A game of pure political competition

Keith Hudson

(Preliminary apologies for this particular blog to my mainly America readers!)  Because George Osborne, Chancellor of the Exchequer, now wants to be the next Prime Minister of this country, he’s making the most . . . extraordinary efforts to show that he’s worthy of the job.  He’s launched the great Northern Powerhouse notion, he’s going to split the banks into retail and investment arms (but how?) and, only yesterday, he’s announced the most astonishing cut-backs in the spending of many government departments.

George Osborne has until recently sought the quiet life, giving himself time to keep up with new ideas (as evidenced from the books that he’s mentioned and clues in his occasional speeches) — something that a Prime Minister cannot possibly do, rushed off his feet by his secretariat.  For some years, Osborne has been known as the king-maker within the Tory Party and he even persuaded Cameron, his pal since Etonian days, to publicly mention three candidates some months ago — Theresa May, Boris Johnson and Sajid Javid (the wunderkind from Deutsch Bank).

I don’t think Osborne ever intended that Theresa May should be a future prime minister (too strong-minded for him to manipulate) or Boris Johnson (far too loose a cannon) but Sajid Javid, his protege, despite having had two rapid ministerial promotions in the last six years since he became an MP (quite exceptional), is proving not have the charisma, particularly on television, that’s desirable.

And, lately, Cameron has actually mentioned Osborne himself as a possibility. In other words, Osborne has decided he’ll have to do the job himself.  However, if he can reduce the substantial annual deficit to nil within the next three or four years, then his claim to the job will be difficult for Tory MPs to deny.

As to his Northern Powerhouse idea, that’s not going to come off.  He wants to devolve power to city councils up there — but there’s simply not enough talent up there to make it work — it’s all down in London and the south.  If the northern cities need to be revived then it’ll be a 30 year job by vastly catching talent from all classes from the nursery years onwards, releasing the schools from state domination, giving the municipal universities their freedom (something the state took away from them in the19th century) and making sure that Manchster, Leeds, Liverpool, Sheffield and Newcastle get as much spent of them per head and Londoners have.  Then, in 25 to30 years’ time we might begin to see some brilliant ideas emerging in the north and their creators deciding to remain there instead of going down to London and the south as they do now.

As for reforming the banks?   No chance so far anyway.  Even Osborne hasn’t mentioned the only way to split retail and investment operations properly — to split them physically and legally,  Surely it’s already been clearly demonstrated both in this country and America that Chinese Walls become leaky within a year or two. The Four BIggies are already scared by the dozen or so new banks that have been arriving on the scene since 2008, as well as the possible success of the lagtet innovation, crowd-funding.  Osborne should make them more scared by separating the Four into Eight,  (If Osborne were to do the job job properly then he’d also split the four new Biggie retail banks into, say 16 regionally-based banks.  Each of them would be plenty large enough for maximjum efficiency retail operations.)

Finally, what about yesterday’s dramatic announcement of massive cut-backs in departmental spending — 40% has  been mentioned!  There, Osborne is quite definitely laying down his marker for prime ministership.  Prime Ministers kin the past, even Margaret Thatcher, have tried time and again to reduce adminstrative expenditure but they were always foiled by the civil service, the chiefs of which are usually far more intelligent than ministers and, besides, know the set-ups so thoroughly that they can rings rings round any attempts by here-today, gone tomorrow politicans to reduce their numbers and overall control.

Only departmental ministers with particularly high intelligence and have a forceful personality are going to succeed.  Osborne is laying this down so strongly that unless a department minister can schieve really remarkable cut-backs then he won’t be assured of a high place in an Osborne government. So each department head is going to have to make a judgement: Is it likely that Osborne is going to be Cameron’s successor?  If so, and if I’m prepared to serve under Osborne, then I’ll have to have a serious battle with my departmental civil service head.  For the first time for a long time in British politics (and probably for the first time since since the civil service became meritocratic in the1880s) there is going to be a game of pure politicial competition between government ministers.

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