Too Many Bodies

Recent years have not been good to independent committees and policy advisory bodies. Last December, the entire Social Mobility Commission, headed by Alan Milburn, resigned, citing a lack of political progress towards a fairer Britain. Andrew Adonis left the National Infrastructure Commission having accumulated multiple grievances with the government. The Office for Budget Responsibility has found itself the object of repeated sniping for its Brexit pessimism, as has the Governor of the Bank of England.

Despite this, the IPPR’s blockbuster report on Prosperity and Justice advocates the creation of yet more independent expert commissions and regulators. There should be more ‘social partnership’, exemplified, according to the report, by the Low Pay Commission. There should be an industrial strategy, overseen by an independent Industrial Strategy Committee. There should be a new regulator for corporate governance and an ‘Ofdigi’ to promote the digital commonwealth. The Bank of England should have an extended mandate; among other things it would work closely with a development bank, the National Investment Bank, which will have a politically independent management. Economic devolution should be promoted by new regional executives, overseen by regional councils indirectly elected by constituent local authorities. And, as a final flourish at the end of the report, there should be a National Economic Council.

Can bodies work?

It is worth going back to first principles to ask what these various bodies might be expected to achieve. A number of the bodies recommended in the IPPR report would have consultative and advisory functions. These are not to be sniffed at. For example, the Low Pay Commission has only ever had the power to make recommendations, but for governments seeking to avoid an argument, it was very attractive to accept recommendations backed unanimously by the Commissioners. Labour embraced the Commission because it steered a path between the Blairites and the union wing. But in 2015, when the Conservatives found themselves with an outright majority and no significant internal divisions over minimum wage policy, George Osborne took his own decision without waiting for the Commission. It was effective for as long as it would solve a decision-making problem for the government, and no longer.

Expert commissions have the role of finding proposals that are acceptable to the parties in the weak sense that they prefer the commission’s proposals to the alternatives. Those alternatives are either the status quo – stasis and non-decision – or decisions made in other ways. In the UK context, this generally means decisions by ministers, pushed through cabinet and Parliament. This latter option is often attractive and rarely blocked.

Ill-fated commissions

But blockage does besiege British governments in infrastructure decision-making, with Heathrow the most notorious example, as Steven Griggs and David Howarth have documented. The Davies Commission was meant to cut through the problems by making a recommendation that all parties would commit in advance to accept. But British political parties never tie their hands. By the time Davies reported, the Cameron government had an outright majority that it was not prepared to jeopardise by accepting Davies’ recommendations. Cameron ‘welcomed’ the report but indicated that it was ‘yet to decide’ its preferred scheme. It took a weak minority government to give up the possibility of political gain, accept cross-party support, and proceed with Heathrow expansion.

In 2013, Labour commissioned Sir John Armitt, now successor to Lord Adonis at the National Infrastructure Commission, to review the way that infrastructure decisions were planned and made. He recommended changes to decision-making procedures. The Commission would produce a ten-year package of infrastructure plans, which Parliament would vote on as a package, with limited powers of amendment and creating a restricted timetable for review. But ministers have no reason to accept such constraints. They can make decisions if they want to, obfuscate and postpone if they don’t. The chances that infrastructure recommendations will be as influential as those of the Low Pay Commission in its heyday are slight. There is too much at stake, especially when long-term plans are in the throes of turning into short-term realities.

In search of consensus and partnership

The fate of the advisory bodies proposed in the IPPR report is likely to be similar. Despite the current divisions in Cabinet and gridlock in government, there is little sign that ministers feel at all inclined to seek solutions from such bodies, at least not in economic areas where decisions have salient political consequences. Social partnership may be a lovely idea, but it has only taken root in countries where the political system presents governments with major barriers to making decisions, where coalitions of support have to be assembled. A National Economic Council could be valuable to a Chancellor who faced serious obstacles to implementing his programme, but this is rarely the case. The IPPR report castigates the ‘rabbit out of a hat’ policy-making of the Budget, but these rabbits usually run, and the Chancellor gets the credit.

Writing in the Financial Times, Jesse Norman criticised the IPPR Commission for paying attention to market failure but not government failure. This criticism is unfair. Recognition that the political system prevents the necessary decisions being taken permeates the report, which is why it repeatedly proposes new mechanisms for economic governance. But the report is evasive in its steadfast focus on the economic, averting its eyes from the awfulness of the country’s politics. Unfortunately, prosperity and justice need political revitalisation as well as economic ideas.