Merlin Weekly Macro: Old challenges for any new government

20% behind in the polls. Leaking votes to Reform UK, now holding a steady 12% share, more than double where they were a year ago. The PM rules out an election specifically on May 2ⁿᵈ, the same day as the local elections. Talk in the press of Penny Mordaunt as a leadership stalking horse. They might be able to close some of the gap over what time remains but surely any change of Tory leader now, what would be the sixth since 2010 and the fourth in this Parliament alone, really would be the last panicked gulp of a drowning party as its head ducks beneath the waves for the last time. Seeking divine intervention, Sunak hopes his policy and economic stars will align and 2024 is going to be his and the Tories’ Year.

Starmer’s Prospective ‘Politburo’

The usual speculation is mounting as to when the election will be as the fifth anniversary wire inexorably approaches in December (the latest it can legally be held is 28 January 2025, but that will mean campaigning over Christmas when most normal people will have more cheerful preoccupations than arguing over immigration and funding for the NHS). If he is victorious, recent talk of government reform prompted by the Institute for Government (IFG) has been of Keir Starmer’s determination to govern from a small executive cabinet committee. It has already been variously dubbed the ‘Quadrumvirate’ and the ‘Politburo’ and dismissed as doomed to failure by such luminaries as John Major and Gordon Brown. It will comprise Starmer, Deputy PM Angela ‘Angry Ange’ Rayner, Chancellor of the Exchequer Rachel Reeves and Chancellor of the Duchy of Lancaster Pat McFadden. The IFG reform programme would see the Duchy of Lancaster title becoming a purely symbolic one (if not abolished altogether, though that might be a republican step too far given the Duke of Lancaster is the Monarch), its role on the executive changed to that of First Secretary with cabinet responsibility for the oversight of the Civil Service.

There are currently 22 Ministers who have cabinet rank, plus the Prime Minister himself; up to six more are in attendance. You see them in the No.10 Cabinet Meeting Room all squashed cheek-by-jowl around a Georgian dining table designed for half that number. As a formal forum, it is absurdly large for effective decision making. By way of comparison, in 1936 Prime Minister Stanley Baldwin had a 10-man cabinet responsible for the government of a third of the globe, rather than more than double the number of people today around that same table minding the business of a small island. In 1997, Tony Blair understood the problem but went too far in the opposite direction: his “sofa government” was too informal and relaxed, allowing the undue influence of unelected, appointed advisers to hold sway over policy. David Cameron’s informal style was also prevalent but with fewer advisers in evidence. As for Boris and the expletive-ridden WhatsApp wrecking ball that was Dominic Cummings, however well intended the sentiment to break the system to “get things done”, the less said about the means the better.

Politics and good government: as fish is to chips, or oil is to water?

But there is a serious point to this: the imperative is indeed to “get things done”. Otherwise, why bother voting for change if nothing ever does change regardless of who is in power? It breeds cynicism about the political process and gradually erodes the trust in politics and politicians as the electorate increasingly thinks itself irrelevant, taken for granted, or worse, taken for fools. Politics and democratic government are indivisible. But do politics make for good government?

There have been many excellent insights into the inner workings of British politics and its characters over the years. It is true that most political autobiographies are never read and are left to gather dust as forgotten, vain and self-serving or self-exculpating literature of dubious merit. But some become compelling best sellers: Alan Clark’s notorious Diaries; Margaret Thatcher, The Downing Street Years; Rory Stewart’s Life on the Edge, to name but three.

The latter and most recent reveals a good man, with lots of non-political real-life experience (he was previously a district governor in Iraq and founded a successful aid charity in Afghanistan) wanting to give something back to society and to make a difference. Evident is the extent to which he was largely out of his depth in the cut and thrust and devilry of Westminster politics; quite how he imagined he would be a successful Prime Minister is a mystery. But four elements of his autobiography are revealing, pertinent and enduring: his observations on the intransigence and bunker-mindedness of the civil service which views ministers as serially inconvenient impositions but occasionally useful idiots; the never-ending merry-go-round of ridiculously short-term ministerial appointments; the frequency with which new ministerial appointees have zero experience of their new areas of responsibility and are actively steered away from areas they really do know about; the almost infallible inability to make reliable financial forecasts of departmental expenditure and deliver projects on time and on budget. Stewart illuminates everything about why the public sector is the dysfunctional mess we know it to be.

The five-year electoral cycle seriously impedes proper pan-economic strategic fiscal planning. Government is all too often reduced to short-term tactics for political gain, or outright firefighting to contain departmental or bigger crises (today we have the unfortunate coincidence of both: the political expediency of electoral bribes masquerading as tax cuts ahead of the election, necessitating future crudely applied spending constraints to pay for them while public services are demonstrably failing).

New government, old challenges

It was Liam Byrne, the outgoing Treasury Secretary in 2010 who in the aftermath of the Global Financial Crisis and Labour’s electoral defeat left a scribbled message to his successor, “I’m afraid there is no money”. Then, government debt/GDP was 65% (today, nearly 100%); the nominal debt was £1.05 trillion (today £2.6 trillion); the government deficit/GDP was 3.3% (today, 5.6%). If the coffers were empty enough 14 years ago, the Treasury has been stripped bare today. The prospective potentially new administration inherits an unholy mess; the need to get a grip is urgent and obvious (indeed this week Rachel Reeves is drawing comparisons with 1979). But taking a more optimistic view and after the Office for Budget Responsibility blew the Treasury’s cover about current spending plans (i.e. there aren’t any), an incoming government at least has the advantage of putting even the most basic plans in place where none currently exists. But it still requires significant deep thinking, political principle and courage to confront the central problem: the need for fundamental public sector reform as the basis for creating a competitive, match-fit economy that is good enough to take on and beat the rest of the world.

Starmer’s early, pre-manifesto thoughts revolve around five policy pillars: securing the highest sustained growth in the G7; creating a clean energy “super-power”; improving the NHS; better policing and justice; reducing inequality and promoting education, the central plank of which is the imposition of VAT and business rates on private schools. Note that there is zero mention of or priority for defence.

It is among these broad aspirations that the quality of detailed planning, decision-making and execution really counts. This is what goes to the nub of the IFG reforms and Starmer’s Gang of Four and how it delegates responsibility down through the spending departments.

Round or square pegs for circular holes?

Its imposition would be steered by the erstwhile Civil Service insider Sue Gray, the former senior Mandarin who investigated the Boris ‘Partygate’ scandal, whether he broke the Parliamentary Code and held Parliament in contempt (all the while she herself was flirting with the wrong side of the Civil Service Code, actively negotiating with Labour to be its prospective executive Chief of Staff while ostensibly a politically neutral public servant). As a solution to blending pragmatic planning with tactical implementation, it appears on the surface to be a good idea. Where it is at risk is that it becomes detached from Cabinet and is eventually undone by Labour’s own internecine, intra-tribal politicking; at worst, when things go badly, it adopts a bunker mentality with all its inherent defensiveness.

But whatever the structure, success hinges on two supreme factors: first, having the right, sufficiently qualified and experienced people to cook up the policy in the first place (the wider electorate and respectively the good people of Holborn & St Pancras, Leeds West, Ashton-under-Lyne and Wolverhampton Southeast will decide whether Starmer, Reeves, Rayner and McFadden are any better than today’s incumbent equivalents); second, getting the civil service and the unions to cooperate: without that, however good the plans, they will sink without trace.

The importance of the Official Opposition

Finally, regardless of which party forms a government, a properly functioning Parliament making good laws and promoting the highest standards of governance requires an effective Opposition to challenge and to hold the government to account. The bigger the government majority, the more demanding and difficult the Opposition job. If, as is currently forecast, the Tories lose by a wide margin, inevitably followed by resignation, introspection, political blood-letting, infighting and more than likely multiple attempts at finding a leader around whom to coalesce with any chance of a victorious return to power, in the meantime it must ensure it fulfils that essential role of constructive Opposition. What are the chances?

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