Pat McFadden: Sue Gray isn't going anywhere

The giveaway for the power and influence Pat McFadden was to wield in Sir Keir Starmer’s Government came just a few hours into its creation.

With the new Prime Minister finally inside No 10 after the election triumph and the Cabinet being appointed, second to stroll up Downing Street as the TV cameras rolled was Mr McFadden.

Only Angela Rayner, on her way to formally being made Deputy Prime Minister, was before him. Rachel Reeves, about to be handed the keys to the Treasury, was to follow in his wake.

Mr McFadden, a softly spoken Scot, may not have the public profile of those two colleagues, but as Chancellor of the Duchy of Lancaster in the Cabinet Office, he now sits at the heart of the Government.

He has been tasked with driving through implementation of the five “missions” Sir Keir set in the election campaign: kickstarting economic growth, making the UK a “clean energy superpower”, controlling crime, breaking down “barriers to opportunity” and making the NHS “fit for the future”.

Matching the rhetoric to reality is easier said than done, however, as Rishi Sunak found in struggling to deliver his own five priorities before the Tories were booted from office in July. 

But Mr McFadden, speaking to The Telegraph ahead of the Labour Party conference in Liverpool this weekend, believes his approach – creating “boards” for each mission, underpinned by reams of data and an attempt to get ministers to think outside of their department silos – can deliver tangible results.

“There are libraries of literature about how ministers can be captured by departments and become spokespeople for departments,” he explains, sitting in his Westminster office overlooking Horse Guards Parade. 

“We are trying to make sure we have a forum for these where people can speak as Cabinet ministers, and not just as spokespeople for their departments.

“We are trying to encourage innovation and thinking. And we are trying to make sure it is not just Whitehall and that other parts of both the state and the private sector are involved.”

To make his point, Mr McFadden zooms in on a single issue: school absences in the wake of the Covid-19 lockdowns that forced children to stay home.

The numbers are “shocking” – his word. One in five pupils miss half a day of school a week on average. That is despite the lockdowns being years behind the country now.

The figures are for the whole state school sector and even worse in secondary schools, where it is one in four. Mr McFadden, who went to a comprehensive, is determined to change that.

“No child can afford to be missing 10 per cent of the school week – half a day a week – on a regular basis,” he says.

“That could have an impact that could stay with children for the rest of their lives. So that’s the kind of thing that we can use data and determination to try and tackle.”

So what to do about it? Mr McFadden suggests parents bear some responsibility: “I think you’ve really got to get a message to parents that children have to be in school.”

The same push was delivered in a letter issued by Bridget Phillipson, the Education Secretary, issued to head teachers earlier this month for the start of the new school year.

Could the Government make punishments for truancy tougher? Or incentivise school heads to do more? Possible solutions to the problem, at this early stage of a new government, are hazy.

But the focus will see teams of officials and ministers zoom into the data to locate school areas that seem to be tackling the problem, with best practice understood and rolled out.

Another example of how Mr McFadden is using the “engine of government”, his description of the Cabinet Office, to have an immediate impact is scaling back Whitehall waste.

The Tories quietly lifted a cap on how much money could be spent on consultant contracts without the approval of either the most senior civil servant or minister in a department.

It meant up to £20 million could be spent on outside workers without senior approval. That is changing. Now all consultant spend of more than £100,000 must be signed off by a permanent secretary, with anything north of £600,000 needing cabinet minister approval.

Mr McFadden, 59, is one of the few members of Sir Keir’s Cabinet with prior government experience, having had ministerial posts in the New Labour years.

But his centrality to the “Changed Labour” project is also down to his political smarts, having served as Sir Tony Blair’s political secretary and been there for Labour’s 1997 return to office.

Moderate instincts and a clear-eyed take on what was needed to reassure voters saw Mr McFadden help lead the election campaign, alongside campaign manager Morgan McSweeney. Together they would make the key calls, with Sir Keir, in the six-week race. 

Now in office Mr McFadden forms part of “the Quad” alongside Sir Keir, Ms Rayner and Ms Reeves. This body meets once or twice a week for major decisions and its importance is still a little unappreciated outside of the Westminster bubble.

So it is a knowing sigh that greets inevitable questions about the rows dominating headlines this week on Sir Keir’s donations and the influence of Sue Gray, his chief of staff.

Mr McFadden was in the trenches for the so-called “TBGBs”, the brutal power tussle between Mr Blair and his chancellor Gordon Brown that scarred the New Labour years.

Given the signs of splits emerging this week seem to be coming from inside No 10 itself, rather than tensions with, say, the Treasury, is this not worse than those clashes?

“No, absolutely not,” Mr McFadden answers straight back. “One of the things this Government has, which I think is a great asset, is a very high level of trust among Cabinet members, a really collegiate way of working.

“You mentioned TBGBs between the [then] prime minister, the chancellor and other Cabinet members. I think that [unity] has shown itself to the different departments and the civil servants as we’ve come into office. So I think we’ve got a really good team spirit in the Cabinet.”

What, then, of the revelation that Ms Gray is being paid more than the Prime Minister (she is on £170,000, Sir Keir on £167,000). Is it right she is paid more?

“I am not going to talk about anyone’s salary,” comes the response, Mr McFadden clearly eager not to make news on the subject.

And what about loose speculation Ms Gray could soon leave the Government? “I don’t think she is,” he eventually says at the second time of asking, adding: “But honestly I hope we can focus on what I’m doing.”

A similar straight bat is deployed to the idea the quickest way Sir Keir could end the rolling grumbling about donations from Labour peer Lord Alli is to say he will no longer accept anything from him.

“He will properly declare everything,” Mr McFadden says of his boss. “I’ve got nothing really to add.”

On other political matters, Mr McFadden is keener to speak.

He helped design the strategy in recent years to turn Labour into a safe space for Conservative waverers disillusioned by their natural party.

Two mantras were often uttered by him: that a party stuck in opposition must be trusted with the country’s economy and defences to have any chance of winning back power.

He wants to stick by the centrist path that took Sir Keir into No 10. In a message perhaps partially aimed at colleagues, he says: “Don’t go back to being the kind of Labour Party that the Tory Party likes to fight and likes to beat.”

Mr McFadden also rejects suggestions that the Government risks betraying those voters who backed it after being reassured there were no plans for tax rises, only now to be told hikes are coming in next month’s Budget.

“The first line, the first paragraph certainly, of our manifesto was about economic stability and sound management of the public finances,” he says to counter criticism of the decision to stop giving winter fuel payments to all pensioners but the very poorest.

Before the conversation wraps up, there is time for Mr McFadden – back in office after a 14-year absence – to cast his eye over how the Tories are shaping up in Opposition.

“What strikes me about the Tory leadership election is how unreflective it is,” he says, with the scars on his back from the efforts to make Labour electable again.

“There is no change candidate that is standing. There is no one saying to the Tory Party it really has to change from top to bottom.”

The underlying message is clear: Cabinet ministers are not quaking in their boots at the prospect of any of the four Conservative leadership hopefuls.

Real political danger does lie, however, in failing to deliver on the election promises. To neutralise it, much will depend on the success of Mr McFadden’s mission boards.