A Prime Minister's Department?

I have recently found myself nodding along with those who argue that Whitehall needs ‘a stronger centre’, or ‘a new Department of the Prime Minister’. But I have two caveats.

First, this would be a major constitutional change.

Second, it would be a major organisational challenge which would need careful, years-long planning and resolute implementation

Such abstract concerns can sound unconvincing; ‘the blob’ resisting change, as ever. So I thought it might be helpful to describe a real world example of an inter-departmental argument in which I was an observer and minor participant - and consider how it might have been handled by a more powerful No.10 machine. The following example is pretty dated now but that avoids the analysis being confused by more recent politics.

This dispute took place in the mid-1980s when the Thatcher-led government was in the final stages of the privatisation of the warship-building yards. Warship-building itself was at a low ebb with Yarrow (on the Clyde), Swan Hunter (on the Tyne) and Cammell Laird (on the Mersey) all running out of work. Unemployment was a serious problem in all three regions - and shipyards and their suppliers were major employers. But it was very unlikely that all three yards could survive whether inside or outside public ownership - ‘though there was one Ministry of Defence (MoD) order that might save one or more of them: Four Type 22 Frigates.

The first two of the four (HMS Cornwall and Cumberland) were ordered from Yarrow, so safeguarding the future of that yard. But the question of the destination of the final two orders remained open.

The Department of Trade and Industry (DTI - my department) was responsible for both shipbuilding policy and the privatisation process. Its Secretary of State Norman Tebbit and his officials both agreed that the other two frigates should be built on Tyneside. Cammell Laird should close unless it could attract other orders such as for oil rigs and submarines. This would create a relatively strong Swan Hunter able to compete with Yarrow after privatisation and so ensure downward pressure on defence spending - whilst also maybe winning orders overseas. It would also probably facilitate the forthcoming privatisation.

But the orders needed to be placed by the MoD. We suspected (maybe we knew?) that MoD officials agreed with our analysis but they were in fact supporting their Secretary of State, Michael Heseltine, who had led the regeneration of Liverpool following the 1981 Toxteth (Liverpool) riots. He believed, understandably enough, that at least one of ‘his’ frigates should be built on his beloved Mersey.

Heseltine and Tebbit came from absolutely opposite wings of the Tory Party. Heseltine was an interventionist outlier. Tebbit was much closer to the Prime Minister and to Chancellor of the Exchequer Geoffrey Howe. Howe had previously urged Prime Minister Thatcher to refuse funding for Liverpool’s renewal and leave the city to a fate of “managed decline”.

The DTI v. MoD argument was conducted along traditional Cabinet Government lines. Interdepartmental correspondence was followed by officials’ meetings chaired by the Cabinet Office and then a ministerial discussion in a Cabinet Committee - and finally a Prime Ministerial decision - to allocate one frigate (HMS Chatham) to Swan Hunter and one (HMS Campbeltown) to Cammell Laird.

Both yards were then privatised. Neither yard built another surface warship and both closed in 1993 although some ship repair etc. business continued. Here is a photograph taken as the workers left Swans for the last time:

So ... Did Cabinet Government work well?

Yes? Two very senior politicians, one of whom saw himself as a future Prime Minister, knew that their arguments had been given a full airing and properly scrutinised. Neither felt disrespected and both therefore felt able to accept Mrs Thatcher’s political judgment.

No? It was the wrong decision. It doomed both yards and increased government spending as a result of reduced competition. Liverpool’s economy was not greatly helped by the decision and Tyneside certainly suffered. The inter-departmental fighting wasted time and political energy. It would have been much better if the decision had quickly been referred to the Prime Minster via officials and political team in No. 10 - and Tebbit and Heseltine told to just accept the result, whatever it was.

Looking back on it, therefore, Norman Tebbit’s Spads and officials might have wished No.10 to have been stronger. The right policy (in economic and regional terms) might then have been imposed on Michael Heseltine. And Mr Heseltine, in this scenario, would not have been too upset. He would have known, when he joined the government, that such contentious decisions would be taken (a) quickly, (b) centrally, (c) by the Prime Minister advised by political advisers and various experts in No.10, and (d) for the greater good of the UK. He would have known that his role would have been more like that of a very senior civil servant - to argue his case as best he could but then, like a good soldier, to accept the decision of the No.10 team. (Those that know Mr Heseltine will recognise that this is an unlikely scenario.)

Alternatively, maybe, the centrally-strong No.10 machine would have included politicians such as Tebbit and Heseltine who would take decisions based on advice from civil servants in departments that did not report to politicians. Such advice would, again, have been strongly in favour of closing Cammell Laird. But it is possible that the argument could have been thrashed out within No.10 itself and the decision taken more quickly than it was.

It is possible, too, that a much stronger (expert-advised?) No.10 might not have taken the post-Toxteth decision to pump lots of money into Liverpool. There were quite a few voices, at the time, who argued that Liverpool was too remote - too near the end of the line - from the London, South East, West Midlands, Manchester economic powerhouse.

Now - Please don’t shout at me if you disagree with any of the above regional, economic or political analysis. It really doesn’t matter. Much of it is hypothesis.

My point is that a strong centralised government would operate in quite a different way to the way Cabinet government operates - or should operate. And it would take different decisions. Senior politicians would be less influential and/or they would not run their own departments. There would less inter-departmental argument and less challenge. Those working in No.10 would have more power, with real consequences for decision-making. Those who would be more powerful would include future versions of Steve Hilton, Dominic Cummings and Morgan McSweeney.

Does this sound attractive? Maybe not - but a more powerful Prime Minister’s machine would be able to drive change much more effectively. The Prime Minister is currently almost a supplicant, begging his ministers to get on and deliver on manifesto promises. And the inability to tell Cabinet ministers what to do can be a serious problem when faced with a cross-government emergency such as Covid ... or absence of growth.

What About Parliament?

A centralised administration would require a substantial change in ministers’ relationship with Parliament.

In the above example, for instance, Michael Heseltine will have answered Parliamentary Questions about “his” decision to “rob” Swan Hunter” and “favour” Cammell Laird. But what if the decision had clearly been taken by a beefed up No.10? Would he still have been required to account for the decision even if he had clearly not taken it? That would have reduced his role to being a mere government spokesperson. That’s not very attractive for any politician, let alone an ambitious one. And MPs, too, would surely feel that they had not been allowed to question the true decision maker.

Constitutionally, therefore ...

A more powerful centre may therefore, or may not, be a good thing, but it would certainly represent a significant constitutional change.

(And it would probably be much better than the regime preferred by recent Prime Ministers - an uneasy compromise in which they are surrounded by weak or subservient Cabinet ministers and so try to act ‘presidentially’ whilst pretending that they continue to lead a Cabinet government.)

The Change Programme

Let’s assume that an incoming Prime Minister were determined to abandon Cabinet government and create a more powerful centre. This would require a significant change programme.

Different change management experts use different descriptors but they all talk about the need to identify something like “the six Cs”:- the key elements of any system, none of which can be permanently altered without simultaneously requiring or causing change in the others.:-

• Constitution:- i.e. organisational structure, reporting lines etc.

• Culture:- new relationship etc

• Communications:- including not only communications whilst the change programme is being implemented, but also new ways of communicating once the changes have been implemented

• Capacity:- i.e. resources, and in particular staff numbers

• Capability (or competence):- i.e. staff skills, training, experience and motivation

• Compensation - salaries, bonuses, appreciation

Put another way, if you try to change one of the ‘C’s without changing the rest of the system then the system will over time, like this child’s flexible toy, snap back (revert) to its previous state.

What are the implications for centralising power into a Prime Minister’s Office?

Well, obviously enough, there would need to be a new constitution including the formal relationship between Parliament, ministers and departments. And the government’s internal culture would need to change. Ministers would be expected to compete much less than they do now and instead work more collaboratively.

External communications (including accountability) would also need to be rethought, as would those within government. There would need to be more traffic to and from No.10 and rather less elsewhere.

Significant capacity would need to be added to the centre - including premises as well as staff. Supporters of a stronger centre often talk about importing more politicos and experts from the private sector.

Competence? Politicians would need to be more team-spirited and technocratic than they are now. They would be less free to impede policies which they disliked, or which were unpopular with their supporters. This might not appeal to conviction politicians.

Senior civil servants would need to learn how to operate in an initially unfamiliar environment, no longer reporting to and directed by their Secretary of State but instead having some sort of reporting line to No.10. The extent and nature of this change would need careful thought and might take a while to bed in.

Compensation? The salaries of the additional advisers in the Prime Minister’s Office would need some thought. The political staff and other external hires would probably expect significant salaries. Departmental officials would need to understand how and by whom their performance was to be evaluated in this new world.

Concluding Comment

I have no doubt that a stronger centre would offer some advantages over the current arrangement. But it would represent a significant break from the past and require detailed planning and much difficult decision-making. I find it hard to see how this could be done by a government under pressure. Cross-party agreement would help, but this currently seems unachievable.

Martin Stanley