In this chapter, we examine the almost uniquely powerful position the British prime minister is in compared to heads of government abroad, and the long list of the PM’s powers and resources. With so much in their favour, why is their performance often so underwhelming? Premierships can go by in a blur of frenzied activity. Prime ministers typically only reflect fully on the powers and resources they possessed after their period in office is over, when they are writing their memoirs, ruefully reflecting on what might have been. That doesn’t mean that there aren’t precise powers, some formal, others informal, accumulated over the years, and it is these that we consider in this chapter. The most successful prime ministers, like Thatcher or Attlee, knew, by study or osmosis, how to use them.

The Chancellor of the Exchequer and the Treasury rose, and then rose again in its place in the twentieth, and rose again in the twenty-first century, to become, the biggest single challenge to the authority of the prime minister. No longer subordinate at all. Naked power, ambition, the knowledge that some were virtually unsackable, command over the purse and the backing of the mighty resource of the Treasury compared to the puny No. 10, ensured that Chancellors could be a power to themselves, strutting around Westminster and Whitehall at times like an overmighty baron in medieval England, making the job of prime minister at times impossible. Reaching this elevated position was not preordained, as we shall see in this chapter, and occurred through seven successive pulses, each associated with a commanding figure, usually the Chancellor, who has shaped the office, much as our landmark prime ministers have done to their own office. There are three great contemporary problems with the Treasury: its handicapping of the prime minister in shaping government strategy, its prioritising of financial over economic policy, and a diminishing role of Parliament in its oversight, have all had long roots.

This chapter offers a historical power analysis from the Saxons to the end of Pitt the Younger’s premiership. In the liminal premiership, the ‘key’ minister/advisor behind the monarch, or Oliver Cromwell during the republic, had serious power, but cannot be considered a prime minister as their power was wholly dependent on the monarch, and the complex machinations of court politics. The important innovation is how the role of ‘lead’ minister developed, with the monarch’s agreement, into the more independent ‘prime’ minister. We contend that only with Robert Walpole’s accession to the office did the power of prime minister become apparent, the primary reason being the monarch’s (George I) reliance on Walpole to control Parliament for spending and the protection of the monarch’s power. However, it was only with Pitt the Younger’s premiership, which truly established more formal parts of the office – particularly the Treasury, the state/economy and the Cabinet – that we see the beginnings of the modern office we know today.