Leading article: The good, the bad and the gimmicky

The new proposals announced by the Prime Minister yesterday in the Government's draft Queen's Speech were the usual New Labour-style mix of the good, the bad and the gimmicky. One of the good ideas was reform of banking regulations. The run on Northern Rock last autumn demonstrated the pressing need for more solid guarantees of ordinary depositors' savings to mitigate outbreaks of panic in the retail banking sector.

The national savings scheme for the low paid is also a sensible proposal. For too long, the incentives have been to load up on credit, rather than put money aside for the future. A cultural shift is necessary if we are to bridge the yawning pension savings gap. Similarly, a tightening of the law so firms cannot abuse the resource of agency workers and flexible working rights for parents would be welcome reforms of employment law.

The most glaring of the bad ideas is Government "help" for first-time buyers, in the form of a £100m subsidy for shared equity programmes. The mostrational way to help those who are presently priced out of the market is to allow the housing market to correct itself and thus bring house prices down to more realistic levels. Encouraging them on to the market now through shared equity schemes and the like will merely run the risk of landing them in negative equity. As the Housing minister, Caroline Flint, told the Cabinet this week, the housing market could easily fall by between 5 and 10 per cent this year. What sense doesit make to help first-time buyers on to the ladderat this point in the cycle?

And then there were the gimmicks. Mr Brown wants parents' councils to oversee schools. What exactly are existing parent-teacher associations for? Mr Brown also outlined proposals for boosting patient power in the health service through a new NHS constitution, and increasing the accountability of the police through elected representatives. Yet the truth is that these are not real policies for devolving power and freedom to the users of these public services, but rather attempts to give the mere impression of such a democratic shift.

But perhaps the most significant aspect of yesterday's announcement was what it played down. The Prime Minister said very little about the economic storm clouds looming over the nation. Considering that the situation is so alarming, this omission seems perverse. The Bank of England's latest quarterly report indicates that the inflation figures are worse than anticipated. And the assessment of the Bank's Governor, Mervyn King, yesterday regarding the prospects for growth made for very pessimistic reading. If Mr King's prognosis is accurate, we could be on course for our first recession since the early 1990s.

So this was hardly the best time for the Government to shed its reputation for fiscal prudence. Earlier this week, the Chancellor of the Exchequer, Alistair Darling, announced £2.7bn of public borrowing to dig the Government out of its 10p tax hole. This means the Government is likely to breach its own "sustainable investment" rule, which stipulates that net public debt must stay below 40 per cent of national output. There is simply no more room for manoeuvre in the public finances. All the Government has left is a £100m cushion (and that is, of course, excluding the £100bn debt exposure from nationalising Northern Rock).

Yesterday's policy announcements were designed to be the main event of the day, but the sad truth for the Prime Minister was that the shadow of recession and the fallout from his own previous blunders conspired to make this draft Queen's Speech feel like a sideshow.