Exiting the EU: Shaking the Ground

13 Jun 18

The Brexit magma flowing under Whitehall is causing tremors in all areas. Could eruptions be on the way? Colin and Carole Talbot find out. 

 

When lava began spitting from the earth at various points around Hawaii’s Kilauea volcano, a volcanologist was asked: “Why is this happening so far from the volcano?”

Her reply was startling: “You don’t understand – the whole island is a volcano, well, five volcanos actually.” It’s starting to look like Brexit may be having similar effects to the magma flowing under the main island of Hawaii. Tremors and eruptions are occurring all over the Whitehall village.

It is shaking up relationships between government departments and reconfiguring the departmental landscape, sometimes at break-neck speed. Flowing under parliament, it is shaking up how it tries to hold the executive to account. And it is even changing the relationship between parliament and its accounting and value for money watchdog, the National Audit Office.

The first and most obvious consequence of Brexit for the machinery of government was the rapid creation of two departments in Whitehall – the Department for Exiting the European Union and the Department for International Trade, headed by two new secretaries of state, David Davis and Liam Fox respectively.

Thousands of civil servants have been rapidly recruited or moved to staff these new departments, one of which – Dexeu – will have a very short lifespan.

Rapid changes are not unheard of in Whitehall. Some were already under way before the Brexit referendum triggered even bigger moves.

The old Department for the Energy and Climate Change and a large chunk of the Department for Business Innovation and Skills have been reformed into the new Department for Business, Energy & Industrial Strategy. The rest of BIS (about 1,000 staff), together with UK Trade International (another 1,300) and an extra 800 “Brexit” staff formed the new DIT.

Confused yet? You should be. These new structures have had zero time to settle and clarify who does what. The result has been a great deal of confusion – and tension – within Whitehall.

For example, it has been unclear who is really supposed to be coordinating Brexit. Initially, it appeared this was what Dexeu had been set up to do, but it soon became apparent that both No 10 (together with the Cabinet Office) and the Treasury had their own ideas. Most significant was the move from Dexeu of the first permanent secretary, Olly Robbins, to No 10.

While Dexeu has maintained a database of the 300-plus workstreams within the government on Brexit, its power to coordinate work or even impose ways of working (like departmental Brexit plans) has been extremely variable.

The task of resourcing the Brexit workstreams has been split between the Cabinet Office for personnel and the Treasury for funding; £1bn has been given to departments for 2018-19 by the Treasury to fund Brexit work.

There have also been tussles between the DIT – charged with negotiating new trade deals outside the EU – and the Foreign & Commonwealth Office, which played an important role in promoting such trade, especially through UK Trade International. It appears that Liam Fox’s DIT wanted to grab the UKTI staff but have the FCO continue to foot the bill. That didn’t happen, so it looks as if DIT is going to cut the staff who promote UK exports.

The NAO reported last November that Dexeu had set up seven official-level boards to coordinate various aspects of Brexit, assisted by eight working groups and all supporting an “inter-ministerial group”. The complexities are mind-boggling.

Finally, it’s worth noting that Dexeu has a very limited life span. Sources suggest that it will go as soon as the UK officially leaves the EU in April 2019; it could be earlier, were Davis to carry through one of his many threats to resign. The vultures are already circling, with FCO, DIT and the Cabinet Office likely to grab bits of the corpse.

Westminster fissures

Brexit also appears to be creating disturbance caused by fissures within and between the select committees in parliament.

Games of musical chairs in Whitehall inevitably produce reorganisations of departmental select committees, which are unsettling in themselves but added to this has been the extremely controversial nature of Brexit itself. This has been straining the traditional non-partisan, consensus style of select committees to the limits and beyond. Although we have not yet researched this, there is a clear impression that conflicts over select committee reports are becoming more frequent and sometimes bitter.

There has also been some jockeying for position. The Public Accounts Committee, always highly active, but mostly restricting itself to value for money studies, seems to have seen Brexit as an opportunity to expand into new areas. As a result, the PAC now appears to be treading on the toes of some the departmental select committees with their inquiries, some of which have a clear Brexit focus but not an obvious value for money one.

For example, recent reports (such as HC 699) have focused on the Department for Environment, Food & Rural Affairs and DIT’s plans for managing Brexit. This looks at prioritisation or the lack of it within these departments around their workstreams.

Other inquiries have focused on Brexit issues that have no obvious value for money focus, such as the number of workstreams within Dexeu and the FCO.


"The new structures have had zero time to settle and clarify who does what. The result has been confusion and tension"


Finally, one notable absence has been the Treasury select committee subcommittee on HMRC. Given the huge potential problems for HMRC – with customs, VAT and borders all problematic – it might have been expected to be especially active. However, the subcommittee appears to be dormant and the full Treasury committee seems to be concentrating on trade, economic and financial issues rather than the more practical end of Brexit.

 

NAO flows further

The NAO’s relationship with parliament has been slowly evolving over the past two decades, but Brexit appears to have given this process something of a boost.

For many years after select committees began working in 1980, the NAO operated mainly with and through the Public Accounts Committee. There were limited contacts with other select committees, notably defence (where someone from the NAO was seconded from 1979 onwards) and the environmental audit committee, which was seen as a sort of PAC for the environment.

Things began to change in the 2000s under the Labour government. The NAO expanded its work with other select committees and, in 2004-05, parliament approved an extra £3.4m to support this work. By 2007, the NAO was supporting more than a dozen select committees with various investigations. That year, it also began producing performance reports for all departmental select committees, analysing departments’ own performance reporting.

Brexit seems to be producing another huge step change in the NAO’s work with parliament. Since July 2017, the NAO has produced a dozen reports on various aspects of Brexit and set up its own internal Brexit coordination team. It is working with all select committees involved with Brexit and the liaison committee of select committee chairs.

Mere rumblings or major eruptions?

The Whitehall/Westminster system of government is unusual in being extremely flexible. Although the great offices of state of the prime minister, chancellor of the exchequer, home secretary and foreign secretary make it appear very stable, it often changes – and quickly.

Most government departments have no specific legal basis and the structures can be “re-dis-organised” almost at will by prime ministers. This can be both a blessing and a curse.

It allows for great flexibility and rapid adaptability, but it can also make apparently solid institutions suddenly appear very fragile indeed. It remains to be seen if the magma of Brexit will produce just rumblings and minor quakes, or if we are in for a major explosion in the government. As the Hawaiian volcano reminds us almost daily, apparent stability can sometimes turn into something else very quickly.


Scrutinising Brexit: Uncertainty fogs the figures

Parliament has been scrambling to calculate the impact Brexit will have come 29 March 2019, writes Dominic Brady.

The Public Accounts Committee has released six reports on Brexit since the referendum vote in 2016.

These have been critical of the government’s approach, suggesting departments have not been recruiting effectively and that customs may struggle to deal with increased demand.

A recurring theme in the PAC’s work seems to be a lack of certainty hindering preparations.

Government departments are drawing up three contingency plans – for deal, no deal or transition – to be used depending on the outcome of negotiations.

Labour’s Meg Hillier, who chairs the PAC, tells PF she is calling for “an evidence-based calculation” of the true cost of Brexit and, to do this, is working with opposition MPs and looking at National Audit Office data.

Hillier also expressed the need for select committees to collaborate more regularly in future to ensure they provide comprehensive scrutiny.

“The wind is under the wings of the select committees, we will be working together so that we do not get in each other’s way,” she says.

Hillier expects the PAC will continue to effectively hold the government to account: “I hope we can punch at our weight at least, if not, above it.”


 

  • Colin Talbot and Carole Talbot

    Set up the Brexit|Org|Gov project at the University of Cambridge

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