By Colin Marrs

04 Jul 2016

HM Treasury’s new permanent secretary Tom Scholar arrives in post via a somewhat different route to long-serving predecessor Sir Nick Macpherson. Colin Marrs takes a look at his career to date and speaks to those who've worked alongside him

In civil service terms, there can be few harder acts to follow than Sir Nick Macpherson. In April, after more than 10 years running the Treasury, the longest-serving permanent secretary in recent history stepped down. His successor, Tom Scholar, is the son of Sir Michael Scholar, whose own glittering Whitehall career spanned the 1970s to the turn of the century. So what qualities will the new man at the top bring to the department, and what are the challenges he faces?

Scholar entered the Treasury in 1992, embarking on what Hugh Pym’s 2014 book Inside the Banking Crisis describes as a “classic fast track mandarin’s career”. By 1997 he had risen to become chancellor Gordon Brown’s first principal private secretary. However, in 2001 – deviating from the path followed by Macpherson – Scholar left the department. He then served as the British representative on the boards of the International Money Fund and World Bank, followed by a six year spell as economic minister in the British Embassy in Washington.

On Brown’s coronation as prime minister in 2007, Scholar returned to the heart of Whitehall, taking on the dual role of the PM’s principal private secretary and Downing Street chief of staff. “Gordon was keen for Tom to come back. In contrast to Tony Blair’s appointment of Alastair Campbell, he was keen not to have a political head of his office,” says Dan Corry, head of the Number 10 policy unit at the time.

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Corry remembers Scholar as a “terribly nice guy”. “He was very calm and decent and was very concerned about other people. However, he was very sharp in a typical Treasury way – he was very good at getting to the core of issues. During that period there was lots of tension – it was a difficult time for the Treasury, with banks suddenly beginning to go down. You need a cool head in that situation, and Tom provided that.”

Scholar’s close working relationship with Brown at the Treasury stood both in good stead when the enormity of the credit crunch began to dawn on officials. It wasn’t long before Scholar was back at the Treasury, leaving Number 10 in January 2008 to become managing director of HMT’s International and Finance Directorate.

As the 2008 financial crisis unfolded, Scholar was part of the team coordinating the government’s response.

He worked closely with then-business minister Baroness Vadera, now the chair of Santander UK, trying to figure out how the unravelling credit crunch would affect the economy. “When I joined the government, I found the place bewildering. But he was somebody who had complete command and control,” she says. 

“When I joined the government, I found the place bewildering. But he was somebody who had complete command and control,” – Baroness Vadera, former business minister

Vadera and Scholar built a close relationship, together concluding that the root of the problem stemmed from the banks’ lack of capital. Their work led to Brown’s £500bn banking rescue package, announced in October 2008. “We understood the implications of what we were saying and that they could be huge and unprecedented, but we were focused on how to get to the right outcome,” she says. “It all seems perfectly obvious now, but at the time it was rather more brave or out of the ordinary.”

Scholar was adept at navigating these unfamiliar policymaking waters, says Vadera. “My job was more of an advisory/policy role,” she says. “His was in making it happen. One of the things I appreciated about Tom is you could have the conversation about doing radical and untried things and he was calm and measured and showed good judgement. He has an enormous capacity for work and an even bigger one for handling stress.”

However, these qualities were matched by a healthy ability to take a step back from the demanding work he was involved in, Vadera says. “He is very charming and funny and we shared quite a lot of moments of black humour working together. Soon after the rescue package, he came round to dinner and brought with him a bottle of wine called ‘Bailout’ – I have no idea where he got it from.”

In 2009, Scholar was promoted to be second permanent secretary at the Treasury, where he served until 2013. Andrew Hudson, director general in the Treasury from 2009, and now director at the What Works Centre for Wellbeing, praises Scholar’s communication skills. “He has a good knack of being able to talk with people at different levels in the department and make sure they feel part of the team. He is relaxed but is able to talk about serious issues without getting too heavy about it,” he says.

"Tom wears his intellect lightly – he doesn’t lecture people and isn’t pompous and po-faced,” – Sir Ivan Rogers, the UK’s permanent representative to the European Union 

In 2013, prime minister David Cameron put Scholar in charge of the European and Global Issues Secretariat in the Cabinet Office – a role now taken on by Oliver Robbins, who has been handed the unenviable task of preparing the ground for Britain's departure from the European Union. At EGIS, Scholar served as Cameron's Europe advisor, and was one of the UK government “sherpas” who undertook the pre-referendum negotiations on a revised relationship with the EU – the option ultimately rejected by voters.

According to Sir Ivan Rogers – the UK’s permanent representative to the European Union who spoke to CSW before the vote – Scholar's laid-back personality came in useful during sometimes tense discussions with EU counterparts.

"Tom wears his intellect lightly – he doesn’t lecture people and isn’t pompous and po-faced,” he says. “He is good at building an atmosphere so that people want to do business with him – and we were setting our counterparts difficult problems they would rather not have been facing.” 

This is not to suggest that Scholar was a pushover during meetings, Rogers says. “He didn’t hammer people and was not aggressive and unpleasant, but stuck to a line where he had political instructions. Within that structure, he has the agility to negotiate effectively.”

Rogers also highlights Scholar’s stamina, although he carefully stops short of labelling him a workaholic. “He works hard, but he doesn’t impose his routine on others. He is capable of enjoying himself and has a young family. His management style will go down well in the Treasury. He is not gradeist or status conscious – he’ll talk to anyone with expertise to bring to the table.”

Scholar has done enough time at the Treasury to be considered an insider, which according to Corry is “classically what the department goes for”. While his knowledge of the department will be invaluable, Corry wonders whether the new boss would have been helped by experience working within a spending department. “I started in a spending department before moving to the Treasury. I thought it helped, in a way, to see how departments see life,” he says.

“Tom has seen the department from the outside and knows what it looks like from a distance. I think that will be an advantage when dealing with outsiders” – Sir Ivan Rogers

However, Rogers says that Scholar’s spells at the World Bank and IMF will provide a useful degree of perspective. “Nick was in the building for 31 years and never left the place – that is one of the reasons he is loved there,” he says. “Tom has seen the department from the outside and knows what it looks like from a distance. I think that will be an advantage when dealing with outsiders.” 

Another challenge facing Scholar will be to overcome the loneliness that accompanies top dog status. “For anybody, there is a big step up from being a number two to being a number one,” says Hudson. “There is nobody else to look to if there is a really tricky issue with the relationship with another department. You really are the point person for all the key relationships with ministers, and other departments in Whitehall.”

The relationship between the Treasury permanent secretary and cabinet secretary is always key to the smooth operation of government, according to Corry. “Nick and Jeremy Heywood were great sparring partners. They are of a similar generation but Jeremy has been Tom’s boss in the past – Treasury staff will be interested in how he stands up against Number 10.”


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