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Machinery of Government

6.24 p.m.

Lord Annan rose to call attention to the case for co-ordinating relations between Ministers, political advisers, the Civil Service and Cabinet committees; and to move for Papers.

The noble Lord said: My Lords, ever since the First World War when Lord Hankey set up the Cabinet Secretariat and Lord Haldane laid down the principles governing the accountability of civil servants, British governance has been praised for its efficiency. That is very different from what happens in Washington. There each agency goes its own way in the hope that the President will come down on its side. Lord Halifax once compared American administration to a disorderly afternoon's rabbit shooting: nothing comes out where you expect--and then something emerges from the far end of the field.

In Britain, of course, traditionally policy was made by individual Ministers. They would discuss their ideas with their civil servants who would then consult their colleagues in the Treasury. A paper would then go to the appropriate Cabinet committee. After they had chewed it over, it would then go to Cabinet. So long as there was no change in the law it was up to the Minister and his civil servants to tell their colleagues if policy was being changed.

That was the pattern for making policy before 1979. Mr. Gerald Kaufman accurately described that in the book that he wrote in 1980. Unfortunately, in the 1997 edition of his book, he seems to imagine that it still holds good, but it does not.

The old system had two failings. Few Ministers had the experience of managing a large organisation, and the Permanent Secretary in effect was responsible for the efficient management of his department. But Permanent Secretaries were more interested in enlarging rather than contracting their departments. In the 'eighties fiscal crises forced the Government to insist that government departments should aim to be as efficient as private enterprises in which profit ruled. So internal markets were set up and areas of business were hived off to executive agencies or to quangos.

The second failing was personified by Sir Humphrey. My old colleague from the days of the future of broadcasting committee, Sir Tony Jay, put his finger, in his immortal television series, on a problem that

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sometimes faced Secretaries of State. The noble Lord, Lord Jenkins of Hillhead, relates in his memoirs that when he became Home Secretary he found that the Permanent Secretary would recommend a single course of action. When he asked for the file to see whether any other options had been considered, the Permanent Secretary was outraged. That was why--in part--the Home Office had become the graveyard of several political reputations.

Ministries develop a philosophy of their own. If some outside adviser was infiltrated to put a different slant on policy, he could find himself marginalised; departmental papers mysteriously failed to come his way so that he appeared in conference ignorant and idle. Even more unwelcome was a challenge from inside to the prevailing philosophy because it was very properly laid down that the department must have a single view. In other words, Permanent Secretaries claimed to have a monopoly of advice instead of a claim to co-ordinate advice.

How did Ministers defeat Sir Humphrey? Ever since 1964 (indeed before that) they brought their own political advisers into their departments, or they set up a private office, or their party financed a private think-tank. In the 'eighties special advisers in No. 10 second-guessed the policies individual Ministers put forward. Policy began to be made in No. 10 and departments were told to carry out that policy. Indeed, it became common to announce new policies to the media or to a party meeting before Cabinet had considered the matter.

But perhaps the most notable change was in Cabinet itself. In the old days papers were remitted to official Cabinet committees. It now became customary to remit business to ad hoc committees which the Prime Minister appointed. The official committees no longer met. Oral reports by Ministers replaced the minutes of Cabinet committees. Indeed at one time the Cabinet itself seems not to have discussed policy.

This lack of Cabinet papers drew comment at the Scott Inquiry. The judge said that he could not discover what government policy on arms sales was. Apparently government policy was whatever the Minister said it was. Again, in the row over the Prison Service, Mr. Derek Lewis said that the Home Secretary did not consult him before making or altering Prison Service policy.

That leads to another constitutional malaise. The House well knows what happens if a noble Lord complains about a BBC programme. He will be told smartly that that is a matter for the governors. They were set up precisely to protect the BBC from political interference in its day-to-day affairs. But what happens if there is a break-out from prison? Can the Prison Service be exempt from ministerial responsibility? If the Child Support Agency is alleged to be unfair, can the Minister say that that is no concern of his?

Whole sectors that used to be in departments have been transferred to quangos. Moreover, in the interests of reducing public expenditure, units in ministries have been disbanded, including several in the Treasury itself.

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As a result relations between Ministers and civil servants have deteriorated. Civil servants were once partners to all decisions that Ministers made. It was the duty of civil servants to listen in to their chief's telephone calls. They could save a Minister's time in taking the vast number of decisions he has to take because they came to know his mind. What is more, they were there to protect him from pressure groups, lobbies and crooks. They could also warn him if they thought that he was about to make a decision that could be challenged and lead to a judicial review. A Permanent Secretary would say, "If you do X, Minister, then in all probability Y and Z will follow. Is that what you want?"

Yet one hears of civil servants complaining that they were not called in to discuss the briefs that they had given Ministers. One hears of Ministers giving a paper to Cabinet which his civil servants had never seen. Perfectly reasonably, it seems to me, a Minister may choose to have meetings with his junior Ministers and his parliamentary private secretary without civil servants being present. But to take policy decisions in such a meeting without consulting them is another matter. One hears of Back-Benchers being brought into such meetings who, perfectly reasonably, have a particular axe to grind. That is dangerous because the power of the lobbies grows stronger every year and if a lobbyist can get an amendment to a clause in a Bill his organisation will consider that money has been well spent.

The other problem is consultation. People dislike change in their own bailiwick, even the most remarkable performers. I think in particular of the profession of law. People dislike change, and the offer of consultation is often rewarded by a blank refusal to accept the need for change. But never to consult is equally foolish. The little world in which I have some experience was amazed when the polytechnics and certain colleges were upgraded to universities without any consultation with the universities although that step had immense repercussions on funding, research and the curricula. It was contrary to the organisation of higher education in all advanced countries where distinctions are very properly made between different types of institution.

What has happened? The influence of the Civil Service has declined. Fiascos and cock-ups in governance have increased. The most recent was the BSE affair. It seems that the Civil Service brief was around for months before Ministers considered it. When the crisis broke, Ministers did not have time to review the evidence. They called in various people to give evidence unsystematically, and I thought that they were stampeded by public opinion. Not until far too late were European relations considered. And that disaster is still with us, and costing millions of pounds.

The most spectacular disaster was the poll tax. I do not wish to go over that ground again. But I think that one thing should be said. It is clear that if one does not consult local authorities--they were never consulted during the whole process--one will be in great difficulties. It is clear that the checks and balances in our unwritten constitution were insufficient to avoid the calamity which cost the taxpayer £2.2 billion.

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There is one particularly difficult problem in public administration. How can one have proposed legislation properly considered when more than one department is concerned? For instance, the item "reducing unemployment" requires an input from the DfEE, the Treasury and the DTI. There are others that noble Lords can easily bring to mind.

Considering this matter, Sir Christopher Foster suggested in a recent paper that a new kind of Cabinet committee, a task force, should be set up. Each department would be represented by a Minister and the chair should be taken by a non-departmental Cabinet Minister. He should act not as an independent, impartial chairman but as a broker between the departments. Whereas other committees respond to papers put to them by Ministers, task forces should take the initiative and put forward papers and solutions themselves and work to deadlines.

From what I hear the present Government are addressing themselves to some of those problems. Official Cabinet committees were reinstated by Mr. Major, but I hear that now on each of them sits a member of the Policy Unit at No. 10. When the Minister winds up, I wonder whether he could tell us how this Policy Unit at No. 10, under the chairmanship of the Minister without Portfolio, works? Is it there to put questions to departments? Is it there to consider the evidence resulting from consultation and then to ensure that a Bill is drafted that is logical and acceptable--in other words, to judge what the public will wear? Is it for departments rather than the Policy Unit now to put up policies and draft White Papers? Who now sets the Government's timetable and establishes deadlines for legislation? Will the Policy Unit supervise the work of departments? Will it assess their efficiency?

Are the advisers in No. 10 primarily concerned with policy, or--since many have had careers in the media--are they more concerned with ensuring that Bills and White Papers are acceptable to the electorate? In fact, are they superior public relations advisers studying polls and other devices to discover what Rousseau called the General Will?

Finally, will the Minister without Portfolio act as the presidential chief of staff does in the White House? That is to say, will he act as a gatekeeper to the Prime Minister?

I am not asking these questions with hostile intent. Nor am I blaming previous Administrations for all the diseconomies of the past 20 years. When the noble Baroness, Lady Thatcher, was Prime Minister, she had good reasons for making some of the changes in the country's governance. All I want to do this evening is set the stage for others who are far better informed than I. The House is awash with noble Lords who have first-hand experience as former Ministers or distinguished public servants; or, like the noble Lord, Lord Beloff, have pondered on these matters for years. I am a historian; and, as we all know, historians are wise only after the event--and sometimes not even then.

My Lords, I beg to move for Papers.

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6.40 p.m.

Lord Beloff: My Lords, we should thank the noble Lord, Lord Annan, for initiating a debate on the important topic that is before us but we should regret that the hopes expressed in the final paragraph of his remarks have clearly not been fulfilled, for although the House comprises many people with long experience in the public service, they have not seen fit to speak in the debate. That is much to be regretted. It reminds the House once again of the great loss sustained in the premature death of Lord Bancroft.

I find it even more difficult since it means that there are no Members here who can assist me in trying to penetrate the mixture of dogmatism and insinuation that marked the treatment by the noble Lord, Lord Annan, of recent history. Some of it was very familiar; some of it was new to me. I find it difficult to know how far it was intended as an indictment of previous administrations and how far as a note of warning to the recently elected one. To begin with, 1979 shows a foreshortening of perspective which does not altogether assist in solving a very real problem. The problem arose when the position arrived at through the Northcote-Trevelyan reforms of the 19th century came up against the vastly expanded responsibilities of the modern state, bringing, as the noble Lord, Lord Annan, reminded us, considerable executive tasks on top of policy making.

During the two world wars the problem was addressed by bringing into government service, both at ministerial and official level, people from other walks of life, notably industry and commerce. However, wartime expedients have rightly not been thought altogether satisfactory in peace time. There is a great deal to be said for the original idea, which I have defended in previous debates in this House, of a core element of professional and professionally trained civil servants.

That approach has, as the noble Lord reminded us, some dangers. Within departments there are likely to be views--what may be termed departmental lore--which might impede an incoming Minister with radical and reforming intentions, although one must be careful about choosing examples. To take a point on which I agree with the noble Lord, Lord Annan, in his analysis of the recent past--namely the headlong rush into university expansion and the way in which it took place--I have no evidence whatever that civil servants in the Department for Education were hostile to the move. In some respects they may indeed have encouraged it in the hope that they would thereby acquire a power over the higher education sector that they had not hitherto managed to establish. That is a matter for historical argument. Again, the difficulty for both the noble Lord, Lord Annan, and myself is that we do not have the documents. There is an occasional shaft of light, as for instance through the Scott Inquiry--an episode important in itself but which can hardly, by extension, be used to illuminate what happens in government generally.

As the noble Lord, Lord Annan, said, there have been various attempts to bring in advisers of one kind or another from outside the Civil Service in order either to

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bolster a Minister's own opinions or to give him access to those sections of the active community whose opinions he desires to know. It was an element given some consideration by the Labour Party in its earlier years as an alternative party of government. There were members of that party who believed that the Civil Service was so much a part of the Oxbridge-educated establishment that it would be necessary for Labour governments to recruit from outside. That never acquired the status of a doctrine but may have influenced action. The first government to do so on any scale in recent years, as the noble Lord, Lord Annan, will know, was the Wilson government of 1964. The recently published diaries of Sir Alec Cairncross, a senior Treasury figure at the time, reveal the awkwardness created in the Treasury by an inability to know whose advice Ministers were taking and what was the position of such advisers in relation to the permanent Civil Service.

It is always likely that an incoming government will feel the need to bring in people from outside. The question is how they then relate to the official advisers to a Minister and whether they may sour his relations with them. An article in the current edition of the Economist suggests that the present Chancellor of the Exchequer goes around the Treasury accompanied by, I believe the phrase is, his "band of trusties" and that means that he does not receive the full support of civil servants who would otherwise have been anxious to co-operate with him. Whether or not journalism is a suitable source for our information, I merely say that this kind of thing echoes from time to time in all governments.

What worries me far more is the matter referred to by the noble Lord, Lord Annan, and mentioned in our debates in recent years; namely, the confusion that exists between the type of people and the incentive shown at its best in private industry and commerce and the type of people and the incentive most appropriate to government service. There has been a blurring of that distinction.

Many noble Lords argued, when the recruiting side of the Civil Service was privatised, that it would have deleterious results. The activities of the new body since it was established already show a pattern of applying to would-be public servants measures of performance, measures of ability and measures of personality which would be suitable if one were looking for people to enter private industry but which may not be suitable for those who are supposed to enter upon a life of public service. The qualities that make a good salesman of lingerie are not necessarily the same qualities that make a good permanent secretary or the ambassador to a friendly country.

The confusion has perhaps been accentuated by the exaggerated attention paid to the handbooks and the gurus of the business school world who appear to have developed both techniques and a jargon which, even for industry, may not be quite so appropriate as they believe. I have known some notable entrepreneurs, including the late Lord Nuffield. I do not believe that

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Lord Nuffield would have been any more successful if he had had an MBA. There are others who come to mind, whose names I shall not repeat.

That seems to me to be a serious problem. It is true that governments deal with a great number of issues which are highly specialised and which demand a knowledge of many matters which people in happier and simpler ages did not require. The problem seems to be a permanent one. Every government will solve it in a different way. Whether they solve it with the correct balance, only the future historian will be able to determine. Even now our views of some major departments in the relatively remote past, such as the 1920s and the 1930s, are being revised by successive generations of historians, as more and more archives come to light.

What is obviously important--the question was not put in the form in which I would have framed it, but I understand the thrust of it--is whether there is also a shifting balance between the Prime Minister's office and the other departments and whether in the current situation we may be moving too much towards a prime ministerial--or, as Dick Crossman used to think of it, a presidential--form of government. Again, it is far too early for those who are not involved in the arcana of Whitehall to answer that question. But some statement from the Minister about that balance would be acceptable, since some pronouncements raise questions about the shape of the new Cabinet committees and the degree to which they are more than offshoots of policy-making at the centre.

Most important of all, I repeat, is that, whatever the system--we cannot expect the system to remain unchanged--we should be able at all times to rely on government service being an attraction to the most energetic portion of the most able and ambitious young people. If that should cease to be the case--because they believe that by going into a party machine, the media or a think-tank they can get to the top by means other than hard slog and promotion within an existing service--the country would be poorly served.

6.55 p.m.

The Earl of Northesk: My Lords, like my noble friend, I thank the noble Lord, Lord Annan, most warmly for affording us the opportunity to discuss this matter. To start with, so far as I am concerned, I must disavow the praise contained in the noble Lord's final paragraph. I speak very simply out of keen interest. To my mind, the noble Lord quite rightly identifies in his Motion that good governance is in direct proportion to the quality, health and robustness of co-ordinated relationships within government.

I was very struck, in the aftermath of 1st May, by an observation from the honourable Member for Great Grimsby, who commented:

    "New Labour took the politics out of politics in opposition. Now we are taking the governing out of government".

That is a snappy turn of phrase, to be sure, but then many a true word is spoken in jest. Mr. Mitchell does make a serious and very valid point about the nature of the relationship between the executive and the various

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arms of the administrative machine. It is a point of particular relevance in the context of the Motion before us today--but more of that later.

As we all know, much of the British constitution is predicated not upon laws written in statute but upon parliamentary and ministerial conventions. One of the less well acknowledged inheritances from previous administrations, the benefit of which the Government are now enjoying, is the sense in which such conventions have been eroded over recent years. The noble Lord, Lord Annan, referred to that. Indeed, notwithstanding the platform of very considerable and far-reaching constitutional change upon which the Government won their mandate, we should be conscious that, in the words of Sir Christopher Foster in the paper to which the noble Lord, Lord Annan, referred:

    "the decline in the influence of civil servants ... is arguably the most important constitutional development of the last 17 years".

By way of example, your Lordships will, of course, be conversant with the Haldane principle defining the relationship between Ministers and their civil servants. In passing, I ask the Minister, when he comes to wind up the debate, whether he can give us some indication of the Government's attitude towards that and whether there is any intention on the Government's part to reinvigorate it. Sir Christopher Foster expresses it thus:

    "British practice has judged that efficiency and effectiveness is best based, not on a remote subordination, but on a two way relationship between the two".

He goes on:

    "This relationship has been deteriorating recently--especially in home departments--with strongly adverse effects ... The main causes have been the increasing number of Ministers and their tendency to deliberate and decide much more with their parliamentary private secretaries, their political advisers and often other political cronies".

While accepting that it is a matter of interpretation, I suggest that the net effect of this and other erosions has been to create an executive that is, at best, over-mighty. As it were, the inter-relationships, of which the noble Lord's Motion speaks, are out of balance. In that context, noble Lords opposite may care to reflect (as we on this side now have to do) that the rather sour fruits of opposition--that sense of impotence in the face of the might of government--have to be endured rather than enjoyed.

In that sense at least, all of us should have some sympathy with the Government's analysis of the ways in which this problem impacts upon ordinary people. Their manifesto expressed it thus:

    "People are cynical about politics and distrustful of political promises".

That said, I have some difficulty in accepting that the many and varied constitutional changes that the Government espouse as the means to resolve that problem will in fact do so. The simple truth will remain; namely, that a political elite, whatever its party complexion and wherever it has its seat of administration, remains a political elite. More pertinently, none of what is proposed will address the quintessential problem of the executive's relative supremacy within the administrative machine. Indeed, it could justifiably be argued that the programme of

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constitutional change will entrench the power of the executive even more immovably into its fabric. Bluntly, that is a deeply worrying prospect.

However, that said, it pays to attempt to assess, in so far as we can, what style of administration the Government intend in that regard. My impression is that the signs are not good. It is a matter of record that there are already many more political advisers within Whitehall than has ever been the case before. I could be persuaded to accept that there is nothing wrong with that per se. However, bearing in mind that they are all unelected, unaccountable officials with, so far as anyone can tell, direct influence over the interpretation and substance of policy, I wonder whether the Minister might be prepared to make available to Parliament a specimen contract of employment broadly defining the areas of responsibility and job profile of such individuals. To do so would go a considerable way towards setting minds at rest, especially--and beneficially--with respect to the Civil Service and future recruitment to it. Or perhaps the Government have in mind a strategy of developing the principle of political secondment into an art form?

As I say, it may be that a case can be made for the use of political advisers. Notwithstanding the style and nature of the Government's programme of constitutional change, it may be that the same could be said of Mr. Christopher Foster's reference to "other political cronies". In that context, I read with considerable interest an article from Alf Young in the Herald entitled "A Britain under boardroom control". He writes:

    "The real threat to the Civil Service under New Labour comes not from Millbank Tower or Walworth Road, but from the growing stream of leading British businessmen who will now preside over everything from setting the national minimum wage to the practical nuts and bolts of delivering the new administration's promised welfare-to-work programme".

Of course there is merit in any government seeking non-partisan input and advice. That gels with the insistence in New Labour's manifesto that:

    "Government and industry must work together to achieve key objectives".

But it is less easy to find its relevance with the Government's stated desire to push back the frontiers of the unelected state and the statement in the manifesto that:

    "Over-centralisation of government and lack of accountability was a problem in governments of both left and right".

Moreover, as Alf Young illustrates in his article, there are worrying and very considerable inconsistencies in some of the appointments. He writes:

    "Even the Scottish Office is not immune from this New Labour love affair with the potentates of corporate Britain. Who can put some fresh economic impetus into the Prestwick area now that production of the Jetstream 41 aircraft is to cease with the loss of 380 highly skilled engineering jobs? Easy. Sign up Sir Richard Evans, the executive at the helm of British Aerospace, for your new Prestwick Airport task force. Isn't he the same Dick Evans who has just decided to scrap Jetstream production? Indeed he is. But who could be closer to the problem?".

I repeat that, whatever the merits of the government of the day tapping a pool of experience and talent outside the conventional political world, a political elite

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remains a political elite. And any such elite is, of necessity, antipathetic to the creation of the sort of co-ordinated relationships that we are discussing today.

There is a further aspect to the matter. Sir Christopher Foster recognises that one cause for the breakdown in relationships within Whitehall is the role of the media. In recent years a great deal of politics, particularly in the province of expression and development of policy, has been driven by the insatiable demand of the media--PR, sound-bites, spin-doctoring have all become the norm.

My own interpretation is that that is a particularly relevant consideration to this administration. I would therefore ask the Minister and his colleagues to pay especial attention to the solution to this problem that Sir Christopher advances; namely that,

    "It would advance public understanding if there were a return to the convention that the first authoritative statement of a new or changed policy is made to Parliament".

The Budget and the Government's White Paper on education with their respective "leaks" are cases in point.

Moreover, as an addendum to that, I would also respectfully suggest to noble Lords opposite that a populist mandate is a very different creature from a popular one. Pursuit of policy on the basis of some kind of PR turf war between the political parties is deeply objectionable. Again the Budget is a case in point. Andrew Grice, writing in last Sunday's Sunday Times comments that:

    "Brown's allies insisted that news management had been a big success",

and cites one of the Prime Minister's aides as saying that,

    "Before every budget, expectations are lowered. It's just that we are better at it than the Tories".

The point is this: the substitution of policy driven by public interest with that driven by public opinion intrinsically and necessarily will ultimately lead to weak and inferior government.

In the circumstances, can we infer that there is something of a crisis at work in the relationships within Whitehall? Moreover, on the basis of the style so far manifest in the current administration, is it credible that this crisis is set to deepen rather than ease? I believe that the answer to both those questions is yes. That can only serve to damage the health and effectiveness of our democracy. Accordingly, the Government should pay due heed to the recommendations of Sir Christopher Foster that:

    "for the sake of good government the Civil Service must be returned to its role in the co-ordination of advice, the implementation of policy and the drafting of government papers and bills".

For my part, I make this point to the noble Lord. If the Government are truly sincere in their worthy aspirations to re- engage the people in politics and to return governance to them, there is no alternative but to address the fundamental imbalance within government of which I have spoken. I am sure the noble Lord would allow that, without this, without addressing the core problem of the supremacy of the Executive, the consequences to our democracy will be dire.

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