14 Jul 2016

May’s Way: A reshuffle that says much about how different she will be from David Cameron

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As noted yesterday in BVCA Insight, the circumstances of Theresa May’s coronation allowed her an extremely strong hand in determining the composition of her Cabinet. She has today exploited that position to the full. With two unexpected resignations (Stephen Crabb and Theresa Villiers) taking place as well, she found herself with even more room to reconstruct the old Cameron administration.

As again observed yesterday (even if not awarded much credibility in advance by the media) the key question in her mind will have been what to do about Boris Johnson. If she wanted him in (if only to avoid the risks involved in having him out) then she had to make him a job offer that he could not refuse without appearing to have no aspiration to be a serious politician. This meant either the role of Home Secretary or Foreign Secretary and as the de facto leader of the victorious Leave campaign, the Foreign Office made much sense as an appointment. Although the media is having fun now as it runs through a series of past Boris ‘global gaffes’, this is actually almost a no-lose decision for the new Prime Minister. If he proves a relative success in office, then her choice will be vindicated (and with him having little choice but to be ultra-loyal to her). If he turns out to a buffoon with a red box, then he can be disposed of at a later date with there being no chance of him able to challenge her.

The rest of this whirlwind reshuffle hints at a number of themes about the Government to come and in particular how Mrs May’s political style will be very different to that of the Cameron/Osborne era.

She has put a premium on promoting peace within the parliamentary party

David Cameron could be a master of the despatch box as he demonstrated in his final PMQs but on the whole his relationship with his parliamentary party and his backbench MPs was often distant. This is partly because he became leader after less than five years in the House of Commons (more than half of which he held Shadow positions for) and hence never really developed a feel for the House of Commons as an institution, but also a matter of choice as he relied on an inner circle for advice which contained comparatively few parliamentarians.

Mrs May is very different. She has been an MP for almost two decades. Her closest friends include a large number of MPs. During her time as Home Secretary she would hold the equivalent of constituency advice centres or ‘surgeries’ for any Conservative MP with an issue covered by her department. She built up a lot of personal political capital by this approach and it paid dividends for her when it mattered. She is well aware of the sour mood in the parliamentary party, a legacy of divisions over Europe stretching back three decades, but hardened by the sense that Mr Cameron and George Osborne had treated ordinary MPs shabbily.

The Cabinet choices she has made represent a determined effort to end that ‘them v us’ division. A lot of the ‘new’ appointments that she has made, such as David Davis, Liam Fox and Damian Green, are ‘old’ figures in the sense that they are also long-serving MPs who are well liked by their peers. They could have been lightning rods for dissent if they have not been brought in (as could Boris) but now they will be among her strongest advocates. She has delivered on her pledge that Brexit would be handed to those who had campaigned for Britain to withdraw from the European Union. She has also chosen her enemies well with neither Mr Osborne nor Mr Gove being capable of summoning up a parliamentary army behind them. Others who she has dismissed (in the case of Nicky Morgan, the former Education Secretary, perhaps rather harshly) are too closely linked to either Mr Osborne or Mr Gove to themselves be a menace. This is a reshuffle which will go down well with the troops on the backbenches. It is also one that offers them the hope of future preferment in this Parliament.

This is a cultural counter-coup, not an ideological shift, within the party

Although some commentators (and inevitably the Labour Party) have asserted that the return of Mr Davis and Mr Fox to office constitutes an ideological shift to the right there is not much evidence to underpin that accusation. If Brexit was largely to be overseen by those who had fought for the Leave side of the referendum (which is logical) and most Conservative MPs who backed Leave were on the right of the party (which they were), then the Brexit ministers were bound to be Thatcherites. The rest of the Government does not look, in ideological terms, very different from its predecessor.

In cultural terms, however, the shift has been seismic. Barely a day ago, the then Prime Minister and the then Chancellor were graduates of Oxford University (Brasenose College and Magdalen College). The same is true today (St Hugh’s College and University College). But 24 hours ago, the two figures concerned had been educated at Eton College and St Paul’s School. As of now, the Prime Minister and Chancellor hail from Wheatley Park Comprehensive School and Shenfield School respectively. This is rather more Grange Hill than Brideshead Revisited territory. The same pattern can be seen in many of the promotions in this reshuffle so far, especially the female Cabinet members. The sole exception to this rule is the Foreign Secretary, but is there any rule to which he is not the exception?

This is a stunning cultural counter-coup within the Conservative Party. From 1965 to 2005 there had been an unspoken acceptance that if the Conservative Party was to convince ‘normal’ people to vote for it then it had to be led by middle-class meritocrats and not those of a more privileged hue. None of Edward Heath, Margaret Thatcher, John Major, William Hague, Iain Duncan Smith or Michael Howard were born with anything silver in any orifice whatsoever. That rule was broken in 2005 when Mr Cameron and his ‘Notting Hill Set’ seized control of the Conservative Party. The old order has now been restored in spectacular fashion. In many respects, the visions of Britain offered by Mr Cameron and Mrs May are not different. Hers, though, has no smack of noblesse oblige to it.

The biggest change within Whitehall will probably be witnessed at the Treasury

To an extent that matched and even exceeded that of Gordon Brown, Mr Osborne functioned as an ‘octopus Chancellor’. His tentacles were everywhere. He was constantly attempting to promote his personal favourites at reshuffles. He intervened in other departments at will whether it be by setting out the (short-lived) scheme for all schools to become academies in his last Budget or by his open warfare with Mr Duncan Smith over the introduction of Universal Credit in the benefits system.

He was also fond of making changes with huge implications for the business models of those affected in his budgets and Autumn Statements with minimal prior consultation. Among those who had a bomb dropped on them in this manner were the pensions sector with the changes made to annuities, the residential property sector when the whole structure of stamp duty was overhauled overnight, and a large slice of the business community when the National Living Wage was conjured out of nowhere. I could cite a few more examples affecting private equity and venture capital but will not be parochial. Critics contended that these were highly personal and political moves designed to capture headlines.

Mr Hammond will not be an ‘octopus Chancellor’ and even if he were inclined to be Mrs May would not let him. His will be a tenure much closer in tenor and tone to that of Alistair Darling (but with a much better relationship with his Downing Street neighbour than Mr Darling had to cope with) and hence will be a more collegial figure in Cabinet and a more predictable figure for the outside world. The irony is that Britain finds itself with a more predictable Prime Minister and Chancellor when, as a consequence of the EU referendum result, it finds itself as a country facing very unpredictable times.

Tim Hames, Director General, BVCA



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