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Political turmoil in cabinet and Whitehall

Source: PSE Aug/Sep 16

Chris Painter, Emeritus Professor of Public Policy and Management at Birmingham City University, considers some potential implications of Theresa May’s new Cabinet and restructured Whitehall machine following the UK’s EU Referendum.

The electrifying and unexpected EU Referendum result during the early hours of 24 June, first promised by David Cameron in 2013, ushered in a period of extraordinary political turbulence. That very morning Cameron announced his resignation as prime minister. During the subsequent Conservative leadership election the main campaigners in that party for exit from the EU bit the dust one by one – Boris Johnson, Michael Gove, then Andrea Leadsom – with Theresa May ultimately the only one left standing. 

An election to succeed Cameron expected to continue until September was over before most of us could catch our breath! The change of premiership in Downing Street took effect on 13 July. Meanwhile, because of a febrile atmosphere within the Parliamentary Labour Party, Her Majesty’s Official Opposition had metaphorically gone missing. 

May premiership and Brexit  

The May premiership will be less glitzy and less obsessed with presentation than under Cameron (and indeed for that matter than during Tony Blair’s New Labour era). There will be a more sober and serious tone. She is a small ‘c’ conservative, her instincts less liberal in both the economic and social spheres than those of her predecessor. She even appeared to reinvent Ed Miliband, the Labour leader until the 2015 general election, emphasising the need for curbs on market excess and corporate social irresponsibility! 

May had cut an impressive figure as one of the longest serving home secretaries from 2010-16, carving out a degree of independence frequently the cause of irritation in Downing Street. That department has proved to be the graveyard of so many ministers. As the late Roy Jenkins observed, based on direct experience, in the Home Office storms of controversy erupt out of nowhere because of the political sensitivity of its responsibilities. It will be fascinating to see whether May’s successor, Amber Rudd, can negotiate the political rapids with quite the same skill. She at least has the advantage of a less powerful policing lobby because of reforms May single-mindedly pursued in that service. 

But the first priority for May’s new Cabinet was to make dispositions for forthcoming Brexit negotiations with our European partners. Three Brexiteers were entrusted with this responsibility: Boris Johnson (controversially) as foreign secretary; David Davis and Liam Fox respectively in the newly-created offices of secretary for Exiting the EU and international trade secretary. Their roles may be complementary but there is potential too for future trouble if these three ministers have different takes on the UK’s new relationships outside the EU. Either way, the outcome will have ramifications for public services, depending on how European legislation is amended. 

Two of these three ministerial positions reconfigured the contours of Whitehall departments around new strategic priorities. May is therefore showing greater willingness than Cameron to embark upon machinery of government changes, heralding more organisational upheaval for civil servants and raising the question of whether the benefits of such restructuring outweigh the costs. 

Frank Augstein - Press Association Images

Fate of the Osborne agenda   

In the new Cabinet the highest profile casualty was George Osborne, replaced as chancellor of the exchequer by Philip Hammond, just one of a number of Cameron’s inner circle whose services were dispensed with. Reports suggest that exchanges between May and Osborne during his dismissal were quite brutal.

Osborne’s deficit reduction plans, on which he had set such political store, repeatedly went awry. By the time of the March 2016 Budget, the objective of achieving a budget surplus by 2020 looked increasingly implausible. The final ignominy was when he was explicitly obliged to abandon that target after the EU Referendum, because of the predicted hit to the economy from the uncertainties surrounding the UK’s future trading relationships. Recalibration of fiscal rules and spending plans, so vital to public services smarting from austerity over the last six years, will come in the next Autumn Statement. But innovative financial instruments for public infrastructure investment seem a distinct possibility to counteract the risks of a Brexit-induced recession. 

Latterly, another part of the Osborne agenda had been devolution of powers to city- and sub-regions. The significant Cabinet change here was the appointment of Sajid Javid as communities and local government secretary, in a straight swap with his predecessor – Greg Clark – who takes on the business portfolio. The latter provided a further example of machinery of government changes; absorbing another ministry, it becomes the Department for Business, Energy and Industrial Strategy. 

The main rationale for moving Javid is that he is very much on the laissez-faire wing of the Conservative Party when it comes to industrial interventionism, a philosophical position at variance with May’s. Yet, to have removed Javid from the Cabinet altogether would have further reduced the already small ethnic minority representation in that forum; so not too many clues about the likely direction of English local devolution there. Will it simply be business as before? Or will some fresh thinking be brought to bear on that project? However, the single speech May was able to make after the formal launch of her leadership campaign before taking over by default, in Birmingham, included a reference to the late 19th century charismatic city leader and municipal activist, Joseph Chamberlain. 

One of the primary criticisms of Osborne’s English devolution strategy was its piecemeal nature. And given that two of the nations comprising the UK – Northern Ireland and Scotland – voted to remain in the EU, a powerful case exists for a constitutional commission to look comprehensively at governance structures, not least to reduce the risk of the country’s disintegration as a second independence referendum looms in Scotland. The fact that May’s first visit as prime minister was to Edinburgh may prove to be instructive. 

Criminal justice, education and welfare 

At the Ministry of Justice the interest will be in whether the new secretary of state, Liz Truss, will proceed with the ‘Govian’ prison reform plans. Michael Gove had been another high-profile casualty of the Cabinet reshuffle. He had proposed extending to prison governors the kind of autonomy ostensibly granted to heads and principals through his previous school academy policy. Prisoner rehabilitation was also to become a cardinal principle, reviving the short-lived agenda of an earlier occupant of the post, Kenneth Clarke, following the formation of the 2010 Coalition government. 

The post of education secretary went to Justine Greening. Her predecessor, Nicky Morgan, became associated with the controversial policy of forced academisation, despite originally being appointed to detoxify this department after Gove’s abrasive stewardship. Like May, Greening is a serious politician of substance. This was the site of yet another change to Whitehall structures – skills, apprenticeships, further and higher education (apart from research) all being transferred from the business department, re-unifying responsibility for the education sector. 

Stephen Crabb’s brief interregnum at the DWP came to an end with Damian Green’s appointment in his stead. In recent times, DWP had been very much shaped around Iain Duncan Smith’s future vision for the welfare system, characterised by strategic over-reach and implementation failure, albeit partly attributable to Osborne’s placing of welfare spending in the frontline for austerity cuts. Green, coming from the emollient wing of the Conservative Party, is unlikely to be a reform zealot. However Lord Freud, closely associated with the current model of welfare reform, remains as a minister of state. 

Missed opportunities 

Cabinet reshuffles, not least during a prime minister’s honeymoon, offer opportunity to break policy logjams and bring fresh perspectives to difficult problems. All the more surprising that one of the rare instances of ministerial continuity under May was the decision to leave Jeremy Hunt at the Department of Health, though it appears this occurred as much by accident as design. Disaffection of sections of the health profession over contractual issues, along with mounting budgetary problems as the gap between demand for services and the resources available widens, present enormous challenges. 

Moreover, given the dysfunctional state of that market and if machinery of government changes are back in vogue, surely the time is ripe for re-creating a fully-fledged Ministry of Housing, rather than simply persisting with a second-rung minister of state for housing and planning within the DCLG. 

There were then a few inexplicable outcomes and some oversights in the Cabinet reshuffle, as well as bold moves to propel the May premiership along a different trajectory. But her government faces the daunting task of reconciling three different overarching objectives: maintaining access to the European single market; placing restrictions on the free movement of labour; and preserving the territorial integrity of the UK. All this is occurring when there are serious capacity issues created by administrative cuts over recent years. 

One final thought. If the former prime minister, Harold Wilson, once quipped that a week in politics is a long time, the three weeks following the UK’s June 2016 EU Referendum seemed a veritable eternity!

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