IT'S TIME TO RE-PACKAGE THE TEDDY BEAR

I'm not referring to an Olympic mascot, but the top secret project code-named "Teddy Bear" which Lord Mandelson, then an MP somewhat fallen from grace, devised with former prime minister Tony Blair, then Director General of the BBC John Birt and current Cabinet Secretary Sir Jeremy Heywood to break up ex-Chancellor Gordon Brown's Treasury. Yes, this cuddly creature is one of the revelations of "The Third Man", the subject of my previous post.

However, notwithstanding its apparently soft exterior, "Teddy Bear" might just end up being one of Mandelson's, or Heywood's, most substantial legacies to British government, albeit one also involving transfer of the "Prince of Darkness" title from politician to civil servant. So let's unpack New Labour's Teddy Bear and consider whether a timely re-packaging for the Coalition Government could make him a winning mascot for the New British politics.

In short, Project Teddy Bear, as I shall call it, envisaged splitting the economic management role of the Treasury from it administration of public expenditure, based on a model of government in the United States. This would have downsized the role of Gordon Brown, who tended to run the Treasury as a sort of International Bank for Re-Distribution and Development. Although, "re-distribution" to less developed countries tended to revert to London banks in the form of money laundering, thereby contributing to the now well-documented excesses of the City of London. Meanwhile, at home "development" became increasingly identified with lucrative construction contracts, many under the guise of the Private Finance Initiative, which now threaten to bankrupt parts of the public sector.

In this context, Teddy Bear remains an excellent idea, not least after last week's unedifying House of Commons squabble between present Chancellor of the Exchequer George Osborne and the shadow-boxing Ed Balls. Re-packaging Teddy Bear would enable the Coalition Government to re-distribute the Treasury's responsibilities between say, Vince Cable, as head of a new finance ministry to handle macroeconomic policy and, yes, my old favourite, Ken Clark, who could lead a US-style Office of Budget and Delivery. George Osborne might be re-shuffled to the Department for Business, Skills and Innovation, where, no doubt, he could very ably represent the interests of the UK banking sector. Such a reshuffle could also afford Ed Miliband the opportunity to consign  Balls to the back benches.