The New Statesman Essay - When Tony wants and Gordon requires

Peter Hennessy argues that new Labour's governing style raises profound constitutional questions

On the evidence of his first premiership, now nearing its end, what kind of political animal is Tony Blair? This is how one well-placed observer put it to me: "Blair is the best Liberal Prime Minister the country has had since Lloyd George, but he doesn't lead the Liberal Party. He leads a party that is not Marxist, not socialist, not even Croslandite. It doesn't really know what it believes in . . . It's a new Labour government, which has a very small cadre of new Liberals in No 10 [new Liberal in the sense of Asquith, Lloyd George and Churchill during their reformist phase in 1906-14]. This is more important than the Napoleonic/presidential-style question.

"The problem is that very few Cabinet ministers understand this. They were building their careers in Michael Foot's time. Tony built his career at that time, too, but he never believed a word of it . . . He's basically leading a party that is very disconcerted. It doesn't know what to believe in. It can never quite decide if he's one of them. He isn't one of them. He's a younger version of Roy Jenkins, and all of Roy's big agenda items are the Liberal ones."

One must be a touch careful of this analysis. Michael Young, the author of the 1945 Labour manifesto, Let Us Face the Future, once described its contents as "Beveridge plus Keynes plus socialism"; in other words, developed new Liberalism plus a dash of public ownership. But Blair does not go for nationalisation, demand management or a universalist welfare state. It is Gordon Brown who is more "a man of 1945" (to borrow Tom McNally's typology) in instinct, emotion and rhetoric. The wider Labour Party has a real sense of this.

And to a degree never before experienced, this is, in the words of a Whitehall veteran, "a bipolar government; it is the Blair/Brown axis that is enduring". The Prime Minister's policy fiefdoms are schools, health, crime, transport, Northern Ireland, foreign and defence, and intelligence (in so far as he takes an interest in it). The Cabinet Office, once meant to be a collective resource shared by the Cabinet as a whole, is in a feudal relationship with the overlord next door; a case of ever closer fusion.

The Chancellor's policy fiefdoms are pensions, child and youth policy, welfare to work, enterprise, science and technology transfer, structural change and regional development. Here, Treasury policy pervades and, through the comprehensive spending reviews and the public service agreements that underpin them, the Chancellor exerts a sway over his colleagues that no predecessor in the Treasury has ever matched. He "stuffs their mouths with gold if they do things that are on his agenda", as an admiring insider put it. Social security is now virtually a Brown satrapy.

All this is a constitutional issue. It subverts what is supposed to be the basis of the British constitution: a government of departments that adhere to collective responsibility in return for a shared say in serious decision-taking. The "Tony wants" and "Gordon requires" phenomena drive policy and suppress collegiality across Whitehall. A combination of commanding premier and overmighty Chancellor leaves a residue of considerable resentment.

If one constructed a resentment index for this administration, the Chancellor would outstrip the Prime Minister. As one minister put it privately: "The PM's bilaterals are a very important aspect of the Blair government. It's his way of keeping the pressure on. Cabinet ministers tend not to like them; nor do their permanent secretaries . . . They involve a much easier relationship, however, than Cabinet ministers' dealings with Gordon Brown. There it is much more 'do as you're told'. It's much more a paper relationship. The Chancellor is a paper man - solitary. It's as if he sits there on his own in his room poring over his papers with a cold towel round his head. Cabinet ministers, when they get no further with Gordon Brown, try to line up with No 10 against the Treasury."

This raises tension between No 10 and No 11 Downing Street. So does the euro, a question the PM and the Chancellor are both profoundly interested in and over the nuances of which they both wish to prevail. Here, one detects the Mandelson factor at its most destabilising. It's not just the Chancellor's people who know about the daily early-morning phone call from the Prime Minister to his Northern Ireland Secretary, which ranges across issues far wider than the great unresolvable of the 19th and 20th centuries. They notice, too, how often Blair invites Mandelson into his office for a chat after Cabinet meetings.

The Prime Minister's people, on the other hand, blame the Chancellor for some, though not all, of the absence of procedural collegiality in the Blair government. "Tony is not a particularly command-and-control person," it has been put to me. "He is bugger all interested in the detail. That's Brown. Tony has a great sense of the big picture. But he knows how to take a barrister's brief, and he does have a strong sense of what the government is about. Gordon hates collective discussion. As a result, they tend to have to be bilaterals, not just with Gordon Brown, but with other ministers, too."

It would be wrong to see Blair as a natural collective Cabinet government man distracted from this approach by a rival imperium in the Treasury. Blair is not a systems man. (I have heard it said, since his Kosovo-related experiences during the Balkans war of 1999, that "the only system and institution the PM empathises with is the armed forces". Hence the influence of the Chief of the Defence Staff, Sir Charles Guthrie, generally - in particular, when he strode across Whitehall last summer to persuade the Prime Minister to see off the Treasury's demands to trim back the defence budget.) The consequences of Blair's lack of feel for what Clement Attlee called the "architectonics" of state have been captured by two of the businessmen brought in to help him in 1997. Chris Haskins, who heads the regulatory impact unit in the Cabinet Office, said in the early autumn that the government was "in the worst of all worlds now, where we've sort of abandoned the Cabinet committee. We've got a sort of Prime Minister's Office, including the Cabinet Office, which really hasn't got the teeth to deliver what the Prime Minister wants."

David Simon, who has been advising Blair on his modernising government agenda, was even more candid earlier this year. "The process by which Cabinet government develops effective policy and the Civil Service and executive agencies work to achieve improving results is both complex and currently inadequately co-ordinated and reviewed," he said. Lord Simon said that more consistent leadership and focus were needed. There were "too many" objectives "and they change often".

As Haskins explained: "He is a lawyer - you have to start with that - so he never actually ran anything before he became Prime Minister. I think he's learnt reasonably quickly that running government is pretty complicated." And, as Simon indicated, ministers need to realise that "culture change is a marathon not a sprint". One close observer of Blair's inner circle underscored the Haskins/Simon analysis. "The PM has never run a department," he said. "That shows through, and in the people around him. They have no real sense of how departments think things through and the brokerages they have to operate and implement. He and the policy unit always want instant action." It is not always plain to senior figures out in the departments whether "Tony wants" means that Tony really does want it, or whether it means that his policy unit people wish it to be so.

So the collegiality/prime ministerialism question remains as live as it has been from the days just before the 1997 election, when one of Blair's men said: "You may see a change from a feudal system of barons to a more Napoleonic system." Yet the ecology of the Blair command premiership is changing, as the general election approaches.

The Cabinet still meets only once a week for an hour on Thursday mornings, and rarely is it involved in the casework of government. But it has become more important as a sounding board for the Prime Minister. And, since the petrol tax protests of September - when, as a Labour movement veteran put it, "the focus groups failed" - some of Blair's colleagues have begun to assert themselves a little. "There is more challenge to the PM," an insider explained. "They realise that they are not going to win the next election just on his face."

Close observers of the Cabinet Office have noticed a mini-revival of Cabinet committees. The Deputy Prime Minister, John Prescott, likes operating through them and recently, for example, has been very active in the chair of MISC 10, the ministerial committee on the Dome. The Home Secretary, Jack Straw, a seasoned Whitehall hand, also prefers them and, since "petrol September", has taken a firm grip on the civil contingencies committee. Sir Richard Wilson, the Cabinet secretary, has subtly encouraged all this, bringing together clusters of informal groups into a proper Cabinet committee form, such as MISC 9 on children's and young persons' services. Wilson skilfully offers the Cabinet secretariat as minute-takers, even if a particular ministerial group does not feature formally in his Cabinet committee book.

Very quietly, and unannounced, the Cabinet secretary has also initiated a review of both the ministerial code and the unpublished precedent book upon which much of the code rests.

Wilson has his critics, among both his fellow senior officials and some of Blair's own people, for being insufficiently robust and unambiguous when what one Whitehall veteran called "the thin, golden line that must not be crossed" is neared and a tilt is made towards a more politicised, American style of Civil Service. For example, when Brown's adviser Ed Balls was appointed chief economic adviser to the Treasury, it was plain to all that this confirmed his existing status as an extra, unelected, hugely powerful Treasury minister through whom everything of substance had to pass on its way to the Chancellor.

Wilson will sustain his arguments against the growth of a Prime Minister's department as Blair's people ponder the next, post-election rejig of the centre. Here, the Cabinet secretary will have a powerful ally in Brown, who stresses the dangers of a lack of collegiality when his own domain could be threatened by it. But will Wilson be able to hold the line when quite a large swathe of permanent secretaries reach retirement in the election aftermath? No doubt more of the top Civil Service will be put out to open competition, but it will be vital for those competitions to be transparently and unarguably based on merit, rather than political acceptability.

Wilson set out his stall before the Commons Public Administration Committee last month. "My concern is that the resources of the state are not to be used for party political purposes," the Cabinet secretary said. He indicated that Alastair Campbell, the Prime Minister's press secretary, will leave No 10 the moment the Queen accedes to Blair's request for a dissolution of parliament. A real test for Wilson will be to ensure that Jonathan Powell relinquishes his post of No 10 chief of staff on the same day, and that he and the special advisers in the policy unit and the strategic communications unit move out, too, and are no longer paid by state funds.

In the grand sweep of history, I would cite the constitutional reforms of 1997-2000 as the policy shifts that, so far, have given the Blair premiership a true singularity. In these, I include devolution and the Human Rights Act, although the watered-down Freedom of Information Act and the first instalment of House of Lords reform tarnish the record somewhat. Strangely, Blair rarely trumpets this rush of change as the great and almost certainly permanent transformation of his country and its governing arrangements that it undoubtedly is. Yet his style of government itself has rekindled several substantial constitutional questions.

To Sir Robin (now Lord) Butler, Wilson's predecessor as Cabinet secretary, it was apparent from the very first week of the Blair premiership that the new Prime Minister wished to run his Cabinet informally, even more so than his recent predecessors who had already moved some distance from the traditional model. The point was illustrated by the famous start of his first meeting, when he said: "I prefer that you call me Tony."

Blair is not interested, as one well-placed insider put it, "in systems or institutions generally". He was quite openly dismissive of such matters during a Commons debate in July, when he declared: "No one will be better governed through fine-tuning the ministerial code. Those are good issues for academics and constitutional experts, but they are not the big issues that parliament should debate when we consider our role in the modern society."

The Prime Minister has underscored his disdain for such niceties by twice refusing to give evidence on the ministerial code to the Commons Select Committee on Public Administration, sending Wilson in his place. Wilson himself has loyally declared himself happy with the convention (invented by Margaret Thatcher at the height of the Westland affair in 1986) that prime ministers do not go before select committees. But I think he is wrong.

The select committee must continue to press for the Prime Minister to come before it and give evidence on all these matters. No one else can account satisfactorily for such things to parliament. Wilson must change his advice to the Prime Minister on this. He cannot - and should not - act as a surrogate for Blair in answering serious and legitimate questions about the organisation of the centre. Blair may find such questions and demands irritating, boring and marginal to his great purposes, but they are the very stuff of the constitution - and the Cabinet secretary knows it.

Peter Hennessy is professor of contemporary history at Queen Mary, University of London. This essay is based on a lecture to the Public Management Foundation, given on 12 December. His The Prime Minister: the office and its holders since 1945 is published by Penguin (£25)