Monster in the Machinery: Gordon Brown's Treasury Plans Could Lead to Institutionalised Warfare

Article excerpt

At last, goal posts in sight, Labour thoughts are starting to turn to the "how" of government: how departments are to be run, how many, what they do, and who does it. It has taken too long for the shadow cabinet to see that machinery matters. Ministers cannot just assume that pulling the levers of policy produces the intended results - the cables may be wrongly connected or go through a junction box Conservatively wired.

A case can be made for a thoroughgoing set of changes, reflecting the changing needs of society, Europe, devolution, the shrinking of the core of government, and the need to look better at issues that straddle departments. But it needs thought: the first priority must be for Labour to work out a sensible architecture for the centre. The question is, will Gordon Brown let it happen? For one of the most striking things, and in its way the most frightening, about the patchwork so far hinted at is Brown's staking his claim to Treasury hegemony. What he has done is to seek Treasury rights over the whole span of public policy.

The Treasury is two departments. One is about the budget, delivering the fiscal balance, after public spending and tax take are put together. The other is about managing the economy, which is not at all the same thing. There is constant tension. A former Treasury permanent secretary once said he would rather have two pound notes torn up in Whitehall than three pound notes well spent. But in its way the system works, if creakily. Indeed, recent moves to give spending ministers more freedom to work out their policies as they think fit, within total spending limits, has helped and probably made for better government. Brown seems to want to reverse this and bring the Treasury back into the detail.

Such intervention and second-guessing will not work. Internally it will get in the way of fiscal control. This is heavily political work, requiring knowledge of the detail of departments, not too much sympathy with them, and the courage to fight them on the beaches. Labour inherits fiscal chaos, plans covered in blood; it also brings with it Brown's amazing commitment on income tax. To deliver Tory spending plans and a tolerable fiscal picture will take a good many creative definitions and a good deal of accountancy, fiscal imagination and sheer guts. Economic, social and political management of this order cannot be left to a Chief Secretary, who is junior to the Chancellor, has other pressures on him and who anyway is to recruit a dozen amateurs to hang on his gun arm. What is wanted is a Department of the Budget to relieve these new tensions.

But a much more important battleground will be between Gordon Brown and other ministers, notably the Prime Minister. Spending ministers will not stand for being tools of the Treasury. …