Reeves keeps misdiagnosing the problem: it's her

Recruiting new non-executive directors to the Treasury and reviewing communications cannot hide an economic programme that is at its heart misguided and damaging

Comings and goings

At the beginning of August, I mentioned in passing that HM Treasury and 10 Downing Street were both looking for more economic advice. Professor John Van Reenan, Chair of the Council of Economic Advisers at the Treasury, is reducing his commitment to one day a week, and one member of the Council, Dr Anna Valero, has left to return to her academic post. In Downing Street, economics adviser Ravinder Athwal left in June, and the Prime Minister has for some months been rumoured to be looking for a substantial figure as an economy guru (though some of his staff seem to have set the sights rather lower).

This week the Treasury announced some new appointments which, the Chancellor presumably hopes, will lighten some of the gloom which hangs around her. There are two new non-executive directors for the departmental board: Sir Charlie Mayfield, former Managing Director and then Chairman of John Lewis; and Edward Twiddy, Chair of the Board of venture capital firm Northstar Ventures UK and co-founder of Atom Bank. Reeves stressed that these appointments would “build on our partnership working with business.

Between them they bring a huge amount of experience and fresh thinking.” Mayfield will play a “lead role”, according to the Treasury, presumably meaning he will be the lead non-executive director; the announcement elaborated that he:

brings extensive leadership skills including a strong track record in change management, both in developing talent and capability, and in driving technology-led transformation.

It is hoped that he can also help to improve relations between the Treasury and the private sector, which, after some incautious pre-election enthusiasm on the part of a number of business leaders, have cooled to well below zero. Twiddy will advise in particular on enterprise and innovation.

Mayfield and Twiddy join Sir Edward Braham, Chair of investment managers M&G, and Jane Hanson, Chair of the Board of Welsh Water, as non-executive directors at the Treasury. (Hanson, incidentally, also has John Lewis links, as an external member of the firm’s Audit and Risk Committee.) Both Braham and Hanson are additionally members of the Treasury’s Audit and Risk Committee.

Well-kent faces

It is worth pointing out, given the Chancellor’s remark about “fresh thinking” that Mayfield and Twiddy are hardly unknown quantities in the corridors of power. Mayfield was Chairman of the now-defunct UK Commission for Employment and Skills—“a publicly funded, industry-led organisation that offers guidance on skills and employment issues in the UK”—from 2010 until its abolition in 2017, and in January this year was appointed to lead Keep Britain Working, an independent review “to investigate the factors behind spiralling levels of inactivity, and how government and businesses can work together to turn this around”.

Twiddy was a Treasury civil servant from 2001 to 2012 “including spells in public spending, corporate finance, tax policy and private office and a secondment with the Foreign and Commonwealth Office”, then spent two years as the first Director of the North East Local Enterprise Partnership. He has been Co-Chair of HM Treasury and TechNation Fintech Delivery Panel’s Progressive Regulatory Environment Working Group; he served on the Opportunity North East Strategic Board from 2018, overseeing “a government drive to improve education and boost productivity in the North of England”, then was appointed to the Business and Economy Board of the North East Combined Authority by the Mayor, Kim McGuinness, in March this year. In 2020 he was nominated as a Northern Powerhouse Investment Champion.

I don’t record any of this as disparagement. Quite the reverse, Mayfield and, especially, Twiddy are clearly successful business leaders driven to contribute to the public good, as their extensive public CVs attest. But, even allowing for last July’s change of government, these are familiar faces in Whitehall and its orbit, they will be smoothly received and entirely comfortable working within the atmosphere of the civil service. That has enormous advantages, of course, as they will not face the steep learning curve that outsiders might and will be able to manage the inevitable frustrations of bureaucracy and administration. But it is no slight on Mayfield or Twiddy to wonder how far they will bring “fresh thinking” to which the Treasury does not already have access.

The medium is the message

A third new board member has also been appointed, whose career trajectory is interesting enough to warrant separate treatment. Jenny Scott co-founded Apella Advisors, a communications consultancy, in 2019 from the dormant Spartan Communications Consulting (established a year before by Julian Hanson-Smith, who became Chair of Apella).

After a two-year spell working as an analyst at the Bank of England immediately after graduating from King’s College, Cambridge, Scott was an economics correspondent for Reuters from 1994 to 2000 then joined the BBC, first as a correspondent but latterly as a presenter and co-host of The Daily Politics with Andrew Neil. She wrote The Living Economy: The Reuters Guide to the Economy of Modern Britain, which was published in 2000.

From 2008 to 2011 she was Director of Communications for the Bank of England, before taking a year’s adoption leave and handing over on an interim basis to fellow BBC veteran Nils Blythe. It was announced in 2012 that she had decided not to return to her post and Blythe was approved in post substantively. However, in 2013 Scott was appointed as Adviser to the new Governor of the Bank, Mark Carney, now Prime Minister of Canada. In 2014 she also resumed her previous role as Director of Communications with additional responsibility for strategy; according to her LinkedIn profile, she worked on “changing the emphasis from reactive to proactive and strategic, resulting in improved public trust and understanding”, and:

co-led, devised and launched the Bank’s three-year strategy to change how the institution works, introducing more agility and empowerment, and how it communicates, with a drive to more creative, targeted content on a digital platform.

During her second stint as Director of Communications, she ran two separate teams: a Media and Publications Division under a Chief Press Officer (Mike Peacock); and a Stakeholder Communications and Strategy Division under Emma Murphy.

In 2017, Scott left the Bank to “pursue new opportunities, including those in the third sector”, and over the following two years studied part-time for a graduate diploma in theology and religious studies at King’s College London. Since 2020, she has also been a Senior Advisor to North Star Transition, a not-for-profit organisation dedicated to helping to manage “the transition from a degenerative to a regenerative world”, and which “work[s] towards a healthy environment, equitable society and resilient economy”. It was founded by Indian economist, consultant and entrepreneur Jyoti Banerjee, a partner at Fronesys, a specialist sustainability advisory service which “help[s] cities and companies deliver integrated thinking through a value-based approach”.

Square peg, round hole?

Scott’s appointment comes weeks after it was reported that the Chancellor of the Exchequer had asked Helen Bower-Easton, Director of Communications at the Financial Conduct Authority, to conduct a rapid review of the Treasury’s operations and performance in this regard. In particular, she was instructed to examine how the Treasury could better communicate the government’s growth plans and public expenditure priorities, and the broader financial context, explore different media channels and their varying audiences and effects, and make an assessment of the staffing levels in the existing media team.

Bower-Easton, whose LinkedIn profile declares that she is “focused on inspiring teams and helping them to succeed in communicating with target audiences in an honest and authentic way”, certainly has considerable experience at the top of government: she worked in communications for the UK Representation to the EU (2006-11); she was Downing Street press officer (2011-14) then Deputy Spokesperson for David Cameron (2014-15) before becoming the Prime Minister’s Official Spokesperson for Cameron and Theresa May (2015-17); she was then appointed Director of Communications at the Foreign and Commonwealth Office (2017-23) under five successive Foreign Secretaries—Johnson, Hunt, Raab, Truss and Cleverly—before moving to her current post at the FCA. However, she did attract some criticism last year for supposedly being the driving force behind the FCA’s decision to place its transparency unit, which handles Freedom of Information requests and other inquiries, under the overall control of her own communications team. It was also noted by The Times that the Foreign Office, from which Bower-Easton had moved, had a poor record in transparency and had been issued with practice recommendations by the Information Commissioner’s Office for “a consistently poor level of performance” in dealing with requests for information.

Scott will presumably have some involvement in implementing any changes that Bower-Easton recommended. There is no question that she is an experienced communications professional, having experience in journalism, presenting and twice managing the communications for the United Kingdom’s central bank, the first time during and after the Great Financial Crisis and the second time encompassing the referendums on separation from the UK for Scotland and the UK’s membership of the European Union.

However, Scott seems to be a passionate advocate for various causes and approaches—this is not to suggest they are worthy or unworthy—some of which seem to touch on sensitive political territory like sustainability, the green economy and climate change. Assuming she has been appointed an NED for her communications expertise, is it helpful for the Treasury or a potential hindrance to have someone on the board who has that kind of track record? It is, after all, a basic rule for communications professionals that if you become the story you have lost your value, however great, as an adviser.

Seasoned Whitehall observers might think that Rachel Reeves is placing too much faith in non-executive directors who will work 24 days a year. The press release carrying the announcement declared the three new NEDs will “use their business expertise and experience to help the Treasury run as efficiently as possible, ensuring it effectively supports economic growth, the government’s number one mission”.

(Are we still talking about missions? I thought it was all about the Plan for Change now; though, in fairness, that has milestones for mission-led government. It seems a long time now since the Chancellor chaired the first meeting of the Growth Mission Board; it met in Darlington just before Christmas, but if it has met more than twice, then the civil service is keeping deathly quiet about it.)

Governance of HM Treasury

A word on high-level governance in HM Treasury before we conclude (if this is your area of interest I draw your attention in the first instance to the Annual Report and Accounts 2025). The Treasury Board is “the most senior of the department’s oversight committees” and “provides advice, support and challenge to the effective running of the department”. It is chaired by the Chancellor of the Exchequer and includes the other six Treasury ministers, the Non-Executive Directors, the Permanent Secretary, James Bowler, the two Second Permanent Secretaries, Beth Russell and Jim O’Neil, the Chief Economic Adviser (who is currently styled as Second Permanent Secretary as well), Sam Beckett, the Finance Director, Sarah Whitehead, and one of the joint Heads of the Government Finance Function, Conrad Smewing. (The other head is James McEwen, Chief Operating Officer at the Ministry of Justice.)

The Treasury Board may be high-powered but it meets very infrequently; in 2024-25, it met once. It delegates authority to the Treasury Board Sub-Committee, which “considers performance and key risks and specific policy areas” and supervises the Treasury’s 17 arm’s-length bodies. The Sub-Committee was chaired previously by the lead NED, Lord Hill of Oareford, so that role might be expected to fall to Sir Charlie Mayfield. Its membership consists of the NEDs, the members of the Executive Management Board and the Head of the Government Finance Function. This more select, more hands-on group does not convene often either, however, meeting just twice in 2024-25.

No plan for change

This infrequency of meeting strengthens the sense that new NEDs, no matter how able, will not really change the political weather. But that is a smaller part of a much larger problem facing the Chancellor, the Treasury, the government and the Prime Minister, and they have consistently misdiagnosed it. Every criticism of economic policy which the government has in any way acknowledged, even if only tacitly, is a tactical one. They admit grudgingly that perhaps they need to communicate better (see Reeves’s review, above), or approach a particular aspect of policy more efficiently, or more sympathetically, or reorder their priorities. All of that remains posited on the idea that the government’s broad thrust of economic policy is correct.

It will come as no surprise if I say I disagree, and that I think the government’s economic policy is fundamentally flawed. I have said before that the Labour Party is essentially interventionist and dirigiste, that Sir Keir Starmer and Rachel Reeves disdain private enterprise and wealth creation, that the Chancellor views private wealth as an inexhaustible supply of revenue, that the state is bad at picking winners, that ministers lack the courage to let the market take its course when it comes to industries which are no longer competitive, that the government was never truly in sympathy with the private sector and business allowed itself to be gulled, that Labour is still stuck in industrial nostalgia, that ministers expected a heroes’ welcome from potential investors, that the Chancellor’s appeal to regulators for ideas for growth showed a government without direction or commitment and that the greatest obstacle to that cherished growth is the nature of the Labour Party itself and the instincts and prejudices it is showing in its Starmerite phase.

If I am right, and there is precious little evidence the government can adduce to say positively I am wrong, then no amount of NEDs or communications reviews will help the Treasury because it is doing the wrong things. I don’t for a moment expect a reversal of policy in any major area: the Budget in the autumn will bring higher taxes and reduced spending in some areas as Reeves tries to find an extra £40-50 billion, and growth will be stunted further. There will be no cure for the moment, nor significant improvement under Reeves’s economic management; equally, however, as I said last month, I don’t believe that the Chancellor’s future is in doubt, because Starmer would have to admit his entire economic framework had been a mistake then find someone in the Parliamentary Labour Party to build a new one.

Starmer and Reeves are not, in that hoary old metaphor, rearranging the deckchairs on the Titanic. The Titanic was a fine ship in conception and could have had a long and safe sailing life. If anything, they are busy moving around the cannon on the Vasa—the ship is inherently flawed and unstable, and nothing can keep it afloat for very long.