Comment – Mandarins with too much power.

But it changes and one particular shift that we have been seeing in the last few years is the insidious but substantial extension of the power of the Treasury. This is something that the Treasury Committee of the House of Commons should be considering in its current enquiry.

The Treasury always was and will be a powerful institution. But recently there have been developments that make it even more so. It is effectively in sole charge of economic policy and, perversely, the transferring of control of interest rates to the Bank of England has strengthened this role.

It effectively dictates the so-called Public Service Agreements – PSAs – under which departments are agents for the Treasury in delivering results in return for money provided. The translation of some spending programmes into what are effectively tax programmes – the Working Families Tax Credit, the new upcoming Child Credit arrangements, and so on – mean that the Treasury takes over large swathes of what used to be the responsibility of other departments. And through its creatures, Customs & Excise and the Inland Revenue, it exercises power and influence in wide swathes of industrial and personal life.

Many of these developments on their own – for instance the PSAs and the translation of some expenditure programmes into tax programmes – have a lot to be said for them. But it is not right that they should be in the hands of one department and one minister.

Through their various powers, and coupled with the amazingly strong positions which Treasury officials have in relation to other departments, we see too much in one set of hands. The counter-balancing elements at the centre, such as No.10 Downing Street or the Cabinet Office, appear helpless against the Treasury. People say the centre of government is too strong; they are right, but they identify the wrong target – it is not No.10 that is too strong, but the Treasury.

A number of steps might be taken to balance this. But they are unlikely to come about under this government, for it is a centralising government, and as between the elements at the centre the Treasury is king. Brown may have yielded up the premiership, but he got the real power. It may be a system that seems to have worked up until now, but we ought to worry about it. No country, corporation or company should be run by its bankers.

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