Welcome Mr Alexander

I do not accept the view that a Chief Secretary has to be a City figure who knows the markets. The Chief Secretary’s job is a very political one, based on doing deals with Cabinet colleagues over their budgets. Mr Alexander’s close proximity to the Deputy Prime Minister and his Lib Dem colleagues is his strength. His success or failure will depend on how well he helps choose the cuts for other departments, and how well he helps Cabinet colleagues sell these to the country. He needs to protect schools and hospitals whilst cutting out waste and less desirable spending throughout Whitehall and indirectly throughout town halls. None of this requires City experience. It requires a close working knowledge of Whitehall budgets and public sector management.

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23 Comments

  1. Bengi
    Posted May 31, 2010 at 3:52 pm | Permalink

    My prejudices are being confirmed – the politicians appear to be clueless on the implications of financial policy – Are the treasury officials any better or are they now all social scientists and classicists.Come to think of it, our business leaders seem to be no better.Perhaps this total incompetence at the top accounts for the mess we are in.

  2. FaustiesBlog
    Posted May 31, 2010 at 4:02 pm | Permalink

    There is the little matter of Alexander's CGT avoidance via his flipping activities.

    I doubt the public will wear his imposition of CGT on 2nd home owners under the circumstances.

    Choppy waters ahead.

    • Nigel
      Posted May 31, 2010 at 11:52 pm | Permalink

      No, Fausties, there is the small matter of your complete ignorance of the tax code. There was no flipping, and no loophole exploitation – just the current CGT rules:
      http://www.hmrc.gov.uk/cgt/property/sell-own-home

      "When you sell or dispose of your own home you don't usually have to pay any Capital Gains Tax…
      …The final three years (36 months) always qualify for relief, even if you weren't living there, as long as it's been your only or main home at some point during the time that you've owned it….
      …You don’t have to claim Private Residence Relief – it's given automatically."

    • Paul Hield
      Posted June 1, 2010 at 8:05 am | Permalink

      98% of the "public" will be unaware of anything to do with CGT.

  3. Brian Tomkinson
    Posted May 31, 2010 at 4:51 pm | Permalink

    I think it also requires toughness. David Laws appeared to have that. We must hope that Mr Alexander, until recently unknown, possesses a similar streak. That is if ‘The Daily Telegraph’ doesn’t force his resignation as well, before he even gets started. Do you think they want to destroy the coalition already? It looks that way to me and then what mess will the country be in?

    • APL
      Posted June 2, 2010 at 12:31 am | Permalink

      Brian Tomkinson: "Do you think they want to destroy the coalition already?"

      How about we would like honest MPs?

      rian Tomkinson: "what mess will the country be in?"

      is in.

  4. Glyn H
    Posted May 31, 2010 at 5:39 pm | Permalink

    So press officer for a Nationsl Park and five years as a Lib Dem MP qualifies him? The obvious candidate was Hammond and people seem to think that Mr Alexander was actually suited to be alongside Letwin to smooth things along. Laws is a loss but he had to resign (and credit to him for a reasonably smart exit). I hope he stays an MP and helps HMT ex officio. This financial mess Brown deliberately wrought is the prime task of HMG.

  5. Plato
    Posted May 31, 2010 at 6:25 pm | Permalink

    Ouch.

    As Mr Martin of the WSJ observes – Mr Alexander doesn't match your last two criteria either.

    Why they didn't move Hammond across is a mystery – I can only assume it was a ruse to keep the LD's hands in the cuts blood/closeness to NC.

    I am very angry/disappointed that the Telegraph are muck raking over expenses AGAIN. Mr Laws was an outstanding CS and a line should have been drawn under the scandal of claims at the GE.

    Their assertion that Mr Alexander has done something dodgy is without foundation – as I'm sure anyone who has glanced at HMRC's own guidance notes states.

    I'm forced to conclude that the DT just want to bring the coalition down. Certainly a lot of their lefty correspondents seem to be axe-grinding like there's no tomorrow.

    What a great shame that a once good quality broadsheet has become sort weird kluge of the Mirror politics/Daily Star zelebrities and UKIP lovers masquerading as the true heart of the Conservative Party.

    I have to read the by-line before adjusting my bias meter as their editorial stance is completely schizophrenic.

    • APL
      Posted June 2, 2010 at 12:34 am | Permalink

      Plato: "I am very angry/disappointed that the Telegraph are muck raking over expenses AGAIN."

      I'm angry that there is still muck to rake.

      Cameron was supposed to have eradicated the rot. We'll see.

      This was the Lib Dems, they are notoriously hypocritical. So the only people surprised to find them up to the old tricks, are Lib Dem supporters.

      Are there any around here?

      • StevenL
        Posted June 2, 2010 at 8:59 pm | Permalink

        I never have been but Clegg is going up in my estimation. I think they had it right on the 10k 0% band.

        On average, people losing their job and taking a new one get a 23% pay cut according to a prominent fund manager.

        So surely relieving them of some tax burden is putting money into the economy under tory economics.

  6. h singh
    Posted May 31, 2010 at 6:40 pm | Permalink

    i find it baffling that chris hune wasnt chosen, he after all has a financial background, danny is just a stop gap until laws come back

  7. Nick
    Posted May 31, 2010 at 8:17 pm | Permalink

    Well, one advantage. He knows all about the dodges with CGT. Takes one to know one, so to speak

    • GeoffH
      Posted June 1, 2010 at 9:36 am | Permalink

      Someone else who hasn't read the HMRC guidance.

      There was no liability. No loophole. No dodge on Danny Alexander's part.

      Almost everyone who has moved house as part of their job, will have had periods when they've 'enjoyed' overlapping ownership of two houses; one their main home for some time and another about to become their main home for the years to come.

      It's happened to me at least four times, as best I can recall, with it taking upwards of more than three months to sell the home left behind in one case and as long as two years in another as part of career postings.

      That it may take some time to sell the first home is why there is a 'grace' period under which there is no CGT liability. That is why Mr Alexander faced no liability for CGT.

  8. pancake
    Posted May 31, 2010 at 8:47 pm | Permalink

    This CGT avoidance thing is a ridiculous story. What he did is exactly what the Inland Revenue's self-assessment guidance leaflet tells you to do… it asks if you've lived in the second home within the qualifying period, and if you have, says you aren't liable to pay tax on it. The Telegraph would only be happy if Alexander had gone out of his way to pay a whole lot more tax than he was supposed to… seriously, you can't blame the guy for following the rules – even if the rules don't make a lot of sense.

  9. Coalition Liberal
    Posted May 31, 2010 at 10:13 pm | Permalink

    I'm afraid Fausties, Alexander has done nothing of the sort. His statement makes that quite clear.

    I am glad Mr Redwood has given his limited blessing. I hope he proves to be correct.

  10. john east
    Posted May 31, 2010 at 10:22 pm | Permalink

    As long as the cuts are made, where they are made is of secondary importance.

    Mr. Alexander only needs one guiding principal, and that is to ensure that front line services and front line employees are affected as little as possible, and that the bloated middle to upper management bureaucrats are effectively purged. However, the civil service and quangocracy will have the opposite priorities.

    Managers will be fighting for their own skins and seeking to embarrass the government with headline making cuts of nurses, teachers, binmen etc. There's nothing more likely to save the managers skins than a wave of unrest as front line services are cut.

    So, the question is, does an inexperienced and untested Mr. Alexander have the whit to defeat a few thousand Mr. Humphrey's?

    It will be interesting to see the outcome.

  11. Peter
    Posted May 31, 2010 at 10:58 pm | Permalink

    Mr Redwood seems to be so removed from public probity as the rest of the political classes. Both Alexander and his predeessor should be (brought to account for their claims of expenses-ed) and (if found guilty of wrongdoing?)barred from standing as an MP or indeed from membership of the Lords as well for the rest of their natural lives.

  12. NED
    Posted June 1, 2010 at 12:51 am | Permalink

    God ! I'm so fed up of all these corrupt MP's and all the dual standards. If they have broken the law then due process should be adopted and the bastards removed from any public position and be barred from taking any other position of influence. Treat then as they would treat a common criminal as there is no difference!! Why should anybody uphold the law when these governing bastards believe that the law of this land is not for the likes of them???

    Reply: Yes, the law does apply to MPs. It is the nature of English law that MPs like everyone else are innocent until proven guilty, and have to stand trial against charegs brought when there is reason to do so. None of this relates to Mr Alexander who is not the subject of any criminal allegations.

  13. David in Rome
    Posted June 1, 2010 at 7:48 am | Permalink

    At last some sense about this issue, but this is what we always get from John.

    I recall some complaints about Ken Clarke as Chancellor as he had no economics background, worse – he was a lawyer, but that certainly didn't stop him being one of the most successful Chancellors of modern times (baring a VAT on fuel or two).

    Danny Alexander however was closely involved in the Tory-Liberal coalition negotiations and is thus probably politically well qualified for this position.

  14. Andrew Duffin
    Posted June 1, 2010 at 2:17 pm | Permalink

    "He needs to protect schools and hospitals "

    As long as he understands that this does NOT cover all the bureaucrats, time-servers, quangoes, and other wasters who hang around these institutions in ever-increasing numbers.

  15. A.Sedgwick
    Posted June 1, 2010 at 8:24 pm | Permalink

    Had Alexander applied to any Footsie 100 company to be financial controller, not finance director, would he have even got an interview?

    • John Hatch
      Posted June 3, 2010 at 3:06 am | Permalink

      Doubtless not, but the job of Chief Secretary is very different from that of financial controller in a public company and nothing hangs on the point.

      I think John Redwood has made an accurate and shrewd assessment of Mr. Alexander's suitability for the role; and what will be required of him if he is to be successful.

      On 20 June 1970, following his victory in the General Election, Edward Heath appointed Iain Macleod, who had a formidable reputation, to be Chancellor of the Exchequer. On 20 July 1970, Mr. Macleod died of a sudden heart attack. His successor was Anthony Barber; who over the next three and a half years was not conspicuously successful. Mr. Laws is hardly in Mr. Macleod's league; but let us hope that Mr. Alexander does better than Mr. Barber.

  16. christina sarginson
    Posted June 15, 2010 at 10:56 am | Permalink

    Interesting blog and the comments are even more intereting. In my opinion I feel it is wrong to label someone as not appropriate if they have not carried out a job which does not appear to be the same. Surely we should be looking at skills, experience and potential to do the job. If we are looking for people who have done the same job before we would be waiting for a long time.

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    […]   First, Clegg assured Naughtie that government continued without David Laws, and he echoed John Redwood’s and William Waldegrave’s point that Chief Secretary is a political job in which the author of […]

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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