David Cameron vs. the Quangocracy

William Rees-Mogg, The Times September 14, 2009

The Conservatives have returned to power three times since their great postwar defeat in 1945. Their first comeback was in 1951; Winston Churchill was their leader. The main domestic theme of his Government was that the Conservatives could be trusted with the newly created welfare state, including the NHS. In the 1950s the Conservatives proved to be competent and reliable managers of a social democratic system. They were rewarded with further election victories in 1955 and 1959.

In 1964 the Conservatives lost the general election. In 1970, they regained power under Ted Heath, but his administration survived for only four years. Heath took Britain into the European Community, but he failed to cope with the militant trade unions and the great inflation of the 1970s. In 1979, the Tories came back into power under Margaret Thatcher. The polls suggest that they will regain power in 2010, for the fourth time in 65 years.

David Cameron has called himself a liberal Conservative; he has courted the Centre vote, which gave large majorities to Tony Blair in three general elections. In this, Mr Cameron is closer to the centrist strategy of Churchill in 1951 than to Mrs Thatcher’s strategy before 1979.

In Conservative terms, Churchill and his successors, Eden and Macmillan, led from the Centre Left. This postwar strategy was largely developed by Rab Butler, the key Conservative thinker of the 1940s. Churchill had been a member of Asquith’s Liberal Government that introduced the first welfare state before the First World War. Mr Cameron has achieved the “detoxification” of the Conservative Party. Polls now suggest that the Conservatives are more trusted than Labour to manage the welfare state.

Yet politicians who win power are often destined to face very different problems from the ones they expected. Heath came to office with joining Europe as his central policy, but he was defeated by the miners’ strike. Mrs Thatcher came to office to set free the overregulated British economy, but established her reputation by winning a war in the South Atlantic.

Now Mr Cameron is facing the aftermath of the worst recession since the 1930s, with colossal accumulated debts, a fiscal deficit of £175 billion and 2.5 million unemployed. Gordon Brown is still talking about the need to protect public expenditure, instead of explaining that the British economy needs protection from the growing overload of public debt. The public understand what is happening better than the Prime Minister. A YouGov poll in The Sunday Times yesterday suggests that 60 per cent think that the budget deficit should be reduced mainly by cuts in spending, while only 21 per cent prefer tax increases. The Conservatives are more trusted than Labour to cut spending without damaging necessary services, by 29 per cent to 23.

The Conservatives have inherited economic problems from Labour in 1951, 1970 and 1979, but at least on this occasion there is substantial public understanding of the need for cuts in spending and substantial trust in the Tories to get them right.

Voters know that cuts are necessary. However, it is never easy for governments to cut public expenditure. Mrs Thatcher was very successful in deregulation and privatisation, with both of which she hoped to raise Britain’s lagging productivity. She was much less successful in cutting public expenditure, though she had some success in restraining its growth.

Mr Cameron will find, as she did, that a significant proportion of national expenditure is not decided by the government or even the local authorities, but by quangos. Many of these are neither transparent nor accountable. He will also find, as Mrs Thatcher did, that Labour has used appointments to senior quango jobs both as patronage and to spread its ideas of what is politically correct. Indeed quangos are often statutorily required to adopt standards of political correctness that are not necessarily conducive to efficiency. The quango members would not be selected if they were not personally seen as politically correct people.

Mrs Thatcher gradually corrected the party balance of the quangos she inherited, though she took a liberal view of the need to represent different opinions. But even in her time, the quangos remained fortresses of political correctness as well as highly effective lobbyists for government expenditure.

As far as possible, Mr Cameron will have to take the responsibility for deciding public expenditure away from the quangos. Spending public money ought to be controlled by accountable elected bodies, either Parliament or local authorities. He will not be able to cut public expenditure in a considered way unless he greatly reduces the number of quangos.

There are some important quangos that spend relatively little public money in a direct way, but take decisions that affect public policy and therefore expenditure. For instance, the Charity Commission’s policy on independent schools will affect education expenditure, both in the independent and state systems.

Unless the policy is reversed, it will lead to some independent schools closing, thus diminishing choice and increasing the costs of state education. This is a highly political policy, going flatly against the current pluralist development of Conservative thinking. It is a partisan political policy adopted by a body that is supposed to be a non-partisan regulator.

If the Conservatives come to power, Mr Cameron in his turn will need to rebalance the boards of the quangos, though more moderately than Labour after 1997. He will not be able to control public spending if he waits for the normal process of board resignations working through the quangos. That would take too long. Neither the British budget nor British culture can afford another five years of the big spenders who control too many quango boards.

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William Rees-Mogg

William Rees-Mogg has had a distinguished career with The Times and The Sunday Times. He was Deputy Editor of The Sunday Times before becoming Editor of The Times in 1967, a position he held until 1981. He was made a life peer in 1988. Since 1992 he has been a columnist for The Times, writing on a variety of issues. He has also been chairman of the Broadcast Standards Council and British Arts Council

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