Nick Macpherson, of course, isn’t dead.
But EJ Thribb of Private Eye might well have written something like that about his latest speech, of which there cannot yet remain many more in his capacity as Permanent Secretary to the Treasury, a post from which he has said he will step down in April this year.
The speech is a great read.
It opines on what economic policy can achieve, and how it should go about achieving it. And the history of the ‘Treasury view’ about these questions.
There are two things to respond to in it. 1) Its economic substance. 2) issues thrown up by the fact that there exists such a thing as the ‘Treasury view’.
Despite being qualified only to write about 1), I’m going to confine myself to 2) and leave the rest to another day, or perhaps Ben Chu, economics editor at The Independent, whose hot-under-the-collar Tweets alerted me to some of the interesting aspects of the text.
The Treasury is full of clever economists and other talented thinkers. So it is bound to produce views. These views may coalesce. And one would expect them, if they don’t, to get filtered, synthesised, so that they can be consumed effectively by their clients – the Treasury ministers. So could there be any issues about the apparently harmless and obvious reality of a ‘Treasury view’?
Well, the speech has to be placed in the context of Nick’s previous public interventions.
Most notably, the letter he wrote summarising the Treasury view of whether it was sound to allow a hypothetical independent Scotland to participate in a currency union with the rest of the UK, without a fiscal union to back it.
At that moment, Nick was acting as an independent advisor, and emphasising the objectivity in the Treasury paper, and his summary of it, so that the rest of us could weigh what he was saying as the words of an economist, and not the words of a politician, who might have reasons to bend an economic case. (For the record, I thought that letter, and the Treasury view it covered, spot on).
In the context of that previous letter written as independent advisor, Nick’s speech can’t help but be read similarly.
His comments about the rightness of the Coalition government’s approach to the crisis have the subtext: ‘I’m an independent, objective guy, and I think that what the government did to respond to the crisis was pretty much right. I understand you wouldn’t trust George Osborne to tell it how it really was, but you can trust me.’
We are then led to wonder how independent Nick is. I have never met or interacted with him. Those that I know who speak of him say that he has a first-rate mind and is of unimpeachable integrity.
But not everyone can convince themself of that. They may be led to wonder how he came to be confirmed in his position. Was he kept there on account of his objectivity, or his preparedness to subordinate his or the ‘Treasury’ views to the political imperatives of the day? If he or his staff wanted to dissent from the position of the Government, could they really do it? If not, what weight can we attach to public views expressed by Macpherson or his staff?
One line in the speech that pressed Ben Chu’s buttons hardest was this one:
“It is no surprise to me that the response to the recent crisis has focused on monetary policy and the credit channel rather than on fiscal policy.”
Ben’s Tweeting responded that of course it was no surprise, since the Treasury was either instrumental in persuading the Government to this view, or was commandeered to market and implement it.
But taken at face value, the words want us to understand that the Treasury did not influence the governments on this course. The government’s strategy was meditated by the governments alone, but their decisions weren’t a surprise, since, had Nick been involved in the thought process, this is what he and his staff would have concluded too, since that’s where the evidence points [on this I disagree, incidentally]. I am caricaturing somewhat for effect, here.
I am not against Treasury civil servants speaking out independently. But the model of sometimes speaking out, and sometimes not, is a curious one. Matters might be improved if it could be codified when independent views were to be offered in public. Some of the responses to my blogs on the Macpherson indyref letter pointed out that the independence referendum was an existential issue for the UK, therefore an exception to the norm of civil service silence. The efficacy of the Darling/Coalition fiscal consolidation is hardly in that category.
I wonder about whether it’s possible for a single person, or body of persons, to combine the role of private implementor and public commentator/critic. Given the legislative and other care devoted to the Bank of England and now the Office for Budget Responsibility, both of which are charged with always ‘speaking out’, it seems neglectful not to attend to this other, influential body-economic lurking inside the civil service, sometimes speaking out, sometimes influencing government towards its Treasury view, sometimes not.