The Treasury under New Labour since 1997: the evolution of a British Institution (2007 - 10)

Researchers: Professor Colin Thain ( and Lena Rethel (

This project has received a three-year £334,000 grant from the UK's national social science research funding body, the Economic and Social Research Council (ESRC) (RES 062 23 0369).

The study will produce a politico-administrative anatomy of HM Treasury, the UK's finance and economics ministry, in its five roles: as a central department, ministry of finance, economics ministry, domestic policy department, and agency of foreign economic policy. Its role since 1997 will be placed in historical, ideological and global contexts.

The aim is to illuminate the ways it has changed and evolved during the period of successive New Labour election victories and encompassing the tenure of one of the longest serving and most influential Chancellors in the post-war era. The project will analyse the 1997-2007 period, but it will also track the Chancellorship of Alistair Darling. The change of leadership in Government on 27 June 2007 allows the project to assess the different styles and approach of Tony Blair and Gordon Brown as First Lords of the Treasury

Project aims

The project aims to:

  • Produce a comprehensive study of the Treasury in its multiple roles in a seminal period, using material in the public domain and interviews with elite actors in the policy process
  • Place developments under the New Labour Chancellors in the historic context of the evolving role of the Treasury and the Chancellorship. This will also involve a comparison of Brown with Blair as First Lords of the Treasury, and Brown's Chancellorship with that of his successor, Alistair Darling.
  • Place the Treasury as an institution and a policy-making actor in the context of ideological shifts since the 1990s, pressures created by globalisation, and changes in the structure of the UK State.
  • Assess the changing culture of the Treasury, and changes in its relationships with Whitehall and the devolved administrations
  • Analyse important policy initiatives - such as operational independence for the Bank of England, fiscal rules, and the new public spending regime
  • Use the research findings iteratively to reflect on key theoretical and analytical approaches to understanding institutions and policymaking.

Research design

The project has three hypotheses:

  • Hypothesis I: The Treasury has undergone fundamental changes in its roles as a central department in the British State, involving an unprecedented extension of its power.
  • Hypothesis II: Treasury power has increased as a result of a combination of strong ideology from the governing party supported by large Parliamentary majorities, the dual-executive leadership of Blair and Brown, and tight control of the departmental agenda by a strong Chancellor.
  • Hypothesis III: Increased Treasury power and activity has not resulted in the effective carrying out of those roles and functions; it has led to overload and ineffective outcomes.

There is no one theoretical or analytical approach that can encompass the complexity of the Treasury's power and role. This study adopts a multi-theoretic approach which synthesises a number of literatures. Previous research highlights the importance of adopting a framework predicated on a historico-analytical approach - giving due importance both to the context within which the Treasury operates and the history of the institution itself.

The framework for analysis has three levels:

  • Level I: Macro: the focus here is on the context: accounts of the historical development of the UK State, its political economy, ideology, political culture, the role of globalisation, and the development of a distinct New Labour ideology. Particularly influential here is the disputed literature analysing New Labour; New Labour's political place developments under Chancellor Brown in the historic context of the evolving role of the Treasury and the Chancellorship set in the context of the development of the Labour Party, and sources which emphasise the impact of globalisation on the nation State.
  • Level II: Meso: the focus here is on institutions, organisations and actors. How do institutions operate? What is the setting? How can we analyse their interactions? What roles do culture, history and power resources play? Particularly relevant are five literatures: core executive studies, new institutionalism, network analysis, policy transfer, and social learning.
    The concept of a core executive has been the subject of a growing literature pointing to the essentially dependent relationships between key actors at the centre of Whitehall. New institutionalism offers a rich set of insights and questions, which focus on the role institutions, play historically in public policy and the impact of their culture on policymaking.

    Policy network analysis remains a powerful tool in the analysis of the way in which the Treasury leads or participates in a number of networks with their own rules of the game, culture and dynamics.

    Policy transfer and policy learning are relatively new concepts in policy analysis. They point to the degree to which policy innovation may be the result of a deliberate or imposed process of transfer from other nation states (or from previous periods of time).Social learning implies that policy actors adjust policy objectives, goals or instruments as a result of the shock of experience and policy failure.
  • Level III: Micro: this focuses on policy processes and builds on Lowi's four-dimensional typology of policy. Here the concept of policy networks is applied to the range of policies with which the Treasury is engaged. Do the networks vary with the policy domain, what are the rules of the game, how have policy processes changed since 1997?


The following is a selection of the papers, chapter and articles that have been produced as a result of the research so far:

Colin Thain 'The core executive in the UK: the roles of the Prime Minister and HM Treasury' Draft paper presented at the 5th ECPR General Conference, Postdam, 10-12 September 2009

Colin Thain and Ross Christie, 'The Treasury under New Labour since 1997: testing historical institutionalism' Paper to the 58th PSA Annual Conference, University of Swansea, Swansea 1-3 April 2008

Colin Thain and Ross Christie, 'Treasury Power: Past, present and future' Paper to the Joint University Council Public Administration Committee Conference Stormont Hotel, Belfast, 3-5 September 2007


Colin Thain, 'Budget reform in the United Kingdom - the rocky road to "controlled discretion"', chapter 3 John Wanna (et al) (eds)The Reality of Budget Reform: Counting the Consequences in 11 Advanced Democracies , Edward Elgar, forthcoming in 2009