Of mandarins and ministers: Securing power, not just office

Fabian Society

Ed Miliband’s Labour government will take office in the toughest of circumstances: our public services on the rack because of cuts, a weak economy with hesitant growth based upon personal debt, housing assets and consumer spending, and with a record trade deficit. Despite the constant Tory mantra, ‘it’s the deficit, stupid!’, all their targets on borrowing, debt and the budget deficit have been missed. Their neoliberal austerity agenda is failing, like elsewhere in Europe. Labour will also face the small problem of ruling without a comfortable majority – or, if the pundits and pollsters are to be believed, no majority.

Labour’s first task will be to abandon the growth-choking austerity, as I have argued in my new book Back to the Future of Socialism, where I set out a coherent, evidence-based alternative, focusing initially on capital spending. But the key will be for incoming ministers to grip their briefs and departments in a way too many in government never do.

When I was appointed a minister by Tony Blair in May 1997, nobody had really taught me how to be one. Although during the 1997 election campaign I had read Gerald Kaufman’s instructive if somewhat satirical book How to be a Minister, I relied upon my own experience, instincts and political values.

Crucially important for an incoming minister is to have a plan; otherwise, the private office, diligent and supportive though I found all of mine in twelve years of government, quickly takes over and fills the diary, prompting busy hours of worthily processing papers and shuffling between meetings. Most important is to arrive on the first day with a sense of political priorities, even if the detail needs to be filled in. Otherwise even the most able ministers find themselves running to keep up, and sinking under piles of routine paperwork.

Many in our ministerial cadre, particularly though not exclusively below cabinet level, seemed more captured by their departments than not. However, Charles Clarke was a notable exception. In 2000, when we were both ministers of state, he in the Home Office, me in the Foreign Office, we had a meeting to discuss getting retired police officers to help with the transition from military peacekeeping to local civilian security, especially in African conflict zones. My officials had been frustrated by lack of co-operation from their Home Office counterparts and recommended a ministerial meeting to resolve the impasse.

Often on such occasions, a ministerial colleague would regurgitate their brief and the meeting would end, with officials happily going off to do what they love doing: reflect, write a fresh paper and prepare for another meeting. ‘Departmentalitis’ is rife within Whitehall, the Treasury by far the worst offender, so I was briefed up to persuade Charles of the merits of the proposal.

He arrived, plonked his burly frame on my office sofa, eyed up the grand old colonial surroundings, and politely interrupted my opening remarks: “Peter, I have looked at this carefully – and I completely agree with you.” His officials looked more startled than mine. “Now shall we tell them all to work out the details as quickly as they can, and let’s discuss some politics?” As the room emptied, we reflected upon what proved to be a common perspective on the shortcomings and successes of the Blair government and how to make it better. How refreshing it was to deal with Charles.

It is pointless being a minister unless you are prepared give political leadership. Although the legendary Yes Minister television series, where civil servants run rings around their hapless minister often comes uncomfortably close to the mark, my experience was rather different. Officials, I found, valued strong political leadership and direction – ministers who knew their own minds – provided they were willing to take advice. The best private secretaries ensured delivery of my ministerial decisions whilst keeping a wary eye for propriety and telling me things I might not want to hear. The best officials had a ‘can do’ rather than a ‘can’t do’ attitude and, if the civil service only adopted that motto as the norm it would be massively more efficient and immeasurably better at delivery.

Maintaining a grip on the ministerial brief involved striking a balance between the routine and the significant. My years in government suggested several lessons.

Around 80 per cent of the pile of papers and files in your in-tray or red box was straightforward and could in principle have been handled by the departmental machine. You needed to keep a weather eye on this bulk because it might contain elephant traps or plain mistakes. It might also contain what I called ‘piss-off’ messages to MPs, couched in turgid prose by drafting officials blissfully oblivious to their impact. You couldn’t simply sign off this material even if tired or late at night. However, for me, doing the job successfully meant focusing as clearly as possible on the 20 per cent where a difference really can be made. I also ‘did my red boxes overnight’, keeping on top of the workload, leaving more time to prioritise and focus on the politics.

Are we in office but not in power? That age old question for Labour governments will be worth every one of Ed’s new Labour ministers asking themselves every day.

Going for Growth

Fabians

The key to a successful Labour government from May 2015 lies in abandoning Tory/Lib Dem austerity and going for growth.

All our ambitions for seeing that everyone shares in higher living standards, for restoring security at work, for expanding public services, for building a fairer society, and above all a strong economy, depend on economic growth.

For political credibility, Labour needs a programme that is prudent and demonstrates that we will not be profligate.

But we must offer a clear alternative to Cameron and Osborne’s vision that only by shrinking the state can recovery be ensured and the public finances repaired. Labour cannot win in 2015 without confronting this.

George Osborne pretends that in austerity he has found a formula for growth. As proof he points to the UK’s recent recovery, with GDP at last having reached its pre-crisis 2008 level early in 2014. He doesn’t explain why this has been the slowest UK recovery for over a century, or why it took the UK six years to escape recession when the American and German economies did it in only three.

Osborne choked off the fragile but real recovery that Labour got under way in 2010, with a savage tax and spending squeeze. And it wasn’t any deliberate relaxation in that fiscal grip that led the economy very belatedly to start emerging from recession in 2013.

What came to Britain’s semi-rescue was unexpectedly weak tax revenues and Osborne’s consequential failure to hit his budget deficit and debt-reduction targets. If he had stuck to those, the economy would still be stagnating today. We were saved by the economy’s automatic stabilisers – the tendency for government borrowing to rise in recessions as tax revenues fall, offsetting some of the drop in private sector spending.

What Britain needs now is for growth to continue and speed up, like it did when the economy emerged from the Great Depression when, between 1933 and 1936, UK growth averaged over four per cent per year, fuelled by a new house building boom.

By contrast, the prospects for continued UK growth today look poor under the coalition government. Disturbingly, in August 2014, the Bank of England and 20 independent forecasters all expected UK growth to slow down in 2015, not persist or accelerate, dropping back well below three per cent.

Yet faster growth is eminently feasible. The Office for Budget Responsibility and the Bank of England fret about an economy facing an imminent labour shortage. But plenty of other economists see sufficient slack in the economy for the UK to experience years of ‘catch-up’ growth, above average growth as spare capacity is brought back into production, the three million people currently underemployed find the jobs or increased working hours they seek, and business investment revives, further increasing the economy’s productive potential, as in the 1930s.

Here lies the key to achieving Labour’s immediate ambitions. The next five years will be tight ones for public sector budgets. That is inescapable. But Labour could allow faster economic growth to bear more of the burden of bringing down the budget deficit – instead of more savage Tory cuts. We should be aiming at annual growth rates of four per cent or more in the next parliament.

It is essential to minimise any slowdown in 2015 and maintain or preferably enhance the momentum for growth in the following years. How to do it? Start with an immediate economic stimulus, including a big boost to public investment in house building, as Ed Miliband and Ed Balls have promised.

It may mean more government borrowing in the very short term. But higher public spending and borrowing today can mean lower borrowing tomorrow if it keeps the economy growing, with tax revenues rising as total spending in the economy increases and welfare bills falling as unemployment shrinks. So borrowing should fall in the medium term.

President Obama’s 2009 stimulus initially added to the US federal deficit but the US economy began growing again, unemployment fell, and as a proportion of America’s expanding GDP her overall deficit fell every year from 2009 to 2013.

Osborne has already revealed that, if he has his way, he will tighten the fiscal screws again in 2016 as part of his plan to cut top rates of tax and reduce national debt to pre-crisis levels, or lower, by shrinking the state.

A Labour government should scrap as many Tory plans for further public spending cuts as possible. The scope for doing so is greater than many realise. It depends on how fast the economy grows. Oxford Economics noted in February 2014 that ‘if the most optimistic forecasters prove correct then none of the spending cuts planned beyond 2014-15 would be needed to return the deficit to pre-crisis levels’.

Just as exercise is vital to improving the nation’s health, economic growth holds the key to overcoming Britain’s budget deficit and national debt problems. A Labour budget boost in 2015 means easing the squeeze on public investment in particular, and being ready to raise current public spending too, financed by fairer taxes such as the commitment to return to a 50p higher rate. But the faster the economy grows the easier it will be to scrap another five years of cuts without having to raise taxes or charges for public services.

http://www.fabians.org.uk/labours-britain-going-for-growth/