The Complete Yes Prime Minister

A REAL PARTNERSHIP

March 9th

I staggered upstairs to the flat for lunch today. Fortunately Annie was home. She took one look at me and asked if it had been a bad Cabinet.

Got anything for getting blood off carpets? I groaned as I slumped into my chintz flowered armchair with a deep sigh. [We presume that it was not the armchair which was the possessor of the deep sigh Ed.]

Whose blood? asked Annie, as she picked up the decanter.

Everyones, I told her miserably.

She asked me if I wanted a small scotch or a double. I settled for a triple.

The nub of my depression was a Treasury Paper that had just been presented to us. The financial crisis is much worse than any of us thought. No one saw it coming -- least of all me -- except one person: my predecessor, the last Prime Minister. No wonder he resigned unexpectedly!

Annie wasnt a bit surprised. I always thought, she mused, that it was strange that he resigned to make way for an older man.

I was slightly put out. Im not older than him, I said.

Oh. She gazed at me with sympathy. Maybe you just look it.

I do now, I thought, thats for certain! I really dont know what Im going to do about all the cuts that have got to be made in the Cabinets spending plans. They werent at all prepared for this. They all have ambitious development ideas, because I asked for them.

We heard the sound of leaden footsteps. Bernard appeared at the living-room door. Annie offered him a Scotch.

Triple, please, he replied bleakly.

Annie nodded sympathetically, and wisely kept silent.

Bernard, I said, Humphrey should have warned me this was coming.

He sat on the sofa and sipped his drink. I dont think Sir Humphrey understands economics, Prime Minister -- he did read classics, you know.

Well, what about Sir Frank? Hes head of the Treasury.

Bernard shook his head. Im afraid hes at an even greater disadvantage in understanding economics, Prime Minister. Hes an economist.

Annie joined us, with a Perrier. Jim, if theres an economic crisis, cant the Cabinet see thereve got to be cuts?

They can see that the other departments have got to make cuts. Not theirs.

Thats rather selfish, she remarked. Annie still seems to think that the Cabinet is full of team spirit. Its not. Theyre in a constant popularity contest against each other. And the quickest way to become popular is to spend money. Public money. This makes them popular with their Department, the Party, the House and the Press. Cutting spending makes everyone unpopular. Annie didnt see why. Bernard tried to explain, but he rabbited on for ages in a totally incomprehensible way about hats, making everything as clear as mud.

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

My explanation was crystal clear, as it happens. Mrs Hacker seemed to feel, as I remember, that the public would be pleased if spending were cut, because the public are the taxpayers. I explained that it was and is a question of hats. The voter, wearing his voters hat, is always frightfully pleased when the Government pays for something because he thinks its free! He doesnt realise that, wearing his taxpayers hat, hes paying for what hes receiving in his voters hat. And the Cabinet Ministers, wearing their Head-of-a-Department hats, are competing with themselves because, wearing their member-of-the-Government hats, they have to pull economic success out of the hat and yet allow the taxpayer, wearing his voters hat, to think that the Government is spending someone elses money when its not, its spending theirs, and so they have to try and keep this under their hat.

[Hackers diary continues Ed.]

Annie asked me, Presumably you encouraged all those spending plans because you wanted to be popular?

Yes and no was the only possible answer. Of course I want to be popular -- nothing wrong with that, thats how you get elected, being popular is what democracys all about. But I also thought we could afford it. I didnt know, and nobody had told me, of these looming problems with inflation, the sterling crisis and low productivity.

Annie asked what I was doing about it. Did you order a clamp-down this morning?

I cant order anything, Annie, I explained miserably.

She didnt understand. Hes only the Prime Minister, Mrs Hacker, said Bernard. He doesnt even have a department of his own to clamp down on.

Annie thought -- still thinks, for all I know -- that the Prime Minister is completely in charge. Its a fallacy. A leader can only lead by consent.

So who is in charge, if youre not? asked Annie, rather perplexed.

I was perplexed by her question. There didnt seem to be an answer. I thought for a bit. Nobody really, I said finally.

Is that good? She was even more perplexed.

It must be, I replied hopelessly. Thats what democracy is all about.

Its made Britain what she is today, added Bernard with sincerity.

Annie contemplated what shed just been told. So your Cabinet are in control, not you.

Shed got completely the wrong end of the stick! No! I said. Think back, Annie! I wasnt in control when I was a Minister, was I?

No, she said, but I thought that was just you.

Annie, like the press and the media, keeps harping on about control. But the point about government is that no one has control. Lots of people have the power to stop something happening -- but almost nobody has the power to make anything happen. We have a system of government with the engine of a lawn-mower and the brakes of a Rolls-Royce.

Of course Id never say any of this in public. The electorate would interpret this as defeatism. Its not, though! Its the truth! And I am going to fight it. [We do not believe that Hacker wanted his readers to believe that he intended to fight the truth Ed.]

We began talking about the further implications of this financial mess. Tomorrow Ive got a deputation of backbench MPs coming to see me, about a pay rise I promised them. Naturally Ill have to tell them they cant have it now. Theyll be furious. Theyll say:

1. That I cant go back on a promise.

2. That they are shamefully underpaid.

3. That its all very well for me because I get fifty thousand quid a year.

4. That its not the money, its the principle of the thing.

5. That its not for them personally.

6. That I am striking a blow against the very foundations of Parliamentary democracy.

How do I know theyll say all that? Because thats what I said when I was a backbencher.

The only way to reply is to lie. I shall say:

1. That I sympathise deeply -- which I dont!

2. That they certainly deserve the money -- which isnt true!

3. That I shall make it my number one priority when the crisis has passed -- which I shant!

4. And that if MPs vote themselves a whacking great pay rise and then tell everyone else theres no money for pay rises, it doesnt do wonders for the dignity of Parliament -- which it certainly doesnt!

I shall forbear to add that when anyone says, Its not the money, its the principle, they mean its the money!

I explained this all to Annie. To my surprise she sympathised with them. Arent MPs underpaid, in fact?

I was astonished. Underpaid? Backbench MPs? I explained to Annie that being an MP is a vast, subsidised ego trip. Its a job that needs no qualifications, that has no compulsory hours of work, no performance standards, and provides a warm room, a telephone and subsidised meals to a bunch of self-important windbags and busybodies who suddenly find people taking them seriously because theyve got the letters MP after their names. How can they be underpaid when theres about two hundred applicants for every vacancy? You could fill every seat twenty times over even if they had to pay to do the job.

But you were a backbench MP only five years ago, said Annie.

I was an exception, I explained. I was the cream. Thats why I rose to the top.

Annie wanted to know if I thought my answers would shut them up. I dont think so. They never shut up. But, I said to her with a shrug, theres no choice. The country just wont accept pay rises for MPs when were cutting back on nurses and teachers.

Nurses and teachers? Annie looked worried. Thats much more serious, isnt it?

Sometimes I think Annie has learned nothing about politics. No, Annie, I said wearily, much less serious. Nurses and teachers cant vote against me till the next election -- backbenchers can vote against me at ten oclock tonight.

March 10th

As I predicted, I had a very stormy meeting with my backbenchers. They said all the things I said theyd say and I said all the things I said Id say, and they said that I should remember that I wouldnt be able to say anything to anyone if I lost the support of my own backbenchers.

I called Humphrey in afterwards. I told him that if Id had some notice I might have softened them up a bit in advance.

He agreed that the lack of notice was regrettable.

Which meant that he hadnt taken my point. Its up to you, Humphrey, I emphasised. Youre Secretary of the Cabinet. You must insist we get papers circulated earlier.

Humphrey hung his head. Alas! There are grave problems about circulating papers before they are written.

So if the papers werent written, why werent they written? I scowled at Humphrey. Surely the Treasury must have seen this coming?

Prime Minister, replied Sir Humphrey with a shrug, I am not Permanent Secretary of the Treasury. You must ask Sir Frank.

What would he say? I asked.

Humphrey shrugged again. It is not for a humble mortal like me to guess at the complex and elevated deliberations of the mighty. But in general I think Sir Frank believes that if the Treasury knows something has to be done, the Cabinet should not have too much time to think about it.

I was furious. But thats an outrageous view.

Yes, he said with a smile, its known as Treasury policy.

Suppose, I asked, that the Cabinet have questions to ask?

I think that Sir Franks view, said Humphrey carefully, is that on the rare occasions when the Treasury understands the questions, the Cabinet does not understand the answers.

I was getting furiouser and furiouser. Do you support this? I asked bluntly.

Humphrey looked truly amazed. I, Prime Minister? I merely try to carry out the wishes of the Prime Minister and the Cabinet.

I instructed Humphrey that it is my wish that, in future, all papers are circulated at least forty-eight hours before Cabinet meetings. I told him to tell Sir Frank.

Humphrey said he would do so with pleasure, and that he would seek an audience with him at once. He left.

The regal phraseology did not escape me. He clearly thinks Frank is getting too big for his boots. Unless he is still worrying about my threat last week to make Sir Frank head of the Home Civil Service. Of course! Thats why hes so disloyal to Frank at the moment.

I wonder if I should put him out of his misery. Do I gain anything by keeping them both in suspense? Yes, I gain an anxious and co-operative Cabinet Secretary.

[Later that day Sir Humphrey Appleby met Sir Frank Gordon, Permanent Secretary of the Treasury, at the Reform Club in Pall Mall. Sir Humphrey made a note about the meeting in his private diary Ed.]

Frank and I discussed the late arrival of Treasury papers for Cabinet this week, and the short notice of the information concerning the economic crisis.

Frank expressed a hope that I had explained that the short notice was due to Americas sudden change in policy over interest rates. I assured Frank that I defended him gallantly, leaving the Prime Minister in no doubt as to the real cause of the rush.

Frank was delighted with this reply. He is less subtle than I would have expected.

He was concerned that we do not lose the PMs goodwill at this time. With the financial crisis, we shall obviously have to bring in some form of pay restraint. Unfortunately, the MPs are being denied the pay rise they have been expecting just at the moment that Frank is due to bring forward the proposed Civil Service pay rise.

This is indeed awkward. Obviously one is not interested in the pay rise for oneself. The last thing Permanent Secretaries care about is the money. We could all have made a fortune if wed gone into industry. Money is money, and service is service.

Nevertheless, Frank and I are both in full agreement that we owe it to our junior colleagues to do everything we can for them.

Ironically, trying to help them will involve raising our own salaries -- about which we dont care at all -- and then we get criticised for feathering our own nests. Still, that is just another cross we have to bear.

[This passage from Sir Humphreys diary is most intriguing. Was he really able to convince himself that in pushing for a large Civil Service pay rise, in which he and Sir Frank would get the largest cash sum, he was acting altruistically? Or was he so cautious that everything he wrote, even for his own private diary, could withstand scrutiny if stolen and leaked? Ed.]

I urged Frank to put our pay proposal in fast, before any pay restraint begins. It is also clear that it must go in the night before next Thursdays Cabinet -- if Ministers have two days to spend talking about it to backbenchers and political advisers theyll come up with all sorts of objections.

Frank was worried about bouncing Cabinet two weeks running. I assured him that there was no alternative.

Frank then suggested that it would be better if the proposal came from both of us. I can see why -- there is safety in numbers. However, he gave as his reasons that we are effectively joint heads of the Civil Service.

Needless to say, this is not a view that I accept. The Cabinet Secretary is the de jure head of the Service. Frank chooses to believe that, a he looks after the financial side and I look after the Establishment side, we are both de facto heads of the Service.

He seemed eager to pursue this discussion, as if to prove a point. I simply avoided it by informing him that, in my view, I must remain aloof and judicial on the matter of Civil Service pay. I told him that it would be fatal, for the Service, if I lost the PMs confidence. [Fatal for Sir Humphrey too, as he was well aware Ed.]

I encouraged Frank to make the running and assured him that when the time was ripe I would come down on his side.

Frank had another worry, this time quite legitimate. Quite rightly, he does not want the Cabinet to adjudicate on the claim.

We decided that it should be referred to an impartial committee, as usual. The question was: who should chair it? We agreed that Arnold [the retired Cabinet Secretary] should be in on it, but it seems improbable that the Cabinet will approve an ex-Civil Servant as an impartial chairman of a committee to decide upon Civil Service pay.

I suggested Professor Welsh. Frank has heard that he is a silly old buffer. Be that as it may, Welsh has asked me to put his name forward as the next chairman of the University Grants Committee. So he will understand what is required of him.

Frank agreed that Professor Welsh would be an excellent choice.

[Appleby Papers BA/281/282]

[Hackers diary continues Ed.]

March 15th

Only five days have elapsed since I instructed Humphrey to ensure that no more papers were bounced through Cabinet. On that very day we decided that MPs were not going to get their pay rise, and that the Treasury would be cancelling half our spending plans.

But what did I find on my desk today? A plan for a Civil Service pay rise!

Humphrey has had the temerity to suggest that because spending cuts mean a lot of extra work for the Civil Service, they deserve a pay rise for coping with them.

Ridiculous! And even if that were legitimate, how dare he try to get it through Cabinet tomorrow, after I told him to make sure that all Cabinet papers come through forty-eight hours in advance?

Humphrey claimed it was not his fault. Prime Minister, it is not for me to speak for Sir Frank.

Speak for yourself, I retorted. Youre Cabinet Secretary. Youre also Head of the Civil Service.

Am I? Humphrey smiled. How gratifying.

At the moment, I said significantly, regretting my momentary slip of the tongue.

As Cabinet Secretary, said Humphrey, I am most eager to reduce public spending, but as Head of the Civil Service I am responsible for the very real problems that will arise administratively if a pay rise does not come through soon. This is a difficult matter for me because Im wearing two hats.

Isnt that rather awkward? I enquired.

Not if one is in two minds, he replied smoothly.

Or has two faces, intervened Bernard, and I could see he instantly regretted it.

Perhaps I should relieve you of one of them, I suggested.

Humphrey panicked. Oh, no. No. Im very happy with both of them.

Faces? I asked with amusement.

Hats, he snapped.

But, I reminded him, you said you have very real problems.

The problem is low morale, which inevitably leads to the danger of a strike. Think of the effect of a strike of the computer men on the social services. Furthermore, we are already experiencing difficulties of recruitment.

This was news to me. I thought you had about ten applicants for every place.

Yes, he acknowledged with reluctance, but we are getting applicants of a very low quality, with very few first-class degrees. Most of them have lower seconds.

Ridiculous intellectual snobbery! I got a third, I remarked.

Humphrey hesitated, aware that hed been less than tactful. Bernard tried to cover for him. A thirds all right for a Prime Minister, but Sir Humphreys talking about Civil Servants.

Humphrey stuck to his guns. Non-cooperation by the Civil Service Unions brings government to a standstill. Presuming that it was previously moving, I suppose. The FDA [First Division Association, the Union that represents the top Civil Servants in Whitehall] has a huge membership now.

Including yourself? I asked.

Humphrey assured me that even though he is a member of the union he will always cooperate with me to the same extent as usual.

Which is roughly what Im complaining about.

I reiterated to him that I cannot possibly get this through, even if I want to. With the backbench revolt looming over the cuts, MPs will never okay a pay rise for the Civil Service. And the Cabinet is bound to resist.

Humphrey saw the point quickly. He suggested that we merely ask for Cabinet to agree, in principle, to look at the application. Then the matter could be put before an independent group of assessors to consider the claim in detail.

This seems a reasonable compromise. The only thing that puzzles me about it is that Humphreys suggestion for chairman is Professor Welsh. Ive heard hes a silly old buffer!

[The Cabinet, the following day, did agree to look at the matter in principle, but made no other commitments. There the matter rested until the pay claim was worked out in detail. This was done in considerable haste, and only eleven days later the following letter was sent by Sir Frank Gordon to Sir Humphrey Appleby. Sir Frank was slightly less careful than Sir Humphrey about what he was prepared to put in writing. We found this personal, handwritten note in the Cabinet Office ourselves. Presumably it was carefully preserved by Sir Humphrey Appleby in case it should prove useful in his fight with Sir Frank for control of the Service. In the event, it was never shown to Hacker, but it reveals much about the way Civil Service pay claims were prepared in the late twentieth century. The complete note is reprinted below Ed.]

H.M. Treasury

March 27th

Dear Humphrey,

I enclose the working papers. I am sure that you will agree that, in all fairness, the most senior grades of the service who really bear the heat of the battle should receive the greatest increase.

This means that there is a significant percentage increase for Under Secretaries, Deputy Secretaries, Permanent Secretaries, and those two jobs which bear the greatest burden of all. [The two jobs being Cabinet Secretary and Permanent Secretary of the Treasury, which, coincidentally, were held by the sender and the recipient of this letter Ed] It comes to about 43%, alas!

The enclosed papers are not for submission. The submission papers, which follow shortly, go up to Appendix Q, so there is little chance that the Cabinet will read them all. The one-page summary for the Cabinet [known in the Civil Service as The Janet and John Bit Ed.] is more or less the same as last time. It is headed Comparable Jobs in Industry, and is also enclosed.

You will recognise that the salary comparisons are based on directors of BP and IBM. I think that there is no risk of their being challenged because, in line with our usual custom and practice, we do not mention them by name. They are referred to as typical industry firms.

Then we take our own new examples of increase from the lowest point of the incremental scale,

e.g.: 3.50 a week rise for a Messenger

4.20 a week rise for a Registry Clerk

8.20 a week rise for a Scientific Officer

For the most senior grade [Sir Frank and Sir Humphrey only Ed.] in the Service it would be a rise of 26,000 per annum. It hardly seems necessary to mention that in the Janet and John Bit, firstly because it can be calculated by the Cabinet Members themselves should they desire to do so, and secondly because it only applies to the two top jobs mentioned above. If there is criticism it is, as we said, just another cross we have to bear.

Sincerely

FG

[Sir Humphrey sent a carefully worded reply Ed.]

70 Whitehall, London SW1A 2AS

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

March 27th

Dear Frank,

I was glad to hear of your proposals for the Civil Service pay claim. Thank you for keeping me informed.

Thank you also for not showing me the full details. It would be most improper if I had full knowledge, since pay is within your purview. Do you think we should volunteer to forego some of the pay rise ourselves? And you have not mentioned pensions.

Are you quite sure that the Cabinet will not want to go through the proposals in much greater detail than the summary?

As ever,

HA

[Sir Frank replied to Sir Humphrey Ed.]

March 27th

Dear Humphrey,

If our own pay rises are brought up we can volunteer to defer the rise. And get it back later, when the fuss has died down.

I have not mentioned pensions. I find it is better not to, ever since we got the inflation indexing through. It creates animosity, confuses things, and pensions are so difficult to put a real value on.

I see no likelihood of Cabinet Ministers going into this matter more deeply. Ministers are briefed by their own officials, and we all know where their loyalties lie.

Frank.

[And Sir Humphrey replied to Sir Frank Ed.]

March 28th

Dear Frank,

I shall put the matter on the agenda last item before lunch. The agenda is full, so with careful management there will only be about five minutes left.

So it should all be plain sailing, but for the vigorous scrutiny of Professor Welsh!

As ever,

H.A.

[Hackers diary continues Ed.

March 29th

I had a most interesting phone call from Dorothy Wainwright this morning. I had asked her to do a paper on the Civil Service pay claim. She wanted to give me an immediate response.

I asked her what her answer was.

I havent an answer, more a series of questions, she told me. Not for you, but for Humphrey. The claim is self-serving and inappropriate, and significant for the questions it leaves unanswered. But please treat my questions as highly confidential, or else youll never catch Humphrey out.

Ive locked the list of questions in my desk and taken the key. So I cant list them here, but I shall come back to this matter tomorrow.

[Fortunately for Sir Humphrey, this phone call was overheard by Bernard Woolley. He was not eavesdropping. It is the Principal Private Secretarys duty to listen in on all telephone calls to or from the Prime minister, in order to minute and witness what was said, to give the Prime Minister an aide mmoire, and to protect the Prime Minister against subsequent misrepresentation. In this instance, Dorothy Wainwright made a tactical error in not calling on Mr Hackers private line. Better still, she could have spoken to him in person.

It is also true to say that Bernard Woolley had a duty to respect the complete confidentiality of the call. It might be argued that he stuck to the letter of the rules -- but it is clear from this entry in Sir Humphreys diary that Bernard Woolley did not stick to the spirit of confidentiality. But then, like all Private Secretaries, he did have a difficult dual loyalty to maintain Ed.]

En route to the Cabinet Room through the Private Office I was halted by an anxious BW.

He informed me that there had been movement. Specifically, movement on a matter on which the Civil Service hoped there would be no movement.

I refrained from pointing out that the Civil Service generally hopes that there will be no movement on any matter.

BW seemed unable or unwilling to express himself with even his usual clarity. He told me that it was in relation to a subject that is normally wholly and exclusively within the control of the Civil Service that developments have developed. I told him that he was speaking in riddles. He thanked me.

Most unusually for me I had been slow on the uptake. I realised that his lips were sealed, and that he must be referring confidentially to minutes that he was duty-bound to make of a confidential conversation between the Prime Minister and one of his confidential advisers.

I asked if this were so. He acknowledged with a nod.

I asked for the name of the confidential adviser. He told me that he was not at liberty to divulge her name. Very helpful.

I questioned him closely, to find out whether the confidential advice concerned the financial crisis or the PMs foolish nuclear strategy. BW hinted that the matter was even more important than either of the above.

I realised at once that he must be referring to the Civil Service pay claim. I asked him, and he refused to confirm or deny it. Quite correctly. [It might be argued that this refusal to confirm or deny was less than correct, since Bernard Woolley had given a clear negative response to all of Sir Humphreys other questions. The inference was therefore unmistakeable Ed.]

I asked BW for his advice. He advised me to consider my position very carefully, perhaps temporarily adopting a middle-of-the-road posture, while keeping my ear to the ground, covering my retreat and watching my rear. A little undignified but I took heed of his warning.

I thanked him for his help. He replied that he had not told me anything. I agreed, for it would have been most improper had he done so.

[Appleby Papers 638/T/RJC]

[Hackers diary continues Ed.]

March 30th

I studied the Civil Service pay claim in great detail when I rose early this morning and, armed with Dorothys excellent questions, I was ready to raise hell with Humphrey. I was delighted that her comments were given to me in complete confidence -- because I learned something important about Humphrey today: he is not always on the side of the Civil Service. With no prior knowledge of the awkward questions I raised he performed reasonably and helpfully, and impressed me more than somewhat.

I handed him the very bulky Pay Claim file when he came in. Its incredibly long and verbose -- goes up to Appendix Q, I think. Thank God Dorothys a patient reader. And a quick one.

I asked Humphrey what he made of it. He said that it was too large for an instant judgement. I told him to read the excellent one-page summary at the front.

He did so. Then he looked up at me, and remarked that I was putting him in a very difficult position.

I got heavy with him. Look, Humphrey, I reminded him, I appreciate that you have a loyalty to your colleagues but you also have a broader loyalty to the Cabinet and its policies.

I agree, he said.

I was confused. You agree?

Yes, he said.

I wanted to get this quite clear. You mean you agree with me? I asked.

Yes, I agree, he repeated.

I still wasnt quite sure that he wasnt playing some verbal or linguistic game. I wanted to be quite sure where I stood. Who, precisely, do you agree with?

With you, he replied.

I wanted to be absolutely sure. Not with Sir Frank?

No, he said.

I summed it up. So youre not arguing with me at all?

No, he answered. Perhaps I havent made it quite clear, Prime Minister -- I agree with you.

Well, you can imagine how completely flabbergasted I was. So I asked him for his view of this self-serving pay claim.

Its not excessive in itself, he replied, but at a time of national strigency it is neither wise nor in the national interest. I dont like to criticise my colleagues, but in my opinion Sir Frank, though no doubt acting from the best of motives, should have placed the good of the nation before the narrower sectional interests of Civil Servants. This claim raises serious questions.

How interesting that he should use that phrase. I told him Id made a note of some questions too. I handed Dorothys list over to him.

He stared at it. Good questions, he said quietly. Where did they come from?

I wasnt sure that I cared for the implication of his question. They occurred to me, I said.

He glanced at the paper again. Yes. Well, theyre very good questions.

This was exactly what I -- and Dorothy -- had thought. So I asked Humphrey what we should now do about these questions. He said that we should ask them. I thought I was asking them, but his view was that I should ask them of Sir Frank. I think you should invite him here to discuss them. He may well have answers. Indeed, he should have answers. This is his job, after all.

I realised that he was quite right. I told him to speak to Bernard and arrange a meeting. And I told Humphrey that I genuinely appreciated his impartiality on this subject. After all, theres no doubt that Humphrey himself would do quite well out of this pay claim if it went through.

Humphrey thanked me, but explained that he saw the rewards of his job as the knowledge that one has been of service to the nation. Im sure he was telling the truth. And of course, I see my rewards in exactly the same light. Nonetheless, one must give credit where credit is due -- Humphrey was extremely fair-minded today.

After he left I asked Bernard how the FDA worked. How, if they are all in the Union, can they bargain with themselves over their own pay?

I could have predicted the answer -- Bernard said its not so difficult if they simply wear two hats.

All very well, I said, but what happens when there is industrial action?

[This phrase must be the only occasion on which the Civil Service uses the demeaning word industrial to apply to itself. Though it frequently describes itself as industrious Ed.]

It can be awkward, said Bernard. The Secretary of our Union was on the Council of Civil Service Unions which planned the last bout of disruption -- and at the same time, as Number Three at Swansea, his duty was to make contingency plans for frustrating the disruption.

I asked what happened. Bernard said he was very successful.

I couldnt see how. He must have known the other sides plans, I said.

Which other side? asked Bernard.

Both other sides, I answered logically. Whichever side he wasnt on at whatever moment he was on the other side.

This presented no problem for Bernard. Yes, he agreed, but he never disclosed the other sides plans.

To whom? I was getting confused.

To his own side.

Which own side? I asked.

Whichever side, explained Bernard patiently, that he was on at whatever moment he wasnt on the other side.

I was now groping blindly through the fog of logic. Yes, but even if he never disclosed the other sides plans to his own side, he knew the other sides plan because he was on the other side too!

Bernard contemplated this question briefly. Therefore I imagine, he replied, that he never disclosed to himself what he knew.

I asked Bernard how such a thing was possible. It seemed all too easy to Bernard. He was a model of discretion, he said.

To me the Number Three man at Swansea sounded like a model of institutionalised schizophrenia. But there remained one vital unanswered question, When there is a genuine conflict of interest, Bernard, which side is the Civil Service really on?

This time he replied without hesitation. The winning side, Prime Minister. And he gave me a winning smile.

Sir Humphrey, having been forced by events to side against the Civil Service pay claim proposed by Sir Frank, was left in something of a dilemma. It had been useful to him to appear more loyal than Sir Frank, and, in any case, since the Prime Minister had found some of the key questions, the claim was inevitably doomed and any wise many would have distanced himself from it. Now, however, he was obliged to find a way to make the Civil Service pay claim seem acceptable -- partly because it would consolidate his position with the PM and with his colleagues in the Service, and partly because he wanted the money.

Accordingly, he consulted his eminent predecessor Sir Arnold Robinson. One of many jobs Sir Arnold had accepted on his retirement was the Presidency of the Campaign for Freedom of Information. Strangely, however, Sir Arnold did not report the events described in this chapter to the press, nor to the Campaign. Indeed, his private notes only came to light comparatively recently when, under the terms of his will, his private papers were released from the strongbox of his bank in Woking thirty years after his death Ed.]

We lunched in the Athenaeum. Humphrey was concerned that he had not been able to support Franks case. Deeply distressing, no doubt, but one does not support proposals that are clearly going to be rejected.

The Wainwright female had given Hacker a list of questions, plus the suggestion that the politicians stop letting us handle our own pay claim and let a Select Committee of Parliament decide on them. An appalling notion! The next thing wed have is politicians removing Civil Servants on the grounds of incompetence, which would be the thin end of the wedge.

It is true, doubtless, that some Civil Servants are incompetent, but certainly not incompetent enough for a politician to notice. A better idea might be that Civil Servants could remove politicians on the grounds of incompetence, although that is a sadly improbably notion because it would virtually empty the House of Commons, remove all the Cabinet, be the end of democracy and the beginning of responsible government.

It appears that Frank used the normal formula -- comparable jobs in industry. And they need a rise of 43%. I made the following suggestions:

1. Since virtually all the relevant staff work in London, there should be a big increase in the London Allowance. Allowances rank as expenses. Because they do not count as a rise, they do not show up in the percentage calculations.

2. Introduce a Special Graduate Allowance for those with First Class Degrees, and Upper Second-Class degrees. (Oxford does not give Upper Seconds, so count any Second at Oxford as an Upper Second.)

3. Double the Outstanding Merit Awards, which everyone gets. Awards rank as Bonuses and, like Allowances, do not count as pay rises.

4. Items 1-3 bring the claim down to about 18% for the top grades. Therefore it should be calculated from 1973, which was the high point in percentage increases [not in income Ed.]. And take the calculation to the end of two years from now, i.e. the end of this claim period rather than the beginning.

These four measures bring the percentage increase down to about 6%. But that still means that the Civil Service overall pay bill will be too high. The only option is to reduce the size of the Civil Service. Thus, a comfortable rise for individuals would be a smaller rise in the total bill.

Of course, real reductions in the size of the Civil Service would be the end of civilisation as we know it. The answer is much less worrying: stop calling some officials by the name of Civil Servant.

E.g. Turn all museums into independent trusts. Then all the staff stop being classified as Civil Servants. They will still be the same people doing the same job and still paid by government grants. But grants, like allowances and bonuses, do not count in the pay statistics. It will look like a cutback, a most impressive cutback, unless anyone enquires very closely. [This procedure was followed in the 1980s, leading the British public to believe that the Civil Service numbered 680,000, its smallest size for many years Ed.]

There is only one problem: setting up a sufficient number of trusts. But it may not have to be done at all. It must only be planned for some time in the next two years in order to be reflected in the statistics. If it subsequently does not happen, it will not be anyones fault.

Appleby thanked me profusely. I indicated that I was always happy to oblige. [Especially, we suspect, with the Birthday Honours approaching. Sir Arnold did have the GCB (Knight Grand Cross of the Order of the Bath) conferred upon him in June Ed.]

I offered to discuss the matter also with Frank Gordon at the Treasury. Humphrey was adamant that I should not do so. Apparently Frank Gordon has a lot of problems coming up at the moment. He hasnt mentioned them to me. [This was because Sir Frank did not yet know about them Ed.]

Finally I suggested one major reform to Appleby:

Members of Parliament can be very small-minded about Civil Service pay, and there is often a struggle to get an increase past the House. But if MPs pay were to be linked to a grade in the Civil Service, then every time they vote for a civil Service pay rise they will accidentally be raising their own salaries. We could also index-link MPs pensions. This could save much unpleasantness all round. [This provision was enacted in 1983 without any legislation and with the minimum of publicity; it was announced in late July, to coincide with the summer holidays of the few journalists who would have seen its significance Ed.]

This was not done in my time in the Cabinet office because Mr Hackers predecessor as MP felt it might motivate parliament to frequent inflationary increases in government spending. I hope MPs would not be so self-seeking, but politicians are a very mercenary lot and we in the Civil Service must not judge everyone by our own high standards.

[Hackers diary continues Ed.]

April 3rd

A most interesting meeting was held today. Present were Sir Humphrey, Bernard, Sir Frank and Dorothy Wainwright. Oh, and me, of course. I learned that Humphrey is a loyal, unselfish servant. Im not sure about Frank.

Frank began the meeting by asserting that Civil Service pay has fallen significantly behind comparable jobs in industry. When I asked which comparable jobs, he avoided giving me a specific answer, and said that it was quite a complex formula which has been generally accepted for some time.

I confronted him with facts. According to my figures, I informed him, a Permanent Secretary is already getting something over forty-five thousand a year. And the Cabinet Secretary and the Permanent Secretary to the Treasury get over fifty-one thousand pounds.

Frank hedged. Maybe youre right, he said with a weak smile.

Ludicrous. Doesnt he know how much he earns? Or has it temporarily slipped his mind, perhaps?

I turned to Humphrey, sitting on my right at the Cabinet table, and asked him for his view.

He was cautious. Rightly so. Its not for me to say really, Prime Minister. I have a vested interest and Sir Frank is in charge of Civil Service pay. Arent you, Frank?

At least Humphrey had the decency to declare his interest. Dorothy, sitting on my left, spoke next.

May I ask a question, Prime Minister? I nodded. She stared hard at Frank, across the table. Sir Frank, what deduction do you make for job security?

He was startled. This was obviously a question hed not been asked before and was not expecting.

Dorothy explained further. Top people in industry can get sacked. Pushed out in take-overs, their firms can go bust. But your jobs are guaranteed.

He hedged again. Well, there are swings and roundabouts.

What about the roundabouts? Dorothy asked acidly.

Frank explained that top Civil Servants may have guaranteed jobs, but they have great pressure and long hours.

Dont they have those in industry? Dorothy wanted to know. Then she looked at me and added: Anyway, industrial leaders have to take decisions and stand by them.

This angered Frank. His cheeks acquired small pink spots. So do Civil Servants, he retorted.

Dorothy turned on him nastily. Really? I thought that Ministers took the decisions.

And the blame, I chimed in. Thats the deal, isnt it?

Frank didnt really know whether to ask all these rhetorical questions or not. Yes well Ministers do, of course, take the decisions, he acknowledged. But Civil Servants have to decide how to carry them out.

Dorothy went for the jugular. Like a secretary deciding how to lay out a letter?

Yes, said Frank. No, he said, changing his mind instantly. And he appealed for help: I think Sir Humphrey knows what I mean.

Humphreys eyes were firmly fixed on the blank sheet of paper lying in front of him on the table. Well, Frank, its up to you, youre in charge of Civil Service pay.

Dorothy passed me a note. It said What about the service element?

I stared coldly at Frank. What about the service element? I asked.

Service element? he repeated. What do you mean, service element?

I wasnt quite sure what I meant, or what Dorothy meant. Im sure it didnt show, though. I turned casually to Dorothy and indicated that she might speak for me.

There is a strong service element about the job, she began briskly, which is rewarded by honours -- CBs, KCMGs, knighthoods.

To an extent, conceded Frank with caution.

Dorothy turned to me again. You see, Prime Minister, I wonder whether we shouldnt compare civil servants with directors of charities rather than industry. I think, she was rustling through all her papers, that they get about seventeen thousand.

I smiled. Thats an interesting proposal.

Indeed it was. Frank was looking panicked. Humphrey wasnt looking any too pleased either.

I dont think well, wed never recruit, said Frank in a voice that was noticeably half an octave higher. Morale would plummet Im sure Sir Humphrey would agree.

Humphrey stayed silent.

I looked at him. Humphrey? I enquired.

Well, Prime Minister, my opinion is that he looked up at Frank, with a distinctly unsupportive look in his eyes, Sir Frank is in charge of Civil Service pay. Though I do think, Frank, that the Prime Minister is entitled to an answer.

Frank was visibly startled by this reply. He tried another weak smile. Nobody else at the table smiled.

The question of index-linked pensions was also on Dorothys notes. I raised it next. Frank dismissed that as completely irrelevant. Those were agreed a long time ago.

But they have a considerable value, I asserted.

He was disparaging. A value, yes. But modest.

I picked up one of the papers in the superb brief that Dorothy had prepared for this meeting. I have an estimate here that it would cost 650,000 to buy back a Permanent Secretarys pension.

Frank smiled again. Thats absurd!

How would you value it? asked Dorothy.

Frank was foolish enough to suggest a figure. About 100,000.

I pounced. In that case, Frank, Ill make you an offer. The government will buy back your pension -- and anybody elses who will sell -- at your valuation. Well give you a hundred thousand, cash, in exchange for your pension rights. Is that a deal?

Frank was by now doing the well-known Civil Servant impression of a headless chicken. Well, I mean, no, I was talking off the top of my head, it could be, that is, I havent calculated it myself.

Dorothy threw another dart straight at the bullseye. The figure of 650,000 came from the Society of Insurance and Pension Actuaries.

Yes, but when it was agreed, whined Frank helplessly, Im sure it was nothing like that.

Dorothy was relentless. She had yet another idea. What about having index-linked pensions as an alternative to honours? Every Civil Servant could choose which way he wanted to take his reward -- honours or cash!

But thats preposterous! shrieked Frank.

Why? asked Dorothy.

I wanted the answer to that question too. It sounded like a damned good idea to me. On my right, Humphrey was looking very tight-lipped and was conspicuous by his silence. Even Bernard was turning pale. I was thoroughly enjoying myself.

It was left for Frank to defend the indefensible. Such a choice would, it would, it, er, it would put us, er, put them in an impossible position. I mean, what about those who already have honours?

Dorothy, of course, had an answer to that. Clearly she had worked out every implication in advance. Its quite simple. They could choose whether to renounce their honour or renounce their pension index-linking. She leaned forward and smiled cheerfully across me at Sir Humphrey. What do you think, Sir Humphrey -- or will you be Mr Appleby?

Humphrey was not amused. He had expected Frank to perform better than this -- his own salary increase and honours were now under attack. Im sure Sir Frank has gone into this very thoroughly, he said.

Not thoroughly enough, I said. Frank, you personally would make a lot of money out of this pay claim, wouldnt you?

Frank spluttered with indignation. Prime Minister, that is not a consideration, he said. Which means yes, presumably.

Dorothy treated Frank to one of her acid smiles. You mean youd be happy to be personally excluded from this rise?

Frank was speechless. She turned to Humphrey. Im sure the Cabinet Secretary would be, wouldnt you, Humphrey?

I was sorry for Humphrey, but he was in a rather awkward position. He stammered and stuttered about precedents, and thinking of the service as a whole, and considering long-term points of view. Then suddenly he found a brilliant way out. Yes! he said, suddenly and very firmly. I would agree to be excluded from the pay rise if, and only if, the government did believe that senior people should be paid less than their subordinates, and if they extended the principle to Cabinet Ministers and their junior ministers.

Naturally I had no such intention. And anyway, my purpose was not to corner Humphrey, who had taken my side on this matter. So I thanked everyone and dismissed them.

I kept Humphrey back for a quick private word. I asked him if he thought we were a bit hard on Frank. On the contrary, he said. Most proper and penetrating questions, if I may say so, even though I do not like to be disloyal to colleagues.

Its clear hes never been a Cabinet Minister.

April 5th

Humphrey really came through today. He has been hard at work on a new, much smaller Civil Service pay claim. He wanted to explain why.

Im afraid I thought all along, he told me, that at a time of stringency the Treasury claim was excessive, not in the nations interest. Nice for Civil Servants, of course, but not something the Cabinet Secretary with his higher loyalty could recommend. That is why we dont let the Permanent Secretary of the Treasury be the Head of the Civil Service. I took the point.

He then offered me a much more modest submission which amounts to only 11% over two years, with the top grades rising only by about the average. The overall Civil Service pay bill would only go up by about 6% a year over a period, in Humphreys scheme.

This is obviously much more reasonable, and Im perfectly willing to okay it. He wasnt even asking for that at once. He said that obviously the lower grades will have to go through the normal procedures, but he suggested that the First Division claim should be processed with the utmost secrecy and speed.

The reason for this is that he fears that his scheme could backfire if there is widespread discussion of it. Many members of the FDA might want to make a bigger claim -- I'm sure hes right, if frank is anything to go by. So Humphrey wants no one to see it now, even advisers.

Thats only acceptable to me if he can get his colleagues to accept such a small rise, a mere 6%. He says he can swing it if I guarantee support and cooperation over the secrecy. I guaranteed it. I got a real bargain there!

But there was one outstanding problem: Parliament. The backbenchers always hate Civil Service pay rises. Humphrey had a solution -- a brilliant solution. It involves a major reform that will be universally popular. [By universally popular Hacker was referring to Parliament and the Civil Service, not the British public. To him, the universe consisted of Westminster and Whitehall Ed.]

Prime Minister, if MPs salaries were linked to a grade in the Civil Service, then they wouldnt have to keep voting themselves their own pay rises. Everytime the Civil Service got one, theyd get one too. Automatically. And if their pensions were index-linked too, that would help.

It certainly would, I agreed. Excellent. Thank you. Humphrey really has been a tower of strength, and thoroughly self-sacrificing. What grade should a backbenchers be, do you think? I asked him.

I think, perhaps, a Senior Principal.

I was surprised. Isnt that rather low?

Backbenchers are rather low, he said with a mischievous twinkle in his eye.

And to what grade should Cabinet Ministers be linked? I asked.

Under Secretaries? suggested Humphrey.

And the Prime Minister?

Well, said Humphrey, at present you earn even less than I do, but I think you should grade yourself as a Permanent Secretary. And you, like me, could have an index-linked pension. And it could be calculated not on your years as Prime Minister, but as if you had been doing the job all your life and it was your retirement salary. [This has been the practice since the 1980s Ed.]

A very fair offer. I thanked him. He shrugged off my thanks. After all, Prime Minister, this is a partnership.

Indeed it is, I agreed. A real partnership.

Yes Prime Minister, said Humphrey. What a nice man he is, underneath it all.