Why Cameron is giving Downing Street a political edge

The decision to make the next head of the No.10 Policy Unit a political appointee, rather than a civil servant, shows the PM has listened to complaints from Tory MPs.

So David Cameron is listening. According to a report on PoliticsHome, the Prime Minister has decided that the next head of his policy unit will be a political, rather than a civil service appointee. Paul Kirby, the current policy chief, is on secondment from the accountancy firm KPMG and is due to leave in March. He has been acting as a civil servant. His replacement, we are told, will be a special advisor. The distinction is not without significance.

The colonisation of No.10 by mandarins at the expense of heavyweight spads has been one of the most consistent complaints from Tory MPs – and indeed spads elsewhere in Whitehall – about the Cameron operation. The gripe is that the civil servants are loyal to the machine, not the party, that they lack strategic judgment and are predisposed to be ultra-cautious. Many Tories, not just the fanatical fringe, think capture by the Mandarinate explains why the government has lacked the dynamic, radical edge they crave. (Civil servants are, after all, supposed not to be ideological pioneers.)

A connected complaint is the fact that ministers and their spads out in the departments don’t know who in No 10 is covering their brief and therefore who to feed ideas to and lobby for support. There has been a sense that civil service channels work around the party, a process that, coupled with coalition and Lib Dem machinations, can feel like a conspiracy to stop the Tories from controlling government. In recent months, resentment of Whitehall officialdom has focused increasingly on the power of Sir Jeremy Heywood, the cabinet secretary who is said to wield formidable influence across government and to be a whisperer of cautious counsel in the Prime Minister’s ear. (Some of that resentment has bubbled up to the surface recently in public examination of Heywood’s role in the whole “plebgate” saga. )

Without an energetic party political policy boss at the very centre, projects can drift off course, lose momentum or just go plain wrong. One example: elections for police and crime commissioners last year were originally meant to be a flagship reform. But they were championed in No.10 by Steve Hilton, Cameron’s former head of strategy, and once he left, there was no one in Downing Street to cheerlead for the project. (And the Lib Dems hated the idea.) So the whole thing ended up a dismal, damp squib. Hilton’s departure last spring is also seen by many Tories as the moment Heywood seized definitive control.

It has been something of a mystery as to why, when the complaints have been so persistent and come from so many sides, the Prime Minister hasn’t acted sooner. One explanation I have heard is that Cameron wanted to wait until civil service contracts naturally expired instead of carrying out a premature purge. That seems oddly lackadaisical given how serious a charge it is that the No.10 operation is politically unfit, but not entirely out of keeping with accounts of Cameron’s character. He plainly finds hiring and firing the least enjoyable part of the job and believes in keeping people in post whenever possible, as his handling of reshuffles testifies.

Tories from all sides of the party will naturally be scrutinising the new appointment for indications of ideological allegiance. Many still find it hard to know exactly what Cameron believes. They will also be hoping for someone who can bring some long-term strategic judgement to the operation. As I write in my column this week, the famous “grid” system that Tony Blair’s team introduced for news planning and hazard spotting on the horizon is said to have broken down in Downing Street. One former No.10 staffer says Cameron’s operation barely looks ahead more than two months, which means they are effectively lost in endless, reactive tactical fire-fighting.

One final point about the new Downing Street Head of Policy, whoever he or she turns out to be. There will be much attention paid in the Conservative ranks to whether or not a “Cameron crony” gets the gig. Another routine complaint levelled against the PM is that he surrounds himself with courtier-chums, all from much the same background and often the same school. No doubt that makes for a jovial time in the office, but it carries the obvious risk that alternative perspectives are neglected and cosy consensus goes unchallenged. One middle-aged, privately-educated civil servant, says of interacting with the exceedingly privileged No.10 crew: “I can come across as fairly posh and they still make me feel like the stable boy.”

There is a feeling across much of the party and in government that the Downing Street setup needs someone at its heart who knows something of the world outside Cameron’s gilded circle and who has a forceful enough personality to force that perspective on the Prime Minister regardless of whether it is something he wants to hear.

David Cameron leaves 10 Downing Street in London, on January 18, 2013, as he prepares to address the House of Commons. Photograph: Getty Images.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

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As long as the Tories fail to solve the housing crisis, they will struggle to win

The fall in the number of homeowners leaves the Conservatives unable to sell capitalism to those with no capital. 

For the Conservatives, rising home ownership was once a reliable route to government. Former Labour voters still speak of their gratitude to Margaret Thatcher for the Right to Buy scheme. But as home ownership has plummeted, the Tories have struggled to sell capitalism to a generation without capital. 

In Britain, ownership has fallen to 63.5 per cent, the lowest rate since 1987 and the fourth-worst in the EU. The number of private renters now exceeds 11 million (a larger number than in the social sector). The same policies that initially promoted ownership acted to reverse it. A third of Right to Buy properties fell into the hands of private landlords. High rents left tenants unable to save for a deposit.

Rather than expanding supply, the Tories have focused on subsidising demand (since 2010, housebuilding has fallen to its lowest level since 1923). At a cabinet meeting in 2013, shortly after the launch of the government’s Help to Buy scheme, George Osborne declared: “Hopefully we will get a little housing boom and everyone will be happy as property values go up”. The then-chancellor’s remark epitomised his focus on homeowners. Conservative policy was consciously designed to enrich the propertied.

A new report from the Resolution Foundation, Home Affront: housing across the generations, shows the consequences of such short-termism. Based on recent trends, less than half of millennials will buy a home before the age of 45 compared to over 70 per cent of baby boomers. Four out of every ten 30-year-olds now live in private rented accommodation (often of substandard quality) in contrast to one in ten 50 years ago. And while the average family spent just 6 per cent of their income on housing costs in the early 1960s, this has trebled to 18 per cent. 

When Theresa May launched her Conservative leadership campaign, she vowed to break with David Cameron’s approach. "Unless we deal with the housing deficit, we will see house prices keep on rising," she warned. "The divide between those who inherit wealth and those who don’t will become more pronounced. And more and more of the country’s money will go into expensive housing instead of more productive investments that generate more economic growth."

The government has since banned letting agent fees and announced an additional £1.4bn for affordable housing – a sector entirely neglected by Cameron and Osborne (see graph below). Social housing, they believed, merely created more Labour voters. "They genuinely saw housing as a petri dish for voters," Nick Clegg later recalled. "It was unbelievable." 

But though housebuilding has risen to its highest levels since 2008, with 164,960 new homes started in the year to June 2017 and 153,000 completed, this remains far short of the 250,000 required merely to meet existing demand (let alone make up the deficit). In 2016/17, the government funded just 944 homes for social rent (down from 36,000 in 2010). 

In a little-noticed speech yesterday, Sajid Javid promised a "top-to-bottom" review of social housing following the Grenfell fire. But unless this includes a substantial increase in public funding, the housing crisis will endure. 

For the Conservatives, this would pose a great enough challenge in normal times. But the political energy absorbed by Brexit, and the £15bn a year it is forecast to cost the UK, makes it still greater.

At the 2017 general election, homeowners voted for the Tories over Labour by 55 per cent to 30 per cent (mortgage holders by 43-40). By contrast, private renters backed Labour by 54 per cent to 31 per cent. As long as the latter multiply in number, while the former fall, the Tories will struggle to build a majority-winning coalition. 

George Eaton is political editor of the New Statesman.