THE END OF THE IMPERIAL TREASURY?
By Alex Pack, Member of the YCC
For many of us in our mid-twenties, our political living memory usually stretches back no further than the New Labour years. Throughout the premierships of Blair, Brown and Cameron, one thing remained consistent – the Treasury has not only financed the Government’s agenda, but helped set it, too. Even George Osborne said in 2008 that Gordon Brown has turned the Department into an “imperial power base” and promised to reduce its influence. But it would not be until the end of his own tenure in 11. Downing Street that Osborne would get his wish.
‘Brexit means Brexit’ is the opaque but defining mantra of the new Government. The Prime Minister and the public are preoccupied with the issue and the creation of DEXEU in particular has shifted the balance of power in Whitehall – reducing the Treasury’s ability to set the agenda. Philip Hammond’s claim that the British people did not vote to make themselves poorer on June 23rd is an attempt to focus minds in Government on the pound in peoples’ pockets. The Treasury’s briefings over the importance of single market access seek to underscore what’s at stake economically.
An influential Home Office has often been a strong counterweight to the Treasury and battles over immigration exemplify this. Hammond hinted at a recent Treasury Select Committee hearing that there were “conversations within Government” around excluding international students from the overall immigration targets, only for Theresa May to say that was “categorically” not the case.
May’s roots in the Home Office and her record-breaking tenure as Home Secretary are shared by her most trusted advisors who moved with her into No.10. This reflects a change in personalities as well as a change in the public mood. What’s more, for the first time since 2010, a close personal relationship between HMT and No.10 can’t be relied upon to smooth over policy differences. Their professionalism will be key to managing differences that emerge in the years ahead.
The move to drop the Autumn Statement and introduce one annual fiscal event will affect the rhythm of Government. No longer will new policy initiatives be readied primarily for an impending Treasury document. However, the new autumn Budget will place increasing importance upon the party conference season which will help set the mood for the Chancellor’s date in the spotlight eight weeks or so thereafter.
The Department’s changing influence should be viewed in relative terms. The Treasury will still control the purse strings though may move to a more European style finance ministry (if only temporarily) – helping fund the agenda rather than set it.
For business, this will mean recognising that pitching on economic grounds alone will be well received by Treasury mandarins, though this viewpoint will be pitted against changing priorities within Government. Concerns over immigration and growing anxieties over regional disparities within the UK through the ‘country that works for everyone’ narrative are ever more important.
Hammond’s Treasury will remain influential. However, whether it will be ‘imperial’ remains to be seen.