OUR TOP TEAM OF ADVISERS INCLUDES:

Tim Allan

Alastair Campbell

Tim founded Portland in 2001 after a career spanning business and political communications. He spent six years working for Tony Blair in Opposition and then in 10 Downing Street. He was a key media adviser during the 1997 election campaign and then served as Deputy Press Secretary in Number 10 during the early period of the Blair government.

Following that he was appointed Director of Corporate Communications at BSkyB plc, responsible for corporate and financial communication during the launch of digital television in the UK. Alastair, who was Tony Blair’s long-time Press Secretary and senior adviser, is one of the country’s foremost experts on leadership, communications and strategy. As the Prime Minister’s Press Secretary and later Director of Communications and Strategy, he was responsible for modernising the Government’s communications structures and approach.

He was involved in every area of policy, travelled extensively with Mr Blair and established close relations with many world leaders. Since leaving Government, he has forged a successful career as an author, broadcaster, public speaker and adviser to senior business figures on leadership and strategy.

Kitty Ussher provides economic and policy analysis to Portland and its clients. A former Treasury Minister, she is now a research fellow at the Smith Institute, an associate at the Centre for London, a member of The CityUK’s Independent Economists’ Panel and a co-founder of Labour in the City.

Kitty Ussher

Kitty was an MP from 2005 to 2010, and her government experience also included three years as special adviser to the Department of Trade and Industry from 2001 to 2004.

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George spent 22 years on The Sun and was Political Editor for five years, widely regarded as one of the most influential jobs in the UK media. He is a regular panelist on BBC Question Time, Sunday AM, Sky News, BBC News Channel, Any Questions, The Week in Westminster and Five Live.

He is a former chairman of Parliamentary Lobby Journalists.

George Pascoe-Watson GPW advises clients on all aspects of media handling, crisis management and campaigning, providing formidable insight into the political world.

James is Portland’s Chief Policy Adviser. He was Director of Policy for David Cameron for four years, 2007-2011. He was responsible for drafting the Conservative Party’s 2010 general election manifesto, co-authored the Coalition’s Programme for Government, and played a leading role in managing the Coalition Government’s policy programme.

James O’Shaughnessy Prior to working in Downing Street, James was Director of

Policy and Research for the Conservative Party between 2007 and 2010, and before that Deputy Director at the think tank Policy Exchange.

Mark leads Portland’s brand and content practice, having joined from Downing Street where he was head of strategic communications, working for the Labour and Coalition Governments.

Mark Flanagan

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Since joining Portland he has advised clients on digital and social media communications. Prior to his political career Mark worked in radio, most recently as Managing Director of LBC (Europe’s biggest commercial newstalk radio station) from 2002 – 2005.

During 2015 we will be working with clients to deliver the right results for them.

If you would like to discuss how we see your situation, and how we might help, please get in touch.

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