The Complete Yes Prime Minister

A CONFLICT OF INTEREST

October 1st

The newspapers this morning made pretty depressing reading. I remarked upon this to Bernard when I met him in my study after breakfast. Theyre all saying that since Ive been in office nothing has changed.

You must be very proud, said Bernard.

I explained to him that it was not a compliment, even though it might appear so from a Civil Service perspective. Ive read ten of Londons morning newspapers, I admitted, which is surely above and beyond the call of duty, and theres not a good word about me in nine of them.

But the tenth is better? queried Bernard, mistaking my implication.

The tenth is worse! I explained. It doesnt mention me at all. [Notoriety is generally preferable to obscurity in the minds of politicians Ed.]

All the papers are basically saying the same thing -- that Im a windbag. I showed Bernard. He was as astonished as I. [Honesty, though doubtless an essential requirement for a successful Private Secretary, must at times be tempered with discretion Ed.]

It is quite extraordinary. The newspapers say that my administration is all rhetoric, that I talk and talk but nothing ever gets done. But its not true -- as I keep saying, there are numerous reforms in the pipeline, a great new change of direction is promised, there are great schemes in development, a whole new philosophy of government, and a profound movement in the whole social fabric and geo-political climate of this country.

Bernard nodded sympathetically. He was in full agreement. So what is actually happening, then? he asked.

Nothing, obviously! Not yet. I was impatient. Rightfully so. After all, these things take time. Rome wasnt built in a day.

The truth is that the origin of this latest absurd burst of criticism is that bloody rumour about another big scandal in the City.

So when Humphrey joined us I told him that I had decided to respond to all this press criticism. The press are demanding action about the scandals in the City. They shall have it!

Humphrey looked interested. What kind of action?

I shall appoint someone, I said firmly. I was glad he didnt ask me who, or for what, because I havent yet worked that out. As a matter of fact, I shall eventually need him to help me work that out.

Instead, he asked me a question that I didnt expect. Prime Minister, when did you make this momentous decision?

This morning, I replied with pride. When I read the papers.

And when did you first think of it? He was courteously cross-examining me.

This morning, I said, suddenly aware that the suddenness of my decision made me look slightly foolish. When I read the papers.

For how long, may I ask, did you consider the pros and cons of this decision? He is sometimes so obvious! He was trying too hard to make me feel that the decision was hasty.

Not long. I was defiant now. I decided to be decisive.

He could see that my decision, though hasty, was right, for he dropped the subject. [A fascinating example of the power of the experienced politician to believe what he wanted or needed to believe Ed.]

Bernard tried to comfort me. Prime Minister, I must say that I think you worry too much about what the papers say.

I smiled at him. How little he knows. Bernard, I said with a weary smile, only a Civil Servant could make that remark. I have to worry about them, especially with the Party Conference looming. These rumours of a City scandal wont go away.

But Humphrey was unflappable. Lets not worry about it until theres something more than a rumour. May I show you the Cabinet agenda?

I wasnt interested. Please, Humphrey, I said. The papers are far more important.

With respect, Prime Minister, replied Humphrey impertinently, riled by my refusal to look at his silly agenda, they are not. The only way to understand newspapers is to remember that they pander to their readers prejudices.

Humphrey knows nothing about newspapers. Hes a Civil Servant. Im a politician. I know all about them. I have to. They can make or break me. I know exactly who reads them. The Times is read by the people who run the country. The Daily Mirror is read by the people who think they run the country. The Guardian is read by the people who think they ought to run the country. The Morning Star is read by the people who think the country ought to be run by another country. The Independent is read by people who dont know who runs the country but are sure theyre doing it wrong. The Daily Mail is read by the wives of the people who run the country. The Financial Times is read by the people who own the country. The Daily Express is read by the people who think the country ought to be run as it used to be run. The Daily Telegraph is read by the people who still think it is their country. And the Suns readers dont care who runs the country providing she has big tits.

[This critique of Londons newspapers was found in Number Ten Downing Street shortly after Hackers eventual departure. Xeroxed copies were found all over the building: the Cabinet Room, the Private Office and, of course, the Press Office Ed.]

[Shortly after the conversation about the City reported above, Sir Humphrey Appleby met Sir Desmond Glazebrook for lunch at Wheelers Restaurant in Foster Lane, a well-placed restaurant in the shadow of St Pauls Cathedral, known for the wide spaces between tables, most of which are placed in their own wood-panelled booths. Discreet conversation is therefore possible in this restaurant, which has become a favourite City watering hole.

Sir Desmond Glazebrook was an old acquaintance of Sir Humphreys. He was at this time still the Chairman of Barletts Bank, one of the High Street banks. Sir Humphreys diary records the menu Ed.]

Wednesday 3 October

Met Sir D. at Wheelers for lunch. Ordered the Dover sole and a couple of bottles of Pouilly Fuiss, Desmonds favourite. As a result he was even more talkative than usual.

I had arranged lunch so that we could discuss the Phillips Berenson business. To my surprise Desmond wanted to talk about it too. He said it didnt look too good, which is the closest Ive ever heard him come to admitting to rampaging fraud and theft among his City friends.

All that the press have said, so far, is that its a case of another investment bank thats made bad investments. But he implied that its the tip of the iceberg. Not only have they broken the insider trading regulations, which everyone knows by now though no one can say so yet, they have broken the basic rule of the City. [The basic rule of the City was that if you are incompetent you have to be honest, and if you are crooked you have to be clever. The reasoning is that, if you are honest, the chaps will rally round and help you if you make a pigs breakfast out of your business dealings. Conversely, if you are crooked, no one will ask questions so long as you are making substantial profits. The ideal City firm was both honest and clever, although these were in short supply Ed.]

I tried to find out if Phillips Berenson had been breaking the law. Glazemont was evasive. He said he wouldnt put it like that. This struck me as virtually conclusive.

I asked specific questions:

(1) Were the Directors of Phillips Berenson siphoning off shareholders money into their own companies?

(2) Were they operating tax fiddles?

(3) Were there capital transfers to Lichtenstein companies?

(4) Was there bribery?

Desmonds answers were even more evasive, yet crystal clear in their implications. In answer to (1) he acknowledged that this had occurred, although the money might have been intended to be repaid later; nevertheless, this repayment has not yet occurred.

In answer to (2) he agreed that Phillips Berenson had placed their own interpretation on Treasury regulations. It was felt that someone had to interpret them, especially as the Treasurys own interpretation didnt seem quite appropriate.

As to (3), capital transfers had occurred a bit. And (4) he did know of undisclosed advance commissions to foreign government officials [City code for bribery Ed.].

And what has brought it all to a head? Phillips Berenson are going to go bust. This is when it matters that they broke the rules -- now that the whole story is likely to come out.

Desmond feels passionately that it must be hushed up. This surprised me. He has a big vested interest. I had not realised until today that a huge High Street bank like this could be affected by the failure of a small investment bank. But it transpires that Barletts has been supporting Phillips Berenson in a big way. Glazebrook revealed that they are in for 400 million.

He was rather defensive. It appears that the problem lay with all that Arab money which they had at 11%. They would have looked rather silly if they didnt lend it to somebody at 14%. Trouble was, there werent all that many people whom you could trust to pay 14%.

Having lent the money at 14% to people who -- it turned out -- couldn't pay, Bartletts kept putting in more and more money to keep its creditors afloat. And yet they still sank.

Why didnt Bartletts (or Desmond) know that these people were crooks? Why didnt they make enquiries? With hindsight, its easy to understand: you simply dont make those sort of enquiries in the City. They had seemed like decent chaps, so the Decent Chap Rule applied: decent chaps dont check up on decent chaps to see if theyre behaving decently. Furthermore, theres no point: if theyre honest its a waste of time -- and if theyre not honest you dont find out until its too late anyway.

Then you have two options:

(a) either you blow the whistle on them and you lose all your money, or

(b) you keep quiet and become an accomplice in the crime.

Therefore -- and I can quite see why -- Desmond Glazebrook chose the third option: namely, to stay ignorant so that the Board of Bartletts Bank could emerge as honourable men who were shamefully deceived by a lot of rotters. Ultimately, the chaps in the City dont mind that. Nor do they really mind people being crooks. What they do mind is people finding out that people are crooks. Worse still, people finding out that people knew that people were crooks.

But the question remains: the whole mistake has cost Bartletts 400 million. Is ignorance worth paying 400 million for?

Glazebrook felt that it was. Ignorance is safety -- at least safety from the law. And, of course, its not the Bank directors own money.

So we moved on, over the trifle, to discuss solutions to this thorny problem. Glazebrook felt that there is only one answer: the Bank of England must rescue Phillips Berenson -- quietly, with absolutely no publicity. That way we keep it all in the family, and Bartletts Bank would get its money back.

There is one tiny drawback in this scenario: Bartletts gets its money not from its creditors but from the taxpayer. However, this is not an insuperable problem. Its feasibility will all depend on the new Chairman of the Bank of England -- who has not yet been appointed. Unfortunately, the likelihood is that the PM will appoint one Alexander Jameson.

Virtually everyone in the City is against Jameson. Its not simply that he behaves honestly. That, apparently, doesnt matter in itself. It is not seen as a fatal flaw, because smart people can be honest and still succeed. But Jameson goes one step further -- he commits the one unforgiveable crime in the City -- he moralises [i.e. he actually tried to stop dishonesty in others Ed.]. He conducts search-and-destroy operations. And, as Desmond Glazebrook rightly points out, the world doesnt work like that.

We in Whitehall have also experienced his interference and his moralizing. He did a frankly awful report on waste and inefficiency in the Civil Service, containing 209 practical recommendations for reform. It took eighteen months of laborious committee work to whittle them down to three.

Desmond wants Jameson stopped. I agree. But it could be difficult. The appointment of the Chairman of the Bank of England is really a Treasury recommendation. But we cannot let that stand in our way because its not just the Phillips Berenson case that will be affected if Jameson gets the job and starts all his confounded amateur Sherlock Holmesing. All sorts of other little matters could emerge. He could uncover a major scandal. Followed by collapse of confidence. Sterling crises. The pound could fall through the floor.

It would, of course, be best for all of us if all these City fiddles could be cleared up. But thats just naive optimism, I fully realise. Pie in the sky. The bottom line (as our American cousins like to say) is that the City earns this country 6 billion a year. We cant hazard all that just because a few chaps do a few favours for a few other chaps, who happen to be their friends, without telling the shareholders.

It might be right to put a stop to it. But it simply wouldnt be reasonable. The repercussions would be too great. The time is not ripe.

[Appleby Papers RR/2056/LFD]

[Hackers diary continues Ed.]

October 5th

Party Conference coming up. Ive been working with Dorothy [Dorothy Wainwright, Hackers Chief Political Adviser] on my speech today, but Im not happy with it.

She claimed that its only a first draft, but that isnt the problem. The problem is that it contains no good news. I pointed this out to her and she shrugged. We couldnt think of any.

Feeble! Theres always a way. And if there isnt any good news you just have to make the bad news look good.

For instance, I told her, you have to say something about the Health Service. Care for old people, mothers and children, that sort of thing. Growing up into a healthy nation.

Value for money? suggested Dorothy.

We cant say that, I pointed out. Everyone knows that costs are completely out of control.

Dorothy suggested an alternative: Were spending more than ever before to make our Health Service the best in the world. Excellent!

We then turned to Defence. I had meant to talk to Party Conference about defence cuts, but I havent been able to get the MOD to make any yet. Dorothy had got the idea already. Shes very quick on the uptake. This government will not put the security of the nation at jeopardy by penny-pinching and false economies. [Not that Hacker would have put the nation in jeopardy by, for instance, merging all three music schools of the three armed services. It was a doubtful necessity to have separate music colleges for the Army, Navy and Air Force respectively. There could hardly have been, for instance, a specifically Royal Naval method of playing the bassoon Ed.]

We turned to the EEC. A knotty problem. I dont want to attack it because I desperately need the agreement on quota reductions. I cant afford to have all those bloody Europeans ganging up on me again. Wholehearted commitment to our friends in Europe was Dorothys excellent wording, but still vigilant and vigorous in our determination to see that Britain gets a fair deal.

Shes very good. Finally, we turned to the economy, the biggest problem of all. No good news there at all, really. I was plunged into melancholy at the mere thought of having to put a good face on it in public.

Dorothy tried to comfort me. Well find something.

I asked her if any further bad news was likely to break during the party conference.

Dont ask me. Youre the one who sees the secret Treasury papers.

I wasnt really thinking of that, Dorothy. I sighed heavily. I was thinking of the Phillips Berenson business.

Ah. She was non-committal. And looking as lovely as ever -- slim, blonde, blue-eyed, cool -- a vision of wisdom, beauty and unflappability. She always makes me regret that Id never had a nanny.

I pressed her. [Not literally, we think Ed.] What do you make of it all?

Im suspicious.

Why?

Because she replied thoughtfully, because of the statements from the Chairman of the Stock Exchange, the Chairman of the Clearing Banks Association, and the Governor of the Bank of England.

I was puzzled. But none of them really said anything.

She smiled. Thats why Im suspicious. If thered been nothing in those rumours theyd all be falling over themselves to say so.

Very shrewd. Very wise. She was right, of course -- there must be more to it than meets the eye. Can you find out a bit more about it?

Ill try, she promised.

The whole thing is so unfair! City scandals always look bad for the government and its absolutely nothing to do with me at all! Yet, if the story breaks during Party Conference it could really hurt me.

Dorothy suggested that, to counteract the damage if damage there is, I could announce a wide-ranging review of malpractice. Not a bad idea exactly, but it did sound rather inadequate.

Then I realised that there is one thing I can do. I can announce the new Governor of the Bank of England. If I choose the right man I can make if look as if no further City scandals will be tolerated.

Dorothy seemed slightly confused. You mean appoint someone really good? She was having difficulty in grasping this concept.

I nodded vigorously, stood up, and paced around the study, greatly enthused with the idea. Yes! I was excited. Someone vigilant and vigorous.

She was even more puzzled. Thatd be a break with tradition, she observed, and asked me if it were Alexander Jameson I had in mind.

Shes no fool. However, I havent yet made my final decision, and I dont need to yet. I know theyd hate it in the City if I appointed Jameson, and if it turns out there is nothing in this Phillips Berenson affair it may not be necessary.

If! said Dorothy.

We continued to work on my speech. Wed reached the economy before we digressed. I couldnt see what I could say about that! I mean, if Id inherited a mess like that from the other party I could blame all the problems on them for the next three years at least. But how do I tell my party that my late, unlamented Right Honourable predecessor had navigated us all up shit creek and then departed with the paddle?

Dorothy tried manfully. You could say: We have come through some difficult times together.

I didnt dignify such a pathetic offer with a reply. I eyed her balefully. She tried again. All the industrial world is facing severe problems.

I shook my head. America and Japan are doing all right.

Okay, she said, not giving up. How about All the European nations are facing severe problems?

It was the best we could think of, but not great stuff to lift the partys spirits and send them out happy.

Dorothy needed more information. What about output?

Down!

As far down as last year?

No, I said.

Great! We are halting the rate of decline in the nations output. Very good. She thought for a few moments. Is unemployment coming down at all?

Not much, I replied, but I could see she had a way of dealing with it.

I was right. We shall make the attack on unemployment our top priority!, she offered. Not bad!

Pay? she asked.

Its rising too fast, I admitted.

We cannot afford to pay ourselves more than we earn. The world does not owe us a living.

True, but not awfully inspiring. Just a bit of Jimmy Carter moralizing really. Nobody likes being preached at, especially not by politicians. I wondered if we could turn this section into an attack on greedy unions and spineless managers, thus directing the heat from me and putting the blame fairly and squarely where it belongs.

Dorothy suggested a more diplomatic formulation. Both sides of industry must strive to work together in peace and harmony for the sake of Britain.

One final reference was necessary: to interest rates, which are undoubtedly too high. If only theyd come down before Conference it might save my bacon. But I just dont seem to get that kind of luck. We thought about it for hours, but we just couldnt find anything good or positive to say about interest rates.

So we discussed how to finish up. As the whole picture is really a total disaster, the only viable option is to wave the Union Jack. So Ill finish with some rubbish about Britains unique role on the world stage, and the nations great destiny.

Dorothy wanted me to say that Id devote every effort to building a peaceful and prosperous world for our children and our childrens children. At least that bit would be honest. Its probably about how long it would take.

SIR BERNARD WOOLLEY RECALLS [in conversation with the Editors]:

The Prime Minister was indeed exercised about his speech to Party Conference. And he had a considerable problem on his hands. You do need some good news if you want to rally the morale of the party faithful.

He made it known to me that he was planning to appoint Alexander Jameson as Governor of the Bank of England. Naturally I reported this to Sir Humphrey Appleby. I must admit to a certain naivit, for I saw this as good news.

Sir Humphrey quickly disabused me. Its appalling news! He was so agitated that he rose from his desk and strode angrily about his office, pausing occasionally at the bullet-proof net curtains to stare out over Horse Guards Parade.

At first I couldnt quite see the danger of appointing Jameson, but I readily accepted that Sir Humphrey had greater wisdom or fuller information than I. So I asked him if he were going to try to change the Prime Ministers mind.

He turned and smiled at me, then replied with characteristic precision. No, Bernard, I am going to change the Prime Ministers mind.

I couldnt help smiling back, though. I couldnt see how this goal was to be achieved. Jameson was a genuinely good choice, so far as I was aware, and the PM was extremely keen on him -- it appeared to be the only hopeful piece of news that he could present to the massed groundlings at Blackpool.

Sir Humphrey found it no deterrent that the PM was keen on Jameson. In fact, he seemed to regard it as a positive bonus. That will be my starting point. If you want to suggest that someone is perhaps not the ideal choice [i.e. rubbish them Ed.], the first stage is to express absolute support.

The reason, as I now understood, is that you must never be on the record saying that somebody is no good. You must be seen as their friend. After all, as Humphrey explained so cogently that morning, it is necessary to get behind someone before you can stab them in the back.

The interesting thing about expressing support for Jameson is that it was indeed the right thing to do. Jameson was good. He was extremely honest and efficient. And Sir Humphrey planned to say so. And this is why Sir Humphreys tactics were so confusing to me at first.

But I should have been patient. He spelled it out.

Stage One: Express absolute support.

Stage Two: List all his praiseworthy qualities, especially those that would make him unsuitable for the job.

Stage Three: Continue to praise those qualities to the point where they become positive vices.

Stage Four: Mention his bad points by defending and excusing them.

Stage Three is simply done, I learned that day, by oversimplification. You label someone. If, for instance, someone is a good man he can seriously be damaged by calling him Mr. Clean. Strange, but true.

Humphrey had heard that Jameson was a churchgoer, information which I was able to confirm. Indeed, I added, he had once been a lay preacher.

Humphreys face lit up. His joy was beautiful to behold. Splendid news! We can certainly use that against him.

I asked for an illustration. Sir Humphrey turned to me and spoke as if speaking to the Prime Minister. What a charming man. Hasnt an enemy in the world. But is he really up to dealing with some of the rogues in the City?

Ingenious. But I wasnt sure it would wash. For, as I explained to Sir Humphrey, Jameson was in reality a pretty tough customer.

Humphrey remained blissfully unconcerned. In that case, well go on to Stage Four and say hes too tough. For instance, it probably doesnt matter that he was a conscientious objector, no one has really questioned his patriotism. Or I thought the criticisms of him for bankrupting his last company were not entirely fair. That sort of thing.

It was clear to me that Humphrey would be coming to praise Jameson, not to bury him. Never before had I grasped the lethal possibilities of praise. Humphrey explained that the same principle can be applied to the personal lives of those who cannot be smeared by praise in their professional lives. All you need to do is hint at something that cannot be easily disproved. And if it is disproved, you never said it anyway, you merely hinted.

The best approach is to hint at a hidden scandal. For instance:

1. If not married -- Homosexuality.

2. If married -- Adultery, preferably with a lady who is beyond reproach, such as one of the royals or a television newsreader.

3. If happily married -- Puritanism or Alcoholism. Or undisclosed Psychiatric Treatment.

The possibilities are most infinite. Careers can be brought to a juddering halt by generously referring to a chap as a great stimulator, a wonderful catalyst, a superb cook, an innovative chess player. As for oversimplification the stages are frightfully easy:

1. Take someones idea -- say, a chap who believes that education subsidies should be funnelled through the parents rather than through the Local Education Authority.

2. Simplify it to the point of absurdity -- 'He believes in a complete free for all.

3. Admit there was some truth in it once. But weve all realised that there is a less extreme way of solving the problem.

4. Label him with the idea every time his name is mentioned. Ah yes, the educational vouchers man.

I learned a lot that day that I was able to apply fruitfully as I rose high in the Civil Service. Indeed, I would go so far as to admit that my eventual rise to Head of the Home Civil Service was not wholly unconnected with the techniques that I acquired that morning in Sir Humphrey Applebys office.

[Hackers diary continues Ed.]

October 8th

Dorothy brought me in a new draft of my Party Conference speech. Its marginally better but still pretty uninspiring. And I remain deeply concerned about this Phillips Berenson scandal and its implications for us all.

However, at my morning meeting with Humphrey (and Bernard) my Cabinet Secretary seemed to disagree with me. Im sure its not that serious is how he casually dismissed it.

This was like a red rag to a bull to Dorothy. In fact, thats how she always responds to him. I can never make up my mind whether their endless disagreements are highly creative or just a bloody nuisance. But certainly her intention was to defend my position. It certainly is serious, Humphrey, she retorted sharply.

He was patronising. no, no, dear lady, I think that the bank over-lent to one big borrower, thats all.

Theres more to it than that. Some of the Phillips Berenson directors have a slightly shady past, you know.

He stared at her coldly. Can you prove it?

No, she acknowledged honestly. Its just my antennae.

Humphrey chuckled and turned to me. I think, Prime Minister, were in the realms of female intuition.

Dorothy went white with anger. Tight-lipped, she stood up and smoothed down her tight-fitting black linen skirt. We shall see, she snapped, and headed straight for the door.

We shall indeed, murmured Humphrey with a confident smirk.

I wondered why he had such confidence. He gave me no hint. So I told him the good news: that I intended to appoint Alexander Jameson as the new Governor of the Bank of England.

I wasnt sure what his reaction would be. I was certainly quite unprepared for the great enthusiasm with which he received the news.

Oh, the Lay Preacher! What a nice chap!

The Lay Preacher, I thought, must be a nickname. I asked how he got it and was, I must admit, mildly surprised by Humphreys answer. Well, he is one, isnt he?

I couldnt see how it was particularly relevant, though Im always a little put off by fanatics of any kind, especially religious ones. But even in these secular days one can hardly hold it against a chap that he believes fervently in God, irrational though that seems to many of us. So I stuck to the point. But Humphrey, do you think hes good?

Good is exactly the word, replied Humphrey. A really good man. Did a terribly good job at the White Fish Authority, too.

The White Fish Authority doesnt sound a totally essential job. Perhaps he spends rather too much time on preaching. Where does he preach? I wanted to know.

In church, I suppose. Frightfully religious. Extremely honest. Honest with absolutely everyone.

Humphrey obviously likes him a lot. And yet theres something about his enthusiasm that worries me. Its good, isnt it, to be honest with everyone? I asked. After all, I was appointing a man to help clean things up.

He was unequivocal. Of course its good. If he finds a scandal anywhere, even here in Number Ten, hell tell everybody. No doubt about that.

You mean hes indiscreet?

Humphrey looked uneasy. Oh dear, he replied with a sigh, thats such a pejorative word. I prefer merely to say that hes obsessively honest.

I was becoming concerned. Im all for honesty, God knows, but theres a time and a place for everything. And we are discussing politics. Handling people, that sort of thing. Do you think, quite candidly, that hes the right man to bring the city into line?

Absolutely, said Humphrey without hesitation. If you want a Saint. Of course, there are those who say he doesnt live in the real world. He is extremely puritanical, even for a bible-basher.

Jameson was beginning to sound like more trouble than hes worth. Or as much trouble, anyway. I indicated to Humphrey that I wanted to hear absolutely all the cons as well as the pros. Reluctantly he continued. Well, I must admit that he is so honest that he might not understand their little games. But it probably doesnt matter that the city would run rings around him. And I dont think its true that OPEC [Organisation of Petroleum-Exporting Countries would eat him for breakfast.

He must be a friend of Humphreys. Of course it matters if the City runs rings around him. But would it? I find it very hard to believe. And who says OPEC would eat him for breakfast?

I told Humphrey I was confident that he is neither so weak nor so stupid. Ive heard that hes highly intelligent and very tough.

Humphrey readily agreed. In fact, I began to see that this may be the root of the problem. Very tough, Prime Minister, yes indeed. A bit of an Ayatollah, in fact. The only question is, do you want to risk a Samson who might bring the whole edifice crashing down?

I couldnt deny that thats a bit of a worry. I fell silent. Humphrey continued to enthuse about him till it began to get on my nerves. He certainly is no respecter of persons. Hes very stimulating, and a great catalyst. The only thing is that, although treading on toes is sometimes a necessity, he tends to make it a hobby. And of course, he does like everything in the open, he talks very freely to the press -- he's not awfully realistic about that.

I asked Humphrey if he knew anything else at all about Jameson.

Well one wonders if anyone can be that moral -- I've heard and then he hesitated.

I was all agog. Yes?

His invariable discretion took over. Nothing. Anyway, Im sure it wont come out.

What? I asked, desperate to know.

Nothing. He was trying to reassure me now, but completely without success. Im sure its nothing, Prime Minister.

Im not sure that I can use this man, in spite of Humphreys enthusiastic recommendation. How little he understands me!

[News travels fast in Whitehall, and in a matter of hours the rumour reached Sir Frank Gordon, Permanent Secretary of the Treasury, that Sir Humphrey was rubbishing Alexander Jameson. In this situation the Cabinet Secretary and the Permanent Secretary of the Treasury had conflicting needs, opposed aims, and different fears.

The following day Sir Humphrey duly received a particularly friendly note from Sir Frank, which has been fortunately released to us under the Thirty Year Rule and is reproduced below Ed.]

HM Treasury

Permanent Secretary

October 8

My Dear Humphrey,

You may well have heard that the Treasury would like Alexander Jameson to be the new Governor of the Bank of England.

We believe that it is about time that the Bank had a Governor who is known to be both intelligent and competent. Although an innovation, it should certainly be tried.

The Treasury has endured these City scandals for long enough. The Chancellor of the Exchequer is quite fed up with having to defend the indefensible, and so is the Treasury.

Furthermore, we believe that an honest financial sector cannot damage the national interest. The City is a dunghill and I propose that we clean it up now. Jameson is our man.

Yours ever,

Frank

[Sir Humphrey did not hasten to reply. But some days later Sir Frank received the letter reprinted below Ed.]

70 Whitehall, London SW1A 2AS

From the Secretary of the Cabinet and Head of the Home Civil Service

12 October

Dear Frank,

Thank you so much for your letter. It is always a pleasure to hear from you.

I was most amused by your droll remarks about the Governor-to-be of the Bank of England. I am fully seized of the need, from the Chancellors point of view, for a clean-up in the City. It would indeed be in the Chancellors own interest.

But I am sure you will agree that we must all ensure that the nations interest is paramount. And although an honest financial sector cannot damage the nation in the long term, there would be significant short-term problems.

An inquiry into the City would undoubtedly cause a loss of confidence, the pound would plunge, the share index would plunge -- and the Government would plunge with them.

This would not be in the Chancellors interest, nor the Prime Ministers. If I might borrow your analogy of the City as a dunghill, may I ask what is left when you clean up a dunghill? Nothing! Except that the person who cleans it up usually finds themselves covered in dung.

Yours ever,

Humphrey

[Sir Franks hostility to the Bank of England embodied a traditional Treasury attitude. Bank of England officials are paid more than Civil Servants, and envy is a factor in the relationship. Further, the Bank is a luxurious institution, serving superb meals in the canteen to its abundantly large quota of staff. The Treasury, on the other hand, is intellectually rigorous and slightly contemptuous of the calibre of those who work at the Bank. The Treasury lite, unlike the Foreign Office lite, are a meritocracy traditionally disdainful of intellectual inadequacy, and even junior officials may express well-reasoned dissent in front of politicians.

Sir Frank did not apparently let the matter drop. His reply to Sir Humphrey is missing, but it provoked a strong reply from Sir Humphrey which we were fortunate enough to find and which we reprint below Ed.]

70 Whitehall, London SW1A 2AS

From the Secretary of the Cabinet and Head of the Home Civil Service

16 October

Dear Frank,

I do not regard this situation as my problem. As you know, sixty per cent of Phillips Berensons outstanding loans are with a mere three foreigners of dubious repute. The Bank of England was charged with the responsibility of supervising Phillips Berenson, but the supervision was a farce. That is why the bank of England wants a cover-up -- to disguise the undoubted truth that their investigators are a bunch of amateurs.

I understand that you want a clean-up. But I bet you to consider the full implications. The Bank of England may have been responsible for supervising Phillips Berenson, but the Treasury is responsible, in turn, for supervising the Bank of England.

If we have a clean-up, therefore, which would inevitably be a very public affair, the Chancellor might ultimately find that he were held responsible. Then he would be defending the really indefensible this time.

In order to survive the stirring up of this hornets nest the Chancellor would need considerable support from the P.M. But, strangely, the P.M. isnt all that keen on defending the indefensible.

In fact, the only way that the Chancellor could persuade the P.M. to rescue him would be to convince the P.M. that he (the Chancellor) had been let down by his senior permanent officials.

Think it over, Frank.

Yours ever,

Humphrey Appleby

[Sir Humphreys deadly threat won the day. The Treasury stopped pushing for a clean-up and Jamesons chances of becoming Governor of the Bank of England were significantly reduced to almost nil. Sir Humphrey, acting for once in what he believed were Hackers best interests, had ensured that Sir Frank would now also oppose Jameson if and when it were necessary.

This development was not, however, known to Hacker. His diary continues Ed.]

October 17th

I discussed, with Dorothy Wainright and Bernard Woolley, the report I received yesterday on Phillips Berenson.

Dorothy had been absolutely right. Its deeply shocking. Full of irregularities and malpractices. Im not sure exactly what the difference is by the way, but Phillips Berenson appears to have an awful lot of malpractices even for a merchant bank. [Irregularity means theres been a crime but you cant prove it. Malpractice means theres been a crime and you can prove it Ed.]

It seems that we have got hold of a confidential auditors report. Actually, its more than confidential -- nobody has seen it. [In Whitehall, confidential usually means that everyone has seen it Ed.]

I asked Dorothy how we got hold of it.

The Senior Partner at their accountants is a friend of mine.

Just friendship? I wanted to be quite clear about this.

She smiled. Apparently hes looking forward to reading the New Years Honours List.

That seemed a fair deal. I asked her how wed do that. In which section?

Bernard leaned forward confidentially? How about through the Welsh Office? For services to leaks? He is irrepressible.

What really surprised me about the whole business is that a High Street clearing bank like Bartletts should be so deeply involved.

But it didnt surprise Dorothy. Look at their Chairman -- Sir Desmond Glazebrook!

You mean, hes a crook too? I was amazed.

No, she explained. But hes a bumbling buffoon.

Shes right, of course. Ive had dealings with him before. [See The Complete Yes Minister Ed.]

Dorothy said, Its easy to see how he became Chairman. He never has any original ideas, he speaks slowly, and because he doesnt understand anything he always agrees with whoever hes talking to. So obviously people think hes sound.

Shes dead right. And the trouble is, Ive been invited to consult him about appointing the new Governor of the Bank of England. Not that its necessary to consult anyone -- I still intend to get Jameson, even if he is a lay preacher. Hes the only chap who could do the thorough clean-up of the City that we need.

I think you may find, said Dorothy, that Sir Desmond doesnt want you to appoint Jameson to do a clean-up.

Do I have any alternative? I asked rhetorically, tapping the Phillips Berenson audited accounts. After this!

She could see the point. No not if it gets out.

Some of it is bound to get out!

Dorothy wasnt so sure. If it gets to court, all of it will come out. But if the Bank of England does a rescue they can probably keep the worst of it quiet. The bribery and embezzlement, anyway. And the directors investing all the insurance premiums in their private Lichtenstein companies just before the insurance business crashed.

I wasnt quite clear at first what she was recommending. Prime Minister, appoint Jameson right away. Then you are protected if it all comes out before he starts. And its something good to announce at Party Conference

[Interestingly, on this rare occasion Dorothy Wainwright and Sir Humphrey were both doing all that they could to protect Hacker -- and yet their recommendations were totally opposed. She wanted Jameson appointed for Hackers immediate protection, and he wanted to avoid at all costs the loss of confidence in the economy that would inevitably accompany doing the right thing, i.e. cleaning up the City. She believed, on the other hand, that before you can increase confidence you must first reduce it.

The crisis festered on, undiscovered by the public, and unreported by the Press for fear of libel actions. Two days later Sir Desmond Glazebrook paid his unwelcome visit to Number Ten Ed.]

October 19th

Dorothy and I were again discussing the vexed question of the Governorship of the Bank, when the intercom buzzer rang.

Who, I asked, will Desmond Glazebrook want me to appoint?

Sir Desmond Glazebrook, said Bernard from beside the intercom.

Youre absolutely right, Bernard, said Dorothy.

He looked blank. What about? he said. It wasnt surprising he was confused, hed merely been announcing Sir Ds imminent arrival. But Dorothy, I realised, was not joking -- she meant that Glazebrook would be recommending himself for the job.

I asked if she were serious. She nodded. After all, who has the most interest in a cover-up?

A good point. I took a deep breath and told Bernard to send him in. Bernard reported that Sir Humphrey was with Sir Desmond and that they were both on the way up to the study.

While we waited I asked Dorothy if Sir Humphrey and Sir Desmond knew about the auditors report on Phillips Berenson. Yes, she said with a warning look. But they mustnt know you know. Or youll have to make the senior party an Earl.

When Desmond arrived it was easy to see what made him such a success in the city -- tall, distinguished-looking, a full head of white hair, droopy Harold Macmillan eyelids with a moustache to match, casually elegant, the epitome of the English gentleman with all that implies -- amateurism, lack of commitment and zero intellectual curiosity. He arranged his impeccable self in my chintz floral armchair and stared at me with his air of baffled amusement. Most people believed that the look of amusement was an act -- I knew that the bafflement was as well.

How good of you to come, I began. As you know, I have to appoint a new Governor of the Bank of England. Id welcome your views.

Desmond answered with confidence. I certainly think you should appoint one. Bank needs a Governor, you know.

Humphrey was not unaware that Desmonds confidence was misplaced. I think the Prime Minister has more or less decided that. Its a question of who.

Ah, said Desmond wisely, as a little light penetrated into his grey matter. Ah, he said again, processing this information. Thats tricky, he went on. Its a question of who, is it? he verified. Well, he concluded, it needs to be someone the chaps trust.

Yes, I agreed. I feel we need someone really intelligent. Upright. Energetic.

Desmond looked nervous. Well, hold on!

You dont agree? I asked.

He weighed up the question with care. Well, of course its a jolly interesting idea, Prime Minister. But Im not sure the chaps would trust that sort of chap.

Dorothy intervened. I think the Prime Minister is worried about financial scandals. Are you worried about financial scandals, Sir Desmond?

Yes, well, of course we dont want any of those. But if you go for the sort of chap the chaps trust, you can trust him to be the sort of chap to see the chaps dont get involved in any scandals.

You mean hell hush them up? Dorothy could never resist a provocative question.

Desmond was shocked. Good Lord, no! Any hint of suspicion and you hold a full inquiry. Have the chap straight up for lunch. Ask him straight out if theres anything in it.

And if he says no? I asked.

Well, youve got to trust a chaps word. Thats how the City works.

Perhaps thats how it doesnt work. Moving on, I questioned him about Phillips Berenson. What do you know about it? I asked him.

What do you know about it? he countered, cautiously.

Only what I read in the papers, I replied.

Oh. Good. He seemed highly relieved. Well, theyre in a bit of trouble, thats all. Lent a bit of money to the wrong chaps. Could happen to anyone.

Nothing more?

Not as far as I know, he said carefully.

Dorothy was not satisfied. Youd give your word on that?

Desmond hesitated. His word was important to him. City gents as thick-headed as Desmond know that their reputation for honesty is not to be trifled with -- what else have they got? Ill look into it for you, if you like.

Dorothy, a real terrier, just wouldnt let go. You havent heard any rumours?

Of course theres always rumours, he replied, relaxing visibly. That was a full toss and thoroughly deserved to be hit straight to the boundary.

Rumours, repeated Dorothy. Of embezzlement. Bribery. Misappropriation of funds. Insider trading.

Desmond tried to take the heat out of it. He smiled amicably. Come, come, dear lady, those are strong words.

Dorothy was immune to his charm. So its not true?

There are different ways of looking at things, he replied, with a total honesty wholly unconnected to the question hed been asked.

Dorothy was curious. Whats a different way of looking at embezzlement?

Well, of course, if a chap embezzles you have to do something about it.

Have a serious word with him? I enquired ironically.

Desmond doesnt fully appreciate irony. Absolutely, he replied. But usually its just a chap who gave himself a short-term unauthorised temporary loan from the companys account, and invested it unluckily. You know, horse falls at the first fence. That sort of thing.

I could see that we were getting nowhere. Obviously Dorothy had been right. Glazebrook did not want me to appoint Jameson. So I asked him who he thought should be the Governor.

Well, Prime Minister, as I say, its not easy. Not all that many chaps the chaps trust. I mean, its not for me to say, but if one were to be asked, assuming one were thought to be of course one is committed to ones current job, but if one were to be pressed I dare say one could make oneself available as a duty one owes to, er the nation

I suddenly realised what he was driving at, and cut through the flannel. I was thinking of Alexander Jameson.

Ah, he said, deflated. How could he even think that he could be Governor. Im certainly amazed by the apparently limitless capacity for self-deception that I find in others. [But never, apparently, in himself Ed.]

What are your views on him? I asked.

Desmond damned him with faint praise. Hes a good accountant.

Honest?

Yes.

Energetic?

Im afraid so.

So youd recommend him?

No. Desmond was unequivocal. Not surprising -- anybody that interprets the word energetic as a criticism would hardly be on Jamesons side. Citys a funny place, Prime Minister. You know, if you spill the beans you open up a whole can of worms. I mean, how can you let sleeping dogs lie if you let the cat out of the bag? You bring in a new broom and if youre not very careful you find youve thrown the baby out with the bathwater. Change horses in the middle of the stream, next thing you know youre up the creek without a paddle.

And then what happens? I asked.

Well! Obviously the balloon goes up. They hit you for six. An own goal, in fact.

I got the message. Leave things as they are. Laissez-faire. Humphrey was nodding in agreement, with feigned admiration, as he sat at the feet of this latter-day Adam Smith.

[Modern readers may wonder why Sir Desmond Glazebrook wanted to be the Governor of the Bank of England, having already reached the dizzy heights of Chairman of Bartletts Bank. In fact the Governor, though less well paid, was viewed as the top job in the City, with the highest status, influence, trappings and even a little real power. There is something romantic, mysterious, and above all secret that creates the traditional allure of Threadneedle Street. Furthermore, the Governorship of the Bank can be seen as service to the nation, not merely as enriching oneself further, thus firmly establishing oneself on the list of the Great and the Good to whom further honours, quangos, Royal Commissions and fact-finding missions to sunny climes will be offered upon eventual retirement Ed.]

October 24th

This evening I sat in my dressing-room at the Winter Gardens, Blackpool. There was a tatty, grimy old silver star on the door. I didnt feel like a star. I didnt even feel like a sheriff. I felt full of despair.

My walk along the cold and windy sea-front, accompanied by what seemed to be the entire Lancashire constabulary who were clearly out to impress me with their security arrangements, had been wet and bleak. Id met no one except several dozen cameramen and reporters, all of whom asked me what I was going to say in my speech.

Of course they didnt seriously expect an answer. What worried me was fear that they already knew that I had nothing to say. For, only half an hour before I went on, I was leafing disconsolately through the dog-eared script on my dressing-table and realising -- as if I didnt know already -- that the speech was completely devoid of content.

Of course, that would have made little difference to the reception. Id have got a standing ovation no matter what! Three and a half minutes. Thats if they didnt like the speech. Dorothy had made that the minimum; my late unlamented predecessor got three minutes last year so come what may it was to be an extra thirty seconds. All the key people had been issued with stop-watches this morning.

But everyone knew that the ovation was mere window dressing. They would only show a few seconds of that on the news. Theyd also show some of my empty phrases, some scattered and half-hearted applause, and then the Political Correspondent would come on and point out that Id had no good news to offer the party or the country.

Hopelessly I picked up the pencil and stared at the speech once again. I need to say something positive, I said to Dorothy, as make-up was smeared over the bags under my eyes by a pretty girl from our TV consultants.

She leafed through the pages. Nothing came to her mind either, I could tell. With the economy in the state its in, its the best we can say, she answered. Unless you want to say the tide is turning?

Theres no evidence, I complained.

We dont need evidence -- it's a party conference not the Old Bailey. You just need conviction.

Gloomily I thought that a conviction was what Id get at the Old Bailey. And my profound melancholy was not lightened when Bernard stuck his head round the door of the dressing-room.

Prime Minister Sir Humphreys downstairs with the Burandan High Commissioner. Can they have a word with you?

I couldnt imagine what about, but I could see no harm in it. While we waited Dorothy said, Unemployment is terrible, interest rates are too high, theres not enough investment. What do we do?

There seemed to be no way out. We couldnt get more investment without cutting interest rates. Yet how could we cut them? There was a case for bringing interest rates down -- and a case for keeping them up. Dorothy wanted them brought down in the interests of social justice -- but social justice is just another word for inflation.

Cant you lean on the Chancellor to lean on the Treasury to lean on the Bank of England to lean on the High Street Banks? she wanted to know.

It seemed rather a tall order to accomplish all that in the remaining twenty minutes before I went on. My option was to announce the appointment of the Lay Preacher, Mr Clean, Alexander Jameson, in the hope of HACKER TAKES NO MORE NONSENSE FROM THE CITY headlines.

[Hackers intention to make this announcement even when he was well aware of the risk involved was a result of what is known to the logicians in the Civil Service as the Politicians Syllogism :

Step One:We must do something.

Step Two:This is something.

Step Three:Therefore we must do this.

Logically, this is akin to other equally famous syllogisms, such as:

Step One:All dogs have four legs.

Step Two:My cat has four legs.

Step Three:Therefore my dog is a cat.

The Politicians Syllogism has been responsible for many of the disasters that befell the United Kingdom in the twentieth century, including the Munich Agreement and the Suez Adventure Ed.]

There was only one thing puzzling me: Humphrey knew I was about to deliver my most important speech since my elevation to Number Ten. Why had he chosen this moment to introduce me to the Burandan High Commissioner?

I was soon to learn. They bustled into the dressing-room and were no sooner seated than Humphrey jumped right in at the deep end.

The High Commissioner, he began, is concerned at the rumour that you intend to appoint Alexander Jameson to the Bank of England, who will inevitably start an investigation into Phillips Berenson.

I couldnt see how this could affect Buranda, and I said so. Phillips Berenson was a shady bank that lent sixty per cent of its money to three foreigners of dubious repute, I pointed out.

The High Commission spoke. Two of those three foreigners were the President of Buranda and the Chairman of the Buranda Enterprise Corporation.

Thank you, Humphrey Appleby, for dropping me in it like that. Ah, I replied thoughtfully.

The High Commissioner did not beat about the bush. If you attack these loans the President of Buranda will have no option but to interpret this move as a hostile and racist act.

Racist? I couldnt believe my ears.

Of course, replied the Burandan High Commissioner. He seemed to have no doubt on the matter.

I tried to explain. I I wouldnt dream of attacking your President per se, I would merely

I was lost for words. Bernard made a suggestion. You would merely say that he was of dubious repute? I silenced him with a look.

May I further point out, continued the implacable Burandan, that a racist attack on our President would undoubtedly create solidarity and support from all the other African States.

Commonwealth countries, Prime Minister, Humphrey reminded me unnecessarily.

We could move to have Britain expelled from the Commonwealth. Our President would be obliged to cancel her Majestys State visit next month, and Buranda would immediately sell all the British Government stock that it has bought.

I turned to Humphrey and whispered, Would that cause a run on the pound?

He nodded gravely. Then he turned invitingly to the high Commissioner. Anything else?

Isnt that enough? I snapped at Humphrey. I indicated that the meeting must end because of my imminent appearance on stage. I thanked the High Commissioner, and promised that Id give his words the most serious attention.

I kept Humphrey in the room after the African diplomat had left. I was livid! How dare you put me in this position? I shouted.

Stubbornly, he stuck to his guns. Its not me, Prime Minister, its Buranda. And the Commonwealth Club is yet another reason for not opening up this can of worms.

I was furious. The President of Buranda is a crook! He doesnt belong to the Commonwealth Club, he should be blackballed.

He already is, isnt he? said a smiling Bernard. Sorry, he added at once, just before I throttled him.

I was angrier with Humphrey than Id ever been before. Humphrey, what are you playing at? I dont get it! Why are you so adamant that I should allow another cover-up in the City? Whats in it for you?

Humphreys reply seemed both desperate and sincere. Nothing, Prime Minister, I assure you. I have no private ulterior motive. Im trying to save you from yourself. Im on your side.

How can we believe that? said a sceptical Dorothy, who clearly didnt.

Because this time its true, cried Humphrey revealingly. We stared at him. I mean, this time I am particularly on your side.

I had reached the end of my tether. I knew I had to say something good in my speech. I could think of nothing other than announcing that the lay preacher would become Governor of the Bank.

How about announcing a cut in interest rates? said Humphrey.

I was about to tell him not to be silly when I realised, from the expression on his face, that he literally had a concrete realistic proposal up his sleeve. [Not literally, we presume Ed.] But I couldnt see how it was to be done. Jameson will never agree to a cut in interest rates for political reasons, I told Humphrey.

Desmond Glazebrook would, said Humphrey. If you made him Governor of the Bank of England, hed cut Bartletts Bank interest rates in the morning. You could announce both in your speech.

How do you know?

Hes just told me. Hes here. Hell allow you to be first with the good news.

I was literally torn. [Hacker had his own non-literal meaning of the word literally Ed.] I was genuinely confused about what would be right. [On the contrary, Hacker knew that it would be right for the country if he appointed Jameson. He was perhaps referring to the fact that it would be right for himself, or his party, to choose Glazebrook. And politicians frequently labour under the misapprehension that what is right for them personally is by definition what is right for their country Ed.] My problem will be that Sir Desmond was such an improbable choice for Governor. He is such a fool. He only talks in clichs. He can talk in clichs till the cows come home.

Dorothys disapproval was aimed, fair and square, at Humphrey. Its jobs for the boys, she accused him.

He shrugged. He couldnt deny it. But he pointed out that a cut in interest rates would give me a considerable success in my speech.

Dorothy was thinking ahead. Wont a cut in interest rates mean that prices will go up?

Shes right, of course, but frankly at that moment I just didnt care, so long as I got a standing inflation. [We believe that Hacker meant ovation, but after serious consideration we elected to print his slip of the tongue because it is so revealing Ed.]

Dorothy seemed bitterly disillusioned. So you dont want an honest man in charge of the City?

This struck me as unfair. Desmond Glazebrooks not exactly dishonest. Its just that hes too thick to understand when hes being honest and when hes not. The fact remains, I said, as I prepared to walk on stage, that the Government simply cannot work without the good will of the City. Can it?

No Prime Minister, said Humphrey.

And theres no point in upsetting them needlessly, is there?

No Prime Minister.

Dorothy, I said, fix my speech to announce the cuts in interest rates. Humphrey, get Sir Desmond up here at once.

Yes Prime Minister, they chorused. Within two minutes Desmond had the job, and I was on TV. I got a six-minute ovation. Proof positive that I had made the right decision.