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Bernard Jenkin: How is the new Government doing?

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The Palace of Westminster has been quiet since Parliament rose for the Summer recess, but apart from a few days off walking in Switzerland, the new UK Prime Minister Theresa May has been taking advantage of the respite from Parliamentary scrutiny to establish the new direction of the government.

This has included dropping some of the policies her team regard as more gimmick than substance, like the imposition of elected mayors and taking a softer line against the sugar industry and alcohol.  There is also a highly significant pause on the Hinkley Point nuclear power station project, which is being interpreted as a new reticence to support Chinese investment in the UK’s critical national infrastructure.  This is no more than to align UK policy more closely with the United States and France.  These are indicative of a more cautious approach by this government.

Theresa May is instinctively cautious.  Her default position has often appeared to be to accept well informed and coherent advice, rather than to challenge orthodoxy for the sake of it.

The publication by former Cameron adviser, Steve Hilton, of his new book, More Human, is a reminder of how radical David Cameron and George Osborne really wanted to be.  It recounts his conclusions from his two frustrating years in Downing Street.  His frustration is also all too evident, as it reminds us how impossible he found it to get anything done.

For all the creative analysis and inventive ideas, he never understood how Whitehall should work, and the book demonstrates that he never thought he needed to understand.  He thought ministers should be able to sweep all before them.  Just by deciding what they want, they should deserve to have their will carried out.  He does not show any understanding that ministers must win the confidence and trust of their officials if they are to optimise their effectiveness.

Civil Servants are the people upon whom ministers must rely for their main source of information and advice, and upon whom they depend to carry out their wishes.  Special Advisers are no substitute for permanent secretaries and their departmental DGs (Director Generals).  A minister and two or three advisers just do not have the capacity to implement real corporate change in attitude and behaviour throughout a large organisation, unless they recruit the whole leadership of their department to their project.

That constitutes an act of persuasion and leadership which was often lacking altogether from the character of the Cameron/Osborne/Hilton project.  Indeed, the language of the ‘post bureaucratic age’ seemed to sideline the Civil Service from the whole business of government – and much of the time the Civil Service itself felt sidelined, slighted and even abused in the process.

Theresa May’s government has already set tighter restrictions on the employment of special advisers.  This is an indication that her government will have more respect for the machinery of government. It would however be a mistake to imagine that this government will be any less radical than that of David Cameron and George Osborne, but perhaps this will be expressed in other ways.

I started my working life with Ford Motor Company, during the period when Margaret Thatcher was abolishing any vestige of Labour’s failed industrial policies.  For those times, that may have been a welcome liberalisation of attitudes from the idea that all the big industrial and commercial decisions must be left to ‘the market’, but as I moved from the motor industry to venture capital, it became apparent that this left a void, where the French, German or US government would be far more active and far more proprietorial over key sectors of the economy.  Towards the end of the Blair era, aspects of defence and aerospace policy were being more coordinated, but Brown and then David Cameron swept much of this away.  We have not had White Paper on Defence Industrial Policy for many years.

From the start, Theresa May has made clear her support for industrial policy.  This is timely, and is utterly consonant with Brexit.  For too long the UK has had a completely laissez-faire attitude to foreign takeovers.  This was only partly out of post-Thatcher preference.  It also reflected EU doctrine about free movement of capital.  Even the ‘golden share’ policy for certain key industries was subject to challenge by the ECJ.  We lost some of our key airports to foreign ownership as a result.  And then there was the disaster of the US takeover of Cadbury.

Expect a more interventionist policy now.  The new Secretary of State of Business Energy and Industrial Strategy, Greg Clark, is no Thatcher ideologue. The UK has global leadership in several areas of science and technology.  We have an underexploited knowledge base.  Some key industries such as defence and aerospace need a boost to avoid falling behind.  We need to recover key areas such as civil nuclear.

Many such initiatives have foundered to some extent because of fear that the EU might frustrate such initiatives.  The length of time to get EU ‘state aids’ clearance underlines how the EU has militated against such intervention, even though it appears to condone it more easily in other member states.

This is partly because our system of open capitalism and free foreign ownership of shares and quoted companies is in contrast to the complex and opaque control of so many of the large and medium sized companies we see on the continent.  Out of the EU, the UK will be free to exploit free markets, but to intervene unimpeded by such fears in future

Gervase@aumitpartners.co.uk

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