Moving the pieces around the Whitehall board
There are rumours that the prime minister if preparing to make machinery of government changes as part of a cabinet reshuffle: is this a good idea?
Last autumn, I wrote an essay about cabinet reshuffles, why prime ministers are attracted to them as a way of supposedly refreshing their team, party and brand, and why they often make less impact than leaders hope. On 29 January, Rishi Sunak created a vacancy in his cabinet my sacking the minister without portfolio and chairman of the Conservative Party, Nadhim Zahawi, over irregularities with his tax returns, but did not immediately appoint a successor. Now the newspapers crackle with rumours that the prime minister will not only select a new party chairman but reshuffle his ministerial team and even make changes to the structure of Whitehall.
One other consideration is that the lord chancellor, secretary of state for justice and deputy prime minister, Sunak’s own Pooh-Bah, Dominic Raab, has been accused of several instances of bullying of staff at the Ministry of Justice. These allegations are now being investigated by a specialist employment lawyer, Adam Tolley KC, who is due to interview at least 24 civil servants. Raab denies all of the charges and the prime minister has so far stood firmly behind him and resisted calls to remove him from office while the investigation goes on. It is unlikely, unless more information emerges, that Sunak will change his position now, so we should expect Raab to stay where he is.
Various rumours are circling SW1, but I have tried to collate the proposals from a range of newspapers and other sources. The potential machinery of government changes seem to be as follows:
Create a department of energy to focus primarily on the crisis in terms of rising prices and potential shortages
Merge what remains of the Department for Business, Energy and Industrial Strategy with the Department for International Trade to create a ministry responsible for business and industry in the UK and foreign trade and investment
Split the Department for Digital, Culture, Media and Sport into a ministry responsible for culture and sport and a future-focused department taking on policy for digital and science
None of these ideas is radical or unprecedented. A separate Department of Energy was carved out of the Department of Trade and Industry by Edward Heath in January 1974. It was established as a response to the energy crisis of 1973, triggered by the Arab-Israeli war of Yom Kippur, and Heath appointed Lord Carrington to run it. The principal areas of responsibility were national and international policy on energy, conservation and development of new technology, but for a while it was a crisis ministry to provide enough ministerial and administrative bandwidth the address the immediate situation. Its remit evolved over time and it was eventually merged back into the DTI in 1992.
Ministerial responsibility for commerce, trade promotion, business, industry and exports has occupied a loose area of Whitehall which has been grouped and named differently over the decades. The current departments, BEIS and DIT, were created by Theresa May in 2016, but there have been at least half a dozen names and combinations of remits: the area was brought into one department by Heath (again) in 1970 when he created the “super ministry” of the Department of Trade and Industry, which combined the Board of Trade and the Ministry of Technology. Wilson split it three ways in 1974, it was two departments from 1979 to 1983, then reunited (without energy until 1992) and wore several name badges under Blair and Brown.
(The most ill-fated and short-lived was the Department for Productivity, Energy and Industry, a Blair-era rebrand which lasted for precisely a week. The private sector complained about the loss of the word “trade”, and Alan Johnson, the new secretary of state, pointed out that the acronym, PE(n)I, would likely be characterised as “PENIS”. The process of changing and reverting ended up costing £30,000.)
The break-up of DCMS would be a step into more uncharted waters. The department’s corporate existence began in 1992, when John Major brought together ministerial responsibility for the arts with a number of other small parcels of policy such as sport, broadcasting, tourism, media regulation and betting and gaming to form the Department of National Heritage, quickly dubbed the “Ministry of Fun”. Its first secretary of state was the self-confident, ebullient David Mellor but he had to resign over a personal scandal in September of the same year. Blair renamed the department as Culture, Media and Sport in 1997, “national heritage” having too tweedy and Tory a ring to it, and in 2017 it had the word “Digital” added to its title.
DCMS has had a chequered existence. It shone in the early days of the Blair government as Britpop and the Young British Artists were in their pomp and celebrities flocked to pay court to the new prime minister, and was responsible for managing the bid for the 2012 Olympics and then some elements of the delivery of the London Games. But the department has always been small by Whitehall terms, and lacking in heft: secretaries of state, with some notable exceptions, have tended to use it as a rung on the ladder of promotion, having little deep commitment to the policy area. It is, perhaps, indicative that there have been 11 secretaries of state at DCMS in the last 10 years.
There are, I suppose, two primary questions if we assume that the rumours of machinery of government changes are broadly true: first, are they a good idea in administrative terms; and second, will they help the fortunes of the government?
A department of energy is not an absurd idea. The government clearly needs to devote considerable brainpower and attention to energy costs and the security of our energy supplies, and if we are to meet our net-zero carbon emissions commitments by 2050, energy generation and storage will obviously play a significant part. Those areas of responsibility seem to me a reasonable spread for an individual department. It would also be a very clear sign to the public that the government recognised the seriousness of the issue and was willing to put resources behind attempts to tackle it. In international terms, it would give HM Government a single point of contact with other countries and international organisations which might be efficient in policy terms. This assumes that the new department would take all of the responsibilities of the minister for energy and climate at BEIS, Graham Stuart.
Grouping together the rump of BEIS with DIT would be an act of rationalisation, avoiding the creation of an additional department and cabinet minister. Does it make sense in policy terms? The new department would essentially be in charge of enterprise, growth, deregulation, exports, free trade and market access and inward investment. It would be very like the iteration of the Department of Trade and Industry which existed between 1983 and 1992, which functioned adequately, but it is true that the DTI, certainly after reunification in 1983, always had something of a bifurcated spirit about it, as if the old trade and industry departments were yoked together rather than integrated.
The old Department of Industry had enjoyed a close relationship with the nationalised industries which it had managed, and after 1979 came under considerable suspicion from the Thatcherite wing of the Conservative Party. It was seen as representing everything that had been wrong with interventionist, corporatist, mixed-economy government policy, in hock to overmighty unions and inefficient and otherworldly practices. Trade was seen as inherently more monetarist: free trade, while it had been a Liberal cause in the early 20th century, was a central part of the Thatcher government’s approach to global economics. (For anyone interested in the way the DTI changed in the 1980s, 1990s and 2000s and the dominance of the Treasury, there is an article from Political Studies here.)
Can this central division be mitigated? One option might instead be to move trade and export promotion to the Foreign, Commonwealth and Development Office, giving it overall responsibility for all non-military external policy. This approach has been taken since 2015 by the Canadian government, which rebranded the two-year-old Department of Foreign Affairs, Trade and Development as Global Affairs Canada; this unified department is nevertheless represented in cabinet by three ministers, the minister of foreign affairs, who is the senior minister; the minister of international development; and the minister of international trade, export promotion, small business and economic development. This would leave a ministry which dealt essentially with domestic business and enterprise, including deregulation, economic development and perhaps inward investment.
We then come finally to the proposed disaggregation of DCMS. It is certainly true that digital policy is a slightly uneasy fit alongside culture, media and sport. Responsibility for the digital economy only moved fully to DCMS, having previously been shared with the Department for Business, Innovation and Skills, after the 2015 election, and was embraced enthusiastically when Matt Hancock, a digital enthusiast, was appointed secretary of state in January 2018. I have argued in print that the current arrangement of policies is dysfunctional and should be changed; moving the digital economy to a stand-alone department which would also have responsibility for science, research and innovation could create a forward-looking and dynamic institution to maximise the UK’s strengths in those sectors. It would go some way to contributing to Sunak’s ambition to make us a “science and tech superpower”.
Of course there are notes of caution we have to sound. The first is that, in the short term, the personalities and abilities of the ministers appointed to head new or merged departments will have a huge impact on how well they function and how effectively they are able to formulate and implement policy. Peter Walker, for example, was an energetic and dynamic head of the Department of the Environment when it was created in 1970, and it is not unrelated that the organisation proved durable, lasting under that name until 1997 and in broadly similar portfolios for longer than that. But it is, I think, fair to say that the current cabinet is short on superstars, and ministers are, after 13 years of Conservative or coalition government, feeling the effects and showing signs of fatigue. It may not be easy to identify two or three secretaries of state at this part of the electoral cycle who have the energy to build a new department with its own culture, identity and sense of mission.
It is also true that creating or merging departments is costly, both in financial terms and in terms of time lost to adjustment. A calculation by the Institute for Government suggests that setting up a new department or merging two mid-sized departments costs in the region of £15 million. The IfG also calculates that in a new department a fifth of the staff will suffer a loss of productivity of about 20 per cent, and this will take up to a year to be resolved. In 2020, as an illustration, the House of Commons Foreign Affairs Committee reported on the merger of the FCO with the Department for International Development, and traced some of the challenges and their effect.
So a serious shake-up of Whitehall could be a distracting disruption to the business of government, at a time when the administration gives the impression of being at full stretch. If the prime minister does want to carry out this kind of machinery of government reform, he must be satisfied that the potential disbenefits are significantly outweighed by the policy and operational advantages, and that those advantages will be realised quickly.
The second issue, of whether this will help the government in a more political way, is, I think, simpler. It won’t. The next general election must be held at the latest on 24 January 2025, so we have less than two years of this parliament left to run. The government’s prospects, if one relies on opinion polls, are not good: the current situation indicates it could suffer an historically severe defeat of the order of 1997 or 1906. Even to recover to a position of losing by a small margin will require enormous effort, determination, skill, luck and clarity of purpose. To take three major areas of public policy—energy, economic growth and science and the digital economy—and create a kind of year zero for them, whatever the organisational benefits are which will eventually be realised, is to choose to take on a significant challenge.
If the organisational changes go ahead, they could turn out to be a brave and far-sighted decision at a difficult time which created much greater clarity, efficiency and effectiveness in specific policy areas. This could then go on to improve the government’s standing and electoral prospects, as well as rebuilding some of the Conservative Party’s reputation for competence which has ebbed away gradually. But that is absolutely a best-case scenario, in which everything goes as well as it possibly can.
The alternative is that machinery of government changes capture a few headlines, give a fleeting sense of purpose and provide fodder for political commentators for a week or two. They will then have to be implemented, which will take effort and attention, while in the background the clock continues to tick down towards the general election (personally I think we’re looking at June or July 2024). The prime minister, when he wakes up, should take a few moments to think whether the game is worth the candle.