Sir Nicholas Macpherson – Permanent Secretary to the Treasury – snubs the Civil Service Code
Macpherson breached the “Civil Service Code” when he released to the public his personal views and political advice regarding sharing of sterling in the event the Scottish Referendum returned a Yes vote.
His unsolicited “advice” (so he says) to George Osborne, Chancellor of the Exchequer also conflicted with the stated position of the Governor of the Bank of England who had previously advised that an effective union of currencies was feasible, subject to agreement to a number of conditions.
When asked to clarify his actions he said “throughout the debate on economic issues the Scottish Government has sought to cast doubt on the British Government’s position. it has claimed we’re blustering, bluffing – in effect casting aspersions on the UK Government’s integrity. My view in this case – and it’s a very exceptional case – is that if publishing advice could strengthen the credibility of the Government’s position, then it was my duty to do it. It was important in this specific case, which goes to the heart of the currency issues, that the arguments were exposed before a referendum than after it.”
It was later revealed his intervention, together with senior members of the government and members of the “Better Together” campaign formed part of a carefully choreographed exercise in political destabilisation, allegedly called “the Dambusters strategy” by insiders.
Noteworthy is his use of the word “we’re” which indicates his actions were politically driven, which he did not deny. Quite disgraceful conduct for a senior civil servant. He should be instructed to resign his position.
The Civil Service Code: Political Impartiality:
You must: Carry out your responsibilities in a way that is fair, just and equitable and reflects the Civil Service commitment to equality and diversity. You must not act in a way that unjustifiably favours or discriminates against particular individuals or interests.
You must not: Act in a way that is determined by party political considerations, or use official resources for party political purposes; or allow your personal political views to determine any advice you give or your action. http://www.civilservice.gov.uk/wp-content/uploads/2011/09/civil-service-code-2010.pdf
Sequence of Events
January 29 2014; Carney Governor of the Bank of England – on sharing sterling between Scotland and rUK
Sharing sterling between an independent Scotland and the rest of the UK could lead to eurozone-style crises unless firm foundations are put in place, An effective union would also force a newly-independent Scotland to hand over some national sovereignty, he said in a speech at a business lunch in Edinburgh.
February 13 2014; Gun for hire
After the love-bombing of Scots last week by David Cameron, Osborne travelled North revelling in his role as bad cop. The venue for his declaration was a dramatic penthouse with a panorama of Edinburgh Castle in the appropriately named Bread Street.
He holstered a very large gun with which he intended to shoot down Alex Salmond’s plan to continue sharing the pound with the rest of the UK after independence, but the bullets were crafted by the long-standing Permanent Secretary to the Treasury, Sir Nicholas Macpherson.
February 13 2014; Osborne fires the first shot – in the currency row
The Chancellor ruled out a currency union with an independent Scotland after “strong” advice from the Treasury’s leading official, which was published today.
Sir Nicholas Macpherson told George Osborne that unions are “fraught with difficulty” and raised serious concerns about the Scottish Government’s commitment to making it work.
Scotland’s banking sector is too big in relation to national income, the UK could end up bailing the country out and fiscal policy shows sign of diverging, he said.
March 7 2014; Danny Alexander, Chief Secretary to the Treasury – Says currency union decision is final
Calls for a monetary union between an independent Scotland and the rest of the UK are akin to “embarking on a damaging divorce” but insisting on still sharing a credit card, Chief Secretary to the Treasury Danny Alexander has said.
Mr Alexander set out his reasons for rejecting the Scottish Government’s preferred currency solution, as he insisted that the cross-party decision to rule it out was final.
He used his speech in Edinburgh to the National Association of Pension Funds (NAPF) to dismiss suggestions that the rejection of a monetary union, which would see an independent Scotland keep the pound, was a politically motivated, tactical move.
March 19 2014; Scare tactic by “Better Together”” bang on the money
On February 13th, in a flying visit to Edinburgh, the UK Chancellor, George Osborne, declared that Scotland would be denied use of the pound, if it voted Yes in the referendum.
What followed was a carefully choreographed exercise in political destabilisation, allegedly called “the Dambusters strategy” by Unionist insiders, which shook the “Yes” campaign to its foundations. It also shook the Union to its foundations.
March 23 2014; Osborne’s case against currency union ripped apart by top economist
The Treasury case against a post independence currency union between Scotland and the rest of the UK has been dismantled as “misleading”, “unsubstantiated” and “the reverse of the truth” by one of the world’s leading economists.
Professor Leslie Young, of the Cheung Kong Graduate School of Business in Beijing, accused the UK Government of relying on a “lurid collage of fact, conjecture and fantasy” in making its argument.
April 5 2014; Currency furore over mystery of missing memos – No paper trail means Treasury’s position engineered, say SNP
The Treasury was last night at the centre of a growing row over political bias, after admitting it had no record of when its most senior civil servant first advised the Chancellor against a currency union with an independent Scotland.
The inability of permanent secretary Sir Nicholas Macpherson to give a precise date is fuelling claims that Westminster’s bombshell rejection of a currency union was cooked up to help the No campaign in the referendum.
April 9 2014; Sir Nicholas Macpherson – ‘I was not ordered to rule out sharing pound with Scotland’
Appearing before MPs at the Public Administration committee to discuss civil service impartiality and referendums the Treasury’s top civil servant rejected SNP claims that he advised against sharing the pound after independence because of political pressure, saying publishing his analysis was “vital to the national interest since the Scottish Government had been casting aspersions on Westminster’s integrity and it needed to be made absolutely crystal clear that a monetary union was not on the table” adding that, “the chancellor, had neither told him to write a letter rebuffing SNP proposals for sharing sterling or ordered the advice to be published.”
MacPherson went on to tell MPs that the decision to publish his advice was “not something I entered into lightly” but insisted he remained “unapologetic” stating “Throughout the debate on economic issues the Scottish Government has sought to cast doubt on the British Government’s position, It has claimed we’re blustering, bluffing in effect casting aspersions on the UK Government’s integrity.
My view in this case – and it’s a very exceptional case – is that if publishing advice could strengthen the credibility of the Government’s position, then it was my duty to do it. It was important in this specific case, which goes to the heart of the currency issues, that the arguments were exposed before a referendum than after it.”
He denied that revealing his private advice showed civil service politicisation, saying it was comparable to clarifying the UK Government’s position if questioned by a fellow European Union member state. He also dismissed the suggestion that Mr Osborne strong armed him into airing views in public. “Ultimately this was my call – the Chancellor is a traditionalist in his approach to the Civil Service, I am quite certain that if I had said that I did not want to publish this advice he would not have pressed me. I thought it was the right thing to do in exceptional circumstances.”
Kenneth Gibson, SNP MSP and convener of the Scottish Parliament’s Finance Committee, said that Westminster’s “currency bluff had completely crumbled. Regardless of the Treasury’s actions we know the real position of the UK Government as an unnamed Government Minister admitted last week is that there will be a currency union everything will change in the negotiations if there is a Yes vote. Even Alistair Darling himself has said that a shared sterling area is desirable and logical. It’s time for the No campaign to stop the foolish bluffing, put its money where its mouth is and back sharing the pound.”
How Sir Nicholas MacPherson Permanent Secretary to the Treasury intervened to sabotage a Yes vote in Scottish referendum
So farewell Sir Nick, as he prefers to be known, Macpherson, knight grand cross of the order of the bath and retiring permanent secretary of Her Majesty’s Treasury.
After a decade in the top job advising Labour and Tory chancellors, Sir Nick is quitting at the relatively young age of 56.
When asked (at a Treasury select committee meeting) what he intended to do next, he hinted he had a second career in mind.
Two chancellors he mentored – Gordon Brown and Alistair Darling – are already “advising” big banks.
Sir Nicholas is infamous for publishing – of his own volition, he claims – the letter of advice he sent to Chancellor Osborne at the height of the Scottish independence referendum campaign.
In this letter, Macpherson rubbished the idea that a UK Government would accept sharing a common currency with an independent Scotland.
He implied that Alex Salmond was misleading the Scottish electorate by saying David Cameron was bluffing in this regard.
(Sir Nick seems to have forgotten that Alex Salmond wasn’t bluffing either, when he said an independent Scotland would refuse to take any of the Treasury’s debt liabilities if a common currency was rejected.)
It is unheard of for a senior civil service mandarin to enter the political arena so brazenly. Asked if civil servants were not meant to be independent of party politics, Sir Nick gave the game away in a recent interview.
No, he said, civil servants were not independent. Rather, they serve the government of the day.
He might have added: and if the government hasn’t the balls to put in the political boot, then the Treasury will do the job.
This is where any democrat, north or south of the Border, should start to get worried. At a lecture last year, held at Kings College in London, Macpherson elaborated on his doctrine of civil service political intervention.
He said that in such an “extreme” case as the independence referendum, in which Sir Nick believed “people are seeking to destroy the fabric of the state” and to “impugn its territorial integrity”, the normal rules of civil service impartiality simply do not apply.
Macpherson has a vision of the British imperial state and sees himself and the unelected civil service as its guardian.
Politicians may come and go, but the state – and the Establishment and City interests it guards – is another matter altogether.
Anyone seeking to “impugn the territorial integrity” of the state or “destroy the fabric of the state” (it’s the same thing as far as Sir Nick is concerned) is the enemy within.
And if the elected government of the day can’t protect the state from those seeking to “undermine” it (as judged by Sir Nick) well then the state (Treasury mandarins, MI5 and SIS, the BBC, retired colonels, etc., etc.) have a duty of care to step in.
Who is Sir Nicholas Macpherson? With his mop of unruly hair and soft accent, he comes across as a more human figure than, say, the caricature Whitehall mandarin of Sir Humphrey Appleton, in Yes Minister.
Delve down, though, and you will discover that Sir Nick went to Eton and Balliol College, Oxford. He lists his clubs in Debrett’s as the MCC and the Athenaeum.
The Athenaeum, in Pall Mall, is the quintessential Establishment club – it allowed lady members only in 2002.
If you’ve read Chris Mullin’s wonderful 1982 political satire, A Very British Coup, you’ll know the Athenaeum is where the Establishment (led by “fictional” MI5 chief Sir Peregrine Craddock) plots to undermine a left-wing, unilateralist Labour government.
OK, Sir Nick is so Establishment he could have been invented by central casting. But does that make him dangerous? Perhaps he’s just an old-fashioned guy with old-fashioned values?
That would seem to be the consensus in government as neither David Cameron nor Nick Clegg had the chief secretary fired for publishing his letter denouncing the common currency.
Nor did Labour object. In fact, while I was questioning Sir Nick at the Treasury Select, one of the Labour members kept interrupting in his support.
That was Rachel Reeves, Oxford University and ex-Bank of England, whose husband is ex-Treasury. When I say Establishment, I mean Establishment.
However, mandarins such as Sir Nicholas Macpherson are very far from harmless. As Chris Mullin (a former Labour minister) puts it, the British elite are: “still mainly educated at the same handful of schools and universities and belong to the same gentlemen’s clubs and freemasons lodges…many of these people are, of course, professionals who would indignantly deny that their political affiliation would in any way affect their duty as public servants and I am sure, in many cases, that is true.
I am equally certain that in many other cases it is untrue.” I have bigger beef with Sir Nick: his time at HM Treasury has been a disaster for the British economy. He was so fixated with the Scottish referendum that other things went by the board.
He has waxed lyrical about the effort put in by the Treasury to thwart Scottish independence: “The project was run by a standing Treasury team of six officials, though during the course of two years’ work some 50 officials contributed to the analytic work” (Full costs of which about £2.5million was charged to the office of the Secretary of State for Scotland.) So Scotland met the bill for advice it never asked for.
Yet during Sir Nick’s decade as head of the Treasury, UK government borrowing doubled from 42 per cent of GDP to 87 per cent, productivity has flat-lined and the trade minister, Lord Maude, had to resign in disgrace after less than a year in the job, with the publication of yet another set of disastrous export figures.
Under Sir Nicholas Macpherson’s reign at HM Treasury we have seen the biggest fall in potential output since the 1930s and the weakest recovery in modern times. Macpherson has been in post far longer than heads of the Treasury usually are.
But far from having a strategic or reforming focus, Sir Nick has hunkered down, defending the political status quo and preparing austerity budgets.
His final few months have been centred on the internal negotiations with the Scottish Government over the post-Smith fiscal framework. True to form, he has used these negotiations to squeeze Scotland financially.
By letting Sir Nick Macpherson get away with intervening openly in a major political situation, the main Unionist parties have created a dangerous precedent. Sir Nick may be gone – in as much as Establishment figures ever actually go.
But in some other referendum, or General Election, or political crisis, we will see the head of HM Treasury, or even the Cabinet Secretary, make a dramatic intervention to “save” Britain from the elected politicians.
Sir Nick’s quiet but calculated sabotage of the independence referendum was carried out “without tanks on the street”. In fact, “It was a very British coup”.
Stephen Etherson: https://disqus.com/by/StephenEtherson/