A recurring criticism of my book, A People’s Parliament, is that it fails to flesh out how government ministers could be appointed without the aid of party politics (Lord Mandelson may not have been elected but, as one of the architects of New Labour, he is a consummate party-political operator.) In the book I point out that 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.
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).
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. Our children and our children’s children will be paying off the mortgage, and will have little to show for Brown’s “investment” as most of it has gone on interest payments, public-sector wages, consultants, refurbishment, fancy computer systems and long-term PFI commitments.
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.
It might well be argued that such a model is inherently conservative and that the role of the Chancellor is akin to that of a company auditor (or finance director). This is undoubtedly the case, but bear in mind the flip side – the model constitution outlined in A People’s Parliament presupposes a legislature appointed by lot and guided by Advocates who are largely unconstrained by the need for fiscal rectitude. Every legislative proposal would be costed and referred to the FPC who would then point out the fiscal consequences. It would then be for parliament to decide its priorities (modify taxes, adjust some other area of spending etc.) It would also be the case that the decisions of the FPC would be subject to exacting scrutiny by the media and other independent bodies (the Institute for Fiscal Studies would in all likelihood assume an analogous role to the IEA Shadow Monetary Policy Committee). Removing fiscal affairs from party politics would not mean a lack of scrutiny – in fact the opposite, given Vince Cable’s recent complaint that the vast majority of members of parliament have no influence at all over government expenditure.
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 ultimate decision (do you want cheap electricity and budget foreign holidays or do you want to reduce global warming?) would be referred back to parliament, without mendacious politicians claiming that you can have your cake and eat it.
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 sponsoered him. For, as Denis Healey put it, Labour [or any other] governments can’t abolish the inconvenient laws of arithmetic, 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 paper 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.
But given the claims of New Labour to be the party of business (“seriously relaxed” about wealth) and the Conservatives to be the progressive party committed to social justice it would appear that politics has now entered a truly postmodern period of transient and shifting identities in which party identities no longer play any meaningful role. This provides an ideal opportunity to engage with the proposals outlined in A People’s Parliament, but I’m not holding my breath as the turkeys are unlikely to be voting for Christmas any time soon. All the talk of fundamental reform in the wake of the expenses crisis seems to have led to nothing of substance (except the implicit acknowledgement that elected MPs are not to be trusted with regulating their own petty cash claims, let alone running the country). How long we are prepared to put up with such a dysfunctional system -- whereby the electorate is a willing accomplice in its own deception -- remains to be seen. One can only hope that serious structural change comes about before the more likely alternative -- the call for the strong leader with the remit to clean up the system.
