THE LIBERAL/SOCIAL DEMOCRATIC POLICY REGIME
Britain’s previous liberal/social democratic policy regime combined elements of the Liberals’ state reforms of the late nineteenth century with elements corresponding to the interventionist state of the twentieth. The Liberals created a higher civil service recruited competitively from the cleverest members of the same social class, and educated at the same elite private schools and universities, as the elected ministers they served. The idea was that officials of this calibre and background would be in a position to offer elected ministers honest advice and ‘to some extent influence’ them, in a shared ‘freemasonry’ of public service. (7) Because the emphasis was on social and political status, higher civil servants were, like almost all the ministers they served, ‘generalists’, relying for expertise on the advice of professional and technical civil servants – engineers, public health doctors, biologists, etc. For dealing with big issues of a politically sensitive nature they would recommend the establishment of Royal Commissions, composed of eminent experts with powers to commission research and call for expert evidence (between 1950 and 1980 one was appointed, on average, almost every year). For lesser issues that nonetheless called for additional expertise Departmental Enquiries could be set up, also with powers to draw on outside expertise.
(7) The quoted expressions are from the famous Northcote-Trevelyan report adopted by Gladstone as prime minister and finally imposed throughout the civil service by the end of the nineteenth century.
With the advent of the Labour Party and an increasingly interventionist state agenda other elements were added to the mix. Innovating parties needed to develop policies out of office to present to the civil service when elected. The Labour Party had a research department that produced blueprints for new policies, as did the Trade Union Congress and the larger trade unions. The Fabian Society, established in 1884 with the aim of ‘permeating’ the main governing parties, became more and more linked to Labour and supplied it with a steady flow of reasonably well worked-out policy proposals. PEP (Political and Economic Planning), founded in 1931, and NIESR (the National Institute of Economic and Social Research), founded in 1938, were products of the depression and aimed in different ways to push social and economic reforms of a broadly liberal/social-democratic nature by publishing serious research on the issues. From 1929 onwards the Conservative Party also had a research department. Many leading politicians, from Cripps and Wilson to Macmillan and Heath, were intellectuals, often former academics and frequently authors of books and pamphlets on policy issues. The civil service existed to advise governments on the policy initiatives derived from all these sources, and turn them into practical plans and laws.
There were differences and tensions between the state and non-state components of this policy regime, but they shared a general commitment to a notion of objectivity, in the sense that policy proposals should be judged on the basis of rational argument and sound evidence. They all saw themselves as professionals, belonging to a ‘public’ domain, serving the public interest.
'The public domain … was quintessentially the domain of … professionals. Professional pride, professional competence, professional duty, professional authority and, not least, predictable professional career paths were of its essence. Professionals were the chief advocates of its growth; they managed most of its institutions, and they policed the frontier between it and the adjacent private and market domains. Above all, the values of the public domain were their values.' (8)
(8) David Marquand, Decline of the Public: The Hollowing out of Citizenship, Cambridge: Polity Press, 2004, pp. 53-54.
The central tension in the liberal/democratic policy regime in the 1950s and ’60s was due to the fact that the higher civil service, and especially its elite in the Treasury, which exercised considerable control over other departments’ policies, was more inclined to be liberal than social-democratic. Moreover the ‘freemasonry’ which Gladstone’s reforms had postulated between the higher civil service and ministers began to show cracks once the ministers were Labour MPs, with ideas and aims reflecting the party’s roots in the labour movement and no longer predominantly educated at leading private schools or at Oxford or Cambridge.
Thomas Balogh, an economic adviser to the Labour prime minister Harold Wilson in the 1960s, voiced a growing impatience with the higher civil service’s typically humanities-based education and pre-industrial social attitudes, denouncing it as ‘the apotheosis of the dilettante’. (9) In 1966 Wilson created a Department of Economic Affairs to offset what was seen as the Treasury’s bias for financial prudence over economic growth, and a Treasury departmental committee chaired by Lord Fulton (a university vice chancellor) recommended a reorganization of the higher civil service on technocratic lines. A Civil Service College was established, to emulate the French École Nationale d’Administration, and a Civil Service Department took over the Treasury’s management of recruitment, training and promotion.
(9) Thomas Balogh, ‘The Apotheosis of the Dilettante’, in Hugh Thomas, ed., The Establishment, London: Anthony Blond, 1959.
Almost all these initiatives were neutralized, largely by the higher civil service itself. The Department of Economic Affairs was closed in 1969 after only three years. The Civil Service Department lasted longer, but was closed by Mrs. Thatcher in 1981. The Civil Service College survives, but only as a provider of short courses, with no prestige. The one significant innovation of the Wilson years that not only survived but flourished was the increased use of ‘special advisers’, brought in from outside to bolster ministers in face of what was seen as excessive civil service caution or conservatism. The Fulton Report had also recommended this, together with ‘greater mobility between [the civil service] and other employments’, including ‘temporary appointments for fixed periods, short-term interchanges of staff and freer movement out of the Service’, and giving further thought to ‘hiving off’ activities to non-departmental organizations. All of this prefigured the erosion of the boundaries between the public and private domains that was to take place under the neoliberal policy regime from the 1980s onwards.
But in retrospect it is easy to see that the issue was not merely changing class relations, or generalists versus technocrats; the fundamental tension within the old policy regime was the contradiction of social democracy itself. The real problem was that by the end of the 1960s British trade unions were unwilling to see the problems of British capitalism solved at their expense, while capitalists were unwilling to collaborate in any state-led economic strategy so long as the unions remained powerful, as even the Conservative prime minister Edward Heath discovered to his chagrin after taking office in 1970. (In 1973 he told a meeting of the Institute of Directors: ‘When we came in we were told that there weren’t sufficient inducements to invest, so we provided the inducements. Then we were told people were scared of balance of payments difficulties leading to stop-go. So we floated the pound. Then we were told of fears of inflation; and now we’re dealing with that. And still you aren’t investing enough!’) (10)
(10) Quoted in Andrew Gamble, Britain in Decline, Fourth edition, London: Macmillan, 1994, p. 99.
The crisis came to a head in the winter of 1973-74. With the coal-miners ‘working to rule’ and the entire country limited to a three-day working week to conserve fuel, the head of the civil service, William Armstrong, had a nervous breakdown. The liberal/social democratic policy regime had collapsed. ‘From that moment’, Peter Gowan noted in a seminal article, ‘a current within the Conservative Party … [was] working to make … [the Gladstonian civil service model] redundant by removing labour as a major force on the political scene, Americanizing the party system and state bureaucracy and breaking up the mandarinate’. (11)
(11) ‘The Origins of the Administrative Elite’, New Left Review, 162, 1987, p. 34.
The Labour Party returned to office in 1974 but crisis management became the overriding agenda. Domestic policy initiatives, from any source, were irrelevant unless they helped meet the conditions attached to the IMF loan that the Treasury mandarins and the Labour leadership decided they must accept, rather than embrace the socialist alternative advocated by the Labour Party’s left wing. The IMF’s conditions meant replacing Keynesianism by monetarism, opening the door to Thatcherism and the construction of a new, neoliberal policy regime.