H2 - the power behind Clark

Heather Simpson has perhaps one of the lowest profiles in New Zealand politics but paradoxically is one of the most powerful. Given her sporadic appearance in the media, and her mentioning on a couple of blogs given the pledge card scandal, I thought it might be worthwhile giving her a brief profile, especially as her name in Wikipedia only brings up a young Scottish TV newsreader.
*
She is unofficially referred to as being "H2" by senior public servants from the Department of Prime Minister and Cabinet, and down. H2 is the Prime Minister’s Chief of Staff, a role in which she has been enormously effective, due to the trust and respect she shares with Clark. She is a political appointee because she has the trust of Helen Clark – no small endeavour – she has been beside Clark through much of her career as MP, Minister and PM. As a result, they have been friends for many years, and Simpson is an academic, and taught economics at Otago University. She is the Prime Minister’s leading advisor on policy and politics, and was instrumental in assisting Helen Clark in ousting Mike Moore as leader after the 1993 election, when Labour lost by one seat. H2 is no slouch, and everyone knows it - she works hard, asks difficult questions and knows when she is being lied to - she is a formidable representative of Clark. You want H2 on your side, and you do not want to cross her.
*
There is little doubt that H2 is the most important unelected individual in the Beehive. Her role in the first term of the government was pivotal – shortly after the first Labour Cabinet was selected and portfolios appointed, Helen Clark insisted that Cabinet papers go through H2 before being submitted. This was because so many Ministers had no experience, and most did not trust their officials.

*

After the 1999 election, officials were seen to be part of the “Ancien Régime” of Treasury dominating policy, of free market policies. Treasury, the then Ministry of Commerce (now Ministry of Economic Development, which was far more than a name change), Ministry of Transport, Ministry of Foreign Affairs, Department of Internal Affairs and other core departments were simply not trusted to provide advice consistent with Labour/Alliance policy.

*
The message came down from the Prime Minister’s office that all Cabinet paper would need clearance from that office – which meant H2. With the notable exception of Dr Michael Cullen, and a handful of the others, and the then Alliance MPs (remember Jim Anderton, Laila Harre and Sandra Lee were Cabinet Ministers), Ministers were expected to not lodge papers for Cabinet Committee UNLESS they had been cleared by H2 first. A Minister needed the respect of H2 to bypass her, few had or have that. H2 sits on Cabinet meetings as an equal, she is not on the sidelines.

*
The Alliance Ministers willingly bought into not trusting the bureaucracy, they were ideologically opposed to the 1980s reforms after all. Jim Anderton, having been made Deputy Prime Minister and Minister for Economic Development, was handed on a plate the Ministry of Commerce. The Ministry of Commerce, until 2000, was responsible essentially for industry policy and policy on non-transport utilities. It was the catch all for all economic policy outside Treasury and transport. To get a feel for how alien its culture would be to the Labour government, you should remember that it was advice from the Ministry of Commerce that recommended that all tariffs on imported motor vehicles be abolished – which made it no longer viable to assemble motor vehicles in the country. It was also the Ministry of Commerce that had recently opened up the postal market to full competition. The Ministry of Commerce was used to phasing out import controls, working closely with Foreign Affairs on removing trade barriers in bilateral and multilateral trade agreements, and in defending a relatively free market approach to utility regulation. Remember also that the Ministry of Commerce opposed Max Bradford’s radical restructuring of the electricity sector in 1998, and also did not support the establishment of a telecommunications regulator.

*
So when Jim Anderton got the Ministry of Commerce, he had a different vision – it would get the (slightly disturbing to staff at the time) rather third world name “Ministry of Economic Development”, and would be Anderton’s vehicle for dishing out subsidies, and the vehicle for other Ministers to engage inquiries and start interfering and regulating in utility markets once more. The Ministry of Economic Development has grown dramatically as a result, and I’ll leave it up to you as to whether the economy has responded in kind due to what MED does. Jim was happy, he gradually gained confidence in MED advisors, and he shift from the Alliance to his own little party says a lot – MED can get a modicum of credit for having taught Jim Anderton some principles of economics, but Clark and Cullen can be credited for having kept some of the wackier Alliance policies under control. However, Kiwibank remains his biggest legacy.
*
Things went so far that the use of language in Cabinet papers came under scrutiny by some Ministers, who didn’t like “Business Roundtable New-Right Treasury speak” to justify policy options. Words such as efficiency were surrendered in favour “value for money” and “sustainability” was thrown about with abandon. Some Cabinet papers were thrown back for using words like “accountability” and “transparency”, which were not popular in certain circles. This went beyond what H2 was pushing, as she was more concerned about the substance of policy rather than style, but the overall flavour was clear – bureaucrats were not trusted to be Labour Party bureaucrats.

*

H2’s job was (and is) considerable. Much policy had to be pushed through quickly, including repealing the Employment Contracts Act, renationalising ACC and reintroducing District Health Boards. Having been out of power for 9 years (or perhaps in some minds 24 years), Ministers needed to be trained, as did officials, to not engage on key policy when it had changed. H2 was not interested in the negative consequences of Labour policy when she knew it already and a decision had been made – officials were trusted to help with implementation. Of course some departments found it easier than others. Te Puni Kokiri, the Ministry of Women’s Affairs and Ministry for Cultural Affairs found life a lot easier, partly because many of those working in those departments were more closely aligned, ideologically, to Labour.
*
It got to the point where major policy that may have a Minister fronting it, had actually been developed by H2. She was key in determining legislative priorities, fiscal priorities and government strategies. With the exception of mundane day to day government activities, H2 was in charge of Cabinet sans Helen. One notable example is amendments to the Telecommunications Bill after select committee hearings, incorporating changes that would force mobile phone operators to allow access to their networks once a competitor had built a network with 5% coverage - this was an H2 initiative - a last minute Order Paper to amend legislation moving through Parliament. Of course, it still needed Parliamentary approval, so democracy was not thwarted - but this shows she was on top of what was happening - regardless of the dubious merits of the policy.

*

By 2000/2001, some Ministers were starting to recruit their own “H2s” – political advisors that would screen out briefings and Cabinet papers for Ministers before they read them. These people would be the new face of the Ministerial office for officials, departmental Chief Executives would get directions from Ministerial political advisors, who would make requests of them, tell them off when necessary and filter advice for Ministers. Part of this reflected the workload of Ministers – part of it reflected the need for Ministers to get trusted brains around topics that were complicated. Political advisors became the new unofficial layer of bureaucratic/governmental management between departments and Ministers.
*
However, none matched H2. Following the 2002 election, while the role of political advisors did not relax, there were more instances of Ministers submitting papers for Cabinet Committee. The Wellington bureaucracy had started to change, it had learnt what not to say and what not to do – a key point was that Dr Cullen was trusting Treasury (he had to, given Budgets), and Treasury had learnt to gain the respect of Dr Cullen, Clark and H2.
*
Treasury is a core department, and has officials involved in every area of government policy, partly to ensure that any financial consequences are commented on (and Treasury can recommend effectively on the best ways to ensure spending is of good quality or not), but also to provide some serious analytical grunt to key policy issues. Treasury tends to hire some of the best officials in government, it hires people with strong analytical nouse and a willingness to ask questions and question the status quo. The quality of policy staff at other departments is variable, from the very good to the utterly abysmal – and Treasury is left picking up the tab. Ministers have learnt this, and have become increasingly willing to accept Treasury, through Dr Cullen, having a role in filtering policy. Treasury, in return, has learnt not to fight policy that has been declared as “happening” by Ministers. It points out the risks and moves on.
*
H2’s role in directing Ministers and officials has been considerable. Her word in meetings is taken to be as authoritative as the Prime Minister unless she says otherwise, and she doesn’t take fools lightly. If H2 listens to you, you know you may have influence – but if you fail to impress, you’re unlikely to get a second chance. H2 is across all areas of policy, she has to be, and that is no small task. She keeps an eye on Ministerial performance, knows what Ministers and political advisors she can trust for being intellectually robust, and those she can’t. She has been instrumental in negotiations with other parties on legislation, coalition agreements and policy – from the Greens to NZ First to United Future. The results are clear, little of the Clark administration has been pushed around by minor parties. When you consider that perhaps the Families Commission and Kiwibank are the biggest concessions Labour has granted its partners, this is no small feat. National conceded far more with NZ First when it was in government.
*
One term for H2 around Wellington has been “the Associate Prime Minister”. It is clear why. She has rewritten Cabinet papers signed by Ministers because they do not reflect the views of the PM, and has been responsible for ensuring Cabinet minutes accurately reflect the outcome of a Cabinet committee meeting. She effectively doubles the working capacity of Helen Clark, who herself is no slouch for the time or effort she puts into her job. She was key in Clark’s four election campaigns, three of which were won. Setting aside for one moment the performance of the government, the corruption allegations and my disapproval of most government policy, and more recently Labour tactics – H2 deserves to be acknowledged as being a shrewd operator. In a government where most Labour MPs are a yard short of a metre intellectually, it is bloody hard work siphoning through Cabinet papers and keeping together, politically what has been until recently, a well oiled machine.
*
As the Clark administration is approaching its end, Helen and all Labour MPs since 1996 ought to give full credit to Heather Simpson. She took Labour from almost looking like a third party between 1993 and 1996 (when so many New Zealanders hysterically backed the Alliance and NZ First), to making mincemeat of the National Party in 2002. She shifted Labour from being a broad church party of liberal and conservatives socialist and free market, to being an MMP centre left socialist-lite administration with its finger on the pulse of enough of the electorate to keep winning. She shedded Labour’s 1980s free market past and won back its core constituency, and negotiated confidence and supply agreements from parties on the centre right, keeping it in the mainstream, and sidelining Labour’s competition on the left. She has helped command a Labour government that has engaged in a quiet revolution in social policy, boosting social spending, restructuring the public sector and expanding the role of local government. New Zealand has been getting reinvented in centre-left Labour eyes, far more subtly, and progressively than revolution in the other direction in the 1980s. She almost single-handedly taught the Wellington bureaucracy to act for Labour policy, not against it, and effectively started a system of political advisors – one which I think will not disappear under National. It will have to, as National will have every reason to not trust many department when it finally gets into power. Most of all, she reinvented Helen Clark from being one of the most hated figures, as Minister of Health in the late 1980s, to being, despite it all, the overwhelmingly dominant figure in New Zealand politics – who won three elections. Reinventing Helen Clark, reinventing Labour, reinventing government and reinventing the public sector – that is Heather Simpson.

*

It has been rare for any part of the news media to report on "Minister" Simpson. Excluding the likes of Ian Wishart, who may be more concerned about Simpson's sexuality than anything else, the true fundamental role that Heather Simpson plays in the NZ democracy has not been publicly mentioned. It may be questionable whether it is appropriate that an unelected official rewrites a Cabinet paper before it goes to Cabinet, although unelected officials draft virtually all Cabinet papers anyway. It may be questionable that Ministers get their own authority vetoed by Heather Simpson if she disagrees with them. However, it is not questionable that she has been as influential as Clark and Cullen in how New Zealand has been governed since 1999. Heather Simpson is a savvy political operator - she may wonder how Labour got to be from being virtually unbeatable, to being widely hated. If she is advising Clark, Hodgson et al, it doesn't show.