The Follies of Business Government

Reforming the British state remains a political task

‘No more will we be ruled by men

Whose sole qualification

Is not ability and ken;

But lies in rank and station:

None shall this land

Henceforth command,

No men will we submit to,

But those who business understand;

Practical men of ditto [sic].’

—Punch, ‘Madrigal of Administrative Reform’, May 1855.

As Reform UK continues to prepare for government, one can observe a nascent infatuation with an age-old British tradition that has perhaps gone under-discussed, namely ‘business government’. Reports indicate that the party intends to appoint a string of ‘top business leaders’ to some of the most senior roles in government, including in the Treasury, where Farage hopes that such figures will begin to approach the public finances ‘as if you’re running a business’. Some sources even claim that there are plans to procure ‘up to 50%’ of the cabinet from industry and that the party is already soliciting policy proposals from firms — reported, admittedly, by a far-left publication, but hardly contradicted by the party’s own pronouncements. It is also no surprise that these ideas would command such strong support from a leadership cadre highly accomplished in the City and elsewhere in the private sector. Either way, Reform’s ambition clearly extends far beyond a simple desire to better hear the needs of the business community, envisioning the substitution of efficient administrators for inexperienced parliamentarians across the political offices of state.

It is not to denigrate the achievements of the corporate heavyweights Reform undoubtedly has waiting in the wings to note that this is a concept fraught with misguided assumptions — and indeed less of a novel hypothesis than a recurrent trend with a long and tortured history. For the structural differences between corporate and political life, insofar as the two can be separated, are such that the talents of businessmen cannot be expected to transfer effectively. Worse still, an excess of faith in business government risks actively subverting the ideological qualities that constitute Reform’s greatest asset in its mission to rescue the British state.

The most fundamental distinction between these two worlds lies in their system of incentives and the absence, in politics, of a ‘good’ that begins to approximate the paramountcy of the profit motive in corporate life. Of course, this fact does not preclude the existence of ‘politics’ (in both the ideological sense and in terms of the basic struggle for power between individuals) within firms. It nevertheless remains that profit and its increase are objectives that every member of a company has some conscious interest in. This is true, most of all, for those to whom our prospective business-politician is typically accountable: shareholders and their pursuit of returns in the form of dividends or capital gains, via a board of directors. What is relevant for our argument is that business executives are thus accustomed to their actions being graded and rewarded, principally, against a quantifiable bottom line — an unambiguous metric without which Reform would be unable to identify genuinely talented individuals in the first place.

‘Success’ in politics, however, is infinitely more elusive. To understand this problem, we must first consider the web of agents in which it unfolds. While the relationships a firm maintains are in many respects endogenous — being free to choose, for instance, which consumers to target and which third parties to do business with (exceptions notwithstanding) — government departments enjoy far less flexibility. They must serve all citizens, at all times, and inexorably in cooperation with the other departments, owing to statutory rules, inalienable state monopolies (justice, taxation), or simply the sheer scale of existing interdependencies. There are significant administrative challenges embedded in this structure itself: the impossibility of creative destruction in the provision of essential services, the presence of legally equal, rival departments in the place of subcontractors. But the most critical point concerns the preferences of its agents, which at every level, from individual voters to the Prime Minister, are informed not by the dispassionate logics of profit — again, quantifiable outcomes towards which all agents can unify — but by a kaleidoscope of differing, frequently unintelligible normative beliefs.

Whether these exist as a precursor to or post-rationalisation of individuals’ policy preferences, and regardless of whether all citizens can be said to share a common material or ‘true’ interest, what matters is the discursive reality that there will always be a degree of opposition to any political action. I refer chiefly to voters and parliament, but also to other departments which, in tandem with public opinion, will compete for the favour of the Prime Minister and/or Treasury on explicitly political terms. Administrative efficiency, or ‘value for money’, is, certainly, one such example — but by no means the most compelling one. Agents have no choice but to address and leverage (lest they be outmanoeuvred) the sentiments that dominate public discourse in spite of what appears irrefutably rational.

Let us suppose, for example, that a minister seeks to trim Britain’s entitlement state to bring the public finances more closely in line with the standards upheld in business. His policies may reasonably project a small but necessary reduction in expenditure without the risk of citizens falling below the minimum standards of assistance that a modern society requires, effected via, say, reductions in PIP eligibility or means-testing the Winter Fuel Allowance — a quantifiable administrative achievement. But how will he manage the outcry that sank such efforts under Starmer’s premiership? How will he convince the electorate that these material benefits, often held to be ‘rights’, are worth giving up? Wherever the answer may lie, it must go beyond statistical realities — which the public is unlikely to comprehend in any case—and approximate the idealism of its opponents: an appeal to patriotic duty or the welfare of future generations, for example. ‘Success’ is not self-sustaining but must be politically constructed.

What is ultimately necessary to salvage control over the state (and thereby any political victories for Reform) is its reworking — chiefly by creating porousness between a party/policy machine (a.k.a. the ‘elected government’) and the civil service and implementation apparatus (the ‘permanent government’). This is understood in Reform by Danny Kruger and is beginning to be reflected in his proposals in Preparing for Government. This article serves only to underline that while Reform’s ‘technocratic’ pitch cannot be lost, a fetish for businessmen in government alone is insufficient and in fact more likely to encounter challenges to exercising ministerial control without individuals with the experience of having developed the subtle language to goad the Walruses of Whitehall into waddling. These issues have plagued even the government most favourable to the permanent bureaucracy in decades, namely the premiership of Keir Starmer — for here the issue is not typically a question of the ‘loyalty’ of the bureaucrats in question, but their procedure-enforced languidity.

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These difficulties are thrown into relief if we consider the career of Eric Geddes, a railway tycoon-cum-politician under the aegis of David Lloyd George. Despite his present reputation mainly resting on his expansion of the welfare state, Lloyd George’s war-postwar Coalition era was perhaps the most extensive experiment in business government to date.

Formerly the general manager of North Eastern Railway, Geddes first took office in 1915 at the newly established ‘Ministry of Munitions’ (MoM) as one of the several business leaders, the ‘men of push-and-go’, brought in to fix a crisis of the British state. The particular crisis in question was, of course, a failure of procurement. Britain was rapidly approaching a shell shortage that was nothing short of apocalyptic, and the war effort was effectively being sustained on the back of imports from the USA. So critical was the issue that Lloyd George, having already made his name on his ability to bust up and Get Things Done as Chancellor over the turbulent Asquith premiership, was moved to head the new ministry. The MoM would be ‘from first to last a businessman’s organisation’, believing that the moment demanded ‘great improvisers’ who could build from scratch and would not be in thrall to the War Office bigwigs held to have failed in the first place.

The ministry was, in fact, a smashing success. Geddes pushed through sweeping rationalisations and within the year, output had increased so dramatically that British shells were beginning to overflow at French docks. His work complete, Geddes was quickly moved elsewhere, first to military transportation, then the Admiralty, and with victory at last, the Demobilisation Committee. It was only in the last of these roles that he suffered noteworthy failure, with mutinies breaking out amongst yet-to-be discharged men in Normandy and Kent. These were admittedly short-lived and Geddes’ decisions largely reflected those of the other senior politicians on the committee.

It was ultimately in his leadership of the newly-created Ministry of Transport (MoT) that both Geddes and Lloyd George envisaged as the former’s peacetime destiny, and it is here that this happy tale begins to fall apart.

The plan for the MoT was one of the duo’s most ambitious yet. Driven by the view that ‘unbridled competition’ in the sector was inherently wasteful, the ministry would seek regulatory control over all elements of Britain’s transport network with a view to effecting centralisation and modernisation. It was not an entirely unfounded view, as the pre-war railways — then the dominant mode of transport — had nearly two hundred private providers, declining profits and rising costs, declining share values and difficulties coordinating investment due to duplicative projects. Amalgamation made some sense, and the numerous local providers were merged by the 1921 Railways Act into four regional monopolies aiming to modernise the network to create synergy with rationalised roads and ports. This would form one of the foundations of reconstruction and export growth. Geddes, emboldened by his wartime triumphs and animated by genuinely nationalist convictions, was confident of success in creating a modern transportation network.

It was not to be. The Railways Act did achieve efficiencies by reducing administrative duplication, through-ticketing and freight coordination and investment could now be planned on a regional basis while parallel routes and facilities were rationalised. But savings were less dramatic than anticipated, owing to large debts, ageing infrastructure, significant labour costs, and obligations to serve unprofitable routes. Over the 1920s and 1930s, road competition diminished the importance of railway transportation and the regional monopolies remained in a fragile position.

Geddes had quickly learned that the skills that had served him so well were of little use as the MoT was turned into a ‘graveyard’ before his eyes. Perhaps this specific failure could be described as bad luck, or the result of a singular bad decision, and it could be argued that we cannot dismiss business government from Geddes alone. But there were deeper reasons for the ministry’s collapse. We must first acknowledge the truly unprecedented and necessarily fleeting set of circumstances that made Geddes’ (very real) wartime achievements possible in the first place: namely, the demands of total war and the collapse of political complexity that the shared desire for victory brought about, for instance, the suspension of electoral politics, as all three parties shared in government, while economic orthodoxies were likewise abandoned or deferred.

As such, Geddes was free to succeed less on the basis of political or methodological ingenuity as the precise opposite. In munitions and military transportation alike, arguably the largest contribution to scale came from a strategy of procurement at (often absurdly) high prices to encourage supply, while the rationalisations found were generally the product of the agreement of the Unions to their own dilution was secured through a promise that it would be reversed at the end of the conflict. Such actions could only be taken thanks to the sidestepping of procedural and fiscal rules that wartime controls permitted, and the consent of the public writ large to this new purpose in the state.

By contrast, the MoT came into being under conditions of peace and the corresponding reassertion of political interest. Lloyd George and his allies may have hoped that the culture of coalition would prevail and that the transformation of the state effected by war might serve as a lasting foundation for a new socio-economic order, but many more believed that either a conflict on this scale would never happen again or that Britain’s victory had only vindicated the pre-war political settlement. As such, wartime norms came under vehement attack: state expenditure — or ‘squandermania’ — saw the government lose repeated by-elections to conservative hardliners on the issue, while industry and the Treasury alike lobbied for an end to wartime taxes and controls. The so-called ‘Geddes Axe’ (Geddes also oversaw systematic cuts across various departments) had to cut through the whole of government spending — and, while certainly successful in its immediate aim of reducing expenditure, interfered with the plans of another of Lloyd George’s ‘men of push-and-go’, Christopher Addison, Minister of Housing, who had made his own grandiose promises.

It was this pit of vipers into which Lloyd George dropped Geddes in 1919. Seemingly taken unawares by the depths of opposition his proposal to assert control over every aspect of transportation encountered, faced with accusations of ‘autocracy’, and active sabotage by the Board of Trade, he shied away from dirtying his hands with politics. He believed that the merits of his scheme would speak for themselves and refused to ‘start making political speeches at political meetings’. The MoT was subsequently cut to pieces — by both cabinet and parliament — retaining control of little more than rail, with which it effected the regional amalgamations but otherwise had no power to force other improvements. Geddes would leave politics dejected and convinced of the separateness of business and political life.

The purpose of this tale is not to taint business government as a whole with the brush of Geddes’ particular naivety. Indeed, the failure of the MoT can be broadly understood on precisely the same terms as Lloyd George’s broader reconstruction programme (embodied most famously by the failure to build ‘Homes for Heroes’ under Addison). Whether or not it might have been possible for some constellation of factions — between Labour, ‘New Liberals’ like Lloyd George, Asquith’s halfway ‘traditional’ Liberals, and the true coalitionists amongst the Unionist party — to sustain a more extensive reconstruction, what is relevant is the simple fact that this did not materialise: that there was no political leader accompanied by a political discourse capable of enlisting a sufficient contingent of opinion behind the project.

This is how we must understand other tales of business government, in the decades since. This experiment would recur, for example, with the appointment of John Davies — former director of the CBI turned Secretary of State for Trade and Industry—under Ted Heath, as well as under Gordon Brown, who brought in Digby Jones, likewise an ex-CBI director, to fill a similar role. Neither of these individuals — talented though they may have been (and all evidence suggests they were indeed talented) — were able to effect the change that could only occur through a reckoning with the political discourses of their day: Davies was compelled by the state’s capitulation to the TUC to maintain a listless policy of subsidy and nationalisation, while Jones’ tenure appears to have consisted of little more than hapless wonder at the indolence of Civil Servants.

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Administrative competence is, of course, an essential quality of ministerial government, and career politicians are not necessarily better. Our own crop of politicians is undoubtedly at a low point in quality. But the point remains that possibilities are circumscribed by politics.

Fortunately, Reform’s ideological foundations are undeniably potent with the ability to sell necessary, difficult and painful decisions to the public. This lies in the fact that, as has been discussed before in this Journal, Reform is perhaps the sole genuinely national political voice in the country. Its appeal cuts across all segments of British society and its pitch is ‘technocratic’, that the basic demands of the nation which have been left unanswered, can be resolved by the introduction of expertise to accomplish political ends where the ordinary politicians failed.

All of this begs the question: so what is the risk? Why, if Reform’s ideological qualities are so strong, is it a problem for the party to see in businessmen a means of infusing a degree of administrative competence that is so often lacking in ordinary politicians? Our concern ultimately becomes one of the discursive and political risks embedded in the idea of ‘business government’ itself.

Lloyd George did not invent the idea of shipping the business brains into the government to get things done. This idea has repeatedly resurfaced in moments of crisis and state failure across British history. The Crimean War, for instance, saw the creation of the ‘Administrative Reform Association’ (ARA), a pressure group of middle-class radicals concerned with ending what they perceived, not incorrectly at this time, as an aristocratic monopoly on political and military posts, while in the twentieth century the Boer War prompted many amongst the patriotic masses to argue that successful businessmen — among whom Joseph Chamberlain loomed large in the popular imagination — should take control of the state. The turn against the boozy ‘Squiffy’ and a parliament of ‘old gangs’ over the 1914-16 period, and the enthusiasm this lent to the MoM, can be understood similarly.

In each of these instances, a similar equation can be identified. Outraged by the bungling of national interests, patriotic contingents of the public would choose businessmen as their avatar of (creative) destruction and reform at the expense of traditional elites. The groups in question were often newly-mobilised — the middle class of the ARA following the 1832 Reform Act, the increasingly ‘jingoistic’ working class in the wake of the Reform Acts of 1867 and 1884 — and as such sought to use ‘business government’ as a means of establishing radical new political norms. In the days of the ARA, this concerned ending a very real aristocratic stranglehold (particularly in the military) on the state’s decision-making capacity, while in the years between the Boer War and 1916, the impetus was to empower technocrats from science and industry to govern the country under a coalitionist spirit that would end the party squabbling from which only elites and foreigners could benefit. Whether or not these prescriptions proved successful is perhaps less important than the fact that they sought to open up genuinely new political terrain.

‘Business government’ in our own time, however, tends to work in the opposite direction. Nowhere is this clearer than in the semantics of a ‘war on waste’ which promises to identify spending that can be eliminated without any real cost to anybody. By asserting that meaningful fiscal savings can be found simply by excising fraud, the most blatant acts of wokery (such as Gender Studies PhD theses), or by implementing simple methodological improvements, the politics of business-like administration can serve to retard political discourse. This, certainly, was the impact of Elon Musk’s DOGE project in the United States, which had zero authority over entitlements like Social Security and Medicaid, delivered cuts below 1% of what was promised, and yet left office with triumphant claims of victory. At the same time, the discourse of the American right has degenerated from an ostensibly serious engagement with the issue of national debt in 2024 to overseeing an increase in the debt ceiling, joined with deranged commitments to some of the most lucrative aspects of state largesse.

This is not to suggest that businessmen cannot play integral or frontline roles in the changing of the guard that has to take place. Indeed, it is a part of Reform’s appeal. Reform is a more serious entity and recognises the limitations of its ambitions in the next years, but smashing the ‘uniparty’ is chief amongst them. But the essence of the Uniparty does not lie in the Commons, a particular Cabinet or even the bureaucracy alone — but rather in political culture. And to that end, there is still much work to be done.

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This article was written by John Thermidor, a Pimlico Journal contributor. Have a pitch? Send it to submissions@pimlicojournal.co.uk.

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