John Key's Government marks its fifth birthday tomorrow. Political correspondent John Armstrong explains how National's linchpins — Key and Finance Minister Bill English — have forged a successful working relationship

Bill English is talking about electric fences. But not the kind used on his Southland farm.

Sitting at the other end of a couch from John Key in the Prime Minister's Beehive office, the Minister of Finance is explaining the complex and delicate dynamics which drive the most important relationship in the corridors of power - the one between Key and himself.

He is referring to the boundaries which Key - a moderate conservative with a dread fear of losing the hearts and minds of election-determining middle-income earners - establishes around what he considers to be no-go areas for reform-minded ministers like English.

"He [Key] is very good at making it clear when those boundaries are infringed ... It's like electric fences. You hit the electric fence."


It seems that does not happen very often. By this stage of proceedings both politicians know exactly what is and is not acceptable to the other.

Strenuous efforts are made to kill any suggestion of disagreement around the Cabinet table. The idea that there might be even a sliver of daylight between the stances taken by the two most powerful figures in the country can shake public confidence in a government.

In 2005, the Herald came under huge pressure not to run a story which intimated that Helen Clark and Michael Cullen were not seeing eye-to-eye over the timing of tax cuts.

When a prime minister and finance minister are in harmony, the governing party can be a formidable creature slaying all that dare cross its path.

When the relationship sours - as it did so obviously and so bitterly for David Lange and Sir Roger Douglas and, to a lesser extent, for Jim Bolger and Ruth Richardson - that government is heading for the rocks.

Apart from the occasional verbal inconsistency in declaring where they stand on issues - and English talking too loudly about selling Kiwibank - there have been no visible schisms in the Key-English combination.

The lingering question is how this pairing has avoided the pitfalls which have seen governments paralysed when the two pockets of power have stopped trusting one another and started undermining one another.

Told, the Herald wants to focus on their partnership before and after National was returned to power in 2008, Key turns and looks at English and exclaims "Okay, love" and laughs. English replies in typically droll fashion: "As a loyal deputy, I can assure you, it is not a partnership." He means not that sort of partnership.


The humour, however, has an edge which leaves the listener wondering just how well the two men actually get along.

That feeling is in part reinforced by the period in late 2006 when the leadership of the National Party was about to fall into Key's lap - much to the annoyance of English whose career had stalled somewhat after he was ousted from the party's top job by Don Brash three years earlier.

English considered that Key was too inexperienced to lead the party.

The factional infighting was resolved after 48 hours of emergency talks involving senior party figures agreed English would become deputy leader at Gerry Brownlee's's expense and would also be handed the shadow finance portfolio in return for not trying to block Key's accession.

Within weeks the pair were singing each other's praises to anyone who would listen. But the state of their relationship came into further question when English told North & South magazine: "I'm a stayer, he's a sprinter. I grind away. John just bounces from one cloud to another."

The unfortunate wording was not surprisingly interpreted as English denigrating Key as a lightweight. It added grist to the argument of opponents that English is the dominant and doctrinaire figure in this administration, who is consumed with completing National' s unfinished business from the 1990s.


Key is seen as coming along for the ride, occasionally applying the emergency brake when English goes beyond the comfort zone.

English's tentacles certainly extend way beyond the confines of his finance portfolio. He was the one pushing hard for meaningful welfare reform. He has basically overseen the big changes in the housing of the poor. He keeps a watching brief on the public service and its adoption of new methods of delivering services. Given the almost-universal involvement of the Treasury in any reform, however, it is par for the course that the finance minister is involved.

English's approach to reform is to make incremental changes, rather than doing it all at once.

As a young backbencher in the 1990s, he watched Richardson's big-bang approach blow up in her face. National's opponents claim English's incrementalism is all about keeping the punters in the dark about his real objectives.

English denies this. "[It's about] taking the public along, not just for political reasons, but because it's how you win the arguments."

What the pair both say is that the success of their partnership is in part because they occupy the same "ideological space". More likely, English is more ideologically focused. But - like Key - he is also a pragmatist.


Refusing to offer up examples which would be swooped on by opponents, Key says differences of opinion occur over "nuances" rather than over the Government's direction - the case with the open warfare between Lange and Douglas.

Key says he cannot imagine how Lange's and Douglas's Beehive offices became so isolated from one another. In contrast, his and English's staff are constantly in and out of each other's offices on the ninth and seventh floors of the building.

There is a specific mechanism designed to keep the Government on an even keel, however. What was a "tight five" of top ministers has - with the addition of Judith Collins - become a "select six".

This alternatively named "kitchen cabinet" - Key, English, Brownlee, Steven Joyce, Collins and Murray McCully - is where National's handling of pressing issues alongside the party's broader political strategy is mulled over and mapped out.

For all the advice from this cabal, Key is the one who makes the final call on what to do. His more hands-off, chairman of the board-style delegation of duties to ministers and his relaxed and cheery demeanour disguise the huge reservoirs of power at his disposal.

English - who is careful not to talk over Key throughout the 45-minute interview - notes that important matter of "distinct hierarchy".


"If a prime minister says 'this is what we are going to do', whether I might completely agree is irrelevant, particularly with a successful prime minister. If he says 'I want this', then that is what happens."

The inner circle
John Key's kitchen Cabinet:

John Key says his senior group gets together every Monday before Cabinet and often gets together for a drink on Tuesday night. They are:

• Bill English
• Gerry Brownlee
• Steven Joyce
• Judith Collins
• Murray McCully

Bill on John:

• "(John) has more ideas than we know how to handle. My framework is a bit more conventional so I spend a lot of time just dealing with issues in a reasonably predictable way but the PM is always stretching the boundaries."

• "He's endlessly capable of everything, I assure you - catching fish, cooking pasta, making up policy, being friends with the Queen. There is nothing this man can't do."


John on Bill:

• "They are quite complementary skills. I do a lot of going around the country opening things and cutting ribbons and being the kind of face of the party that's interacting with the public. And Bill is doing a lot of the long term thinking, heavy-lifting and policy design, all the things that involve ministers ... I'm kind of the retail face."