Government scraps Labour plans in bonfire of the policies

Click to follow
Indy Politics

A bonfire of Labour projects began yesterday as civil servants across Whitehall started the process of destroying schemes that they have spent years preparing.

Because of opposition from both coalition parties, a number of costly and unpopular plans pushed though under the last government will now never see the light of day. The most notable projects to be torn up include Heathrow's third runway, ID cards, new biometric passports and home information packs.

Ending the £5bn ID card scheme has become a slightly easier task as Labour had gone a long way in killing the unpopular scheme already. The Home Office was advising the public not to apply for the card and "wait for further announcements" instead.

Millions had already been spent on the cards, including a £1.3m Government-funded advertising campaign. Independent predictions of the total eventual cost of a national scheme had put the price tag as high as £19bn.

The scrapping of the Contact Point database, launched in January 2009, is set to save around £41m in running costs. It provided demographic data on every child in Britain and the care workers assigned to them, but both the Tories and the Liberal Democrats criticised it as a symbol of Labour's erosion of civil liberties. They will be unable to recoup the £224m set-up costs.

Together with the abandonment of second-generation biometric passports, which were due to be introduced in 2012, the changes in policy look set to require a major restructuring of the Identity and Passport Service (IPS). It may even require new legislation to alter the organisation. The scrapped "ePassport" would have included fingerprint data.

As for Heathrow, it is thought that BAA, which operates the airport, had not even submitted detailed plans for the third runway and sixth terminal as it was awaiting the outcome of the election. Both the Tories and the Liberal Democrats had always pledged to oppose the developments.

No legislation was introduced giving the go-ahead for the expansion, making it among the simpler decisions to reverse. Yesterday, campaigners headed to No 10 to express their gratitude for the decision. However, it will infuriate airlines, many of whom said the move would see Heathrow fall behind other hub airports across Europe.

BAA was not picking a fight with the coalition yesterday, although some in the industry were already speculating that BAA may be entitled to challenge the policy reversal in the courts.

"We will work with the new Government to ensure that policy on airports provides the strong international trading connections on which the UK's jobs and future competitiveness depend," a BAA spokeswoman said.

A complex reshuffle of tax plans has meant officials will have to reverse part of an increase in National Insurance contributions scheduled to come into force from April 2011. The changes had been set to bring in an extra £3bn a year. The 1 per cent rise will now only apply to employees and not employers, enabling the coalition to claim it has protected businesses from what George Osborne targeted as "Labour's tax on jobs".

However, Treasury civil servants have been spared the lengthy job of folding the Financial Services Authority (FSA), which has been given a stay of execution. Workers at the FSA had expected the body to be scrapped when the Tories came to power. But as the result of an apparent struggle between Mr Osborne, who had been keen to abolish the FSA, and Vince Cable, the Business Secretary, it will remain in place for the time being.

Home Information Packs (Hips), introduced for some properties in 2007, have also been scrapped. The decision was welcomed by estate agents, although there was private anger that companies had already spent money preparing to comply with the new rules.

"This is great news for the housing market and for house buyers, few of whom have paid much attention to these pointless packs," said Peter Bolton King, the chief executive of the National Association of Estate Agents. "But it is vital that the new Government acts on this commitment boldly, decisively and quickly. Sellers are not going to be prepared to spend hundreds of pounds now if they feel they won't have to do so in a few months."

The packs had been designed to speed up the process of purchasing a home by giving buyers all the information they needed upfront.