Why the Treasury always wins

29 November 2020

7:00 PM

29 November 2020

7:00 PM

One of the abiding flaws of British political discourse is that it overlooks the importance of organisation and institutions. The political village where I’ve spent my career talks too much about politics and personality; a bit – but not enough – about policy; and almost not at all about organisations.

This creates blind-spots and surprises. Many people at Westminster were surprised by the election of Jeremy Corbyn and his resilience as leader in the face of internal challenge. That’s because they overlooked the vital importance of the Labour Party membership – which Corbyn successfully changed – and the party’s internal structures.

Seen through the lens of party organisation, the fall of Theresa May and her Brexit deal and the rise of Boris Johnson were wholly predictable: the small Tory membership skews heavily towards older men who are more likely than the typical Briton to i) own their own business and ii) want the cleanest break with the EU.

There’s probably a similar explanation for at least some Conservative MPs’ rejection of Covid restrictions: even though the wider public largely leans towards favouring more restrictions, the Conservative membership over-indexes the people who tend towards scepticism.

The bottom line is if you want to win at politics, worry less about good messaging and clever policy, and recruit more members to your party who agree with you. One Nation Tories and continuity Blairites – both of which groups contain many of my friends – still need to learn that lesson.

When it comes to talking about governing, that discourse (and yes, I’m sorry for using the word, twice now, but I can’t find a better one) is at least as bad at reflecting the importance of structure and organisation. Lots of conversations involving journalists, politicians and other village residents tend to focus on heroic personalities and their success or otherwise in winning arguments with other dramatic actors. We don’t talk much about the structure of the state, the machinery of government and the culture of institutions.

In this sense, Dominic Cummings was absolutely right in his analysis of why politics and government produce the results they do. He just failed in his attempts to act on his analysis.

As a result of his departure, the Prime Minister will soon have a new Chief of Staff, Dan Rosenfield. I don’t know Rosenfield. I think I met him at a couple of Treasury drinks receptions some time in the last decade, but I suspect it doesn’t matter. Because while I’m sure that he is, as people who do know him say, brilliant and accomplished, his personality surely matters less than the institution that made him, which is Her Majesty’s Treasury.

The Treasury matters, and matters far, far more than the ups and downs of any of the colourful characters you read about in a lot of political coverage. It matters far more than the latest bit of messaging or the clever policy wheezes think-tankers like me dream up. Its power, its culture, and its worldview have an impact on pretty much every bit of state activity, and the structure of that state.

Lots of people have tried to challenge the Treasury. All have failed. One of the iron rules of British politics and government is that the Treasury always wins in the end. Think back to the early days of this year, when it was said that the Cummings No. 10 machine was intent on bringing the Treasury to heel: the Chancellor’s SpAds would report to No. 10, and economic policy would be dictated by a joint No. 10/HMT unit. Sajid Javid quit rather than accept that.

Yet today, there is no pretence that No. 10 has institutional control over the Treasury. Yes, the PM still fights with the Chancellor about spending, but ‘twas ever thus. Meanwhile, a Treasury man will run the No. 10 operation, while down the corridor in the Cabinet Office, the man in charge is James Bowler – like Rosenfield a former private secretary to Chancellors. The Treasury always wins in the end, and its culture, the way it shapes its clever, effective staff is hugely important to the way Britain works, yet is barely discussed by people interested in that very subject.

The latest proof of Treasury power means, I suspect, that there is no meaningful chance of significant devolution of power or money from Whitehall to the English regions in this Parliament. It wasn’t hard to see the hand of the Treasury in the gloriously ironic ‘Levelling Up Fund’ announced this week, which will see shackled provincial notables begging the imperial capital for public money to spend in their benighted regions – all subject to scrutiny and approval from HMT, of course.

Organisation, institutions and culture: they’re big, complicated, slow and often boring issues. But they matter, and matter more than individuals and often more even than ideas. We should talk about them more.

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