The Blunders of Our Governments
Anthony King and Ivor Crewe
Oneworld, 488pp, £25
It’s the summer of 1984. The Conservative government of Margaret Thatcher is once again discussing the issue of local authority rates. This form of local taxation was, like all taxes, deeply unpopular but the participants in this discussion also considered it to be profoundly unfair. It was levied on the value of the property, irrespective of the income of the resident. Although the money raised provided services to all local residents, many, such as those living in rented accommodation, made no contribution at all.
As the shadow minister with jurisdiction in this area ten years earlier, Margaret Thatcher had promised to release people “from this rates rack”. Yet there had been no mention of abolishing the rates in the 1979 or 1983 Conservative manifestos. An insipid green paper in 1981 had made a dismissive reference to the idea of a per-capita tax on individuals to replace the current system. It was taken no further and a white paper two years later had committed the government to the status quo. Now the matter was being discussed against the backdrop of the miners’ strike and with militant (and Militant) councils such as Liverpool refusing to comply with government-imposed rate caps.
The prime minister listened once again to the arguments about the inequitable nature of the rates: about the little old lady forced to pay the bills of her neighbours who lived in rented accommodation and had much higher incomes, on the basis of the theoretical value of a house that she could never sell. In another private house across the street lived a couple with three sons. All five were wage earners. Yet they paid exactly the same amount in rates as the little old lady living alone on a state pension.
To this was added a further argument: all adults were entitled to vote in local elections but millions of those voters paid no rates and were able to vote for those rate-busting councils that were defying the government, without any fear of financial retribution.
Mrs T’s scepticism evaporated. She was hooked and the poll tax was born. It wasn’t a measure developed in haste; neither was it shaped on an anvil of unquestioning cabinet support. The then chancellor of the exchequer, Nigel Lawson, thought it was “a colossal error of judgement” and voiced his criticism vociferously in a “memorandum of dissent” to fellow ministers.
Anthony King’s and Ivor Crewe’s book is based on exhaustive research; they have talked to the foot soldiers in the civil service and the officers in the cabinet. The result is a fascinating account based on a false premise with a misleading title. The authors tell us that they would have described the poll tax as the blunder to end all blunders, “except that far from ending all blunders it has been followed by numerous others”. As Lawson said, this was an error of judgement and such errors occur in governments all over the world. They always have and they always will.
To blunder is “to move blindly, flounder, stumble”. As the book dissects the corpse of the poll tax, we learn that the review team that formulated the policy was made up of ministers and civil servants of the highest quality: “the brightest selection of people ever gathered”, according to one insider. No stumbling or floundering here. The idea was certainly not developed blindly or in haste.
And what was the impact of the collective genius assembled to solve the rates problem? Eight million people gained from what was officially called the “Community Charge”. There were 27 million losers. Some householders found themselves with an annual loss of around £1,500, while a small minority in London were £10,000 better off. Hundreds of thousands of people simply refused to pay and some 700,000 disappeared off the electoral register, believing it was a way of avoiding the hated tax. As one exasperated civil servant told the authors, “It needed exceptionally clever people to produce anything so stupid.”
The poll tax marked the beginning of the end of Thatcher’s premiership. And in Scotland – where, believe it or not, the Scottish Conservative Party requested that it be implemented in its entirety before being introduced to the rest of Britain – it produced a quaint statistic: there are more pandas in Edinburgh Zoo than there are Tory MPs.
There aren’t that many actual blunders in British politics (though two recent examples come to mind: William Hague’s inexplicable public pronouncement at the beginning of the Libyan uprising in 2011 that Muammar Gaddafi was on a plane out of the country and Theresa May getting her dates wrong when she was rearresting Abu Qatada) but there are many failed policies, and if King and Crewe want to call them blunders, so be it.
I’ll dismount from my pedantic high horse.
It is less easy to ignore their claim that British governments since 1979 have been more prone to such mishaps than their predecessors or than the governments of other countries. Despite making this the premise of the book, the authors endearingly admit that they cannot support their assertions. “Both questions are pertinent,” they confirm, “but alas, we are not in a position to answer either of them.”
Mrs Thatcher spoke of Britain’s entry into the Exchange Rate Mechanism (ERM), over which she presided, as a “folly”. I think that is a better description of the poll tax than “blunder”, but I’m not sure it applies to the ERM. Here, the arguments were so rational that they had the support of all three main political parties, the bulk of British business and most trade unions. Joining the ERM would prevent speculative attacks against the pound, help reduce Britain’s high inflation rate and maintain our influence inside the European Community and in the wider world.
If there was a blunder inside the ERM folly, it was to join with sterling pegged at a rate of £1 to 2.95 Deutschmarks. The ever-prescient William Keegan said in his Observer column at the time: “I cannot for one moment believe that the current exchange rate will hold for more than two years.” It didn’t, ceasing to hold on 16 September 1992, almost exactly two years after British entry.
The mistake wasn’t entering the ERM and certainly wasn’t withdrawal, which helped the country out of recession. It was the bit in the middle: the rate at which sterling was pegged and the absence of any contingency plans as what soon became known as Black Wednesday approached.
This is a familiar pattern. Policy is adopted on the basis of rational arguments and hits the rocks for reasons other than the idea itself. Seeking to seize the proceeds of crime from criminals was an excellent idea. The problem was that the Blair government set up the Assets Recovery Agency by publishing the Proceeds of Crime Bill, grabbing the headlines and leaving the practicalities of how it would work until later. The result: the agency spent £65m to recover £23m, working on 700 cases and recovering assets in a mere 52.
As for the Single Payment Scheme to simplify the operation of the Common Agricultural Policy and Metronet, the public-private partnership for maintaining the London Underground, Labour can be thankful that these disasters weren’t publicised more widely. King and Crewe do them justice, explaining the story in a way that credits the reader with the intelligence to draw his or her own conclusions. Believe me, despite the yawn-inducing subject headings, these are particularly interesting, if little-known, disasters.
I suspect that readers will be unconcerned whether the book’s premise is questionable. It provides a hook on which to hang some meaty and absorbing tales (foreign policy is excluded, so if you’re looking for a blow-byblow account of how we became involved in Iraq, you’ll have to wait for Chilcott).
It is domestic mishaps that entertain the reader through the large part of this book. It’s a shame that King and Crewe didn’t leave it at that, instead of feeling obliged to attempt to draw conclusions across the final 150 pages. Thus we encounter much-debated themes about Whitehall departments working in silos; how there are too many reshuffles (something that the coalition has rightly avoided); cultural disconnect (ministers leading more privileged lives than those they govern); operational disconnect (ministers’ reluctance to be involved in delivery as well as formulation of policy); and so on.
I sympathise with many of their arguments and could add a few more. The virility test for secretaries of state is how many bills they can get into the Queen’s Speech. This can lead to unnecessary and ill-considered legislation. (At the old Department of Trade and Industry, I discussed with David Sainsbury a plan to reverse this process, offering no new bills and using the splendid bill teams – the civil servants drawn together to see through a piece of legislation – to remove legislation from the statute book, rather than add to it.)
There is also the problem of Having Something to Say at Conference. I was as guilty as any of my colleagues in scouring whichever department I was in charge of for an initiative to announce in my ten minutes of airtime by the seaside every year.
Even more pernicious was the prime minister’s demand for policy announcements in the leader’s speech. At least as secretary of state, I knew my patch and had to live with the consequences of my actions. The occupant of No 10 and his acolytes would appear like invading Vikings, pillaging policies and leaving us to clear up the mess.
The authors don’t mention this phenomenon but they rightly highlight the dangers of moving ministers around too much, pointing out that in Germany there have been only half a dozen large-scale cabinet reshuffles in the entire history of the federal republic. In these rather tedious discussions, however, for every argument there is a powerful counterargument. For instance, Enoch Powell approved of moving ministers around constantly. “When a minister begins to think like his officials and understands before they explain, his work in that office is done: he is losing the power to see the issues in a political light from the outside, which alone is what he is there for.”
None of these causes provides a narrative that links all the disparate effects described earlier in the book. They involved judgement calls made by human beings operating in a free society with a limited period to make an impact. A book about government successes would be very boring (and, a cynic would say, very short). Yet some of the factors used to explain these failures could apply equally to the successes. Gordon Brown’s predilection for acting on his instincts and excluding the input of others may well have been instrumental in keeping Britain out of the single currency.
On the other hand, China has many of the attributes considered essential for the absence of political blunders and all the features that would, to take the premise of this book, make blunder-free government such an unattractive proposition.
Alan Johnson is the MP for Hull West and Hessle and was a cabinet minister in the Blair and Brown governments
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