Abolition of Treasury - Lib Dem proposal

[AndrewE]

Lib Dems plan to scrap Treasury for new ‘department for growth’

Daisy Cooper says ‘over-centralised’ Treasury would be merged with parts of Department for Business and moved to Birmingham

www.theguardian.com

The Liberal Democrats would replace the Treasury and Department for Business with a new department for growth, with the aim of creating a more cohesive and long-term economic vision for the UK, the party has said in a major policy move.

Announcing the plan at a speech in London, Daisy Cooper, the Lib Dems’ deputy leader and Treasury spokesperson, said a “Treasury brain” mindset based around short-term fiscal imperatives was dragging the country down.
As part of efforts to rebalance the economy away from the dominance of London, the new department would be based in Birmingham, Cooper said.

which will please someone else here, as well as me...

 

[GusB]

"First Lord of the Department for Growth" doesn't have quite the same ring to it!

 

[aron2smith]

Good to see a distinct policy from them. The treasury urgently needs breaking up but until Mayors/ Combined Authorities can raise their own taxes and borrow for key infrastructure, not a lot will change. Britain needs to be decentralised fully. A federal country would be good.

 

[Snow1964]

The policy splits the Treasury, a large part would be combined with Business Department, be based in Birmingham (to keep it away from political hotbed) and be Department for Growth.

The other part would be in charge of Government spending.

Some news sites are headlining just one of the parts, which makes it sound like Treasury is being killed completely (even if it is partly continuing, possibly with new name)

 

[Richardr]

Problem I see is that the proposal is to remove the oversight of other departmental spending, but merge the remainder with a large spending department. Not sure that makes sense - it seems to make the treasury even bigger with the inconsistent roles of raising revenue and spending a portion of that. I guess the theory is that by being responsible for business, the incentive for the department is that taxes should be raised directly from individuals rather than from business. Business taxes should fall, income tax and the like should rise.

I've nothing against splitting the tax raising part from the departmental oversight role, indeed I favour that, but merging the former with a spending department is just bizarre.

 

[Magdalia]

This isn't a new idea. The last time that a version like this was tried was the Labour Government under Harold Wilson in 1964, starting with James Callaghan as Chancellor and George Brown as the Secretary of State at the Department of Economic Affairs.

There is a big hole in the proposal and that is who is responsible for government deficit and debt. This would weaken the government's ability to manage the debt and deficit, and to be seen to have control. It would probably add a few basis points to gilt yields.

A version of that is what happened in 1964, that's when George Brown coined the "Gnomes of Zurich" name for Swiss bankers.

In my working career I went through many reorganisations, most of them more trouble than they were worth. Quite a few of them were substitutes for substantive policy change. Large parts of the country are currently going through local government reorganisation, it will be interesting to see what appetite there is for reorganisations come 2028 or 2029.

I'm more interested in the policies and plans to boost growth. The strange thing is that HM Treasury is, relatively speaking, more pro-growth now than it has been for a very long time. Here, at one end of the Oxford-Cambridge Growth Corridor, it is evident in many parts of government policy, including East West Rail, the Cambridge Growth Company (soon to be a Development Corporation), the New Towns Task Force and the Reservoir in the Fens. More general policies such as planning reform and declaring many more projects to be Nationally Significant Infrastructure Projects also contribute to growth.