23 JULY 1988, Page 6


The embarrassment of riches in the Whitehall bazaar


As MPs begin to wind down for their long summer recess, there is one lone figure walking the corridors of Westmins- ter and Whitehall for whom the next three or four months represent a combination of marathon-running, tightrope-walking and unarmed combat. He is Mr John Major, the Chief Secretary to the Treasury, whose job it is to battle it out with each spending minister in succession, cutting their bids down to a total which will fit within the guidelines agreed at last Thursday's Cabinet meeting on public spending.

Heredity at least is on Mr Major's side. He is surely the only member of Mrs Thatcher's administration whose father was a skilled trapeze artist, fought (if I remember correctly) in the Brazilian army and earned a living as an athlete. (A profile of Mr Major once added that his father `played baseball for Philadelphia and then swam for the West of England'. Couldn't he have taken a boat?) At first sight, the Chief Secretary may seem unfairly outweighed by the senior ministers who are limbering up for the fight. At second sight, however, it becomes clear that the odds are stacked in his favour by one crucially important fact: he is the only participant in this battle who posses- ses a map of the whole terrain. Each spending minister will command a mass of arguments to show that his own depart- ment desperately needs more cash; but he will have little or no knowledge of the relative strength of the other ministers' claims. As the Chief Secretary proceeds on his round of 'bilateral' discussions with the ministers, he accumulates a multilateral advantage. And even if the dispute be- tween the Treasury and an individual minister is carried forward to the 'Star Chamber' committee of the Cabinet, the minister is still required to present his claim on its own internal merits, without being able to mount an effective case for saying that it is more important than the claims of other ministers.

Only if these disputes resurface in meet- ings of the full Cabinet is there any chance that spending ministers will be able to argue about rival priorities face to face. These arguments always provide the most colourful passages in the Crossman and Castle diaries, with wonderfully vitriolic or supportive little notes — and looks that could kill — being passed to and fro across the table. Mrs Thatcher's Cabinet, howev- er, is a more smooth-running machine than its recent Labour predecessors. Much of the hammering out of relative priorities which used to go on in full Cabinet meetings under Wilson or Callaghan would seem as out of place and ill-organised in her Cabinet as chopping the meat and preparing the vegetables at the dinner- table. And the Treasury is, in turn, an unintended beneficiary of this change in style: more issues can be settled now at an earlier phase of decision-making, in forums where the Treasury can make the most of its own built-in advantages.

Idealists may hanker after a system in which the spending ministers would always be obliged to discuss openly among them- selves the relative strength of their cases: this would encourage them, the argument goes, to think of themselves not only as ministers of individual departments, but also as ministers of the Government with a duty to sustain the Government's overall policies on the control of public spending. But the Castle and Crossman diaries strongly suggest that the more open and multilateral these discussions become, the more the atmosphere simply thickens with intrigues. Joel Barnett's version of events also confirms that for a chief secretary of the Treasury the only thing worse than a `bilateral' with a spending minister is a trilateral with two spending ministers. It is, in any case, contrary to human nature for any minister to sit back and admit that other claims, or the claims of economising in general, are more important than his own requirements. We know that this is contrary to human nature, because Lord Joseph, bless him, used to do it regularly.

This whole system of bargaining resem- bles partly a free market (above all under recent socialist governments) and partly one of those histrionic but necessary fic- tions which are involved in, for example, the adversarial system of English courts of law. Recently, the histrionic element has grown stronger — reminding one of the haggling in a Levantine bazaar, where each side knows from the start what the final price will be but is still obliged to go through the actions of insisting on more or less. Indeed, there is a school of thought which says that in the end the ministries always get what the Treasury had intended them to get. This was obviously not true of Mrs Thatcher's first two years in power, but it has been increasingly true of late — not only in the run-up to the 1987 election, but also during last year's negotiation, when Mr Major managed to settle all the disputes without once having recourse to the Star Chamber.

But last year may turn out to have been the crest of the wave. The ideal position for a Chief Secretary to find himself in is to be able to insist publicly on the tight control of spending while knowing secretly that extra money is available. That was Mr Major's position last year; but now everyone knows that when the Treasury talks about the reduction of public spending it means an increase in real terms (the reduction being only in the ratio of spending to GNP).

The Treasury has to live politically with a principle which would puzzle even the average bank manager: the more spare money it is known to possess, the less power it enjoys. This year is likely to see a resurgence of the Star Chamber under its new chairman, Mr Parkinson. Treasury officials are bound to feel that this involves a shift of power away from Great George Street; and hasty commentators are likely to think that Mr Parkinson's new post will immediately add weight to Mrs Thatcher's side in the tug-of-war which goes on between her and Mr Lawson in economic policies. The Treasury officials will be right, but that does not mean that the shift of power is a bad thing: after a couple of years as Chief Secretary, Joel Barnett was actually pleading with his Prime Minister to set up some sort of Star Chamber in order to get the most intractable political issues off his back.

The hasty commentators, on the other hand, will probably be wrong. Mrs Thatch- er and the Chancellor may be tugging in different directions on exchange rate poli- cies, but on the overall public spending strategy they see eye to eye — in other words, they are alike in having one eye on doctrinal purity and the other on cajoling the electorate. The real political objection to Mr Parkinson's appointment is not that it will be used as a weapon against Mr Nigel Lawson, but that it will become a weapon for the advancement of the career of Mr Cecil Parkinson. Chairmanship of the Star Chamber is a job for someone whose career has already reached an Olympian plateau. Lord Whitelaw was always known to be inimitable; but the Government is still finding out just how irreplaceable he was too.