A new government, anxious over economic policy and fretful about its polling, invites business leaders to whip Whitehall into shape. That was Rachel Reeves, ordering ministers a few days ago to submit their spending plans to corporate executives. Among those wielding an “iron fist against waste” will be former bankers from Lloyds and Barclays. But it was also David Cameron in the summer of 2010, bringing in Sir Philip Green as his efficiency guru.
From day one, Sir Philip’s appointment raised eyebrows. Just weeks before the general election, the “king of the high street” had endorsed the Tories to be the next government; now he too was part of it. Besides, what right did a billionaire have to audit public spending with so many questions over his own tax affairs? Certainly, the review produced by the businessman, taking all of two months and 33 pages, won’t take much space in his biographies, nor will it rank among Lord Cameron’s high points. The entire thing was a stunt, a cheap headline-grabber with a disastrous choice of frontman, given Sir Philip’s role in the collapse of BHS, hollowing out its pension scheme, and the vote by MPs to strip him of his knighthood.
Faced with successful business people, ministers too often approach with one hand pre-emptively tugging on a forelock. Think Rishi Sunak “interviewing” Elon Musk and turning Downing Street’s No 10 into an X. Remember Gordon Brown lauding bankers on the eve of the credit crisis for inventing “the most modern instruments of finance”. Recall Tony Blair, who knighted Philip Green, praising him as “the person who thought up the dream and dreamt the dream into reality”. Sir Philip reciprocated by saying he had Mr Blair on speed dial. Such insecurity aids no business relationships and undermines both politics and the public sector. “The government is us”, as Teddy Roosevelt said: our democratic representatives derive their legitimacy from the fact they are publicly elected and publicly accountable, which is a different order of authority than someone serving their shareholders.
All administrations should spend taxpayers’ money as effectively and efficiently as possible. It’s also right for the chancellor to encourage businesses to pay their way, in taxes and wages, and behave responsibly. But the suggestion by the Cabinet Office minister Pat McFadden that Whitehall should “act more like a startup” seems misguided. Hospitals and schools are not supposed, like Facebook, “to move fast and break things”: they’re meant to serve millions of people, to reliably high standards. The irony of the minister’s comments is that it’s the private sector that urgently needs more competition, to prevent price-gouging on, say, food and energy, and profiteering on children’s social care.
The Green review served briefly as a useful alibi for the Conservatives’ decade of spending cuts. The Tories’ refrain was that public services had to do more with less, just as they claimed businesses do. The result was to bring many public services to breaking point – and to show how unlike private businesses they are. When one brewer can’t make enough stout, customers can sip something else, but when prisons get full, criminals are released early. When a council goes bankrupt, an entire community risks losing basic services and its democratic voice. When schools can’t hire enough teachers, future generations of Britons suffer. Our public services can never be run entirely like businesses, because the role they perform is so much more universal and profound.
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