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Interview

Danny Alexander

Danny Alexander reflects on his time as chief secretary to the Treasury in the coalition government.

Danny Alexander leaving No.11 Downing Street
Danny Alexander, former chief secretary to the Treasury

Danny Alexander was the Liberal Democrat MP for Inverness, Nairn, Badenoch and Strathspey from 2005 to 2015. He served as chief secretary to the Treasury between 2010 and 2015 in the coalition government, and before that as secretary of state for Scotland in May 2010. 

Megan Bryer (MB): Could you tell us a bit about your role in the negotiations between the Conservatives and the Liberal Democrats following the 2010 general election, to start with? 

Danny Alexander (DA): So I led the Liberal Democrat negotiating team in that period. And I'd been – also for the Lib Dems – leading the preparation for coalition negotiations in advance of the election. So that had been a process that Nick Clegg [then leader of the Liberal Democrat Party] had asked me to lead. It went alongside my responsibility of writing the party's manifesto – chairing the group that wrote the manifesto for the 2010 election – and also my role as his chief of staff. In that period, I led the negotiating team, which meant obviously the actual negotiations themselves, coordinating with counterparts on the other side. 

So William Hague [then deputy leader of the Conservative Party] was leading the negotiating team for the Conservatives. Labour didn't really have a recognised leader of their negotiating team, but I coordinated with Peter Mandelson [former first secretary of state for the Labour government], who was kind of coordinating for Gordon Brown [former prime minister] at that time. I don't know if our exchanges were leaked to anyone outside the process, but anyway, we’ll maybe never know! But also within the Lib Dem Party, we had quite an elaborate system of internal governance. And so, after the negotiations, there was obviously discussing with Nick and his team and working out where things lay and where we wanted to move or not move, but also reporting back to our parliamentary party, our federal executive policy committee and so forth. And then ultimately also taking the recommendation to join the coalition, which we'd already entered by that stage, to the special conference of our party, which was about a couple of weeks afterwards.

MB: Then once you entered government, you were one of five Liberal Democrats in the coalition cabinet. How open did you find the relationship between the two parties, and can you reflect on how much information sharing there was? 

DA: It's a good question. So, when the coalition was formed, I became the secretary of state for Scotland. I did that job for two and a half weeks. But part of what that job allowed was also playing a kind of central coordinating role, facing off to Oliver Letwin [former Conservative minister for government policy and chancellor of the Duchy of Lancaster], particularly on the Conservative side. He and I were members of almost every cabinet committee that was going, some that we chaired, and trying to make those formal mechanisms work from a coalition point of view, which meant being able to troubleshoot and so forth. You know, quite quickly that function really was taken over by the Quad [the executive committee which provided leadership for the coalition]– so myself, Nick Clegg [then deputy prime minister], David Cameron [then prime minister], George Osborne [then chancellor] and relevant officials where required. And I would say that at that level, the information sharing was really good.

"information sharing within the coalition was by and large very good. But I know that experience varied widely. And honestly, it shouldn't have done."

I think reflecting on the coalition agreement, we spent a lot of time on the policies, naturally, because that was what would determine whether the coalition would be able to be formed or not. Having a policy programme that we could agree to. We didn't spend enough time on the mechanics, actually. And so I think what it meant was that the information sharing worked well where either people got on well, or it was the centre of government, or you had officials who kind of understood what a coalition really meant. And there weren't that many of them, to be honest. In departments where people didn't get along well, then it became much harder. 

Some of our junior ministers found it very hard to get information about things that were outside their own ministerial brief. Some did. So, Steve Webb [former minister of state for pensions] and Iain Duncan Smith [former secretary of state for work and pensions], I think, exchanged a lot of information across the whole gamut of welfare issues. You know, I think in some other ministries, like the Home Office, for example, they made much more effort to try and keep the Lib Dem minister in their ministerial lane and not really allow the coalition to function in the same way. So we spent quite a lot of time at the centre trying to unblock those kinds of things. For me and the Treasury, I think George Osborne and I worked well together. We got along pretty well. Also, it was the core of the coalition, really, given what we were trying to do. And we had the Quad. So from my experience, information sharing within the coalition was by and large very good. But I know that experience varied widely. And honestly, it shouldn't have done. 

"it's in that negotiating period when, as the minority party, your power is greatest, actually."

From a coalition organisation perspective, I think one of the things I would say should be done differently – if there ever is another coalition – is to negotiate at the beginning an agreement on how information should be shared and how people should work together. So you're clear about that and so you have a template. The most important advantage of that is that then every official in the government knows what they should follow. So it was quite interesting. The coalition agreement which we negotiated was… I think it was treated as almost more binding on the government than the manifesto of one party that had been elected because it was like a founding contract. And so, a lot of attention was paid to whether we had implemented everything in the coalition agreement. I think if we had also had alongside that, or even within it, some protocols on how we should work together. And actually, we had considered that in the preparations, but I think the issue was in the coalition talks that the timetable was tight. We had lots of external factors pushing which mitigated in favour of reaching an agreement pretty quickly. And then Gordon Brown decided to leave Downing Street. And so we had to decide whether we could agree on the basis of what we'd got to so far. And it's in that negotiating period when, as the minority party, your power is greatest, actually. Then in those early weeks, we did put some of that in place but then it didn't have quite the same binding character.

MB: Can you tell us a bit more about those relationships with Nick Clegg, David Cameron and George Osborne. What was it like working with a chancellor from a different political party to you? Were there disagreements, and how would you approach those?

DA: Of course, often. So I think one of the benefits of a coalition government actually is that those kind of ideological or policy disagreements are built in and understood. They exist just as much – or maybe not just as much – but they exist within single-party governments. In single-party governments, those things tend to be resolved through hierarchies and personality. Whereas I think in the coalition government, what it created was a situation where you had to work together to really understand what the implications were of particular issues. 

"one of the benefits of a coalition government actually is that those kind of ideological or policy disagreements are built in and understood."

I think it led to better policy making in the sense that in the Treasury, officials would present different perspectives on the same issue. They understood that in order for the Treasury and, in one sense, for the economy to function, we had to reach agreement and therefore we had to debate it based on the evidence. Then there'll be a process of negotiation. I think we always took the view that as a government, you'd do better if you built things – I mean, you could always go to the lowest common denominator, and you only agree the very few things that you agree on. Or you can have a different approach where you try and build it up a bit more and you do some things that Lib Dems want but Tories don't want, and some things that Tories want but Lib Dems don't want, and you try and create a more ambitious but still coherent package. And I think especially in the first maybe three years of the coalition, we went for that approach. Obviously, as you get closer to an election, then other factors become more and more important. You were asking about disagreement. I think disagreement was built in and it was very explicit and so it actually created a better set of circumstances through which differences could be resolved, or at least issues could be debated and policy could be made.

Rebecca McKee (RM): Thinking back to your time as chief secretary to the Treasury, can you tell us about the conversation that you had when you were appointed? Was that with the prime minister, the deputy prime minister, or both? 

DA: It's a good question. I'd say the most important conversation was with Nick, actually. When we knew that David Laws [former chief secretary to the Treasury] was planning to resign – although it was in the process, it wasn't public yet – Nick asked me to come up with a list of names of people who could replace him. I gave Nick a list of I think four or five names, and I think mine was fourth or fifth on the list. Then he went and discussed it with David Cameron. And then he came back and said, “Well we think we'd like you to do it”. So that was the most important conversation. I think I then had a conversation with David Cameron. That's not so vivid in my memory, to be honest with you. Because of the way the coalition functioned, the position was Nick’s to fill.

Now, he had to fill it in a way that didn't leave the coalition partner feeling massively uncomfortable, and that would be true in both directions. But it was really his decision, so the most important conversations were with Nick.

RM: During your time as chief secretary, the Treasury delivered a set of austerity budgets and a spending review which set the spending limits of government departments. What are your reflections of the spending review process and of negotiating with secretaries of states where they're from different parties? 

DA: Yes, so we set the framework for the spending review in – this is the 2010 spending review because I think I did two – but in the 2010 spending review, we set the framework in the emergency budget in 2010. So in preparation for that, I did a piece of work looking department by department at the level of reductions that I thought could be done. Then George, as the chancellor, did a piece of work looking top down in aggregate, what did he feel was needed for the macroeconomy? And then we put the two things together. And there was a bit of a gap. So we worked through that in terms of what was really achievable and necessary. And that's what we announced, the path to public spending and some of the tax changes that we made in 2010. 

"for some of the departmental meetings, I knew more about what was going on in the department than the minister did – which is not a good look for them."

Then the spending review process itself, I did and we did a lot of preparation for it. Then I negotiated with every department to reach settlements and we set a framework. We gave departments guidance about how much we wanted them to save in an upper and lower range, and we set up an internal process – public expenditure committee and so on, with some kind of incentives built around that. I mean, it was a very interesting process because we had views, Treasury had views about where we thought savings could be found. I had my own views about what should be prioritised and what shouldn't be from a from a party point of view, but also we had priorities that were set out in the coalition agreement. So that was very valuable, because those were things we had to do. The Pupil Premium for education [a coalition government initiative to provide additional funding for more disadvantaged pupils] was one example. We had to deliver the coalition commitments, we had to deliver the spending review numbers, and we wanted to make as many of the savings as possible through efficiencies – that was important – and reforms, which is a sort of bigger area. Welfare reforms, public service reforms, legal reforms, and so on and so forth. And that's one of the reasons why we set the spending review over the life of the parliament, because that then gives you time to deliver the changes that get you eventually to the level of savings that you need. I mean, it was quite interesting. 

I would say for some of the departmental meetings, I knew more about what was going on in the department than the minister did – which is not a good look for them. I was often sharing information in some cases about what money was being spent on that they weren't necessarily aware of. In other cases, we had a very tough negotiation. Some people would say that you're better to push for more and then keep what you really want held back. I was very transparent and said, “This is what I think you need to get to, what we need to get to in your department. And so we can work together to do that and find the best way, or ultimately that's the number that's going to be imposed on you”. 

Actually, the best discussions were ones where we were really trying to talk through what are the things we really care about in this space, and what are the things that we can change, in order to get to the outcomes that were needed. Some departments were quite easy to settle. Some departments – I guess, either the officials or the ministers or a combination of two – had already thought about it. They had their proposals. That was quite straightforward in some cases. Others were much tougher. I think Ken Clarke  [former Conservative lord chancellor and secretary of state for justice] at the Ministry of Justice was the last to settle. I had very in-depth conversations with Theresa May [then Conservative home secretary] at the Home Office. But I would say that some of the ministers who outwardly would be most in favour of reducing public spending, were the ones who wanted to reduce their own department the least. So it didn't go along ideological lines. Everyone saw that there was a role to be played. It was a very intensive process over the course of six months.

"some of the ministers who outwardly would be most in favour of reducing public spending, were the ones who wanted to reduce their own department the least." 

I think one of the things that was also important in that space was to try and get as good an understanding as we could of what were the consequences of decisions – especially the kind of distributional consequences. And actually, the Treasury's understanding of the distribution of public expenditure at that time was rather rudimentary, as compared to the more detailed understanding of the distributional consequences of tax and welfare decisions. And so we spent quite a lot of time trying to enhance the capacity to understand where is the ultimate impact of public expenditure changes. That analysis also played a part in our discussions and then time was spent afterwards in the subsequent years trying to improve that.

RM: You also led the Treasury's initiative on public sector pension reform, which triggered strikes and which was unpopular with the public. What was it like making a case for those reforms at the time? 

DA: So I'm not sure they were unpopular with the public. I think this is a slightly misframed question, if I may say so. I think they were unpopular with trade union members, which is a lot of people. But I think with the wider public, there was also quite a lot of sense that the pensions of public service workers are much more generous than the pensions in the private sector and so this is quite a legitimate area to try and make savings in.

I think that was the right argument, actually. I felt perfectly comfortable making that case. It's a case that we also made in opposition. The meat of it was not making the case. The meat of it was the negotiations. I led the negotiations. We commissioned John Hutton [member of the House of Lords] to do a review, that set a framework. But actually, we had negotiations over 12 months, 15 months which I led for the government. Then you had the leaders of the main trade unions. Dave Prentiss from Unison [public service union] was very active. There were others who were very active. Obviously, the TUC [the Trade Union Congress] was also very much involved. 

That was a really interesting process, because of, I think, a couple of things. One is that I took the same approach that I did to negotiating with departments to say, “This is what we need to get to, and we want to find the best way to do it, the fairest way to do it”. I think those union leaders understood that I was not interested in gutting their pensions. I was interested in finding a financially sustainable way to give public service workers decent pensions over a much longer period. I think if there hadn't been Lib Dems in the government then, perhaps the outcome would have been rather more severe. In particular, the 25-year safeguard that was built into those reforms would not have been made. It took quite a while for that argument to land. 

But also, I think the other thing was that pensions of public servants had always been a matter that was negotiated between the unions and the government. If they'd walked away from the negotiating table and left the government to impose, they would have had no basis to argue for negotiated settlements ever again. So that incentivised everybody to work together to find a reasonable settlement. And in the end, what we settled on – which was to replace final salary with average salary – I think was pretty fair all round. Only really the highest paid public officials – people see a big increase in their salary at the end of their career – who lost out very substantially. And we increased contributions. I still think it's a pretty fair settlement, actually. I mean, a lot of people complain today that public service workers still get better pensions than those in the private sector. But I think it was a balanced thing. But of course, you're right, it also led to some protests and some strikes and all that kind of thing. But in the end, that's part of it.

RM: Reflecting back now, what do you think are some of the particular successes or failures of the coalition government's tax policy?

DA: I mean, I don't want to get into that by criticising successor governments because this is me reflecting on my time in office rather than commenting on the situation today. I think we made some… look, the UK tax system continues to be very complicated, so we didn't make much progress with simplification. I think that we made the tax system a bit fairer, so the Lib Dem policy of increasing the tax threshold – so that taking lower income people out of tax – we delivered that, more than delivered it. I think that was a good change, which I think it's been eroded since through freezing of thresholds, but I think that was a step in the right direction. We made quite a few changes to deal with tax evasion and avoidance and so forth. Some of the things that we put in place, like some of the levies and so on, are still there. But I think the balance we were trying to strike was we needed to raise revenue as part of the effort to balance the books. So we increased VAT, for example, which wasn't very popular, but actually better to move one big thing. But we also sought to try and protect as much as we could the growth incentives within the tax system – some of the incentives around entrepreneurship and so on. I think that stuff we did quite well actually.

RM: Thinking about how the Treasury operated as a department, how did you find the quality of officials working for you and did you feel you were supported?

DA: In general, the quality of the officials was very high, and I think if you're going into office as a minister, you have to recognise that most of the officials there are hardworking, well-motivated people who are trying to do their best. And that actually, your job as a minister is to set policy directions and take decisions. If you're capable of taking decisions, asking questions, challenging, if you have a clear view about what you think about things, then you'll be a better minister than if you're not able to take decisions. Because that's ultimately what civil servants need is, you know, policy analysis, debate, discussion, but the end result is a decision which you're then capable of sticking to, not abandoning when a bit of pressure comes along, of whatever nature. 

I think what I found was, in general, the quality of the analysis was quite high. I liked to meet the more junior officials who'd actually done the work on the papers rather than necessarily the senior officials who turned out to present it. The first time I said that, I caused some annoyance, but gradually it became… Because officials need to know what you think about things and take time to – and that's particularly important in a coalition. Because they're obviously also having the same conversations with George. And they're hearing what he thinks, and I’m there trying to work out, well, what's the option that might be acceptable to both sides? So they're thinking about that at the same time as we're talking to each other. So that's quite helpful. 

I think that in the Treasury, there were some officials who really understood the nature of a coalition and some who didn't. I'd say that was a bit of a challenge sometimes. So Nick Macpherson, the permanent secretary, [former permanent secretary to the Treasury] was very good. He understood that. I'd often bring him in to solve problems. But all departments are very oriented to their secretary of state or to the chancellor and so you have to break that down in a coalition situation. Otherwise, it's not going to function properly. There were some parts of the Treasury that were less – the bits that I worked with most regularly on public spending, on taxation also, that was fine – other bits of the Treasury took more effort, like the financial services, which traditionally had always gone to the chancellor and other junior ministers. So that took more time to get them to recognise that they weren't going to get decisions unless they were decided as a coalition. That was an ongoing theme, especially as new people came and went, and perhaps they built up their experience in non-coalition governments, if you like. But in general, I'd say the quality of the officials was high, the advice was well framed, and I think it worked pretty well in that period. 

RM: I'm interested in your reflections on the Office for Budget Responsibility (OBR) and the role that the OBR played during your time at the Treasury?

DA: We created the OBR and I think it performed the function that it was intended to. I mean, one of the accusations against previous governments was that one way to solve your fiscal problems was to amend your forecast. So the idea was to take economic forecasting out of the hands of politicians. People will debate the extent to which that's true, that's fine. But that was really the idea of it. Any forecast is only a forecast. They're always going to be wrong, whether it's the upside or the downside, circumstances will dictate. We never had any breaches of confidentiality. I think in a way also it helped the budgetary process because decisions had to be made by a certain time in order to be factored into the latest updates of forecasts. So, I mean, I can't say that it was problematic. I think it was advantageous overall. 

"the coalition set out a plan for public expenditure and we should see that plan through. We shouldn't amend it in the light of every forecast change."

There will be quite a lot of to-ing and fro-ing because they do several rounds of their forecasts, so we'd get the first round and we'd look at it and see what they were forecasting. Obviously, that had a big effect on the macroeconomic projections. There was a time – I think it was in 2011 budget – when growth had been slower than had been anticipated. Although we were delivering our spending plans, we were not making as rapid progress as we'd expected on the deficit. So there was a discussion about should we do more? Nick and I took the view – and this was eventually the view that prevailed – that the coalition set out a plan for public expenditure and we should see that plan through. We shouldn't amend it in the light of every forecast change. I think that was the right approach, because it meant that we could be consistent. The economy will fluctuate, and we weren't chasing the forecast each time, at least on the deficit reduction side. We still wanted to have a balanced package, and so that would affect other changes, tax changes, or welfare changes, or whatever. But that was a matter of our judgment as politicians as to what policy choice did we want to make, based on the forecast that we had. That was our job. So I think it's a system that worked pretty well at that time.

MB: In the build up to the Scottish independence referendum in 2014, the Treasury published a series of papers outlining the economic benefits for Scotland of remaining in the union. How did you manage that experience as chief secretary to the Treasury and how did you find Treasury civil servants responded to that? 

DA: I was the most senior Scot in the cabinet so that was really my process, if you like. On the paper specifically, I think there was a lot of attention paid by officials to how those documents should be framed and the nature of the detailed analysis that would be published. Right at the beginning, we decided that we wanted to ensure that voters in Scotland – and indeed people across the whole of the UK, but particularly voters in Scotland – had access to the best analysis that the UK government could offer on these questions. We worked out – were there 10 or nine, I can't remember – but there was a whole group of them. It was really the ones around the economy that I think made the most impact, but there were others on different policy issues on culture and so on.

"I also played the role of coordinating the UK government's engagement with that campaign... That was very interesting. It was quite fun. It was also rather high stakes"

I mean, I don't know how academics reflect on the content of those papers these days, but I think at the time, they presented quite clear evidence, some quite clear conclusions, which obviously, as ministers, we had a strong role in presenting, but the underlying documents themselves were well argued, coherent, consistent, based in facts. The UK government had a view in this referendum so that was the basis on which we said we want to publish this information because we were concerned that there was so much misinformation around some of these issues that you just need to put some facts on the table. 

I think they were quite influential in the early and middle part of the referendum campaign. Obviously, they were all out by the early summer and so then it was really down to the campaign. I also played the role of coordinating the UK government's engagement with that campaign and the kind of role that we wanted to play or not play and then how we coordinated with what was going on in the referendum itself. That was very interesting. It was quite fun. It was also rather high stakes, as many of these things are, of course. I think the government handled its participation in that process quite well, actually. Not hiding from the fact that the UK had a view that we wanted to keep the UK together, that we also had a duty to present voters with information and that as ministers we had views that we wanted to articulate quite strongly in the campaign. Those are difficult but not impossible things to put together.

MB: In the lead up to the 2015 general election, how did you find the experience of balancing being in government while also thinking about the party’s options for what might happen after the election?

DA: I mean, I'm not sure that the balance of activities is much different to other politicians in government in the sense that you – when you're a minister, you're always playing both roles. You are a minister, you have your ministerial role and duties, and that consumes a large share of your time. Then you have your roles as an MP, you have your roles as the leading figure in your party and articulating your views, perspectives, policies, et cetera.

"we knew that we were in a fight for our survival, really, for the Lib Dems, because we knew that some of the things we'd done in government had not been very popular"

I think it changed a bit the way that we worked together in the coalition, especially in those last few months because everyone's view was more on campaigning, I guess. For the government, there were fewer and fewer decisions to make – or that could be made – because of the way that it would be, what we could agree to. We didn't spend a lot of time thinking about what we would do after the election because that would be completely dependent on what the result of the election would be. We spent our time trying to articulate as best we could both the Liberal Democrat's contribution to the coalition government – which was enormously significant – and where we differed, and how we would go differently after the election. So we were trying to get some differentiation between ourselves and the Conservatives, and ourselves and the Labour Party, and in my case, the Scottish National Party. 

But we knew that we were in a fight for our survival, really, for the Lib Dems, because we knew that some of the things we'd done in government had not been very popular, but that also just the decision to go into government had not been very popular with some of our supporters who perhaps had not voted for us on the basis that we would ever go into government. The full economic benefits of what we'd done over the previous years had not come through fully. I think when we started, a lot of people, most people in the country actually understood that economically we were in a mess and some tough decisions – to use the phrase at the time – were necessary to get us back on the right track. We were starting to see economic improvement in the data, but that takes time to feed through to voters, so we were not benefiting. When we started out, we said we set the spending review period over the course of a parliament, so that by the end of that parliament that job could be done, and then we would be able to look forward to a different set of circumstances after the election. But we were not quite in that position, unfortunately. The economy was growing quite well actually by 2015, but not well enough. We knew that we were in that battle so we weren't spending our time contemplating what are we going to do afterwards, because that would all depend on the number of seats we won and so forth.

As it turned out, the Scottish referendum had a big effect on – well, it had a big effect on politics actually at a UK level in the 2015 election, because on the one hand, in Scotland, the Scottish nationalists won almost every constituency, including my own. You know, 45% is not enough to win a referendum, but in the first past the post system, it's enough to win almost every constituency, especially when you're dealing with four-party contests. That was anticipated. I knew that was the situation that I was facing. 

"the Scottish referendum had a big effect on – well, it had a big effect on politics actually at a UK level in the 2015 election, because on the one hand, in Scotland, the Scottish nationalists won almost every constituency, including my own."

But the second, perhaps less anticipated, was that David Cameron made the argument that – they had this poster that illustrated it of Alex Salmond [former first minister of Scotland] with Ed Miliband [then leader of the Labour Party] in his pocket. Do you remember that? The argument that the Conservatives made was, if the Labour Party is the largest party, they'll be dependent on the Scottish nationalists for their support, which means we've just been through this convulsive process of having a referendum, we've saved the United Kingdom through that process. Don't let Alex Salmond take charge of the country by the back door. And that turned out to be a very powerful message in England. There were quite a few constituencies in England that we'd anticipated holding on to, that in the end we lost to the Conservatives by a small margin, where you could see that voters were moved by that line of argument. So, yeah, Scotland played a big effect in the election as well as the referendum.

MB: One moment we are interested in asking for your reflections on is when the Liberal Democrats published a shadow budget to the official government budget in spring 2015 and how you managed that as chief secretary to the Treasury? 

DA: Yeah, so actually what we published wasn't a shadow budget because it was published as an official government document. I made a statement in parliament to set out an alternative set of fiscal projections because the budget contained a set of fiscal projections. Those were hammered out between the parties, but they didn't reflect our view. So I published a different set of projections. It was an effort to differentiate and to show the different path that the country would be on if we had Liberal Democrats in the government afterwards. And I mean, actually, it was quite a detailed piece of work. Some Treasury officials worked very hard on it, along with myself and my team. 

It was a very unusual thing to do, and it took quite a lot of effort for officials and also parliament to get their head around this. I wish we'd come across this mechanism earlier, because it did create – you know, of course, in parliament you're always going to be criticised by your opponents – but it actually created an opportunity to set out your own, my own perspective in parliament. We'd also planned a photo call that day. The party developed a poster, so a poster unveiling. Unfortunately, the poster van broke down somewhere outside London. And so, at short notice, it was replaced with this yellow budget box, which had been, actually, I think, developed as a prop for a party fundraiser or something. So, what became a picture that was very widely circulated was not at all what we had intended, and probably didn't really help, actually.

RM: On to some final reflections now, what do you think is your proudest achievement from your time as minister?

DA: It's a tough one that. Am I allowed more than one? Number one, I'm very proud of having created a coalition government that worked effectively at a very difficult time for the country, the first time we'd done that. Leading the coalition negotiations and then being really at the core of making that system work. Actually, that was really quite important at that time. Secondly, I'm very proud of the work that we did to balance the budget, to tackle the deficit and to take some difficult decisions that actually got the country back onto the right track economically after the financial crisis. And again, that wasn't very popular work in many ways, but it was really important at the time to do that. 

"I'm very proud of the work that we did to balance the budget, to tackle the deficit and to take some difficult decisions that actually got the country back onto the right track economically after the financial crisis. And again, that wasn't very popular work in many ways, but it was really important at the time to do that."

Then if I look at the things, some of the decisions that we made, I mean, the ones I was probably most involved in were the fiscal ones in the Treasury. And so, raising the income tax threshold so that we got to a position where people working full time on the minimum wage didn't pay income tax. I think that was an important thing. It was a step in a more, towards a more liberal tax system. So I was very proud of that at the time. Yeah, I think those are a few things I'm proud of. I could make a much longer list because through the coalition agreement, we delivered 70% of the Liberal Democrat manifesto at that time. So there's quite a lot of things that, you know, policies I was involved in creating in opposition that then we delivered through government.

RM: What advice would you give to a new minister stepping into the role about how they can be most effective?

DA: I mean, there's a few things I would say. I mean, firstly, treat the people you're working with properly. Treat them well. Most of the officials who are working for you are educated, committed people who are trying their best. And you'll get the best out of them if you treat them properly. You know, I heard many stories when I was in government about other ministers who, you know, treated people like shit and it's not the best way to treat people. And it's also not the best way to get the best outcomes in your time in office. 

"Most of the officials who are working for you are educated, committed people who are trying their best. And you'll get the best out of them if you treat them properly."

I'd say the most important thing is your job is to take decisions. And so, knowing what you think, knowing your own perspective on issues, listening, engaging, challenging, and then being able at the end of that process to make decisions is the most important function that you play in the system. You're then accountable for those decisions. So, you know, being able to look yourself in the mirror in the morning and say, you know, “I've done the right thing, is incredibly important”. But those ministers who find it difficult to take decisions or who constantly change their mind afterwards are not actually doing their job properly, in my opinion.

"those ministers who find it difficult to take decisions or who constantly change their mind afterwards are not actually doing their job properly, in my opinion."

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Theresa Villers reflects on her time in government for the Institute for Government’s Ministers Reflect project.

21 OCT 2025 Interview

Sajid Javid

Sajid Javid discusses his time as chancellor and health secretary among several other government roles.

24 NOV 2025 Report

Ministers Reflect on the Treasury

Drawing on over a decade of interviews with over 150 ministers, this report explores the Treasury’s role and the tensions it creates across Whitehall.

10 NOV 2025 Interview

Steve Baker

Steve Baker reflects on his time as a minister in the Department for Exiting the European Union and the Northern Ireland Office.