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Establishment candidates win Select Committee elections

Last Updated: Tuesday, August 10th, 2010

Dear Subscriber,

Establishment candidates win Select Committee elections

During the last Parliament (and previously), Select Committee Chairs were appointed, not elected.

The Whips made the appointments. Unsurprisingly, they tended to opt for safe, solid, establishment choices.

Then, in the after-shock of the expenses scandal, the legislature (that is, in effect, backbenchers) began to assert themselves against the executive (that is, the Government).

The Commons voted through a vast culture change. Although, as before, the Committee Chairs would be allocated between the political parties, contests would be allowed for the places themselves – by election.

So – to pick a real-life example – the Conservatives were allocated the Treasury Select Committee, but two MPs, Michael Fallon and Andrew Tyrie, fought it out for the Chair position.

The culture change looks to be profound. Rather than please the Whips, ambitious MPs, who want to head a Select Committee, must please their colleagues – not just Conservative ones, but Labour and Liberal ones, too. They must make their case, twist arms, curry favours, offer to scratch backs if their own are scratched.

A key question was: would Labour and Liberal backbenchers use their votes to cause David Cameron trouble – opting for non-establishment candidates, such as Patrick Mercer for Defence, and Philip Hollobone at Climate Change – or would they line up, instead, behind candidates from the Conservative left?

The answer was decisive. Andrew Tyrie, at Treasury; Richard Ottoway at Foreign Affairs; Stephen Dorrell, at Health; James Arbuthnot at Defence and Tim Yeo, at Climate Change are all very much establishment candidates. Downing Street will sleep a little easier.

Two questions follow – one a broad one for all the new Chairs, regardless of Party, one more narrowly drawn.

First, will the Chairs band together on the Liaison Committee – the umbrella body for all of them – to demand more Select Committee powers: greater authority to “send for papers”, powers to approve or withhold approval from budgets, the licence to confirm key public sector appointments? Andrew Tyrie, the new Treasury Chair, has ideas about making the Liaison Committee more vigorous.

Second, will the Conservative Right – triumphant in the Party’s internal 1922 Committee elections, but much less successful this week – use the forthcoming elections for Conservative backbench committees to re-establish its primacy?

Three big observations about the looming spending cuts

It’s the oldest trick in the political book.

The new Prime Minister and Chancellor go in to the Treasury – and come out again, ashen-faced. The Prime Minister gulps deeply, turns to the assembled pack of journalists, and says: “I’ve terrible news for Britain.”

“The Chancellor and I have just looked at the Treasury books for the first time. And they’re abysmal – catastrophically, calamitously dire. We knew the public finances were bad. But they’re far, far worse than we thought. The last Government has left Britain bankrupt.”

We’ve always said that our first budget would have to be tough. I’m deeply, deeply sorry to say that – thanks to the last Government – it’s going to have to be even tougher. The axe must fall on public spending. And taxes, I’m afraid, will have to rise…”

David Cameron didn’t emerge from the Treasury when he warned last Monday of “painful times” ahead, and changes to “our whole way of life”: his venue was the Open University in Milton Keynes. But otherwise, he followed the gambit almost to the letter.

The deficit, he said, is a record £156 billion. In the next five years, the interest paid on it will rise to £70 billion – more than the budgets for education, transport and climate change combined. Debt (as opposed to the deficit) is on course to hit £1.4 trillion in five years.

No wonder, the Prime Minister said, the Brown Government refused to publish the relevant information. This suggested that he’d indeed gone into the Treasury, looked at the books, and come out amazed. “It is worse than we thought,” he proclaimed.

It’s indeed the oldest trick in the political book – and, this time, it didn’t altogether work. Financial commentators pointed out that the Institute of Fiscal Studies, poring over the Treasury’s Red Book, had calculated and published much the same figures in March.

Furthermore, some argued, the public finances are better than expected, not worse: last year’s deficit was 10% of GDP, not 12%. That said, the Prime Minister was on strong ground: even the Labour Opposition concedes that cuts must come.

What was significant in his speech wasn’t so much what he said – with its theme of what the new Government found when it looked at the books. It wasn’t even the near-simultaneous, softer-toned interview given by Nick Clegg, the Deputy Prime Minister, in which he spoke of “progressive” cuts.

Rather, it lay in what Cameron didn’t say. The Prime Minister offered no specifics about where the axe will fall. He avoided the other half of the fiscal equation – tax rises. And he said nothing about a big Government proposal judiciously leaked to the media on the very same day.

Which, apparently, is for the Government to emulate the way Canada implemented spending cuts. The Government will hold a “fundamental re-evaluation” of the relationship between itself and the public sector. At the same time, it will launch a public consultation to seek views on where the cuts should come. Finally, a new “Star Chamber” of senior Ministers will consider their colleague’s spending bids.

All this raises interesting questions about the forthcoming Budget later this month – and what will follow it.

New Governments like to get the pain in early – cutting spending and raising taxes early, if they have to, so that they’re in a position to raise spending and cut taxes later, as an election approaches.

However, the Coalition’s pledged to shave only some £6.5 billion from public spending this year – a mere 1% of the total. So how can George Osborne, the Chancellor, get further pain in early?

Will he announce spending for future years in the Budget? If so, will he take up Labour’s model – which, by announcing spending for three years at a time, provided more certainty than annual announcements, until Brown twice shelved the spending reviews on which the plans were based?

Whether so or not, how would a June spending announcement dovetail with the autumn’s spending review – and the proposed public consultation, which will surely run over the summer? Whatever the answers may be, three outcomes are likely.

  1. First, the new Chancellor will surely use the new Office of Budget Responsibility, already operating in shadow form, to provide him with political cover. Expect to see the Office use the Budget to set out in more detail what must be done to bring the deficit down.
  2. Second, poorer people will feel the benefit of the Coalition’s tax cut plans (drawn from the Liberal Democrat manifesto), the pupil premium, and the halt to Labour’s national insurance rise. They will also be protected from public sector pay restraint. Natural Conservative voters, in the meanwhile, won’t get an inheritance tax cut, and the 50p income tax top rate looks to stay. Furthermore, some will lose their child tax credits and child trust fund payments. And they’ll be hit by the Coalition’s capital gains tax plans (although, as we wrote in last week’s newsletter, George Osborne is scaling these down). Expect some unhappiness about this balance from the Conservative backbenches and media during the weeks ahead.
  3. Third, the Star Chamber seems essentially to be a political device to protect the Chancellor. It’s been reported that William Hague, the Foreign Secretary, and Francis Maude and Oliver Letwin, the Paymaster General and Cabinet Office Minister respectively, will sit on it.

If these claims are rights, the rationale seems clear enough. Maude’s the man in charge of planning the Government’s “post-bureaucratic age” – its scheme to cut costs and make savings by putting much more information on-line. Letwin, his deputy, is a numbers man, not to mention a thinker in his own right, and a senior member of the Cameron inner circle – far closer to it than his boss. He was Shadow Chancellor when Osborne was Shadow Chief Secretary, and the Chancellor’s a high opinion of his analytical gifts. Hague, who led the Party in its darkest days during the late 1990s, is popular with the grassroots, and is heeded as the oracle who can divine “what the Party will wear”.

As always, please call me on 0771 726 1570 with any questions.

Tim

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