Inside the Treasury by Joel Barnett - review by Leo Pliatzky

Leo Pliatzky

Trench Warfare

Inside the Treasury


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Joel Barnett was Chief Secretary to the Treasury throughout the last Labour government, part of the time as a Minister not in the Cabinet and later on as a member of the Cabinet, and this is largely a blow-by-blow account of the incessant internecine war which he was obliged to wage on the public expenditure front, under the strategic direction of Denis Healey as Chancellor of the Exchequer. Before going further I must declare a personal interest in two respects, starting with the fact that I was one of his senior Treasury officials for much of his time. As he says, like himself I was a Mancunian whom he describes as ‘blunt and outspoken’, and ‘in spite of many differences of opinion over the years’ we got on well together. He was, incidentally, better tempered in these arguments than I sometimes was, partly because he is a good-humoured man, and partly because, as the Minister in charge, he could always prevail at the end of the day – though no doubt it did not always seem like that to him.

The second respect in which I have a personal interest is that my own book about public expenditure and the Treasury since the war is being published about now. I mention this not merely out of self-advertisement but in order to comment on the different rules which apply to books by former Ministers and by former civil servants. Though both are scrutinised by the Cabinet Office and the Department concerned – in this case the Treasury – Joel Barnett must either have kept a diary, which civil servants are discouraged though not actually prohibited from doing, or have made use of official papers, which officials may not do. In his account of the successive general cuts exercises and of the endless series of individual public expenditure cases, he describes exactly what went on between Ministers and which of them said what to whom. The rules inhibit civil servants from saying much about that or even about what they said to each other.

There is, however, one rule which applies to both an ex-Minister and a retired civil servant; neither of them discloses the advice given by officials to their Ministers. Thus there are only two references in Joel Barnett’s book to Douglas Wass, for instance, the Permanent Secretary to the Treasury, or to myself, as compared to fifty references to Tony Benn and twenty-five to Peter Shore. Though I am in general in favour of reasonably open government, I support this reticence about what goes on between Ministers and their advisers. It would be intolerable if Ministers could have their own officials’ advice cited against them while the issues in question were still live. Even to allow disclosure after the dust had settled would, I think, make it difficult to have the frank kind of policy argument to which Joel Barnett refers.

His book, incidentally, provides no support for the conspiracy theory of the civil service which has been developed on the left and on the right, or for the notion that it is the civil servants who frustrate the accomplishment of manifesto commitments. Certainly he records suspicion from time to time of what the civil servants were up to, he criticises what he saw as delaying tactics in certain cases, and he regrets what he saw as a ‘them and us’ attitude between civil servants and Ministers; these particular passages in isolation may be taken as bearing out the Yes, Minister portrayal of Whitehall life. But he also stresses how the sheer weight of work, the volume and complexity of decisions, and the time limits against which they must be taken, rather than official intrigues, constrain Ministerial room for manoeuvre; the world at large has little realisation, I think, of how impossible these things make the life of a senior Treasury Minister. His overall verdict is that:

throughout my five years as Chief Secretary I had found my officials intensely loyal both to me personally and to the Government.

He also writes:

What was interesting over all the Budgets was what and who influenced them. As to the ‘what’, the economic and financial environment was naturally the most important … As to ‘who’, the TUG came close to the head of the list … The Prime Minister was the man with the maximum influence.

In this scenario, which perhaps goes too far in writing out the Permanent Secretary altogether, the affable but Machiavellian Sir Humphrey from Yes, Minister does not even get a bit part. Nevertheless, so powerful is the television medium, that I dare say that the Yes, Minister myth will continue to prevail over the reality.

Anyone looking for an exposition or critique of the planning and control of public expenditure will not find it in this book. The public expenditure survey system, on which the denizens inside the Treasury spend a large proportion of their working lives, does not get a listing in the index, though the annual surveys are in fact mentioned a couple of times in the text. There is no mention of many other features of the public expenditure landscape such as Estimates and Supplementary Estimates, the Consolidated Fund, the National Loans Fund, or the Appropriation Act. There are a good many references to the PSBR and cash limits, but it is taken for granted that the reader knows what they are and how they work. There is one passing reference to the money supply but no discussion of it or of its connection, if any, with public expenditure and the PSBR. Joel Barnett did in fact become perfectly conversant with the technicalities of public expenditure control, and such references as he makes to them are all highly accurate; for that matter, the book as a whole strikes me as a highly accurate record. But for the most part the book is simply not about the aspects of public expenditure which I have listed above; its principal concern is with the politics and the personalities and the power struggles involved. On those aspects it will be very useful testimony; for instance my own book would have gained a great deal, so far as this particular period is concerned, if Inside the Treasury had been published a year earlier and I had been free to quote from it things which I was not free to say from my own knowledge.

Joel Barnett says that his five years in the Treasury converted him from being an optimist to being a pessimist. When he first came to the Treasury I felt that he would have preferred some other portfolio than the ungrateful role of Chief Secretary. ‘What are we in politics for but to spend? was a remark that I heard from more than one Labour Minister at the time. Nevertheless he buckled down to the job manfully, and he also took more naturally to the taxation side of the work. It is only from his book that I have learned that he more than once contemplated returning to the back benches, but was dissuaded from doing so. What quelled his optimism was not merely the grinding trench warfare against the demands of spending ministers – a species that, in office, behaves true to type whatever the political complexion of the government – but the growing realisation, which few of them seemed to share, that the basic reasons why this country could not afford their ambitious schemes were low productivity and excessive wage claims. He ends with a very sensible warning to his colleagues in the Labour Party against committing themselves afresh to policies they cannot hope to fulfil. And yet, for all his recognition of the inadequacies of the TUC and their part in the country’s industrial performance, he believed, and presumably still does, that

We in the Labour Party could never part from the institution that gave birth to us. We were stuck with each other, and had to make the best of it.

The defectors to the Social Democratic Party have of course taken a different view.

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