In one sense, this Government is the most centralised in recent history, perhaps ever. Theresa May, Nick Timothy and Fiona Hill – her two co-Chiefs of Staff – keep a tungsten grip on Whitehall. Little happens without their approval. Nothing much lasts of which they disapprove. And lurking in the wings is the Prime Minister’s most important adviser of all – Philip May.
In another, it is far more collegiate than any since John Major’s, and is arguably better set up for consultation and discussion. A mass of Cabinet committees and sub-committees provide the means – in particular, three of the former that May chairs herself: those on Brexit, social reform and, perhaps above all, the economy and industrial strategy.
That last has offered a way for the free marketeers in the Cabinet to seek to amend, water down and in some cases block interventionist ideas favoured by the Prime Minister herself. Previously unaware Westminster-watchers first came across these in the major speech she made to ConservativeHome four years ago – the address that made her leadership ambitions evident and began to set out a personal programme.
May spoke of “taking on vested interests in the private sector”. She criticised businesses that “abuse their market position to keep prices high”, “companies at the less scrupulous end of the credit industry”, and “selfish” bank and big company executives. The then Home Secretary set out a programme for dealing with “Britain’s over-reliance on financial services” and “the inequality between London and the rest of the country”.
The Government should, she said, expand “our nascent industrial strategy” – the first time she is recorded to have used the phrase. And during her leadership campaign launch speech in Birmingham, she put more flesh on the bones of what it might look like. “A proper industrial strategy…should be capable of stepping in to defend a sector that is as important as pharmaceuticals is to Britain,” she said, complaining of Pfizer’s bid for AstraZeneca.
“I want to see changes in the way that big business is governed,” she went on. “If I’m Prime Minister…we’re going to have not just consumers represented on company boards, but employees as well. (Her ConservativeHome speech had referenced “the public’s anger about companies that evade taxes and excessive corporate pay). “Fixed items of spending – like energy bills – have rocketed,” she said, presaging her later support for price caps.
Once she became Prime Minister, the new economy and industrial strategy committee provided the main means by which free marketeers in Cabinet fought back against what they consider this distinctly non-Thatcherite programme. The charge was led by Philip Hammond, supported by Liam Fox, Sajid Javid, Michael Fallon (from time to time) and – Justine Greening who, one Minister told this site, “has strong free market sympathies”.
Over in the interventionist corner, meanwhile, were Greg Clark (who since he leads the industrial strategy more or less has to be) and most of the rest of the members of the committee – Damian Green, Karen Bradley, Jeremy Hunt, Chris Grayling, Andrea Leadsom and Patrick McLoughlin. Most of them are less concerned, according to ConservativeHome’s sources, with ideology than “frankly, not getting on the wrong side of the Prime Minister”.
Hammond and company succeeded in getting May to water down her enthusiasm for putting workers on boards. They also fought back over foreign takeovers, though it was reported recently that a Green Paper may include “a proposal that foreign bidders for stakes over a certain size in critical national infrastructure assets should be subject to government scrutiny”.
That the Prime Minister favours an energy price cap is plain: Clark recently pledged “muscular and strong action” to protect consumers. Ministers with particular free market sympathies are concerned that the manifesto will deploy tough language about foreign takeovers, and revive plans to put workers on boards from their unquiet sleep. “The point about manifestos is that Cabinet committees can’t probe them,” one said to ConservativeHome.
As we have previously written, the main members of the team shaping the manifesto are John Godfrey, the head of the Downing Street Policy Unit; George Freeman, who chairs the Downing Street Policy Board; Ben Gummer, “the most important Minister you’ve never heard of“, and Timothy – which returns us to where we started. Our former columnist has strong interventionist views: see here.
This site’s leitmotif is that everything in the Government’s programme must be subject to the requirements of Brexit: Britain needs what we call an Open Brexit to make leaving the EU work well for the economy. It follows that before making any manifesto commitment, Downing Street should ask itself: “will this proposal help to attract investment?” And “Will it reassure business, or alarm it?” If for that reason only, our sympathy is with the free marketeers.