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Matrix Friday, 16 October, 1998, 19:14 GMT 20:14 UK
Treasury
Gordon Brown at desk
Brown: gave up control of rates, but is Treasury power growing?
In the third programme of the BBC's Matrix of Power series, the Treasury falls under the spotlight.

Matthew d'Ancona, Deputy Editor of The Sunday Telegraph, looks at the way in which the most powerful department in Whitehall has changed since New Labour came to power.

The Treasury has long been a mighty institution, controlling the nation's finances and curtailing the demands of other departments. But, since May 1997, Gordon Brown has claimed new powers to intervene in every nook and cranny of government.

For the first time this summer, the Treasury drew up three-year spending limits for the departments - with contracts between them and the Treasury to ensure that the release of funds is matched by improved delivery of services.

Gordon Brown's first act as chancellor was to hand over control of interest rates to the Bank of England. But that does not mean the Treasury's power is shrinking - far from it.

The fear, in fact, is that it is threatening to take over the government.

On a collision course?

The chancellor laughs off suggestions that the Treasury's control amounts to a stranglehold:

"There are no victors. Government doesn't work unless the treasury and the departments are working well together┐ But the public must know that where public money is being spent there is proper scrutiny and care taken to ensure that the money is being properly spent."

But others say that the Treasury's new powers have set the Chancellor on a collision course with his colleagues.

Kenneth Clarke, chancellor from 1993 to 1997, says: "Brown sees his job as being a political primus inter pares, the chief executive controlling Whitehall and pursuing various social policy objectives at the behest of his chairman, the Prime Minister, next door.

"I think it guarantees that the war between the Treasury and the other baronies will be more ferocious than it's been even at any time during my years in government."

Lord Burns, former Permanent Secretary at the Treasury, says that there is also a danger that the Treasury will assume too great a role as a forger of Government strategy:

"The Treasury has got to be up there in the strategy formation┐ but it can't expect to do it itself. Strategy is a function for government."

Twin centres of power

Brown and Blair
Twin centres of power
The key is the relationship between the chancellor and prime minister. For there are now two nerve centres to the Government: the Treasury and Number 10.

At present, Mr Blair seems content to delegate the detail of policy to his old friend next door and to concentrate on the presentation of results - the Big Picture, as he likes to call it.

But how long can this twin track system survive?

If the system works as well as Gordon Brown hopes, the quality of government will undoubtedly be improved. But if it does not, the tensions between the two centres of our institutional landscape might cause just the opposite to happen.

Only one centre can prevail. The question is whether the chancellor and his successors will realise that.

Listen to programme 1 - Number 10

Listen to programme 2 - Parliaments

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