The chancellor of the exchequer is a man... entrusted with a certain amount of misery which it is his duty to distribute as fairly as he can.- Former Chancellor of the Exchequer Robert LoweThis week, the prime minister, in his capacity as minister of finance, delivered his mid-year communication on the state of the nation's public finances. During his communication, the prime minister confirmed that he "was wearing two hats over fiscal reform, that of prime minister and also as minister of finance". Therefore this week, we would like to Consider this... is it in the best interest of the country for the prime minister to also serve as the minister of finance?The Westminster modelIn our column last week, we suggested that, in some instances, we have deviated from the Westminster model of government. In order to consider the propriety of the prime minister simultaneously serving as the minister of finance, we should look to Westminster to determine whether this arrangement is in our best interest.In England, the chancellor of the exchequer is the title held by the British Cabinet minister who is responsible for all economic and financial matters. It is equivalent to the role of minister of finance or secretary of the treasury in other countries. The chancellor is the third oldest major state office in British history, dating from the time of Henry I, one which originally carried responsibility for the exchequer, the medieval English institution for the collection of royal revenues. The chancellor controlled monetary policy as well as fiscal policy until 1997, when the Bank of England was granted independent control of its interest rates. The chancellor also has oversight of public spending of government departments.Historically, the office started in 1221 with Eustace of Fauconberg (Bishop of London) and the office was occupied by notables such as Thomas Cromwell (1533-1540), who served under King Henry VIII, Benjamin Disraeli (1866-1868), Winston Churchill (1924-1929), Neville Chamberlain (1931-1937), Harold Macmillan (1955-1957), John Major (1989-1990), and Gordon Brown (1997-2007). Disraeli, Churchill, Macmillan, Major and Brown later went on to become British prime ministers. The present British chancellor is George Osborne and it is instructive to note that, in the British experience, no chancellor of the exchequer simultaneously served as prime minister. In England, the Chancellor's official residence is No. 11 Downing Street, very close to the prime minister's residence which is No. 10 Downing Street.The Bahamian experienceWhat has been the Bahamian experience? From the establishment of Cabinet government in The Bahamas in 1964, our experience started with a replication of the Westminster model but quickly morphed into a perversion of that convention. In the first Bahamian Cabinet, and for the next nine years, the minister of finance did not simultaneously serve as premier prior to 1969 or as prime minister after that, but that tradition was radically altered in 1984, eleven short years after independence.Bahamian ministers of finance included Sir Stafford Sands (1964-1967), Carlton Francis (1967-1973), and Arthur D. Hanna (1973-1984) during the Cabinets of Sir Roland Symonette and Sir Lynden Pindling. It was not until Hanna resigned from the Pindling Cabinet in 1984 that the tradition changed when Prime Minister Sir Lynden Pindling also served as minister of finance. Sir Lynden reverted to the time-honored tradition of the Westminster model by "firing" himself as minister of finance six years later and appointing Paul L. Adderley, who held the office from 1990-1992.The breach of the Westminster convention continued when Hubert Ingraham became prime minister in 1992, holding both ministries until 1995 when he also "fired" himself as minister of finance and was succeeded by Sir William Allen. Sir William held that position until 2002. Upon becoming prime minister in 2002, Perry Christie, following in the footsteps of the former prime minister, Ingraham, assumed both offices of prime minister and minister of finance, until being defeated by Ingraham in the elections of 2007. At that time, Ingraham also took on the position of minister of finance for his entire second five-year term. Upon being elected prime minister again 2012, Christie repeated the examples of his predecessors in office by appointing himself as the minister of finance. Inherent conflictsThere is little doubt that a prime minister who also serves as minister of finance faces inherent challenges and conflicts. As already observed, the dual role presents an important deviation from the Westminster model.Secondly, the primary role of the minister of finance is to protect the revenue. Situations undoubtedly arise when the exigencies of the state dictate that the minister of finance must advise the prime minister that certain actions must be taken which might conflict with the objectives of the prime minister. A recent example of this is the issue regarding the taxation of the web shops. The objective of protecting the revenue necessitates that the minister of finance should advise the prime minister to tax the web shops, while the objective of the prime minister is to pursue the role of consensus-builder and conciliator of opposing stakeholders. The minister of finance has the incontrovertible responsibility to ensure that taxes are extracted from various elements of society, regardless of the prime minister's objective to assuage those divergent or divisive constituencies.In addition, the current controversy with respect to the implementation of a value-added tax (VAT) suggests deeply different approaches by the prime minister and the minister of finance. The inherent implications of the roles of each potentially place these ministers on a collision course with each other that can cascade out of control.Third, when conflicts arise, the prime minister, who also serves as minister of finance, creates a schizophrenic dissonance in the single person who occupies both offices. There are times that the minister of finance must advise the prime minister that his proposed course of action is simply wrong. Robert Lowe, chancellor of the exchequer from 1868-1873, observed in the House of Commons on April 11, 1870: "The chancellor of the exchequer is a man whose duties make him more or less of a taxing machine. He is entrusted with a certain amount of misery which it is his duty to distribute as fairly as he can." That is not and should not be the normal role of the prime minister.Fourth, in business parlance, and few would suggest that government is not a business, the prime minister's role should be that of "chairman of the board" (the Cabinet), whereas the minister of finance serves more as the "chief financial officer". Responsible corporate governance requires that the chairman should not simultaneously serve as the chief financial officer. These are distinctly different duties often with deeply divergent objectives and responsibilities. Fifth, the Biblical admonition that "no one can serve two masters" also applies here. Serving simultaneously as prime minister and minister of finance implies an inherent conflict of roles and objectives which are often difficult to reconcile. Hence, the prime minister's suggestions that he simultaneously wears "two hats" also means those "two hats" could conceivably conflict with each other. ConclusionIn light of those who have served as chancellors of the exchequer and cognizant of the norms that were established by our former leaders relative to the potentially divergent roles and responsibilities of the prime minister and minister of finance, future leaders should determine how best to structure the government in a manner that will best serve our country. That we have deviated from the Westminster model in such an essential manner should require us to demand that our leaders should respect those institutions that for centuries have enhanced governance for the benefit of its citizens. We must respect those institutions and, more importantly, acknowledge that they were established that way in order for governance to run more efficiently and effectively. Or, in modern parlance, "if that nearly 800-year-old system ain't broke, why are we trying to change it?"o Philip C. Galanis is the managing partner of HLB Galanis & Co., Chartered Accountants, Forensic & Litigation Support Services. He served 15 years in Parliament. Please send your comments to pgalanis@gmail.com.

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