Treasury chief Macpherson rapped for abandoning civil service impartiality

Osborne makes his "Edinburgh declaration" on currency union, using Macpherson's "impartial" opinion

Report by Thomas Connolly

The head of the Treasury has had his knuckles rapped by a House of Commons select committee for his admitted bias against a Yes vote in the Scottish independence referendum campaign.

Sir Nicholas Macpherson published a letter opposing the SNP’s proposed post-referendum currency union with the rest of the UK, written for the benefit of his political boss, Chancellor George Osborne, in a key intervention in February 2014.

Macpherson: Civil servant took a partisan view
Macpherson: Civil servant took a partisan view

The move raised eyebrows at the time, because of the supposed impartiality of the UK Civil Service. The Scottish Government believes that the Treasury’s actions were in breach of the spirit and letter of the so-called “Edinburgh Agreement” setting out the terms of the independence vote and signed by Alex Salmond and David Cameron more than two years ago.

Macpherson has served both Osborne and his Labour predecessors as Chancellor, Gordon Brown and Alistair Darling MP, leader of the “Better Together” campaign. He is known to have been close to Darling particularly.

He revealed publicly earlier this year that at a crucial moment in the campaign he had decided personally that in such an “extreme” case as the referendum, the normal rules of civil service impartiality “do not apply”.

This astonishing admission was made in a London lecture in January. The Permanent Secretary to the Treasury used colourful phrases during his lecture, stating that this was an instance where “people are seeking to destroy the fabric of the state”, and to “impugn its territorial integrity”.

While the Treasury mandarin’s position might seem untenable it appears that he will remain in his job.

Better Together sources confirmed last year that it was Darling who had pressed for the controversial currency union position to be agreed by Labour and Tory politicians.

Last April, Macpherson told the Public Administration Select Committee (PASC) that the advice was published in order to clarify the UK government’s position and diffuse concerns in financial markets, not to influence Scottish voters. His comments in January contradicted that position.

In a report published today (Monday), the committee criticised Macpherson’s actions. It stated that he should not have published his views in the run up to the referendum and doing so “compromised the perceived impartiality” of one of the UK’s most senior civil servants.

The report is understood to recommend that the decision to publish such comments “should not recur”, and that the Civil Service Code should be revised.

The Treasury’s intervention in the currency issue, and in co-ordinating a No campaign within the Civil Service – revealed by last year – raised controversy.

Salmond: Demanded inquiry into Treasury RBS leak
Salmond: Demanded inquiry into Treasury RBS leak

There is also the curious case of the RBS board meeting which discussed whether or not the bank should create a “brass plate” registered office in London in the event of a Yes vote, details of which were leaked by the Treasury to the BBC before the meeting had actually ended.

That incident – about which the SNP have complained bitterly and continue to press for an inquiry – sparked the infamous YouTube spat between then SNP leader Alex Salmond and the BBC’s political editor, Nick Robinson.

Salmond’s new book about the referendum, The Dream Shall Never Die, alleges that the RBS email to the BBC was sent by a Treasury civil servant, Robert Mackie – son of Alistair Darling’s former Treasury special adviser Catherine McLeod, an ex-journalist who re-emerged immediately prior to the referendum as a commentator on BBC and The Herald newspaper.

As revealed, the Treasury’s specially-created referendum unit played a leading role in co-ordinating responses across Whitehall. The Treasury had become the “lead department” handling the UK Government’s response to last year’s campaign at the behest of Osborne and his Chief Secretary, the Liberal Democrat MP Danny Alexander.

Pisani "cried" at result
Pisani “cried” at result

Treasury Deputy Director Mario Pisani, a Treasury civil servant who played a leading role in the so-called “Scotland Analysis Programme Team”, told Civil Service World: “In the Treasury, everyone hates you. We don’t get thanks for anything. This is one occasion where we’ve worked with the rest of Whitehall.

“We all had something in common, we’re trying to save the Union here, and it came so close. We just kept it by the skin of our teeth.

“I actually cried when the result came in. After 10 years in the civil service, my proudest moment is tonight and receiving this award.”

He added: “As civil servants you don’t get involved in politics. For the first time in my life, suddenly we’re part of a political campaign. We were doing everything from the analysis, to the advertising, to the communications. I just felt a massive sense of being part of the operation.”

Commenting on the select committee report, SNP Westminster Leader Angus Robertson MP said:
“We knew the Treasury failed to act in accordance with civil service impartiality rules and this report sets outs the steps which must be taken to ensure such a breach does not happen again.

“We expect the highest standards from senior civil servants and Sir Nicholas MacPherson and the Treasury fell short.

“Sir Nicholas Macpherson would be very welcome to come to Holyrood and explain his perspective. As we go forward and look at the possibility of new financial powers being rolled out in Scotland the relationship between Holyrood and the Treasury should be one of transparency and trust.”