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Reshuffle delays & a snapshot of the new Ministerial Team

Last Updated: Tuesday, August 10th, 2010

Dear subscriber,

Reshuffle delays, adviser struggles

The start of a new Government isn’t easy at the best of times – especially when the Party concerned has been out of power for some 13 years, and suddenly finds itself ruling in coalition.

Only yesterday, two weeks after the election, did a complete Government list emerge. The explanation lies partly in the slow appointment of some Ministerial Peers, and partly in the continuing negotiations between the coalition partners.

And in the meantime, Andy Coulson, the new head of the Downing Street communications team and former Conservative Head of Communications, has moved to extend his empire into Government Departments.

The Times reported on Monday that the new Government plans to create more than 100 Conservative or Liberal Democrat peers. The Financial Times claimed the next day that it would settle for a smaller number. What’s certain is that Cameron can essentially appoint individual Peers to fill vacancies as events demand.

So while there’s no indication yet on the Tory grapevine of a mass of Lords appointments, a few decisions have already been made. Jonathan Hill, John Major’s former Political Secretary, will go to the Upper House as an Education Minister, and Sir James Sassoon, formerly a Labour Treasury adviser, stays on there – but also travels to the Lords.

Before yesterday, Commons appointments have continued on an ad hoc basis. Yesterday, James Brokenshire was suddenly appointed as a junior Home Office Minister. Earlier this week, Norman Lamb, a Liberal Democrat MP, was made Chief Parliamentary Adviser to Nick Clegg.

Brokenshire’s appointment seems to have been necessitated by a shortage of Commons Ministers to deal with the wide range of Home Office Business and legislation. Lynne Featherstone, the Liberal Democrat Equalities Minister working under Theresa May, was apparently resistant to diluting her duties.

As we wrote on Monday, Downing Street is pushing for a media special adviser (SPAD) in each Department. This initiative is been driven by Coulson, and has been badly received by some Secretaries of State – since most of them are restricted to two SPADS only, and some laid appointments plans which are now being disrupted.

A snapshot of the new Ministerial Teams

As we report elsewhere, there has been a long delay in the publication of a full list of the new Government – which has finally appeared today.

It isn’t yet clear which Ministers will undertake what responsibilities. Nor has a list of Parliamentary Private Secretaries to Ministers been published.

But enough information is public to allow a quick snapshot of each Ministerial team, Department by Department.

Foreign Office: William Hague is in place as Foreign Secretary. Mark Francois, the former Conservative Europe spokesman, has been not been appointed Europe Minister – he was apparently viewed as too Euro-sceptic by the Liberal Democrats. The man in place is David Lidington, usually viewed as being on the centre-left of the Party, and formerly Hague’s Parliamentary Private Secretary when he was Conservative leader. Jeremy Browne is an Orange-Booker Liberal Democrat – one of the most right-wing in their Parliamentary Party. Alistair Burt and Henry Bellingham are both experienced figures who are being rewarded for their services.

Treasury: David Laws is Chief Secretary and therefore has his fingerprints on the spending cuts axe – providing political cover for George Osborne, the Chancellor. Osborne has essentially brought his Shadow Treasury team with him into office – a sign to the world that he “looks after his own”. Mark Hoban is Shadow Financial Secretary and David Gauke is Exchequer Secretary: Hoban especially is now a Finance Bill veteran from Opposition. Justine Greening, who might have hoped for higher things, is Economic Secretary. Greg Hands, squeezed out of the team because Laws has been squeezed in, becomes Osborne’s Parliamentary Private Secretary. This is a very shrewd appointment. Hands has good connections on the Right, is well liked and has good political instincts. Osborne chose well.

Justice: A bewigged Ken Clarke returns to preside over part of his old Home Office brief. He’ll raise an eyebrow at finding Tom McNally – the head of James Callaghan’s political office when the latter was Prime Minister, and Clarke a mere Opposition spokesman – in his team as a Lords spokesman. Nick Herbert, who apparently insisted that his role in driving police and prison reform should span departments, is a Minister of State. Fellow Conservative Crispin Blunt moves from the Home Office into Clarke’s team and Jonathan Djanogly, a former Shadow Solicitor General, brings legal expertise to the table.

Home Office: Theresa May is doubling up as Home Secretary – a mammoth job in itself – with being Minister for Women and Equalities, a portfolio in which she has a strong interest. Lynne Featherstone, who stands firmly on the left-wing of the Liberal Democrats, will assist in this field as a junior Minister. Pauline Neville-Jones has firm ideas and a direct manner, and will mastermind security policy. May’s a novice in this area, and their relationship will be worth watching. PNJ is not noted as a team player. The very capable Damian Green will pull immigration policy together, and James Brokenshire has been drafted into the team late to help cope with the Department’s massive range and workload. Nick Herbert, unhappy at being edged out of a Cabinet seat, is also in the mix.

Defence: Liam Fox is in charge, helping to keep the Conservative Right happy in the process. His team faces a potentially turbulent Defence Review against a background of spending cuts (although his budget is protected until the Security & Defence Review is complete). Gerald Howarth provides an element of continuity from Opposition as a Minister of State. Nick Harvey, the former Liberal Democrat Defence Shadow Secretary, carries the same rank. Fox has lost his former Shadow Ministers Andrew Murrison and Julian Lewis. He gets Andrew Robothan, Cameron’s former leadership campaign whip. Cameron put him as number two in the Whips Office, and the Whips’ establishment – headed by Patrick McLoughlin, the Chief Whip – long manoevered to get him out. They’ve at last succeeded and Robothan gets a big consolation prize at Defence. It’s noticeable that no Lords Minister yet appears on the official list.

Business: Vince Cable has bagged a big Department and, unusually, he has a Liberal Democrat Ministerial teammate – Ed Davey, the Party’s former Shadow Foreign Secretary. Otherwise, he inherits most of Ken Clarke’s Opposition team: Mark Prisk will take on small business, and John Hayes skills. Hayes will be the one-to-watch in this department. He has an ambitious agenda for vocational education and apprenticeships. Eddie Vaizey, part of the Cameron circle, will work cross-Department with Culture, Media and Sport. David Willetts, also a part of the Clarke team, will cover Universities and attend Cabinet – unsurprisingly, in light of his seniority (though he hasn’t been appointed to the Privy Council). Baroness Wilcox is the Lords Minister.

Work and Pensions: Iain Duncan Smith now has the opportunity to put his ideas on healing the “Broken Society” into practice. Chris Grayling has been savagely demoted from his former rank as Shadow Home Secretary but may well be in place to run the nuts and bolts of the Department, which he’s shadowed. Steve Webb, a Christian Liberal Democrat, has a faith interest, like his new Secretary of State, but will have his own ideas on pensions as perhaps the
Commons’ foremost social policy expert. With Lord Freud in place to help drive through welfare reform, there’s potential in this Department for personality and policy clashes. Maria Miller, like Justine Greening, might have hoped for more, but will have her work cut out as Minister for Disabled People. Philippa Stroud, who directed IDS’ Centre for Social Justice, will be the new Secretary of State’s Special Adviser.

Energy and Climate Change: Another Liberal Democrat-headed Department. Chris Huhne, once Nick Clegg’s competitor for the Liberal Democrat leadership, is in place. He’s a special interest in climate change, and his junior Ministers, Greg Barker and Charles Hendry, are also now experts in the area, having worked as part of Greg Clark’s Conservative front bench team in Opposition. As part of Huhne’s team, they’ll share responsibility in ensuring that the compromise on nuclear power (‘it must not be subsidised’) in the Coalition Agreement is adhered to. Lord Marland is the Minister in the Upper House.

Health: Andrew Lansley was publicly promised the Health portfolio by David Cameron – and now duly has it. Unlike some of his colleagues, he enjoys little continuity in his team, inheriting only Anne Milton, a junior Minister, from Opposition, and Earl Howe from the Lords: the latter has, however, been shadowing health in the Upper House since New Labour came to power. Simon Burns, a former senior Conservative Whip, returns to the Department in which he served as a more junior Minister during the Major premiership. Paul Burstow is the Liberal Democrat Minister. The team has no great reforming brief, and will be tasked with minimising all the political difficulties that the Health brief presents.

Education: Michael Gove’s appointment as Secretary of State was slow to be announced, but he now has a Department for which he’s prepared assiduously. Gibb, the Schools Minister, is totally committed to the brief. Tim Loughton is an expert on children’s issues. They make up the bulk of Gove’s former Opposition team. Maria Miller is replaced by the Liberal Democrat Sarah Teather – one of that Party’s more able women MPs. Teather also has responsibility for co-ordinating family policy across The Coalition. Jonathan Hill, John Major’s former Political Secretary, comes straight in to the Lords to help Gove get his radical New Schools programme through the Upper House.

Communities and Local Government: What Eric Pickles doesn’t know about local government isn’t worth knowing. The former Bradford Council leader and Shadow Local Government Minister moves into the Department that Caroline Spelman seemed set to head. Grant Shapps will cover the Housing Brief, and the hugely impressive Bob Neil looks to take on planning. A star of the Department looks to be Greg Clark. Pushed out of Cabinet by the need to put Liberal Democrats in, Clark will take charge of the localism drive, and is sure to develop views on local tax reform. Andrew Stunell, the former Liberal Democrat Chief Whip, has muscled his way into the Department, and is expected to take the cohesion brief. Pickles’ task will be hugely aided by his SpAd, Sheridan Westlake. Westlake, a veteran of Conservative HQ, is a star performer.

Transport: Moving David Laws into the Treasury meant shipping the equally numerate Philip Hammond out. He is none the less rewarded with his own Department, and is well placed to protect his new brief from his old boss, George Osborne, when the cuts come. Theresa Villiers, the former Conservative Shadow Transport Secretary, has accepted a demotion to the number two slot in the Department. Mike Penning, the former Health Spokesman and ex-fireman, is a junior Minister. So is Norman Baker, the idiosyncratic Liberal Democrat former Shadow Transport Secretary. It’s a curious Ministerial mix, but Hammond has the intelligence and skills to keep it in order.

Environment, Food & Rural Affairs: Caroline Spelman moves to the Department. Her environmental business history has already attracted some media flak. She’ll be assisted by Jim Paice, the experienced Conservative farming spokesman, and Richard Benyon, a Cameron ally with his own landowning interests. Lord Henley is the Lords Spokesman. He’s presumably the gentleman who once said to Ann Widdecombe, when told by her that the Almighty addresses her as “Ann”, “Well, he calls me Lord Henley.”

International Development: Andrew Mitchell’s old school manner renders him at first glance an unlikely International Development Secretary. But he developed a passion for the subject as Shadow Secretary of State in opposition, and appreciates that it needs intellectual grasp as well as emotional intelligence. As a banker, he’s got to grips with the international financial mechanisms. Alan Duncan moves from the prisons brief back to a department that he once led as Shadow Secretary of State. Stephen O’Brien, Mitchell’s other junior Minister, was at Health.

Culture, Media and Sport: With Osborne, Gove and Cameron himself, Hunt completes the Cabinet intake from the Conservative Commons intake of 2005. Eddie Vaizey is expected to cover the arts brief, doubling up with Business, and Hugh Robertson will take on the vital responsibility of preparing for the Olympics. Both served under Hunt in Opposition. John Penrose moves over from Business, where he was a Shadow Minister, giving the new team a more commercial feel. There’s no Lords Minister yet on the official list.

Northern Ireland: The Conservatives’ “new force” alliance with the Ulster Unionists didn’t pay off at the election. None the less, Owen Paterson, who helped mastermind it, goes to the Northern Ireland office as Secretary of State. Hugo Swire, a former Opposition spokesman, travels with him. An old Cameron friend, Swire was turfed out of the Shadow Cabinet by the Tory leader, and his rehabilitation is bound to be seen as a consolation prize.

Scotland: Given the election result in Scotland, Cameron was poorly placed to send David Mundell, the only Scottish Conservative MP, to the Scottish Office. He serves instead as a junior Minister beneath Danny Alexander, Clegg’s Chief of Staff, who faces the task of making the new Government’s case in the teeth of SNP and Labour hostility.

Wales: The Conservatives gained seats in Wales at the election. Cheryl Gillan is rewarded by moving from her Shadow Secretarial seat into the Welsh Office proper. David Jones, a Conservative, is her junior Minister.

Cabinet Office: Francis Maude retains charge of the implementation of policy as Paymaster General. Oliver Letwin has a Cabinet place as his deputy, and remains a trusted member of Team Cameron. Mark Harper and Nick Hurd – the first from the right of the Conservative Party, the second from the left – are their junior Ministers.

Leader of the Commons: Sir George Young is sympathetic to giving backbenchers more powers, and his resolution will be bolstered by having David Heath, the former Liberal Democrat Shadow Commons Leader, as his Deputy. They will be a powerful team.

Law Officers: Dominic Grieve, who clashed with the Conservative leadership on grammar schools, was made Shadow Home Secretary after David Davis’ spectacular resignation. Cameron wanted a replacement who was known to share Davis’ trenchant views on civil liberties. Grieve was later eased out to Justice, and now takes up post as the Government’s senior law officer. Edward Garnier, another Conservative, is his Deputy.

Lords: Tom Strathclyde, a popular figure in the Commons as well as in his own House, remains Lords leader. He’ll have to mind a Parliamentary Party that’s extremely unhappy with the Coalition Agreement’s recommendation of a part or wholly elected Upper House.

Whips: John Randall moves up to number two in the Conservative Whips Office below Patrick McLoughlin. Alistair Carmichael, a Liberal Democrat, is number three on the Government list. This suggests, mistakenly, that the two parties’ Whips Offices have merged. Not so: although the two will have a formal relationship, Carmichael and the other two Liberal Democrat Whips on the official list, Norman Lamb and Mark Hunter, will operate separately. On the Tory side, Mark Francois is the de facto number three – in a consolation move to make up for his non-appointment to the Foreign Office – and all the Tory Whips, bar new appointee Chloe Smith and Shailesh Vara, were part of the previous Opposition Whips’ team. Brooks Newmark and Philip Dunne, who have independent means, are both serving unpaid.

And finally: Lamb is also supporting…Nick Clegg – Deputy Prime Minister, Lord President of the Council, and the man in charge of shaping constitutional reform and renewal.

Tory Right revolts on capital gains tax

The Conservative right was expected to put pressure on a majority Cameron Government over the EU, tax rises, green issues and the forthcoming defence review – signs that large elements of it, which voted for David Davis in the 2005 Tory leadership election, have never come to terms with the Cameron regime.

This pressure will find many new outlets given the formation of the Coalition – which will heighten tensions between the leadership and the right.

The Coalition’s plan to hike capital gains tax has this week provided a major flashpoint. The Liberal Democrat manifesto committed that Party to “taxing capital gains at the same rate as income”. The Conservative manifesto said nothing on the matter.

The agreement between the two parties found a compromise – referring to “a detailed agreement on taxing non-business capital gains at rates similar or close to those applied to income, with generous exemptions for entrepreneurial business activities”.

John Redwood took to his blog and warned against a blanket rise in non-business capital gains, referring intriguingly to “a group of MPs and peers” which “last night…worked into the night on how we might come up with a solution to the political problem facing the Coalition.”

And Lord Forsyth grabbed an op-ed in the Daily Telegraph to warn that “the problem is not that capital gains tax is too low, but that the marginal rate of income tax is too high.” He advised Cameron to “tell his Chancellor to have the courage of his convictions and cut the top rate to 40 per cent”.

Redwood, who twice contested the Conservative leadership and is the Chairman of the No Turning Back Group – one of the main right-wing dining clubs of Conservative MPs – is a key figure on the right, and his blog is widely read. The NTB dined on Tuesday and some members voiced support for Redwood’s view. He also won support for his views at Wednesday night’s gathering of the Cornerstone Group.

This may have been the meeting Redwood cryptically refers to in his blog – the dates certainly fit. Forsyth, a former Thatcher Cabinet member and the Chairman of George Osborne’s former Tax Commission, remains a bearer of the Thatcherite torch.

His commission produced radical proposals for what Osborne referred to as “flatter, lower, simpler taxes” – a phrase he used more frequently at the start of his Shadow Chancellorship than since – and Forsyth remains keen to push its proposals.

Osborne has cause to be grateful to the Liberal Democrats for providing him with this means, via the Coalition agreement, of finding some revenue to help reduce the deficit. Were he, however, to adopt elements of the Redwood “solution” any right-wing Budget revolt might be headed off.

The Chancellor will also be looking to maintain good relations with the Party’s right, and since there seems to be no watertight definition of a non-business capital gain or an entrepreneurial business activity he has plenty of room to manoevre.

Osborne’s solid start

Earlier this week, we wrote that George Osborne, the Chancellor, has given himself political cover by ensuring that David Laws, perhaps the most fiscally conservative Liberal Democrat, will have his fingerprints on the public spending axe as the new Chief Secretary to the Treasury.

We also noted that Osborne has pledged to allocate his promised £6 million of departmental spending cuts by next Monday – a saving that the Liberal Democrats accepted as part of the agreement between the two parties. These initiatives were a part of what’s proved a solid start for the new Chancellor.

There’s been no equivalent of Gordon Brown’s spectacular 1997 decision to give the Bank of England responsibility for setting interest rates. But Osborne’s moved quickly, announcing the establishment of an Office of Budget of Responsibility under the Chairmanship of Sir Alan Budd.

Budd, a former Chief Economist at the Treasury and member of the Monetary Policy Committee, has strong links with the new Government – his period as Treasury Chief Economist coincided largely with the Major Government (and the forced end of the Exchange Rate Mechanism experiment).

The OBR’s independent status will none the less provide Osborne and Laws the cover they need to announce deep cuts when their public spending review takes place this autumn. It’s already up and running in shadow form and will publish forecasts at the time of the emergency budget – which will take place on June 22.

The Chancellor has also moved swiftly to ensure that he, and not Vince Cable, the new Business Secretary, has the whip hand on banking reform. He is to chair the Cabinet committee on the matter, which will set the terms of the new commission to examine it.

Although Osborne, like Cable, pledged a banking levy during the election campaign, the industry tends to view Cable’s support for the measure as driven by ideology, and Osborne’s as powered by politics – the Chancellor didn’t want to be seen as “soft on bankers” in the wake of the banking collapse.

He may therefore ensure that the committee’s appointments are likely to take a more supportive view of the industry – which, again, would provide him with political cover for any recommendation opposing a unilateral levy (or Cable’s suggestion that bankers’ bonuses should be limited to £2500 apiece).

Osborne’s also manoevered to fix the blame for the new EU Directive on hedge funds and private equity firms – agreed at this week’s meeting of EU finance Ministers – on the Labour Government, while attempting to spin the decision to “note the concerns expressed” by the UK as a tactical win.

The Chancellor held out the possibility of the directive being watered down as it continues its journey through the EU institutions. He appears to be holding his fire for future battles on proposals for the EU to create its own framework for financial regulation as a whole – and on the institution’s budget.

Although Osborne’s formally lost Matt Hancock, his former Chief of Staff to the Commons, he’s retained the services of his other two main advisers, Rohan Silva and Rupert Harrison. However, Hancock, now newly-elected as the MP for West Suffolk, is a key Osborne aide and likely to work closely with him.

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

Tim

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