Examination of Witnesses (Questions 160
THURSDAY 15 NOVEMBER 2001
160. Which leads me neatly on to the question
of vaccination. What did you advise the Prime Minister to do back
in March? We read that he was uncertain in his own mind whether
we should slaughter or vaccinate and you told us earlier you were
an adviser. What was your advice?
(Lord Haskins) A lot of us were asked. I was asked
in this particular case as a supplier of foods to the great British
public. The question which was asked was whether the great British
public would accept food from vaccinated animals. A number of
retailers and manufacturers were brought together and the answer
after a lot of discussion was yes. The second question was whether
we would be happy to sell food from vaccinated cows, milk from
vaccinated cows, without labelling it. The answer was yes. That
was a very good answer to that because animals are being vaccinated
all the time. The head of the Food Standards Agency, Sir John
Krebs, said that if we had to label it, we would have to label
every product which came from the dairy herd, "Might have
been subject to vaccination against pernicious diarrhoea",
which is a very common and friendly sort of vaccination which
we give to calves. Therefore we would be labelling all products,
"This might have been . . .". We won that argument and
most people accepted that people would be safe in taking their
food from vaccinated animals. But in the end the Government did
161. So your advice was set to one side.
(Lord Haskins) It was. Other factors were considered.
There was the issue of the foot-and-mouth-free nature of Britain
and if you vaccinated there was then a problem. There was the
issue of whether it would be effective. The proposal at that time
was purely to vaccinate the cows which were in sheds before they
went out to pasture. The decision was taken not to do so. I suspect
it would not have made very much difference. Introducing vaccination
at that stage in the crisis was probably too late. When we come
to review this, we shall have to look at vaccination much more
162. I was interested earlier on when Martin
Taylor said that the only thing the private sector could bring
to the table in the public sector was competition. Then you went
on later on to say that private sector management was superior
to public sector management. Which is it? What is the reason for
involving the private sector. Is it to introduce competition or
is it to introduce better management?
(Mr Taylor) The management is superior because it
has the discipline of competition. That is the point. The crucial
difference between the public sector and the private sector is
that the private sector is subject to competition. Business people
do not do energetic things or risky things or all that because
they are fundamentally dynamic, they do it because if they do
not they go out of business. That is the spur.
163. Another thing you said later on was that
civil servants and possibly Cabinet Ministers had more interest,
as far as the Health Service was concerned, in avoiding political
trouble than in improving patient care. That is a very serious
accusation to make and in terms of our investigation of the public
service ethos, if that is the outcome of a public service ethos,
then it means that the public service ethos is a pernicious influence
on delivery. What evidence do you have for that damning indictment
of public service.
(Mr Taylor) You have been quoting from my assorted
journalism and as you know journalists are not required to produce
evidence. Let me give you a parallel. One of the things for which
the new Labour Government has been rightly praised from many sides,
was the decision to allow the Bank of England to set interest
rates and take it away from the Treasury. There is absolutely
no doubt that the interest rate policy setting process before,
and I mean for many decades before, was a highly politicised one
and that we very often got the wrong interest rate because Ministers
were involved who took a political view when an election was coming
up, based on whether there was some embarrassing news around in
some other way. To have got ourselves clear of all that seems
to me to be an enormous advance. I would go further and I would
praise the Chancellor not only for giving the Bank of England
the freedom to do this, but for not badmouthing the Bank in public
when it does inconvenient things. His silence on this score is
magnificent and it contrasts with what people are doing on the
continent at the moment where every Finance Minister sounds off
every week. I take that diversion because I think what happens
in Health is somewhat similar. Targets are set which are essentially
political targets. The target we have at the moment is waiting
lists. That is by no means the only or even the major determinant
of patient care. I think that if one of Lord Haskins's entirely
unaccountable agencies were setting policy for the NHS, a devolved
NHS, without reference to political pressures, they would not
start there. I do not blame the officials and Ministers for the
situation. It is the natural consequence of excessive promises
made in the past and a kind of national hysteria. It is just unlikely
under those circumstances that the right things will be done.
It is very unfortunate.
164. How do you overcome, or does it matter
that you cannot overcome, the tension which exists when you do
things that way between accountability and delivery? How can you
maintain accountability if you hand over the whole shebang to
an independent agency?
(Mr Taylor) It is immensely complex and you would
not in fact just do that. You should start thinking along those
lines. I do not sense, maybe I am just uneducated on this matter,
that that is the way the Government is thinking, in terms of changing
the long-term governance of the National Health Service. Any intelligent
government would long to be free of the incubus of the Health
Service; it is a source of constant ministerial embarrassment
and it is set up to be for the next ten years.
(Lord Haskins) On the targeting thing, Government
should be very careful. If Government think that the private sector
is run by a whole lot of targets being set and everybody achieving
them, the cheating that goes on in the private sector in achieving
targets is as spectacular as it is in the public sector. The opportunity
for a manager in a large company to use bureaucracy to achieve
a target is actually quite extensive. The only target that matters
at the end of the day in the private sector is earnings per share,
profitability and all that. It is a very simple target. In the
public sector you do have to develop other targets. The ultimate
target in the public sector is that Parliament and the people
are satisfied with what they are getting. That is the ultimate
(Mr Taylor) What I also know from the private sector
is that if you have one key target and you subordinate all else
to that, things will go wrong elsewhere to try to get you to meet
(Lord Haskins) Absolutely.
(Mr Taylor) It is a dangerous temptation that we keep
(Lord Haskins) If you take some of the remuneration
schemes, the share options, these can be very, very disruptive
targets set within the private sector. You will find managers
taking wrong decisions to achieve those sorts of outcomes. I would
just be very careful of targets. They have to be there but make
sure that you recognise their limitations.
165. The more I listen to both of you, the more
I am struck by this thought. You both think that if only you could
get politics and politicians out of the picture somehow everything
would be okay. Surely this is the infirmity of the business view
of government over the ages, is it not?
(Mr Taylor) Let me defend myself while Chris thinks
of some witty riposte. No, I do not think that, but in a sense
politicians have brought this on themselves. They claim credit
for all sorts of things which happen quite naturally without them,
so they naturally get blamed for all sorts of things over which
in fact they have no control. The difference over the last 30
or 40 years is that we live as businessmen in a consumer society
and so do politicians now. People are constantly going on about
their rights and expectations. Their rights and expectations are
much higher than they were and so they should be and the hurdle
is constantly being raised. Politicians are always more impressive
to me when they do not promise immediate results, but when they
state their objectives over a long period and move sensibly towards
them. Unfortunately, promising miracles is not taking politicians
out of this, it is taking that kind of instant tabloid politics
out of it because I think that is where they get into trouble.
But then I am only a businessman.
(Lord Haskins) As far as Parliament is concerned,
the policy, the strategies have to be determined at that level.
We are daily talking about the way we deliver those strategies
and the mechanism for delivering those strategies, those integrated
mechanisms, the increasing assumption that every Minister is responsible
for every action within the National Health Service. It has to
be faced that that is unworkable and a step should be taken back
from that. You have to make those independent agencies accountable.
There is a quite sensible way of making them accountable to Parliament
on a day-to-day basis, through for example the Audit Commission
and the National Audit Office. Let us recognise that Ministers
should be humble about how much they can deliver personally. They
always fall into the trap of promising over-delivery.
(Mr Taylor) Like chief executives.
166. The other bit of the picture then is also
a mythology about the private sector. I had a letter the other
day from a major British company, a high street retailer asking
me whether I would like to join them at a gala Labour Party dinner.
This was one of these £1,000-per-head dos that people like
you go to. I wrote back and said that my dealings with their company
had been so appalling over the yearsand I gave them an
instancethat I had vowed never to have any more contact
with them and I was afraid I could not come to the dinner.
(Mr Taylor) Good for you.
167. Where has this idea come from that somehow
salvation is coming from the direction of British management,
which has an appalling record, British companies, many of which
are lousy, for our public services?
(Mr Taylor) Why do you say British management has
an appalling record?
168. I thought that was just a truism.
(Mr Taylor) One of the problems of the misunderstanding
between the public sector and the private sector is that so many
people in Parliament do believe that is a truism. It is not. It
is false. I heard someone in one of these committees the other
day saying, "Look at Marks and Spencer, it has fallen on
its face", and all the rest of it, "How can we trust
British managers?". Of course the reason Marks and Spencer
has fallen on its face, and yes, they may have been arrogant and
foolish and all the rest of it, was that they were up against
people who did certain things better than they. That is what is
forgotten. There were lots and lots of people who came into the
market and attacked them and took their business away. Now they
are fighting back again. That is a healthy process. People do
concentrate on some of the things which go seriously wrong and
I must say we have had some egregious examples recently but it
is largely a function of the business cycle. All my business life
I have watched the public attitude to business people follow a
quite predictable cycle, depending on where interest rates are,
which goes, "The businessman is hero. The businessman is
idiot. The businessman is a crook". We go round again. People
are infinitely more professional than they were when I was first
in the business world. They are competing in an extraordinarily
open global economy because Parliament has been wise enough to
open our markets. On the whole they do a good job, and if they
do not do a good job, my goodness they get shot pretty quickly.
We should be aware of this. I do not believe that they have the
solution to every problem and I do not believe that they are wonder
workers, but with respect nor are they shambolic.
169. Are you paid for all this work you do?
(Lord Haskins) No.
170. Not a penny?
(Lord Haskins) Not a penny.
171. Therefore to whom do you feel you are accountable?
(Lord Haskins) I suppose at the end of the day I feel
accountable for giving advice to the Prime Minister. I am only
172. I accept that, except you are giving a
lot of advice. Here you are, a trustee of Demos
(Lord Haskins) No, I have given that up.
173. You have given it up.
(Lord Haskins) Yes; too busy.
174. Is that because it was blue sky thinking
and you did not see that as
(Lord Haskins) No, I was involved in Demos at the
beginning and it was a very remarkable innovative thing and I
am glad to see the Government has taken a lot of the Demos thinking
on. Things move on. You should not stay with anything indefinitely.
175. I am intrigued. I am going back to the
ethos. You are talking about the way you perceive that we have
these monolithic organisations which are breaking up. Do you think
that regionalisation is the way forward? Do you see the RDAs as
a good thing, for instance?
(Lord Haskins) I do. I am sorry, but I am on an RDA
too. They are an interesting experiment. The danger is that if
they are there they have to be given support. I have a question
mark about their democratic legitimacy but they are an interesting
experiment and should be encouraged and should be used as part
of this delivery process. They should be the link between central
government and local delivery and they do have a role to play.
RDAs are in effect a public/private partnership which work quite
well, and should be built on.
176. Coming on from there, do you see that strategic
health authorities are going to be something the Government should
be embracing? They are now talking about them coming in in April
next year. Do you think it is a good idea to have strategic health
authorities, in other words trying to break it up a bit and stick
it to regions?
(Lord Haskins) Absolutely; absolutely.
177. Do you see a regionalisation as a way to
(Lord Haskins) I do; ideally. We have a very centralised
system. The trouble is that we have had two disastrous attempts
to reform. The 1972 reform was so awful and the 1992 patch-up
did not work so, nobody has the stomach for the sort of reforms
that are needed. Defining regionalism in England is a difficult
subject. I do not think people want to belong to a place called
the East Midlands. They do want to belong to Yorkshire but they
do not want to belong to the East Midlands.
178. Do you think the public ethos can hinder
the delivery of good services because people get so ingrained
with it? You were talking about these large organisations which
do not always work to the best for their end user, but is it just
because the ethos is out of control?
(Lord Haskins) It is not so much the ethos. As long
as they have the responsibility for this and they feel they are
going to be held to account, then you will get what Martin was
talking about, the sort of bureaucracy where protecting themselves
is more important than protecting the customer. You have to change
that structure and I think that can be done. I have used the agency
process and that is the way.
179. By breaking it all up and sticking it into
regions, or counties.
(Lord Haskins) By making it more consumer driven than
producer driven. The old English counties worked quite well in
their own sort of way. Local government was the real point of
delivery until 1944.