- National Economic Council: Economics and enterprise
- Democratic Renewal Council: Constitutional and political reform
- Domestic Policy Council: Public services
Saturday, 6 June 2009
Hidden amongst the noise and disruption of an astonishing day in British government are a couple of fascinating stories which have the potential to form the political landscape for years to come. But there's almost no time to act: the government must take steps within 48 hours to avoid being overtaken by events.
The first story is the reshaping of the Cabinet into three new "councils". These are:
The second story is Brown's appointment of more people from outside the House of Commons as ministers - Alan Sugar being the most visible - and his statement in today's press conference that we can expect more appointments in the near future.
Combined, these two changes could have as big an impact as Blair's "government by special adviser" which helped him so powerfully set the agenda in the first few years of his premiership. Perhaps Brown might have made these changes sooner, but that's academic - and he still has a year, plenty of time to create real change through these two new mechanisms.
So what impact will these changes have?
First, the councils will provide a simplified framework for the message of the Brown government. Three clear themes which can be repeated and deepened over the next twelve months: an economic policy to ensure a continued recovery from recession, fundamental reform of the constitution and the political environment, and a government which aggressively takes the citizen's side in a public services revolution.
Despite past criticism of Brown's alleged lack of vision, it is possible to discern a very clear theme in the last two years: urgent and overwhelming action to rescue the country from a financial and economic crisis. While this emerged more out of circumstance than deliberation, the prime minister has been the world's leading figure in taking the crisis on. And despite some public discomfort with the levels of public debt and money supply growth that have occurred in the last year, the consensus opinion among economists is that it was exactly the right response to the crisis.
And the next steps in the shaping of the government's message are important. Recovery from recession must still be the key message around which Brown builds his next twelve months, because it's his main political asset. But by the time of the election, that story will mainly be about an achievement already won (if it's not, then he has little chance of re-election) so the conversation must be broadened in order to create a credible electoral platform. The three councils provide the structure for that conversation.
Second, the development of clear policy strategy in each of the three areas is crucial.
For the economic council: Recovery must be built on a growth in productivity as well as demand, so that government debt can be serviced, and fiscal and monetary balance restored, in a way that's politically acceptable to the public. This is the impulse behind the appointment of high-profile figures to the economic council, and the elevation in Lord Mandelson's status - it is surely an important signal that the Business Secretary has been made de facto deputy prime minister.
This is an area that Brown is familiar with, and it has come up many times in his political life - since the early 1990s before Labour was in government. The productivity of the British economy has grown since then, though the role of the financial sector in that increase is controversial. In any case it must be complemented in the future by other sectors, with the goal of increasing the trend rate of productivity growth from 2% to 3-4% for a decade at least. It's time for ambitious actions to increase productive investment and structurally improve the UK's productivity - and the new council must move quickly to bring expertise both from business and from the economics profession into public policy.
For the constitutional council: the task is partly about representation, equity and justice, and partly about public perception of politics.
For politicians to take the bold steps that are demanded by a fast-evolving society, they must have legitimacy. The public delegate their authority to representatives in a temporary compact which notionally reads like this: act in our interests and we'll trust you to hold power for a while. But an underlying, perhaps more fundamental, message is: be a symbol of how we see ourselves, and we will ask you to make us better people.
This is the nature of the insult that many people feel they've received from MPs recently: they have betrayed us by acting like normal people instead of the idealised figures we wish they - and we - could be. And so the moral authority to help the rest of us be better than ourselves has been diminished. I don't personally think this attitude is particularly fair to MPs, but perception is more than reality in this area.
So the constitutional council has a mission to restore faith in the character of politicians. And one way it can do this - although perhaps too radical for a first step - is through self-sacrifice. If a Labour government were to create a political system not structured around its own political objectives but those of democracy and of a fair representation of our diverse population, it would win huge credibility from the many people who are disillusioned with politics and with the government, but who are not impressed by the alternatives on offer.
Of course such an action would strengthen the Liberal Democrats politically - but more at the expense of the Tories than Labour. Labour would be unlikely to win an election under PR, but it might have a decent chance of being the largest party - and it would probably stop the Conservatives from gaining power for a while at least. The task of winning the Liberal Democrats' trust in forming a coalition would be transformed if Labour were to implement PR; and even if this were not achieved and a Conservative/Liberal coalition resulted, it would be seen as an honourable outcome for the final year of a Labour government. Brown would leave power having made a bigger impact on the future of British politics in three years than Blair did in ten.
But if that is a step too far for today, completing reform of the House of Lords will be an easier task and possibly a higher priority - and probably a task that Jack Straw would enjoy finishing. In addition, a restoration of local government power would be a good way to increase public trust in a political tier they can feel closer to.
The public services council faces the greatest political challenge for a Labour government, but it's one that perhaps only Labour can succesfully tackle. Brown once had a reputation for prudence - remember her? - and could have again. My own feeling is that public services will thrive best when power is placed in the hands of their users - devolving the task of achieving better local services to those who can most directly apply the pressure. One challenge here will be to combat the tendency for middle-class users to gain the greatest power over and access to public services. It will be impossible to eliminate this effect but it can be reduced.
Again there's a question of public perception in this area: public services are by most objective measures better than they've ever been. But this is not the impression that many people have. And a Labour government - still the only party committed to the interests of the worst-off in society - needs to find the way to demonstrate these improvements.
Just as it is in the private sector, productivity is a concern in the public sector. This doesn't only mean a higher quantity of outputs in a fixed time: it also means generating outputs that better serve people's needs. Once again, allowing the users of the service to determine and communicate those needs is the best way to achieve this.
And if public spending does need to be cut in future - which most economists think it will - it is better done with power in the hands of its users rather than its providers, as this will focus institutions on their most effective services as perceived by the public.
Third, the growing presence of outside experts in government - Ara Darzi, Paul Drayson, Mervyn Davies, Shriti Vadera and now Alan Sugar among others - is an opportunity and also a risk. The opportunity comes from bringing outside expertise into government, which allows policymaking to be more accurately aligned with the objectives of society and the economy. The risk is that unelected peers have less legitimacy than MPs, even though technocrats can appeal at times when career politicians are perceived as tarnished.
Both of these factors suggest a move towards a more American style of government, with appointed cabinet members and stronger legislative scrutiny. Ministers do appear before select committees at present, but they rarely have to persuade a large number of MPs of the merits of new legislation - unlike in the United States where no bill passes without balancing the concerns of a majority of representatives.
The US system has flaws too, of course. But the new council structure has the potential to reinvigorate Cabinet government, shifting the details of policy from Number 10 but paradoxically strengthening the leadership role of the prime minister. And a strong legislative body, elected proportionally, scrutinising a Cabinet of apolitical experts heading executive departments, would be a truly new and positive change to British politics.
So what's the urgency?
Apart from the fact that only a year remains in the current Parliament to make all this happen, there is an impending deadline. A truce seems to have been called within the Labour Party until Monday, while MPs await the results of the European elections. Gordon Brown must take advantage of this two-day gap to take the initiative in all three policy areas. If not, Monday will bring more rumours and the story of the next few weeks will be all about a potential leadership challenge. Even if none materialises, the momentum will be gone.
The message is already at risk of dilution - Saturday's newspapers are still talking about plots and asking whether the reshuffle was as radical as it could have been (that is, as radical as the media would have liked - since promotions and sackings are much easier to report than a reconfiguration of Cabinet influence). What has been missed is that the changes in structure of government are more important than the reassignment of personnel.
But if each of the three Cabinet councils announces bold proposals in its own area - or if one makes a start and signals that the others will follow - the news agenda can be shifted onto substantive discussion about real changes. Each council will need its own strong leadership - presumably Straw on the constitution, Darling on economics and perhaps Ed Balls on public services. Mandelson would coordinate the overall strategy while Brown himself articulates the vision and provides the authority to see the changes through.
The next forty-eight hours will be critical to the birth of this process. If the right momentum is created, the force of renewal will give Labour its best chance of winning the next election - and the UK its best chance of making social and economic progress for the next twenty years.