The Omnipresent Osborne

Posted on: October 12th, 2015

The Better Government Initiative has previously been very critical of what became known as “sofa government”. This informal style of government emerged under New Labour and was characterised by decisions made without proper consideration by self-selecting subsets of ministers and advisers – often without the participation of affected ministers or the formal recording of decisions.
While this may have added pace and drive to the centre of government, it made for bad decisions and poor implementation. We were relieved when, of necessity, the coalition government returned to more normal forms of collective decision making, for all the reasons set out in our report on Cabinet Government:
Now the coalition is gone and we have seen the re-emergence of a sofa government tendency. Except now it seems that we don’t even need the sofa – an armchair will do since the only person sitting on it is the Chancellor of the Exchequer. This summer has seen the Chancellor announcing rail schemes in Birmingham, devolution deals in Manchester and Sheffield, Defence programmes in Faslane, and nuclear energy, transport and cultural exchange programmes in China. All of them, it seems, while wearing a hard hat and a high-vis jacket.
The only announcements other ministers get to make seem to be those the Chancellor doesn’t care about or are bad news, such as cancelling railway projects and scaling back support for renewable energy. It is only then that we are reminded that other cabinet ministers are available.
The politics of all this seem clear enough. The Chancellor is staking his claim to replace the Prime Minister at some stage in this Parliament and wants to demonstrate the breadth of his reach and vision. The fact that his colleagues are prepared to accept the situation simply shows that he is seen as the clear front runner and being obstructive now will likely be career limiting once the Chancellor is (even more) in control of political patronage. Alternatively they are paying out rope.
The question is whether it is good for government? The answer to that turns on whether the Chancellor is merely announcing decisions reflecting the outcome of a proper policy process or a personal agenda cooked up with a small band of confidants. The suspicion is that a bit of both is happening.
George Osborne is not the first Chancellor to have ambitions to use his position to go beyond the traditional role of minding the public finances and blocking the extravagances of his colleagues. Gordon Brown’s Treasury too was proactive in promoting policy changes across government, but was perhaps more inclined to leave public announcements to the responsible Secretaries of State.
The strength of effective cabinet government is that it enables policy decisions to be driven by a shared political strategy and take account of the broad range of interactions with other policies and programmes. The object is to enable one policy area to develop without damaging others or, if that is not possible, to allow the consequentials to be taken care of.
One wonders how far policies like the Living Wage or the attempt to engage the Chinese in investing in nuclear power stations and other UK infrastructure has been subjected to proper collective consideration. The rationale for reducing the cost to the taxpayer of in-work benefits by reducing subsidies to employers seems clear enough, including to the Labour Party, which had similar proposals in its election manifesto. If, however, the state itself is a significant employer of those who stand to benefit, in the health service and social care for example, then the implications for budgets or, more likely, service levels could be significant. They should have been identified and handled as part of the initial policy process. All the indications are that the proposal was not discussed with affected colleagues. Still less was there any consultation with business about the proposed pace of change and how they are likely to respond, as the Government’s new lead non-executive director, Sir Ian Cheshire, has pointed out.
The “devolution” to the cities – the Northern Powerhouse Project – is strongly (and curiously) closely associated with the Chancellor rather than the Communities Secretary. Unlike the Living Wage it did not appear out of the blue. Some of its elements, like the City Deals, flow directly from programmes developed under the Labour Government. Others, like the requirement for strong City Regions under elected mayors, go back at least 25 years to Michael Heseltine on his return to government. He remains involved still. The scale and longevity of this project mean that collective decision-making processes have been operating at some level although it is evident that the wider implications – e.g. for devolution to Scotland and Wales and the EVEL proposals or for the National Health Service – remain works in progress.
Big ideas need a strong patron, but good government needs clarity of objectives, proper consideration of options and an examination of costs and benefits. Ideas-driven policy pushed by an over strong individual is going to take short cuts and risk arriving at half-baked solutions.