With the Autumn Statement around the corner, His Majesty’s Treasury has called for policy suggestions from… the public. The Treasury took to Twitter/X last night to fish for ideas, perhaps because they don’t yet have any themselves. Desperate times call for desperate measures…
Did you know you can suggest policy ideas for the Autumn Statement?— HM Treasury (@hmtreasury) September 25, 2023
Head to our representation portal by 5pm on Friday 13 October 2023 to submit your idea.https://t.co/FVbMy6dSLc pic.twitter.com/Rse7uUWxi3
Entries close on October 13th. Co-conspirators might want to offer some actual conservative ideas… maybe cutting taxes?
We are at that stage of the political cycle where newspaper editors start to temper their usual criticisms of the opposition. A prime beneficiary of that has been Rachel Reeves, whom we now learn in fawning profiles is some kind of chess wunderkind as well as a fiscally conservative former Bank of England economist. All sagacious commentary now paints her as the safe pair of hands Britain needs from its first woman Chancellor of the Exchequer.
Which made her press release this week about “Rishi Sunak’s failure to heed warnings on debt issuance costing taxpayers £56 billion” extraordinarily embarrassing. It was a bit technical, and no doubt this was deliberate to demonstrate her mastery of arcane financial matters. The press release in her name claimed:
In October 2020, the Institute for Fiscal Studies warned Sunak that – given the large sums being borrowed during Covid-19 – the “costs of financing it just slightly wrong will be large.”
They said that the way to tackle that risk was to sell more long gilts, in other words: use a longer term, lower cost borrowing approach that would have protected public money more from sudden spikes in interest rates.
Instead, Sunak opted for a short term, high risk approach, which has left the UK exposed to inflation going up, building up substantial costs down the line.
Because of the then-Chancellor’s choice to ignore those warnings, it means that the UK now issues far more index-linked gilts than other G7 countries*, over twice as much as a share of the second-placed country which is Italy.
There are a number of problems with this argument. The first and most problematic of which is that the IFS actually recommended issuing longer dated index-linked gilts. The reason for this is that the gilt market would not be able to absorb issuance on the scale of the covid borrowing that was not index-linked. This would be obvious to anyone with a basic knowledge of government debt markets.
In any case the Debt Management Office, an arm’s-length branch of Treasury which is in constant touch with the gilt market, advises on what maturities the market can absorb. It’s not done by the Chancellor having a guess at what might work. The idea that £400 billion of gilts could have been issued at the prevailing low rates at the long end without the rate moving suggests a basic failure to understand how markets function and how prices move with supply and demand. Responding to her claims, Economic Secretary to the Treasury Andrew Griffith is blunt:
“Rachel Reeves and Labour have completely misunderstood the expert advice they are quoting. The only thing Labour understand about debt, is how to increase it.”
Another Treasury source was equally condescending, chortling that it was “hilariously shoddy analysis from the kids at Labour HQ”.
*The Tories have come up with seven specific questions for Rachel Reeves to answer on the Labour Party’s amateur debt analysis:
Yesterday, the Treasury promoted their new anti-economic abuse toolkit with a video of Victoria Atkins visiting domestic abuse charity, Advance. All well and good, so far.
1 in 4 women in England & Wales will experience domestic abuse in their lives.— HM Treasury (@hmtreasury) July 12, 2023
One form of domestic abuse is economic abuse.
Minister Victoria Atkins visited West London Women’s Centre run by @AdvanceCharity to announce plans to support those who need it. pic.twitter.com/LK7UMvY8ww
The trouble is, someone in the Treasury’s comms team clearly didn’t do their due diligence. Advance, the anti-abuse charity, are themselves under investigation by the Charity Commission for… bullying. To make matters worse, the CEO Nicki Scordi, who is featured in the video, has herself been subject to complaints. According to one source for Civil Society, Scordi left staff “walking on eggshells from her frequent outbursts, reducing many employees to tears”, whilst another employee said she was manipulative and “demeaning”. You only need to look at the glassdoor reviews to see this isn’t an isolated experience. It seems Victoria Atkins could have done with an Advance warning…
Today the Chancellor was in front business leaders at the British Chambers of Commerce conference extolling the virtues of in-person working, claiming working from home can lead to a chronic “loss of creativity“:
“The default will be you work in the office unless there’s a good reason not to be in the office… there is nothing like sitting around the table, seeing people face-to-face, developing team spirit – and I worry about the loss of creativity when people are permanently working from home and not having those water cooler moments where they bounce ideas off each other. Not every great business idea happens in a structured, formal meeting.”
Guido’s inclined to agree… the only problem is the latest data shows HM Treasury was only 63% occupied as of last month. Nearly a third of civil servants were away from their desks. They must all have good reasons…
Hat-tip: Elliot Keck
The Treasury are on the lookout for a new Head of Cyber Security to tackle to the growing threats the country faces online. Candidates will be expected to “lead and drive a team providing critical services to the organisation” as foreign actors attempt to undermine our security through clandestine means. Seriously important work.
The job ad outlines the responsibilities:
“The Head of Cyber Security identifies, understands and mitigates cyber-related risks. They provide risk or service owners with advice to help them make well informed risk-based decisions.
HM Treasury are seeking a candidate that has a consistent track record of managing cyber risk management services and people. The ability to empower, lead and drive a team providing critical services to the organisation will be key… This is a crucial and influential role requiring excellent negotiating and analysis skills, with the ability to collaborate with all key partners at all levels of seniority.”
The chosen candidate, if hired outside the capital, can expect a salary of around £50,550. A good salary for important government work… although potentially not as important to the Treasury as the Government Internal Audit Agency’s “Diversity, Inclusion and Belonging Advisor“, who was offered £53,324 late last year. The House of Lords’ Head of Inclusion and Diversity was offered even more, at a generous £66,440 per annum.
Conor Holohan, media campaign manager of the TaxPayers’ Alliance said:
“Taxpayers are tired of Whitehall’s misplaced priorities, with bureaucrats favouring diversity non-jobs over positions of critical importance”
In the civil service diversity is more valued than security…
The Chancellor didn’t give much airtime to efficiency savings in his Budget statement yesterday, instead focusing on a steady-as-she-goes package that was, frankly, boring. That appears to have been by design.
In January, Guido revealed Jeremy Hunt had dispatched Treasury mandarins to finally crack down on woke waste in Whitehall, prompted by Conservative Way Forward’s report showing “politically motivated campaigns” were costing the taxpayer more than £7 billion a year. Nothing on that front in the Budget, despite claims the Treasury were taking it “really seriously”. What happened?
Treasury sources tell Guido that while Hunt “didn’t announce it per se“, a “a review [is] happening now” into where the Treasury can make “obvious savings in central government“, which is coming further down the track. Guido also hears there had been plans to include a few words about government efficiency – and diversity and inclusion spending specifically – in the Budget document yesterday, although they were ultimately removed pending the review. A Treasury source adds it was partly because the savings still need to be “worked out logistically with other departments.”
Of course, Ministers have made it their mission to cut down on waste before. In 2022, when Sajid Javid was still Health Secretary, he vowed to cut down on pointless diversity and inclusion jobs in the NHS. It didn’t do much good – a DHSC source later told Guido it was difficult for government to enforce those kind of top-down changes on NHS management after all. Still, it should be easier for Hunt to get it done within Whitehall…