Hi! Current government and Politics student here! Personally, I'd reccomend you make the switch. Here's why:
First, Politics is a great course. It's a great curriculum, and while I can't speak for your college in this regard, in mine it's filled with lots of really interested and opinionated people. If you're looking for somewhere to have a passionate debate, you'd be hard pressed to find anywhere in a sixth form better. Some are as politically informed as anyone you're ever likely to meet, while others hardly know a thing on the subject when they come to the course, so you should fit in fine regardless of your current ability level. If you're a politics buff, you get to start from the ground up, defend your positions, learn some academic theory you almost certainly didn't know before, define your terms and concepts more rigorously, and challenge your preconceptions. If you're relatively new to the subject, you get a whole new area of understanding opened up for you.
In the first year (you probably already know this, but in case you don't) you study democracy as a concept, and the way the UK's political system works in theory and in practice. Maybe that sounds a little narrow to you - I don't know, it did to me at first - but I raises a lot of really interesting questions about what we value in a society, whether what you would like to see in theory would work in practice, and how we construct and relate to power structures, just to name a few. Then, if you wanted to carry it on to the second year, you could start to look in-depth at various political philosophies like socialism, liberalism, and anarchism, and debate the relative merits of each. Fun, right?
Second: it works really well with both history and law. For history, you gain some additional insight into the ways governments and politics influence lives and events; for law, you learn the discipline of advocating and defending your position through debate.
Third, you don't want to spend a year of your life stuck in a class you don't like - and it's clear you're not enjoying psychology at the moment. It's just too much time to waste when you could be enjoying yourself and learning about something you love.
Fourth and final: I think your issue with University applications isn't really an issue at all. It's true, probably, that Universities would appreciate the kind of breadth a psychology A-level would represent on you application; on the other hand, psychogy is a subject which (in my opinion) relates much more closely to law than it does to history, and history is the application only application you're going to make where your A-levels are going to matter, right? And I think there is something to be said for the kind of focus and coherence a Politics A-level would give to your application. So, if what you're concerned about is University applications, I think you'd be at least as well off switching to roughly equally prestigious subject that you enjoy (and in which you are therefore more likely to succeed academically).
Pitch over. Regardless of your decision, I hope you have a wonderful two years of college!