Former UK Treasury chief urges honesty on Brexit

By on 14/09/2017
Lord Macpherson, former permanent secretary at the UK HM Treasury, speaking at the Global Government Finance Summit 2015

The UK government is failing to explain the realities of Brexit negotiations to the public, the former permanent secretary to the UK Treasury has warned.

Lord Macpherson, who was the top Treasury official for 11 years from 2005 to 2016, said last week: “I feel passionately that this is an area that needs leadership: someone has got to be honest with the British public about the compromises and trade-offs that need to be made. Sadly that simply hasn’t happened.”

Asked how he would feel if he was still working at the Treasury, with every decision impacted by the UK’s impending departure from the bloc, Macpherson also appeared to question the structures put in place to manage Brexit planning and negotiations. “I worry about how Whitehall resources are being harnessed and deployed in support of the government’s approach,” he said.

During his time leading the Treasury, Macpherson managed its response to the financial crisis, then oversaw Gordon Brown’s economic stimulus package and the Tory-Lib Dem coalition’s austerity agenda.

Speaking an interview with the BBC, he recalled the first symptoms of the credit crunch in 2007, when mortgage lender Northern Rock asked the Bank of England for urgent financial support – prompting a run on the bank.

Explaining that almost nobody remained at HM Treasury who’d experienced the last recession in 1991, Macpherson acknowledged that it had been unprepared for the crisis: “I take my share of the responsibility for that,” he said. “The Treasury didn’t have the right resources in the right place when the run on Northern Rock took place.”

But Macpherson noted that that its experience in rescuing Northern Rock proved invaluable when bigger banks got into trouble the following year. And, he said, the close working relationship between officials and ministers – led by then-chancellor Alastair Darling, who also participated in the interview – limited media leaks which could have exacerbated the problems.

It was a challenging period, he recalled: “We were in very serious unknown territory. Yes, you can prepare for it, but in reality the number of decisions we had to take in very short order was terrifying.”

His job was made easier, Macpherson said, by the fact that Darling was calm and good at making decisions “sensibly, sequentially and quickly”.

“Having someone in that post who has the temperament to deal with a crisis was, from my perspective, very lucky.”

About Catherine Early

Catherine Early is a journalist and editor specialising in government policy and regulation. She writes predominantly about environmental issues and has worked for the Environmentalist, the ENDS Report, Planning magazine and Windpower Monthly, and also written for the Guardian, the Ecologist and China Dialogue.

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