Ministers: Here are your P45s

If politicians are not up to their jobs and perhaps can never be, why not try appointing those who are?
Keith Sutherland
28 March 2010

Gordon Brown’s election pledges include a promise that cabinet ministers will have to sign up to public, annual contracts outlining what they are expected to deliver. Their positions will be subject to delivery – “just as it would be in a business or any other organisation”  Brown also said the head of the civil service, Cabinet Secretary Sir Gus O’Donnell, will be asked to “performance manage” departments’ top civil servants against their delivery of the pledges. (Note the new focus on delivery rather than the formulation of policy, which clearly now takes place elsewhere.)

Whilst this makes a lot of sense in the light of Jackie Smith’s admission that she lacked the experience to be Home Secretary and needed better training, it does make one wonder if it might be possible for ministers to be appointed on merit rather than partisan affiliation. Although three out of five civil servants already work for government agencies headed by unelected chief executives, but Next Steps agencies like the prison service are ultimately part of the Home Office, headed by an elected minister, selected from the miniscule pool of talented and experienced MPs in the governing party.

So what would it mean for government ministers to be appointed purely on merit and without reference to the political process? As an example of how this might be possible one need look no further than the Monetary Policy Committee of the Bank of England. Prior to 1997, the setting of interest rates was viewed as one of the prime responsibilities of elected politicians. Monetary policy was a key instrument in the transformation of the economy during the 1980s, but the flip side has always been that many Chancellors chose to inflate their way out of their accumulated debt and to meddle with interest rates when an election was in the offing. This has always ended in tears so Gordon Brown’s decision to leave the setting of interest rates in the hands of a committee that was appointed purely on merit led to a decade of stable economic growth. The maintenance of low inflation is now accepted as an important priority right across the political spectrum and it is now inconceivable that monetary policy could be returned to elected politicians.

But if this is the case with monetary policy then why not fiscal policy? Gordon Brown used to pride himself in sticking to his “golden rule” for public borrowing – that the government’s books should balance over a single economic cycle –so why not contract out this commitment to an all-appointed Treasury “Fiscal Policy Committee” (FPC) in a similar manner to the mandate given to the Bank of England Monetary Policy Committee (MPC). Brown recently announced that his four-year deficit reduction programme would be “legally binding”, so perhaps he is regretting not having established an FPC in 1997.

Of course Brown didn’t create an FPC because he suffers from political bi-polar disorder: while one of his personalities (Prudence) was all for fiscal rectitude, his other personality (Providence) was trying to build the New Jerusalem, and the latter project is a very expensive one.

Although the Governor of the Bank of England and the members of the MPC are appointed by the government, no-one would suggest that this is in any way political. The mandate was carefully specified and of a technical nature, so a shortlist could have been drawn up by headhunters, with the final appointment made by the appropriate parliamentary committee. Exactly the same principle could be applied to a Treasury “Fiscal Policy Committee” and its head, the Chancellor of the Exchequer. The appointment of the Chancellor would be for the duration of an average economic cycle (typically a decade or so). If the books balanced over this period then the retiring Chancellor would be well rewarded, or might even renew his contract; if the books didn’t balance then he would retire under a shadow and on severely diminished means. “Successful” Chancellors might expect to have a say in the appointment of their successor, who would probably rise from the ranks of the FPC.

If this model works for the Treasury then how about other departments of state? The employment contract for an education minister might uncontroversially stipulate improvement targets for numeracy/literacy and GCSE and A-level grades (leaving it to the minister to decide how best to achieve these targets, without being constrained by dogma or party prejudice). Similar principles would apply to the Department of Health. Energy secretaries would be contractually required to ensure long-term interrupted supply and price stability, and this requirement could easily be operationalised. Given the emerging consensus on anthropocentric global warming, environment secretaries might well be charged with medium-and long-term carbon emission targets.

Of course this is where it all starts to get interesting, as the remit of the energy secretary and the environment secretary would be diametrically opposed. Reduced carbon emissions will lead to higher energy costs and heavy industry decamping to a country that is less concerned about global warming. But at least the debate would be honest – the two ministries could slug it out in public without the need to maintain the appearance of cabinet unity. The political decision (do you want cheap electricity and budget foreign holidays or do you want to reduce global warming?) would be referred back to the legislature, composed of independent MPs, and now formally separated from the executive “delivery” arm.

In all the resulting choices and conflict (which we usually refer to as “politics”), the Treasury would assume a central role in preserving the equilibrium of taxation and spending over the economic cycle. For this reason the Chancellor of the Exchequer would be the default chair of inter-departmental meetings. Indeed the first “prime” minister was Robert Walpole, who assumed the role of First Lord of the Treasury and Chancellor of the Exchequer in 1721. The two roles diverged largely because the “prime” minister’s principal job was winning elections on behalf of the political party that sponsored him – hence the need for the Chancellor to disappear back into the shadows and to be replaced by a charismatic front man with an engaging smile (as in the Blair-Brown partnership).

In the post-party-political age there will be no further need for this sort of duplicity. Needless to say the appointment of government ministers by the apolitical mechanisms outlined in this post presupposes a consensus on fundamental matters such as the maintenance of low inflation, fiscal responsibility, an important role for the private sector etc. It would not work in an era of clear ideological disagreements or rigid social stratification.

Keith Sutherland is a publisher and author of A People's Parliament

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