The current government reshuffle has led to the appointment of David Gauke MP, formerly Secretary of State for Work and Pensions, and MP for South West Hertfordshire as the new Secretary of State for Justice and Lord Chancellor. He is believed to be the first solicitor to hold the job, and the news marks a return to the practice of appointing lawyers to the position after the previous 4 incumbents being non-lawyers.
Mr Gauke is aged 46, is from Ipswich and a supporter of Ipswich Town. A calming influence it is said, with the expression "uncorking the Gauke" being used when he has in the past been summoned to meet the needs of broadcasters when the going has got sticky and a government spokesman has been needed.
While the reshuffle had been known about in advance, the involvement of the post of Justice Secretary in it was unexpected, but followed the promotion of David Lidington to Cabinet Office Minister. The appointment of Mr Gauke means that he will be the 6th holder of the position in the last 6 years, and after only 7 months in post for Mr Lidington – hardly on the face of it a recipe for continuity.
But in fact, Mr Gauke had involvement in his previous roles in the Treasury in the main issues which he will find in his MoJ in-tray. Assuming as would be likely that he continues to follow the same path which he has trodden before, and indeed the advantage of that has previously been recognised by him when taking on a new role, we are able already to look ahead to positions which he and his ministerial team are likely to adopt.
Previous work in the Treasury is key to his expected positions
Leaving behind 10 years in the world of a corporate lawyer in the City, and only 5 years after entering parliament as an MP, Mr Gauke became a minister as Exchequer Secretary in the Treasury in the Coalition Government formed in 2010, before being promoted to Financial Secretary, still in the Treasury 4 years later. It was in these roles and particularly that of Financial Secretary that his exposure to current justice issues took place.
Autumn Statement announcement of whiplash reform
The announcement of the plan as it then stood of introducing a ban on recovering general damages for minor whiplash injuries by the then Chancellor of the Exchequer George Osborne in his Autumn Statement and Spending Review of 25 November 2015 came as something of a surprise. Mr Gauke though is likely to have been closely involved in the plan at an early stage.
In fact, Mr Gauke gave a keynote speech to the ABI Conference earlier that same month. The UK insurance industry, he said, "is a great UK strength and an industry we are proud of". He went on: "British insurance is the best in Europe. Our ambition, as a government, is to do our utmost to keep it that way."
In the detail of the speech, he noted the fact that insurance fraud was a significant problem, but that government had taken certain measures to deal with it. He identified both the Insurance Fraud Taskforce which had been set up earlier that year with a view to reducing the cost of insurance fraud, as well as MedCo, the aim of which was "helping tackle fraudulent and unnecessary whiplash claims".
More work alongside the ABI
Mr Gauke also spoke at the ABI conference of 4 July 2017 and looked back to his years as Financial Secretary between 2014 and 2016, this speech being his first as Secretary of State for Work and Pensions, a position to which he had been appointed by Theresa May in her first post General Election government of June 2017.
He said: "I am also somewhat familiar with the ABI. Indeed there was a period when I was Financial Secretary that no day felt complete unless I had a meeting with Huw (Evans – ABI Director General) and his team."
While the quote may be thought alarming by the claimant lobby, in fact it will no doubt have been a reference to the significant work on pensions reform in which the ABI were closely involved alongside government.
It is though clear from his words used in the same speech that in his then new role at the DWP, Mr Gauke intended to build on his work in the Treasury, seeing the benefits both of consistency and the pursuit of long-term objectives. He may well think similarly of those advantages when it comes to him addressing current issues in his new role.
Parliamentary questions on whiplash reform
As Financial Secretary, In March 2016 it fell to Mr Gauke to answer written questions put to the Chancellor in relation to whiplash reform. The answers in truth said little more than the issues raised by the Labour spokesman would be included within ongoing work within government on the reform, which would be made the subject of an Impact Assessment and consulted upon, as indeed was the case, but there is another sign here of Mr Gauke's connection with the reform at that stage.
Discount rate questions
A connection between Mr Gauke and the issue of the discount rate can also be seen from answers to parliamentary questions, this time in March 2017, following his promotion to the second-in-command role in the Treasury as Chief Secretary in July 2016.
While the announcement of the reduction in the rate to minus 0.75% had been made by Liz Truss as the then Lord Chancellor, consultation with the Treasury was required by the Damages Act and may well have involved Mr Gauke.
In March 2017 in his answers to a written question to the Chancellor of the Exchequer Mr Gauke referred to the "significant implications across the public and private sectors" from the change, and the fact that the government would, as it has done, be publishing a consultation on the subject.
It is reasonable to assume both from his Treasury background, and from experience of a degree of previous involvement in the issue, that Mr Gauke's briefing on the subject of the discount rate will not take too long.
Whether though it will be short enough to enable his department to respond by the end of this month to the Justice Committee's report delivered at the end of November remains to be seen. What is clear is that the MoJ had not anticipated a change at the top during that 2 month window.
In summary, while Mr Gauke may have some relief at being able to move on from the challenges of implementing Universal Credit at the DWP, there are issues of importance to insurers in his in-tray, including taking forward reform of the discount rate as well as the anticipated publication of the Civil Liability Bill to enact whiplash reform.
While his appointment was unexpected, past involvement on those 2 issues suggests that his views can be guessed at more easily than when Mr Lidington was appointed. Insurers will be hoping that signs already available from previous involvement reasonably suggest that the new Justice Secretary is aware of the importance of continuing the path of reform, and will be able to secure parliamentary time to do so.
For more information please contact Simon Denyer, Partner on +44 (0)161 604 1551 or email email@example.com