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We need an Iron Chancellor


AS factions of advisers seek to redefine Johnsonian government following the announcement that Vote Leave alumni Dominic Cummings and Lee Cain are to leave No 10 Downing Street, it is imperative that No 11 reclaims independence.

Rishi Sunak’s tenure as Chancellor will provide ample material for political scientists to dissect. All Chancellors alter Britain in ways that will not be understood for generations, whether they are as dramatic as the policy programme of Nigel Lawson in the Budget of 1988, or as tight-pursed as Brown in 2000. This is even more so for Sunak: crisis has been knocking down our doors since he started the job.

One of the questions to reflect on is whether the Chancellor should act as a ‘constitutional counterweight’ to the power of a Prime Minister. While No 11 is next door to No 10, close, connected, but fundamentally a separate entity, this is not how the Chancellor’s office has been run since January 2020. However, this separation is vital to the functioning of British Parliamentary democracy.

The dynamic between the Chancellor and Prime Minister is and always has been a formidable topic, and 2020 is no exception. The year started with the forced resignation of Chancellor Sajid Javid and the unprecedented merging of Treasury special advisers into the No 10 team forming the ‘Joint Economic Unit’. Instead of seeking a partnership of varying (un)easiness, like Blair and Brown or Cameron and Osborne, Johnson moved to assert dominance over the Treasury and neuter it as a quasi-independent powerbase.

Even at the time this was concerning, given the potential huge implications for fiscal policy (little did we know what 2020 had in store for us). Would the Government risk focusing on social and political considerations, leaving the EU and ‘levelling up’, without time being given to the economic considerations of deficit reduction and debt payment? Yet, the emergence of Sunak as a political heavyweight demonstrates the enduring power of the chancellorship.

While Johnson’s moves have been perfectly within his prerogative, they are ultimately unwise. Government will fare better if No 11 is used as a constitutional counterweight to No 10. Constitutionality is a thorny issue. We have not inherited an unspecific constitutional text like the United States. There is no singular codified constitutional source, making Britain one of only eight nations globally to just sort of get on with things without being chained like Prometheus to the fundamental rules of our Olympian forebears. While the US Constitution sets out the powers of Congress in Article I and (indeterminately) sets out the powers of the president in Article II, Brits are in a curious position that means, like our Canadian and Kiwi cousins, or our former Viking invaders the Swedes, we must ask how do we, with all our accumulated knowledge and experiences, envisage an aspect of government functioning.

When that aspect is what relationship the Chancellor has with the PM, Sir John Major and Kenneth Clarke state that their ability to govern well as PM and Chancellor respectively was due to personal friendship, allowing frank disagreement and mutual trust. Arguably ‘common sense’ would dictate that a close working relationship and common objectives would be crucial to success – two heads are better than one.

Cameron and Osborne demonstrated the effectiveness of such a joint strategy, with one of the closest such relationships. Their conferring of trust and responsibility markedly increased the stability of the Government. They had worked together as special advisers, entered the Shadow Cabinet within months of each other, and in media portrayals they became intertwined as the ‘Notting Hill Set’.

In office, Cameron and Osborne were motivated to cultivate their relationship in a personal and political way in part due to their analysis of Blair and Brown. Terrified of factional warfare in the heart of government, they formed an enduring partnership. Osborne was regarded as the driver of strategy, spent a striking amount of time in No 10, and, outside work, he was godfather to Cameron’s first daughter.

In contrast, the Blair-Brown relationship was underpinned by the ill-defined ‘Granita pact’. This dubious agreement stipulated the remit of each’s political authority, failed to provide a stable and dynamic modus operandi and led to splits and policy disputes. This intense factionalism went so far as to affect the wellbeing of those involved, notably Alastair Campbell, and noticeably fatiguing Blair in the second term. 

The crux is that despite some previous PMs and Chancellors operating so closely, No 10 has never attempted to assimilate No 11. A Chancellor can be effective only if the PM trusts him. To deliver and gain the confidence of the PM he must first be given the freedom and the power to work with his own advisers. Through bringing new ideas to the table we see creative disagreement injected into the veins of government. This was demonstrated in 1988 when Mrs Thatcher suggested lowering the top rate of tax from 60p to 50p. Nigel Lawson advised a move to 40p, taking advantage of the political capital of a new parliament to absorb the opposition to such a move. As an independent, but loyal, Chancellor, Lawson was able to bring forward policy suggestions that helped define Tory radicalism and increase the Treasury’s tax intake.

Moreover, by being given the chance to live up to the trust the PM puts into them, a Chancellor can form a greater, earned trust with the Prime Minister. Without this distance between them, not only is a Chancellor restrained, but he may also become resentful, and appear loyal only due to being under the watchful gaze of the PM. The move signals to other office holders that Cabinet Government is secure, for if, arguably, the second most prominent minister in the land is held on a leash, why would more junior Cabinet members or ministers be given latitude?

Neutering the Treasury was a worrying move that could have made it harder to restrain the Prime Minister’s ambitions, but in the long run British government will suffer if the Chancellor does not move back next door.

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Angus Gillan
Angus Gillan
Angus Gillan is a political researcher and campaigner with a background in modern politics and ancient history.

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