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15 September 2022

The sacking of Tom Scholar sets a dangerous precedent

If officials become unwilling to confront ministers with inconvenient truths, worse decisions will be made.

By David Gauke

There has been something rather reassuringly British about the last few days – the ceremonial grandeur, the dignified but sincere mourning, and the patient queuing. We have also heard much about the late Queen’s charm and good humour, of how her status and experience provided us with greater soft power, of how former prime ministers found that her knowledge and experience and ability to ask pertinent questions could be of much value.

The Queen, of course, had little or no direct power but she had a subtle and important influence on our nation. She embodied continuity and stability and decency. This was in part about her personal character but also about the role of the constitutional monarchy. A politician may become prime minister but there was still someone to whom they were junior.  

It is striking that when Boris Johnson was found to have unlawfully prorogued parliament in autumn 2019, for many the biggest problem was not his desire to suppress the House of Commons at a time of emergency but the allegation that he had lied to the Queen. Drawing her into such a controversy was the very essence of bad behaviour. It was a line that one rogue prime minister may have been willing to cross but, it can be assumed, one the other 14 that served during her reign would not have done so. The Queen and the institution of the monarchy, in other words, usually exerted a check and a balance on her ministers, requiring them to behave.

We do not have a written constitution, and nor would it be a panacea, but its absence makes the shared recognition that our institutions matter even more important. This is no small thing. Countries with strong institutions – which ensure that power is trammelled, conflicts resolved peacefully, and rights protected – thrive. Those countries without such institutions do not.

The constitutional monarchy is but one institution. The distribution of power between them may shift over time – from the monarchy to the House of Lords, and from the Lords to the Commons, for example – but the broad point remains the same. The balance of institutional power should allow a nation to change and adapt but restrain the capricious and prevent the corruption tendency that absolute power brings. Strong institutions increase legitimacy and trust.

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In that context, we should turn to another vital institution, the civil service, and the dismissal of Tom Scholar as permanent secretary of the Treasury.

There are a number of objections to his sacking. At a time of economic turbulence, removing a senior official with vast experience of crises (Scholar was a key figure in responding to the global financial crisis of 2008 and Covid-19) must be a mistake. The Tory peer and former Treasury minister Theodore Agnew launched an ad hominem attack on Scholar’s competence in the Times, but that is not the view of many who worked with him. The former chancellor Sajid Javid went out of his way to praise him and certainly my experience working with Scholar as chief secretary to the Treasury was very positive.

On occasions, the chemistry between a minister and an official does not work. That cannot be the case here because Scholar was removed on the same day that Kwasi Kwarteng was appointed Chancellor. They might have worked well together – Scholar is nothing if not professional – but the decision was clearly premeditated. 

The reason for his dismissal appears to be a desire to change “the Treasury orthodoxy” and make it more “focused on growth”. Growth, obviously, is good but the idea that this thought has not occurred to Treasury officials is absurd. The problem is that the obvious ways of improving growth (by, for example, addressing acute labour shortages by making it easier for EU nationals to live and work in the UK or reducing trade barriers with our biggest market) would not be politically palatable to ministers. At the same time, officials might not be that excited by ministerial claims that simply cutting taxes will have magical implications on trend growth rates. The absence of evidence to support this belief is frustrating but it is harsh to sack Scholar if he lacked sufficient faith.

The worry is the message this dismissal sends to the civil service in general, and the Treasury in particular. If, as a consequence, officials are unwilling to confront ministers with inconvenient truths, to identify and articulate risks, worse decisions will be made. This will not serve the country well and nor will it serve ministers well. Bad decisions will be made, and trust will be diminished. To limit the damage, Scholar’s replacement needs real economic credibility.

The UK is not viewed by markets as favourably as it would like at the moment, in part because of political instability. The pound is performing poorly and gilt yields are rising. Maintaining market confidence – an irritating Treasury obsession if you have ambitions to spend more and tax less – is something of a problem. Mucking around with the Treasury or, for that matter, other economic institutions such as the Bank of England or the Office for Budget Responsibility, does nothing to maintain that confidence. The feedback on damaged institutions may be unusually quick.

At a time when most of the nation appreciates the importance of the constitutional monarchy as an institution, ministers should tread with care with other aspects of our governmental system. Institutions, both political and economic, really do matter.

[See also: The right-wing press were dismayed by the lack of dissent from the royalist consensus]

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