Lib Dem plan to break up Treasury – snap verdict
The Liberal Democrats have announced a new idea; it’s a rehash of one that has been kicking around for at least 60 years.
As Daisy Cooper, the Lib Dem deputy leader, acknowledged in her speech this morning (see 9.37am), people in British politics have been complaining for years about the Treasury having too much power. One prime minister who actually did something about this was Harold Wilson, who created the Department of Economic Affairs in the 1960s as a counterweight to the Treasury. It was supposed to deal with long-term economic planning, leaving the Treasury as more of a simple tax-raising department. It did not last. But prime ministers – particulary those with difficult relationships with their chancellors – have been toying with the same idea ever since.
In an article about this four years ago, George Dibb, at the time a researcher at the IPPR thinktank, now on secondment to the civil service, said:
Ultimately, Harold Wilson, Gordon Brown and Theresa May are not all wrong. A short-termist Treasury with absolute control in Whitehall will always skew policy in a damaging way. Tony Danker, director general of the Confederation of British Industry (CBI), made a similar point this month on the role of the Treasury in economic growth: “No CEO would put the finance department in charge of sales.” The Treasury has to be broken up, with long-term economic strategy the responsibility of a new ministry. That way it would be matched by an equal and opposite force with long-term vision and powers to direct the economy towards socially important goals. Whether that goal is decarbonisation or addressing regional inequality, the Treasury’s instinct to pull tight the purse strings will always be a barrier.
Today, as well as adopting these arguments, Cooper was making an argument about growth, claiming that a stand-alone growth department would do better than the Treasury at boosting GDP. Perhaps. But Rachel Reeves claimed she was turning the Treasury into a growth department when she became chancellor. Since then growth has been disappointing, but in large part that is not because of Whitehall machinery; it’s because there are political objections to the pulling the most effective growth levers (joining the customs union or the single market, increasing immigration) that would apply regardless of which department was in charge.
Still, Cooper is likely to find a lot of people agreeing with her central argument. Those who have suggested breaking up the Treasury in the past have included figures as diverse as Will Hutton, Maurice Glasman and Dominic Cummings. If a left-leaning coalition is in power after the next election, the Lib Dems could have considerable clout when this debate is being thrashed out again.
Still, dismantling the Treasuy won’t be easy. In a good New Stateman article on this topic last year, George Eaton quoted Harold Macmillan, the former Tory PM. Macmillan summed it up like this:
To reform the Treasury is like trying to reform the Kremlin or the Vatican. These institutions are apt to have the last laugh.
Key events
Georgia Gould says she was ‘shocked’ by latest revelations about family friend Peter Mandelson
In her interviews this morning Georgia Gould, the education minister, was also asked about Peter Mandelson. Her father was Philip Gould, the pollster and strategist who worked for Labour when it was in opposition in the late 1980s and 1990s, and then when it was in government. He was a key figure in the development of New Labour, right at the heart of the Tony Blair inner circle and a close friend and ally of Mandelson.
This is what Gould told Sky News about her response to the latest revelations about the peer.
[Mandelson] was a good friend of my father’s. I’ve known him my whole life. I have been completely shocked by what has come out.
I know that my dad, who’s no longer alive, would have been too.
He is someone who I thought of as a public servant. And I could not believe when I read some of the things that have come out. When the whole government needed to be focussed at that time on the huge challenge that you face, to be passing information in that way, it is deeply painful to see what has emerged.
Gould was referring to emails showing Mandleson leaking confidential government documents to Jeffrey Epstein. These are now being investigated by the police.
Stephen Bush has devoted his Financial Times Inside Politics briefing to the Matthew Doyle controversy this morning. His take is very straightforward. Here’s an extract.
As political calls go, this is not a difficult one. It’s perfectly fine in my view to believe a friend’s claims of innocence, but if they then go on to plead guilty, the obvious political reality is that you are never going to be a viable candidate for membership of the House of Lords. Frankly, if they do not plead guilty and continue to protest their innocence, unless or until they are acquitted, you are not going to be a viable candidate for membership of the House of Lords.
To grasp that you should not need to be, or employ, “a brilliant strategist, focused ruthlessly on what the voters think”, as many connected to this government keep telling me the departed Morgan McSweeney was.
If you oversee a Downing Street operation that cannot get such an obvious call right, what other mistakes are you making?
Here is Ben Quinn’s story about the controversy.
Phillipson announces 10-year plan to modernise and improve school buildings in England
Bridget Phillipson, the education secretary, has announced a 10-year strategy to modernise and improve school buildings in England. The Department for Education says:
For too long, millions have been poured into sticking-plaster repairs to deteriorating classrooms that fail to meet the needs of pupils learning inside them.
The government will put an end to this cycle of patching and mending buildings that have already deteriorated, as the education secretary unveils today a 10-year plan to transform the education estate so that children and young people across the country have the high-quality classrooms that are fit for purpose and resilient to climate change from flooding and overheating.
As part of the drive to make schools more inclusive by design, the government expects that every secondary school will, in time, have an inclusion base – a dedicated safe space away from busy classrooms where pupils can access targeted support that bridges the gap between mainstream and specialist provision.
The full 52-page educational estates strategy paper is here.
As Alexandra Topping reports, all secondary schools should have specially designed areas for neurodiverse children and pupils with special educational needs under the plans.
Lib Dem plan to break up Treasury – snap verdict
The Liberal Democrats have announced a new idea; it’s a rehash of one that has been kicking around for at least 60 years.
As Daisy Cooper, the Lib Dem deputy leader, acknowledged in her speech this morning (see 9.37am), people in British politics have been complaining for years about the Treasury having too much power. One prime minister who actually did something about this was Harold Wilson, who created the Department of Economic Affairs in the 1960s as a counterweight to the Treasury. It was supposed to deal with long-term economic planning, leaving the Treasury as more of a simple tax-raising department. It did not last. But prime ministers – particulary those with difficult relationships with their chancellors – have been toying with the same idea ever since.
In an article about this four years ago, George Dibb, at the time a researcher at the IPPR thinktank, now on secondment to the civil service, said:
Ultimately, Harold Wilson, Gordon Brown and Theresa May are not all wrong. A short-termist Treasury with absolute control in Whitehall will always skew policy in a damaging way. Tony Danker, director general of the Confederation of British Industry (CBI), made a similar point this month on the role of the Treasury in economic growth: “No CEO would put the finance department in charge of sales.” The Treasury has to be broken up, with long-term economic strategy the responsibility of a new ministry. That way it would be matched by an equal and opposite force with long-term vision and powers to direct the economy towards socially important goals. Whether that goal is decarbonisation or addressing regional inequality, the Treasury’s instinct to pull tight the purse strings will always be a barrier.
Today, as well as adopting these arguments, Cooper was making an argument about growth, claiming that a stand-alone growth department would do better than the Treasury at boosting GDP. Perhaps. But Rachel Reeves claimed she was turning the Treasury into a growth department when she became chancellor. Since then growth has been disappointing, but in large part that is not because of Whitehall machinery; it’s because there are political objections to the pulling the most effective growth levers (joining the customs union or the single market, increasing immigration) that would apply regardless of which department was in charge.
Still, Cooper is likely to find a lot of people agreeing with her central argument. Those who have suggested breaking up the Treasury in the past have included figures as diverse as Will Hutton, Maurice Glasman and Dominic Cummings. If a left-leaning coalition is in power after the next election, the Lib Dems could have considerable clout when this debate is being thrashed out again.
Still, dismantling the Treasuy won’t be easy. In a good New Stateman article on this topic last year, George Eaton quoted Harold Macmillan, the former Tory PM. Macmillan summed it up like this:
To reform the Treasury is like trying to reform the Kremlin or the Vatican. These institutions are apt to have the last laugh.
Nurses’ families fear being torn apart in UK immigration crackdown, survey says
Families of nurses and carers have said they fear being torn apart under an immigration crackdown condemned as “an act of economic vandalism”, Josh Halliday reports.
Cooper defends Lib Dem plans for windfall tax on banks
Q: You are here being hosted by UK Finance. But the financial services sector does not like your plans for a windfall tax on banks. Have you dropped your support for that?
Cooper says the Lib Dems are still committed to that. She says it is justified because banks have made unexpected profits relating to the QE system. She accepts that banks are not happy about the plans. But the party is talking to them about that, she says. And, although the banks don’t like the plan, they “do like what we’re trying to do with it” (measures to promote growth).
Q: How would you justify the cost of such a big reorganisation?
Cooper said these plans were consistent with existing plans to move civil servants out of London.
Lib Dems say they would locate new growth deparment in Birmingham
Cooper said the Lib Dems would locate their new growth department in Birmingham.
She said this reflected the fact that the Lib Dems were a party representing seats all over the country.
We Liberal Democrats are the only political party with MPs that span from the Highlands and Islands of Scotland down to the tip of the southwest. So we know we see the differences in economic growth between the southeast and everywhere else.
Lib Dems call for ‘anti-growth Treasury’ to be split up, and replaced with big growth department, and smaller spending department
Cooper says that some people wanted the Treasury’s powers to be tweaked, and others said the PM should have more power over economic policy.
But the Lib Dems were proposing a different plan, she said.
Today I can announce that we Liberal Democrats don’t just want to get rid of this anti-growth chancellor. We want to get rid of this anti-growth Treasury.
And as part of our plan for government, we would break up the Treasury and replace it with a new, powerful, full Department for Growth, with a mandate to boost long-term prosperity, improve living standards and end the cost of living crisis.
The Department for Business and Trade would be merged into this new Growth Department, recognising the central role of British business in driving growth.
And a smaller Department for Public Expenditure would be set up to oversee department spending and ensure value for money.
This new Department for Growth would focus minds on what growth could help us achieve stronger economic growth.
Cooper said having a Department for Growth would force the government to focus properly on growth policies. And it would make parties contemplate pulling “the biggest growth lever”, having a better trading relationship with the EU.
Treasury has too much power, Cooper says
Cooper said one of Labour’s problems was that it had been led by “Treasury brain”.
The winter fuel payment fiasco – a short-term Treasury tax grab driven by the desire for immediate bankable cuts.
The jobs tax – a short-term Treasury tax grab with no regard for the crushing impact on jobs, on growth or investment.
The family farm tax and the attack on family businesses – short-term Treasury tax grabs by the chancellor that could lead to some of the most resilient, long standing British businesses being broken up and sold off.
The list goes on.
But this isn’t a new problem. For too long political parties without a vision for growth have allowed the Treasury tail to wag the political dog. And it must stop.
For decades, everyone has identified this as a problem. The Treasury does too much.
Cooper said parties had recognised this as a problem for decades.
The Treasury does too much: fiscal policy, economic policy, and controlling government spending.
In most other countries, these roles are split up. The Treasury enables governments to go for short-term tax grabs that suit political cycles over the need for long-term growth.
And the Treasury is disconnected from the real economy. Despite holding all the economic power, the Treasury isn’t responsible for policies on business or trade. This leaves British businesses jumping through hoops.
Daisy Cooper opened her press conference, hosted by UK Finance, a trade group for the financial services sector, by saying the Lib Dems believe in talking up Britain.
But Britain is stuck in a doom loop, she said.
We have strong institutions. We have dynamic markets and universal public services. We have world leading universities, creative industries and life sciences. We are the third largest market for artificial intelligence, and we have awesome entrepreneurial people.
The United Kingdom is an amazing country and has enormous potential, but we can never take this for granted and we must accept that we are stuck in a rut, stuck in a doom loop of low economic growth, and that is a big problem.
Economic growth matters. We need to get Britain growing again to end the cost of living crisis. We need to get Britain growing again, to rebuild our public services. And we need to get Britain growing again, to invest in the climate transition and create the well-paid jobs.
Cooper said even Wes Streeting says the government does not have a growth strategy.
Lib Dem deputy leader Daisy Cooper holds press conference
Daisy Cooper, the Lib Dem deputy leader and Treasury spokesperson, is holding a press conference now. There is a live feed here.
Minister rejects suggestion Doyle’s appointment to Lords shows No 10 doesn’t take child abuse seriously
Georgia Gould, an education minister, has been the government voice on the airwaves this morning.
In an interview with Sky News, she said that when No 10 announced that Matthew Doyle was being made a peer in December, it did not know that he had campaigned for someone who was subsequently convicted of paedophile offences.
Referring to Labour’s decision to remove the whip from Doyle in the Lords yesterday, she said:
There’s an investigation going on. We’ll wait for that to conclude. But the prime minister said on Monday night that we want to ensure the highest standards in public life. He’s gone back and looked at this appointment. He’s taken action to withdraw the whip.
Asked whether the government was taking child abuse seriously enough, she replied:
We’re taking it incredibly seriously.
And Keir Starmer is somebody who has spent his whole career putting people into prison, And this is his lifelong work. It is deeply important to him. And no one is harder on themselves than the prime minister. But he’s clear that things need to change. Vetting has to be better.
Asked if the documents submitted as part of the vetting process for Doyle’s peerage would be published, she referred to the ongoing investigation and said “we’ll have more to say when that’s completed”.
Starmer faces PMQs amid pressure over why ex-No 10 aide friendly with sex offender was given peerage
Good morning. At PMQs last week Keir Starmer had to face questions about a Labour peer with a paedophile friend. Today he seems likely to face questions about another peer in this category.
As Peter Walker reports, yesterday Labour said it had removed the whip from Matthew Doyle, who only recently became a Labour peer, having previously served as Starmer’s director of communications.
Doyle had campaigned for a friend who had been charged with possessing indecent images of children. The friend claimed he was innocent at the time, but subsequently pleaded guilty. Yesterday Doyle issued a lengthy statement apologising.
Given that Doyle’s peerage was announced in December, and that he took his seat in early January – after the details of his friendship with Sean Morton had been made public – Labour’s decision to remove the whip yesterday looks like a move timed to minimise the dangers from this issue being raised at PMQs.
But Starmer still faces questions about why Doyle was allowed to take his seat in the Lords in the first place. In a post on social media last night, Kemi Badenoch said she would not let the matter drop.
Keir Starmer handed a peerage to Matthew Doyle despite knowing about his ongoing friendship with a man charged with child sex crimes.
The Prime Minister has now suspended the whip, but he must come clean about what he was told before making this appointment.
We won’t let this go.
Last night Anna Turley, the Labour chair, said she did not think Doyle should be in the Lords at all. That was her “personal view”, she said. But Starmer is likely to be asked if he agrees.
Here is the agenda for the day.
9am: Daisy Cooper, the Lib Dem deputy leader and Treasury spokesperson holds a press conference where she is due to make “a major Treasury announcement”.
9.45am: Dan Tomlinson, a Treasury minister, gives evidence to the Commons Treasury committee on business rates.
Noon: Keir Starmer faces Kemi Badenoch at PMQs.
1pm: Starmer speaks to the women’s PLP (parliamentary Labour party).
1.30pm: Ed Miliband, the energy secretary, gives evidence to the Commons energy committee.
And today Bridget Phillipson, the education secretary, is publishing an education estates plan, including more space for classes for children with special educational needs.
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