Leading article: A liberal but fragile legislative agenda

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Yesterday was the official inauguration of a new political era, but the Queen's Speech itself was as familiar as an old friend. There were no surprises among the 22 bills announced. Its contents had been foreshadowed in last week's coalition programme. A leak of the contents to a Sunday newspaper had further drained the occasion of drama.

But did the speech make up in substance what it lacked in novelty? The legislative programme is a mixture of the good, bad and the potentially revolutionary. Among the good were the bills to scrap ID cards, channel more funding to schools that take in disadvantaged students, end the imprisonment of child asylum seekers, and to improve mental health services for armed forces veterans. A bill to introduce smart electricity meters to encourage household energy conservation is also welcome, as is the Government's plans to continue the search for a private-sector partner for the Royal Mail.

Among the bad was the proposed legislation to impose an annual cap on migrants from outside the European Union and a bill to deliver a "referendum lock" on any future European treaty. The first is economically illiberal statism. The second is a recipe for a counter-productive fight with our Continental partners.

The potentially revolutionary measure in the Queen's Speech is, of course, the referendum on voting reform. Although the Conservatives have said that they will campaign against any change to the existing first-past-the-post system, the Bill will be whipped by the Government, ensuring that it will make it through the Commons. But there is a different danger. No detail has yet been provided on the timing of this referendum. Nick Clegg and the Liberal Democrats must not allow it to be delayed until the latter half of this Parliament, when the present sweetness and light might have given way to rancour and acrimony. Such discord could sink the whole reform agenda. This referendum must take place within the next year so that the public have their opportunity to get rid of our discredited electoral system.

The Prime Minister argued yesterday that the main theme of this Queen's Speech was the decentralisation of power. Up to a point. Allowing schools to opt out of Local Education Authority control will give them greater freedom, but it will also make them directly accountable to the Schools Department. That is not devolution, but centralisation. This Government talks the talk on giving away power. It remains to be seen whether it will walk the walk.

Yet this legislative agenda will be far less important for the fortunes of this coalition Government than next month's Budget. The Government says that its welfare reform Bill will get "five million people languishing on welfare into work". But what will determine this administration's success or failure in tackling unemployment will be the health of the wider economy. Unemployment is likely to get significantly worse when the Government begins to cut into public spending. in the end what will bring the unemployment figures down is a job-creating, private-sector recovery.

There are considerable pitfalls ahead on this front. Closing a structural deficit of an estimated £90bn a year will involve severe pain. It is impossible to foresee just how powerful the backlash from the public sector unions will be. And the risk of another global financial crisis is growing as fears rise over the exposure of banks to the debts of the crisis-stricken economies of southern Europe. The possibility that the Government could find itself in another 2008-style financial emergency cannot be ruled out.

What the coalition Government unveiled yesterday is, on the whole, a liberal and progressive legislative programme. The bills deserve a fair wind. But we should be in no doubt that it is the state of the wider economy which will be making the political weather in this Parliament.

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