Reforming the Treasury, reorienting British capitalism

My British Political Economy Brief for SPERI on how to reform HM Treasury, co-authored with Andrew Gamble, Colin Hay, Tom Hunt and Tony Payne.
In its dual role as both the ‘economics ministry’ and the ‘finance ministry’, HM Treasury sits at the apex of the British state, and indeed the British political economy. This role has received a great deal of critical attention in the wake of the 2008/09 recession and subsequent imposition of ‘austerity’ by the Conservative-Liberal Democrat coalition government, continued by the Conservative majority government; for example, it is currently being reviewed by former Head of the UK Civil Service, Lord Kerslake, on behalf of the Labour Party. In this Brief, we consider previous attempts to challenge the Treasury’s pre-eminence within government over economic policy, and suggest that the Treasury should be accepted as the dominant economics ministry with political capital and effort spent on reforming its role, responsibilities and mandate. Creating an alternative economics department within government – a ‘beefed up’ business department – will have only a limited impact. The Brief also sets out how and why a ‘developmental’ approach to the Treasury should be considered and outlines the need for a new growth model and how the Treasury can oversee its development and functioning, before suggesting a new approach for the Treasury to economic stability and regulation.
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 Image: HM Treasury