[A-List] UK state: Treasury "modernisation"

[Keaney Michael]

Those who count in the Treasury

Heather Stewart
Monday April 15, 2002
The Guardian

Ed Balls, 35 - also known as the chancellor's brain - is at the centre
of Gordon Brown's kitchen cabinet. He has been Brown's confidant,
adviser, and head policy wonk since the dark days of opposition, and the
chancellor rarely makes a decision without consulting him. Balls is
married to health minister Yvette Cooper, and shares the care of their
two young children so she can get on with her ministerial duties. One
Whitehall insider said of him: "Ed Balls is nearly as clever as he
thinks he is."

The other half of the formidable duo known in the Treasury as "the Eds,"
is Ed Miliband , 31, son of the Marxist intellectual Ralph and brother
of MP and fellow policy wonk David. Miliband provides the hardcore
number crunching for many of Brown's reforms - particularly on social
policies such as the working families tax credit and the New Deals - but
stays out of the glare of publicity.

Connecting Brown with the party and the unions, is his political
secretary Sue Nye , a dyed-in-the-wool Labour supporter who met her
husband, millionaire BBC chairman Gavyn Davies, when they were both
working in No 10 under Jim Callaghan in the 70s. She helped organise the
notoriously disorganised Brown when he was shadow chancellor, but since
Labour came to power she has been able to hand that job to civil
servants. She has good links with No 10.

Mark Bowman , 31, is just settling in as the chancellor's principal
private secretary - one of the most onerous jobs in the Treasury, though
also a surefire route to higher things. Bowman's predecessor, Tom
Scholar, went straight to Washington to be Britain's man at the
International Monetary Fund, and another previous incumbent, John Gieve,
is now permanent secretary at the Home Office. Bowman travels everywhere
with the chancellor.

Shriti Vadera , a tough-talking former banker at the City firm, Warburg,
is a director of Oxfam, and advises on international development and
debt relief, but her expertise on the complex funding behind public-
private partnerships led to her casting as negotiator for the Treasury
in the battle with Ken Livingstone over the future of London
Underground. Officially a member of the council of economic advisers,
Vadera is the main point of contact between the Treasury and the City,
and is known for not suffering bright junior officials, let alone fools,
gladly. Keen to stay out of the limelight, she was once whisked out of
her house by the Treasury's former media relations man, John Kingman,
past an Evening Standard journalist who wanted to talk to her about the
tube. Kingman commandeered the car of Sir Andrew Turnbull, the
Treasury's top mandarin, to rescue her.

Gus O'Donnell , the former press officer to John Major, was one of the
few senior Treasury officials from the Tory years who joined Brown's
inner circle after the 1997 election. He sits as the Treasury's
non-voting representative on the Bank of England's monetary policy
committee, and is also often chosen to face sceptical questioning from
the Treasury select committee about the thinking behind budgets. As the
man in charge of assessing whether Britain meets the five tests on euro
entry, O'Donnell hit the headlines in January when it was claimed he had
let slip to a group of potential Treasury recruits that it would be a
political decision.

Michael Ellam , 33, the sardonic head of communications, is a Treasury
high-flyer, who has the unenviable task of showing Brown what the papers
have to say about him each morning, and has been known to shield him
from upsetting headlines. He learnt Russian working in Moscow for the
London School of Economics in the early 90s.

Full article at:
http://politics.guardian.co.uk/economics/story/0,11268,684516,00.html


Where Brown goes to find the big ideas

Inspiration comes from the 'huge laboratory' across the Atlantic, as
well as across the Channel

Larry Elliott
Monday April 15, 2002
The Guardian

In a supermarket on the corner of Lexington Avenue and 125th Street in
upper Manhattan, Gordon Brown reflects on the changes he can see to one
of America's most notorious areas. "I'm interested in Harlem because I
remember it as it was 10 years ago," he says. "How the public services
had deteriorated, how the drug culture was developing, how the whole
place was boarded up."

The chancellor is in Harlem to look at how the US is regenerating
run-down communities, one of his priorities for Labour's second term. It
is not the first time he has looked to the US for policy inspiration.

Brown's first source of inspiration is his background on the east coast
of Scotland. His political philosophy is rooted in a tradition of
Scottish Labourism - egalitarian and tribal. Brown hates poverty and the
Tories in equal measure; it's what endears him to Labour activists.

But if the old Labour side of the chancellor is Scottish, the new Labour
side is American. "He draws on America a lot," says Gus O'Donnell. "He
is very interested in the US because it's a huge laboratory. A lot of
policies start at the state level, and different policies are being
tried in different states."

The classic example of this is the welfare-to-work programmes pioneered
by Wisconsin, which drew Labour policy wonks in the mid to late 1990s.
O'Donnell, who was in Washington for the Treasury at the time, said:
"The number of people coming through from Labour to visit Wisconsin was
almost embarrassing."

But O'Donnell says Brown owes a policy debt to the US in other ways,
too. "The importance of research and development, university links with
business, venture capital angels; the whole enterprise agenda is much
more vibrant in the US."

The international flavour to the Treasury is not exclusively American,
however. Ed Balls, chief economic adviser at the Treasury, says that
contrary to popular rumour the plan for Bank of England independence was
not cooked up in the plane on the way back to London from a meeting with
Alan Greenspan, chairman of the Federal Reserve board. Canada, Australia
and New Zealand were all templates when plans were being drawn up to
make the Bank of England independent and to establish a new framework
for fiscal policy. "We also want to know why the Dutch labour market is
so good and why Scandinavia is socially cohesive," he says. "But it is
true to say that the tide of ideas is stronger across the Atlantic than
it is across the Channel."

What Brown likes about America is its sense that everybody should be
able to better themselves. "The idea in the US that opportunity should
be extended to everybody is very important to what we are doing. There
is far more intervention in the US than people imagine."

The chancellor is scornful of the pre-war Treasury mentality that led to
one mandarin scrawling across ideas for tackling unemployment drawn up
by Keynes "Extravagance! Inflation! Bankruptcy!", but the inert force of
decades of official dogma is proving hard to shed, despite the young
blood introduced since 1997. The Treasury's ingrained determination to
cut out waste has found an echo in Brown's own stern-minded
Presbyterianism to produce the obsession with the private finance
initiative.

That said, the Treasury has been opened up to new thinking. Maeve
Sherlock has been brought in from the National Association for One
Parent Families, Tony Burdon on a year's contract from Oxfam to work on
development, debt and aid, Britain's leading economic historian, Nick
Crafts, advises the productivity team one day a week, while Ed Miliband,
the chancellor's special adviser, concentrates on welfare and poverty
reduction.

Full article at:
http://politics.guardian.co.uk/economics/story/0,11268,684515,00.html


Michael Keaney
Mercuria Business School
Martinlaaksontie 36
01620 Vantaa
Finland

michael.keaney at mbs.fi