Former Treasury chief Lord Macpherson: don't leave Brexit to Whitehall's "gifted amateurs"

Ex-Treasury perm sec challenges David Davis's claims about the civil service's readiness for Brexit, as his former colleague Lord O'Donnell warns of major task presented by Great Repeal Bill

By Matt Foster

21 Feb 2017

Britain's exit from the European Union will require a crack team of "battle-hardened" negotiators, the long-serving former permanent secretary of the Treasury has said, as he warned that ministers cannot rely solely on civil service generalists.

Speaking as the House of Lords began debating the government's Brexit bill, Lord Macpherson – who stepped down as the Treasury's top official last year after more than a decade in the job – said the challenge of leaving the EU meant there was now a need to "nurture capacity" in the civil service, and pointed out that Whitehall still has only "limited" expertise in trade negotiation.

Last month, Brexit secretary David Davis prompted anger from unions after he claimed that the civil service's ability to cope with World War 2 meant officials would be able to handle the extra work of leaving the EU without a fresh injection of resources. 

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Civil service numbers increased by more than 400,000 during the second world war, but today the entire organisation has fewer than 390,000 staff, and departments are continuing to reduce staff numbers in line with 2015 Spending Review settlements.

Speaking in the Lords on Monday, Macpherson took on Davis's claims directly, saying the minister's assurance that the civil service had "coped well enough" during the Second World War "misses the point".

"Had the civil service been better prepared, the pursuit of the war in 1940 would have gone a whole lot better," he added.

And the ex-Treasury chief also offered his verdict on the kind of skills that would be needed for Brexit, saying it was "not a time for gifted amateurs who have flitted from one post to another in Number 10, the Cabinet Office or indeed the Treasury".

"We need to build a team of battle-hardened professional negotiators who understand the world trade order and have the contacts to construct Britain’s place in it," he added.

Macpherson also used his intervention to argue that David Cameron had made a "mistake" in holding an EU referendum in the first place, and he launched an impassioned plea for his former department to champion "multilateralism over bilateralism" amid debates over the UK's post-Brexit trading future.

"In the late 19th century, this country showed admirable contempt for countries such as Germany, France and the United States, which sought to charge tariffs on imported goods," he said.

"But in the 1890s, it was the Foreign Office and the Board of Trade, supported by the prime minister's hero, Joseph Chamberlain, which sought to undermine the free trade system by advocating bilateral trade deals.

"I can see this happening again, and I hope the chancellor and Treasury will stand up to these pressures. Trade should not become an arm of foreign policy, or bureaucratic self-interest."

"Huge pressure"

Monday's debate also saw a heavyweight intervention by Lord O'Donnell, the former cabinet secretary and head of the civil service, who said that while the economic impact of the Brexit vote had been "less than expected so far", it had likely "​boosted the prospects not of free trade but of president Trump and [far-right French presidential candidate] Madame Le Pen, who both favour protectionism".

"It is against that background that ministers and civil servants will have to negotiate our exit," he said.

"As far as the civil service is concerned, I have every confidence that it will do its utmost to achieve the best possible deal for the UK. However, as my successor has said, it is under huge pressure.

"The negotiations are extremely complex and I have yet to hear of the Government closing down work to allow civil servants to transfer across to the new tasks."

O'Donnell pointed out that while civil servants had become "very good" at negotiating with the EU, the forthcoming Great Repeal Bill – which is set to transpose all EU law into UK law – will keep officials "busy in an effort that will probably leave things exactly as they are".

The former top official also called on ministers to secure the rights of EU citizens working in the UK at the time of the Brexit vote "as a matter of principle", and he urged the government to ensure parliament is given a "genuine vote" on any preliminary deal Britain strikes with the EU's 27 remaining member states.

"The UK parliament should have a serious role in what the deal should cover," O'Donnell said. "That is what we in this House ​should aim for with judicious amendments that help us to achieve a better deal for all in this country."

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