Meet the mandarin in Liz Truss’s sights as she takes on Treasury orthodoxy

If you have paid even a passing interest to the Tory leadership race, you will have heard a certain phrase snarled like a profanity by Liz Truss: “Treasury orthodoxy”.

To the front-runner, the hive mind of the civil servants running the most powerful government department is a deep-rooted barrier to a post-Brexit economic revolution.

At the centre of it all is a man who has the establishment coursing through his veins as the son of a Treasury mandarin, and who has been part of the Downing Street set-up since he was a child, when he would play the piano at John Major’s Christmas parties.

His name is Sir Tom Scholar, permanent secretary at the Treasury, and he is one of many people in government whose future is likely to hinge on the outcome of the leadership contest.

In a Rishi Sunak premiership, the Treasury’s top civil servant could expect to be made Cabinet Secretary, sitting at the very centre of power in Number 10. In a Liz Truss premiership, he could almost certainly expect to be moved sideways, or worse.

Rightly or wrongly, Sir Tom is regarded as the “walking embodiment” of the Treasury groupthink that critics like Ms Truss say has captured a succession of chancellors.

While Mr Sunak has largely adhered to that philosophy, Ms Truss wants to shake up the bastion of what she derides as the “bean counters”.

The job of civil servants, of course, is to implement the policies of the government, no matter who is in charge, and Sir Tom has worked under eight chancellors, including Gordon Brown. He was reappointed for a second five-year term only last year.

Truss supporters, though, have little doubt that if she gets into Downing Street, her first chancellor will send Sir Tom on his way. “You don’t have to keep the civil servants you inherit,” insisted one Truss supporter.

One government minister said: “If you look at the facts, he has been there for 13 years and he took over the top job in 2016, so if anybody embodies the Treasury and its thinking, it’s that man.”

Meg Hillier, the Labour MP who has got to know Sir Tom in her role as chairman of the public accounts committee, said the Treasury’s “old fashioned” way of doing things has potential to rub other ministers up the wrong way.

She said: “He is quite an intellectual, not a populist. We hear about Liz Truss talking about Treasury orthodoxy and the Treasury way of doing things, and I can see him being almost puzzled as to what she thinks is wrong in what the Treasury is doing. He is quite steeped in how to do it in the proper, straight-down-the-line way as he would see it.”

But he is “not a civil servant who would play politics,” she stressed, instead doing “exactly what any Chancellor would expect him to do”.

Given that Ms Truss this week dismissed the “Gordon Brown economics” of giving people handouts to help with their energy bills, the fact that Sir Tom used to work for the Labour prime minister is perhaps not the best thing to have on his CV.

Gordon Brown's man

Brown was so impressed with the man who was his principal private secretary for four years in Number 11 that when he became prime minister, he recalled Sir Tom from Washington (where he had become the UK representative on the boards of the International Monetary Fund and the World Bank) to become his principal private secretary in Number 10.

Under Brown, Sir Tom had been part of the transformation of the Treasury into the most powerful department it had ever been, with far more say in other departments’ spending than before. The Treasury’s wider reach across Whitehall remains to this day, and ministers in other departments are understood to resent some of the scrutiny which Sir Tom has imposed on them.

His unavoidable connection to the Brown era, however, is nothing to Truss and her supporters compared with Sir Tom’s record on Brexit.

He was head of the negotiating team that was tasked by David Cameron with getting a better deal for Britain within the EU in the vain hope that it would prevent the UK from voting to leave.

It later emerged that he had never asked for changes to freedom of movement rules — one of the key drivers of Brexit — and the result was that he came back from Brussels with next to nothing.

One former Treasury official said: “It’s implicit that he didn’t try hard enough to get concessions from Brussels and I’m still convinced that if we had gone in a bit harder the negotiating team could have achieved more and Brexit might not have happened.

“But he is a victim of his instinctively cautious approach to everything.”

Sir Tom was also associated by his detractors with Project Fear, and during the Brexit negotiations, he was blamed for turbo-charging Philip Hammond’s plans for a soft Brexit.

“His views on Brexit were pretty plain,” said one minister, who also suggested the Treasury under Sir Tom sees Brexit as a problem to be managed, rather than a golden opportunity to restructure and strengthen the economy.

Whether or not the accusation is fair, the belief in government that he represents old school Treasury thinking is not helped by his background.

His father Sir Michael Scholar joined the Treasury in 1969 and worked as private secretary to the chief secretary to the Treasury, Labour’s Joel Barnett, then worked for two years as Margaret Thatcher’s private secretary, returning to the Treasury for a decade in 1983.

Rising through the ranks

Sir Tom, 53, was schooled at Dulwich College (where Nigel Farage was several years above him), read history at Trinity Hall, Cambridge, before taking a masters degree at the London School of Economics, and joined the Treasury in 1992, fresh out of university, when Norman (now Lord) Lamont was chancellor.

By the time Labour came to power in 1997 he was principal private secretary to the chancellor, a role in which he served Gordon Brown for four years.

The married father-of-three spent six years abroad, and when Brown became prime minister he brought him back to be his principal private secretary in Number 10.

In 2009 he was promoted to second permanent secretary at the Treasury, and in 2016, after a spell as an adviser to David Cameron, he got the top civil service job at Number 11 as Permanent Secretary to the Treasury.

“He is the walking embodiment of Treasury orthodoxy,” said one former Downing Street aide. “And that’s more closely aligned to Rishi than Liz.”

If she wins, Ms Truss, who wants to delay paying off pandemic debts in order to cut taxes, will tell her first chancellor to focus on growth instead of the Treasury’s usual “one pound out, one pound in” way of thinking, which is likely to lead to clashes with civil servants.

Sir Tom — who Ms Truss saw close up when she was chief secretary to the Treasury under Theresa May — is the sole survivor of Dominic Cummings' “s*** list” of inherited permanent secretaries who were in his crosshairs, and some who know him believe he would stay on even if Ms Truss wins.

John Glen, who served as city minister until last month, said: “In contrast to politicians, he was the master of man management and has established a culture of high quality bright young things. He always popped up at the right time.

“If I was a betting man I would put money on Tom [staying] – it’s easy to say what you like at this point but government is different to politics.”

Jill Rutter, another former Treasury official now working at the Institute for Government, said: “Rishi Sunak, at least, seems to have recognised that having Tom, who had been one of the major officials in the response to the financial crisis, was pretty fortunate when you came to having to design things like Covid packages. That may have prevented Tom’s career from going the same way as the others who were put into the discard bin.”