Full text: David Cameron's new year's message

"We are on the right track" he says. Are we?

David Cameron's new year's message (see video below) is unusually pugnacious: even his parting shot "so happy new year" sounds like he's banging a table whilst saying it. It's a broad defence of the government's actions this year, and their plan for the next - but hardly a proper one, as it fails to mention any of the highly publicised slip-ups comprising the omnishambles which was Cameron's 2012. Leveson, the series of U-turns (pastygate, petrol tax, caravans tax), Rebecca Brook's horse, are all ommited. Neither does he mention the EU, or Syria, or the rise of UKIP, or even Nick Clegg's autotuned apology for the rise in tuition fees.

He concentrates on defending the government's approach to the economy, pointing to increased employment and a £13bn fall in the deficit this year. He says "we are on the right track. On all the big issues that matter to Britain, we are heading in the right direction and I have the evidence to prove it."

But Labour vice chair Michael Dugher is not so sure. In response to the message he said:

"It's a case of more of the same from David Cameron. In his New Year message, Cameron talks of people who work hard in this country but he's the one hitting hard-working families on lower and middle incomes whilst cutting taxes for millionaires.

David Cameron stands for the old divide and rule Tory approach of the past - he can't be the One Nation Prime Minister Britain needs.

Cameron promised change but nothing is changing for the better. Britain's economy is failing under his policies over the last year, with nearly one million young people out of work. Prices are still going up faster than wages and borrowing is going up not down, over 7 per cent higher this year than last year. This Prime Minister is out of touch, he stands up for the wrong people and he's failing to deliver for working people."

Here's the full text from Cameron's speech today:

"2012 was an extraordinary year for our country. We celebrated our Queen with the Jubilee. And with the Olympics and Paralympics we showed beyond any doubt that Britain can deliver. It was a great year. But, if we are honest, it was a tough one too. We are still dealing with debts that built up over many years. And for many families, making ends meet is difficult. So to anyone starting this new year with questions about where we are heading and what the future holds, I want to reassure you of this: we are on the right track. On all the big issues that matter to Britain, we are heading in the right direction and I have the evidence to prove it.

This government inherited a huge budget deficit that was dragging our country down. Well, this New Year, that deficit is forecast to be £13bn smaller than last new year, down by one quarter since we came to office. We inherited a welfare system that was frankly out of shape, that paid people not to work. So we made some big changes, and this new year almost half a million more people are in work than last new year. That is real progress. We inherited an education system where too often mediocre was deemed good enough and discipline in many schools was slack. We said we need more discipline, tougher exams and more academies because those schools consistently get better results. Well, this new year we’ve got more than 1,000 academies open than last New Year. The numbers studying science and languages are going up. And teachers have more power over discipline than they’ve had for years.

This is, quite simply, a government in a hurry. And there’s a reason for that. Britain is in a global race to succeed today. It is race with countries like China, India and Indonesia; a race for the jobs and opportunities of the future. So when people say we can slow down on cutting our debts, we are saying no. We can’t win in this world with a great millstone of debt round our necks. When people say we’ve got to stop our welfare reforms because somehow it is cruel to expect people to work, we are saying no. Getting people into good jobs is absolutely vital, not just for them, but for all of us.

And when there is a fight on our hands to change our schools, we are ready and willing to have it because having a world-class education is the only way our children are going to get on in this world. And we know what we are doing all this for: not just to get our country up the rankings in some global league table but to get behind anyone who likes to work hard and get on in life. It’s for those people that we made changes to our tax system in 2012, cutting the income tax bills of 24 million workers. It is for them that we have frozen the council tax for three years in a row, to keep bills as low as we can. And we did the right thing by our pensioners too, in 2012, bringing in the biggest ever increase in the state pension.

This is what this government is about: making sure Britain succeeds in this global race and, above all, helping our people succeed, the people who work hard and aspire to a better life for their families. So this is my message to the country at the start of 2013. We can look to the future with realism and optimism. Realism, because you can’t cure problems, that were decades in the making, overnight. There are no quick fixes and I wouldn’t claim otherwise. But we can be optimistic too because we are making tangible progress. We are doing what’s right for our country and what’s best for our children’s future. And nothing could be more important than that. So happy new year and best wishes for 2013."

Cameron delivers an unusually pugnacious message. Photograph: Getty Images.
Photo: Getty
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Theresa May's U-Turn may have just traded one problem for another

The problems of the policy have been moved, not eradicated. 

That didn’t take long. Theresa May has U-Turned on her plan to make people personally liable for the costs of social care until they have just £100,000 worth of assets, including property, left.

As the average home is valued at £317,000, in practice, that meant that most property owners would have to remortgage their house in order to pay for the cost of their social care. That upwards of 75 per cent of baby boomers – the largest group in the UK, both in terms of raw numbers and their higher tendency to vote – own their homes made the proposal politically toxic.

(The political pain is more acute when you remember that, on the whole, the properties owned by the elderly are worth more than those owned by the young. Why? Because most first-time buyers purchase small flats and most retirees are in large family homes.)

The proposal would have meant that while people who in old age fall foul of long-term degenerative illnesses like Alzheimers would in practice face an inheritance tax threshold of £100,000, people who die suddenly would face one of £1m, ten times higher than that paid by those requiring longer-term care. Small wonder the proposal was swiftly dubbed a “dementia tax”.

The Conservatives are now proposing “an absolute limit on the amount people have to pay for their care costs”. The actual amount is TBD, and will be the subject of a consultation should the Tories win the election. May went further, laying out the following guarantees:

“We are proposing the right funding model for social care.  We will make sure nobody has to sell their family home to pay for care.  We will make sure there’s an absolute limit on what people need to pay. And you will never have to go below £100,000 of your savings, so you will always have something to pass on to your family.”

There are a couple of problems here. The proposed policy already had a cap of sorts –on the amount you were allowed to have left over from meeting your own care costs, ie, under £100,000. Although the system – effectively an inheritance tax by lottery – displeased practically everyone and spooked elderly voters, it was at least progressive, in that the lottery was paid by people with assets above £100,000.

Under the new proposal, the lottery remains in place – if you die quickly or don’t require expensive social care, you get to keep all your assets, large or small – but the losers are the poorest pensioners. (Put simply, if there is a cap on costs at £25,000, then people with assets below that in value will see them swallowed up, but people with assets above that value will have them protected.)  That is compounded still further if home-owners are allowed to retain their homes.

So it’s still a dementia tax – it’s just a regressive dementia tax.

It also means that the Conservatives have traded going into the election’s final weeks facing accusations that they will force people to sell their own homes for going into the election facing questions over what a “reasonable” cap on care costs is, and you don’t have to be very imaginative to see how that could cause them trouble.

They’ve U-Turned alright, but they may simply have swerved away from one collision into another.  

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

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