Morning Call: Whitehall whitewash
How will Keir Starmer run No 10?
Good morning. Will Labour rip up Whitehall? And will that help the party deliver? Thoughts below.
Then for our paid-tier subscribers: Arun Advani, the man behind Labour’s non-dom tax reform, and David Burgherr and Andy Summers get into the mechanics of whether the new policy will raise revenue; and Ben shows why Lee Anderson’s polling suggests, pace Twitter, that he is a non-entity.
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When prime ministers enter No 10, they want to change it. Harold Wilson brought in external advisers such as Bernard Donoughue to lead a policy unit. Tony Blair created the PM’s Delivery Unit and the Strategy Unit. David Cameron established the National Security Council. Dominic Cummings had grand ideas about recreating the power of the White House in Downing Street. Liz Truss briefly sought to break the Treasury with an in-house economic unit.
Now, a new report from the Institute for Government calls for the next government to try again. It recommends strengthening the centre of British government by bolstering support for the Prime Minister, countering Treasury dominance and ensuring the government outlines its priorities. All good stuff. The Treasury decides what goes in spending reviews which, in turn, affect what every other department can do. The PM, meanwhile, lacks the institutional capacity that their cabinet can draw on. And outlining long-term priorities can only help focus Whitehall on delivery.
Picking up on some of the recommendations, Labour is reportedly considering an inner cabinet of Keir Starmer, Rachel Reeves, Angela Rayner and Pat McFadden. This group would decide overall strategy and budgets, while “mission boards” will drive delivery.
But hasn’t the government tried this before, as the list above demonstrates? An “inner cabinet” – see Wilson, sofa government and the coalition’s quad – is not new. More importantly, the risk is that Whitehall reform becomes a way for the government to indicate its priorities, not deliver them. Want to make the country more innovative? Then create a department for science, technology and innovation. Or reduce regional inequality? Then send some civil servants to Darlington. The easy option is to blame the system of government, in the same way that circular parliaments are praised as the solution to disharmony and angry exchanges rather than solving the issue people are actually angry about.
The structure of government matters. But so do the ideas of those in positions of power. As I’ve written before, Keir Starmer and Rachel Reeves have different perspectives on power – one is an institutional reformer, the other a proud upholder of fiscal orthodoxy. Here is potential for conflict, not personality-based but policy-based. (I wonder whether Starmer asked the former Bank of England chief and freshly appointed adviser to Reeves on the National Wealth Fund, Mark Carney, if quantitative easing, about which Will recently wrote a feature, was the right decision for economic growth.)
But it’s unclear whether Starmer is poised to counter Reeves’s Treasury-based power. At the Institute for Government report’s launch, Gordon Brown called for Labour to create a “National Economic Council” jointly chaired by Reeves and Starmer to focus the government on economic growth. Harold Wilson established the Department for Economic Affairs to do something similar, while the Treasury dealt with the public finances. Only one still exists.
Freddie’s picks
What does Lee Anderson’s defection mean for Rishi Sunak? Rachel has the analysis.
“For most people the town hall can seem as distant as Whitehall, and its politicians just as inept and self-regarding.” Scathing review from Jonny Ball on Andy Burnham’s and Steve Rotheram’s new book, Head North.
“It will survive one term.” The former Labour insider Jonathan Rutherford thinks rising sectarianism could prove fatal for a Labour government.
Can the master of the hatchet-job place herself beyond criticism? Lola Seaton reviews Lauren Oyler.
Uncover insights from Lowell’s Financial Vulnerability Index
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The abolition of non-dom status is murkier than it looks by Arun Advani, David Burgherr and Andy Summers
In 2022, while running for leadership of the Conservative Party, Jeremy Hunt promised to repeal the ban on fox hunting. Last week he shot Labour’s fox.
Labour announced in 2022 that it would abolish non-dom tax status. This colonial-era tax break allows wealthy foreigners to live full-time in the UK while avoiding tax on money they invested abroad. Using the evidence from our research, Labour promised a more modern regime for supporting new arrivals to the UK, and said this would raise more than £2.3bn, to be spent on primary school breakfast clubs and nurses.
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