The Rest Is Politics: Leading - 83. The Man Who Ran Downing Street

Episode Date: June 30, 2024

What are prime ministers really like behind closed doors? How do you become Britain’s most powerful civil servant? Are special advisors a force for good or ill? On today’s episode of Leading, Rory and Alastair are joined by Gus O’Donnell, the former Cabinet Secretary and Head of Civil Service, to answer all these questions and more. TRIP Plus: Become a member of The Rest Is Politics Plus to support the podcast, receive our exclusive newsletter, enjoy ad-free listening to both TRIP and Leading, benefit from discount book prices on titles mentioned on the pod, join our Discord chatroom, and receive early access to live show tickets and Question Time episodes. Just head to therestispolitics.com to sign up, or start a free trial today on Apple Podcasts: apple.co/therestispolitics. TRIP TOUR: To buy tickets for our October Tour, just head to www.therestispolitics.com Instagram: @restispolitics Twitter: @RestIsPolitics Email: [e-mail] Audio Editor: Nathan Copelin Video Editor: Teo Ayodeji-Ansell Social Producer: Jess Kidson Assistant Producer: Fiona Douglas Producer: Nicole Maslen Senior Producer: Dom Johnson Head of Content: Tom Whiter Exec Producers: Tony Pastor + Jack Davenport Learn more about your ad choices. Visit podcastchoices.com/adchoices

Thanks for listening to The Restis Politics. Sign up to the Restis Politics Plus. To enjoy ad-free listening, receive a weekly newsletter, join our members chat room and gain early access to live show tickets. Just go to therestispolities.com. That's the restispoletics.com. Welcome to the Restis Politics leading with me, Rory Stewart. And with me, Alistair Campbell. And we're absolutely delighted to have today's guest because if Kirstarmer becomes Prime Minister, the first person he would meet, after walking through the most famous front door in the country, is the head of the civil service, the cabinet secretary. And the last time there was a change of party in government, 2010, today's guest was the man who greeted David Cameron as he walked

through the door 14 years ago. And that man was and is Gus O'Donnell. I'd been in the building that day with Gordon Brown hours earlier. And we got kicked out after Gordon accepted. The election was over. And Gus stayed there because he's part of the civil service, the permanent civil service. And I've known Gus since the 80s, I think, when I was a journalist and he was a press secretary. He's an economist by training. He became press secretary to John Major, both when John Major was Chancellor and then Prime Minister. He then rose to become permanent secretary of the Treasury before getting the top job, Cabinet Secretary, in the final year of Tony Blair's premiership. He was there for the entirety of Gordon Brown and then the start of David Cameron's premiership.

And Gus, can we start with David Cameron? Because you, of course, there's a picture I was seeing earlier, of you literally being the first person, the door opened, Cameron comes up the street, there's the world's media there taking the pictures, the doorman opens the door, and then you're standing there, you shake his hand, you shake Sam Cam's hand, and you say, welcome to Downing Street. Just tell listeners what then happens as a new Prime Minister takes office. Right, and remember, Downing Street's had about an hour from when we've cleared out from all the things that were there right for Gordon Brown to work with. We've changed the furniture. We've moved all the stuff relating to the past.

And so I greet, as you say, David Cameron and Sam Cam at the door. He then walks through. They walk through with the staff as they've just clapped out, Gordon. They're clapping in David Cameron. I run around the side, greet him in the cabinet room. And I've got this wonderful picture that he gave me on his retirement. He had his private photographer there. And it shows him he's just come into the cabinet room.

There's just Sam, him and me in there, and he puts his head in his hands and thinks, oh my God, what if I let myself in for? And it's just that moment. And you realize, you know, you talk about stressful things in life. So we've got, there he is, Sam, pregnant, right? So it's going to be a new child. He's got a whole new place to live. The office is underneath. You know, it's an incredibly unhealthy lifestyle because we're going to make sure he never gets

his 10,000 steps in because there's a lift up to the flat. As soon as he steps out of the door, we're going to put him in an armoured vehicle, which takes him to somewhere else where he doesn't have to walk very much either. And then, you know, it gets slightly worse because I've greeted him in there. And then I have to tell him about precisely how many million people do you want to kill because, you know, we've got the nuclear letters and all the rest of it. This is brilliant. And just give us a little bit of sense. There was a clue at the beginning of this where you talks about moving furniture and removing stuff from the previous administration. What does that mean? What furniture was being moved? What kind of stuff gets shuffled out so the new guys come in?

Well, it's hopefully during what I would have called the access talks, we've talked to the opposition with the current prime minister's permission to just sort out like, well, where do you want to work from? You know, what office do you want? Gordon set up this kind of horseshoe, very unusual approach to it in number 12. So we basically put things back to where they have been historically, basically going all the way back my time through Satcher, Major and all the rest of it. So there's a lot of moving of the furniture. There's some IT changes. Gordon had some special attributes, which required us to kind of modify things slightly. Everything had to be on a permanent capital letter lock.

But, you know, you're trying to make them feel at home. It's a really big change in their lives, and suddenly they've got this really important job. And quite often, you go back to 97 with Tony Blair going through the door, if it turns out that it's Kirstama. This is their first ministerial job, not just their first time as prime minister, but they've never done anything before as a minister. So it's dramatic, and it's dramatic for the family. So you have to think about this not just from a policy point of view, but from a personal point of view. You know, it's the kids, you know, God, this is like so strange. What advice would you give somebody who is taking over as prime minister?

That it's incredibly hard work. You know, the one thing I would say is you need to come into it rested. And of course, that's the one thing that you don't get. No chance, you know, the election night has been intense. They've got to give all those first interviews. They've got to do that, you know, steps of Downing Street. You know, before they come through that door, they've made this statement. And I can tell you what the statement will be if there's a new prime minister, because they all say the same thing.

They want to bring the country back together. They want to restore trust in politics. Nearly all of them say the same sorts of things. But it's important they get it right, and it's important they set the tone. And they all say then, now I'm going back inside to get to work on delivering for you the people. And then you have to kind of say to them, well, actually, you know, let's not make. make too many decisions while you're in a very, very tired state. Let's pace ourselves. And it's hard because they've come through the door, this has all started. And then you've got Switch,

who are the wonderful switchboard operators in Downing Street saying, well, you know, I've got President Biden on the line. I've got President Macron. I've got, you know, all of these people, they're filtering all of these calls. At the same time, you have prepared with the Foreign Office. You know, if President Biden calls, here are the three points you really must make. and you've tried to clear this in advance, but it's been quite hard. You know, so you have to go through it

with the Prime Minister before he takes any of these calls. And in the middle of it, you know, there's, I call it Uncle Bob, wants to get through. Now, is this really Uncle Bob

or is this someone like Alistair Campbell pretending to be Uncle Bob to kind of, you know, like get some kind of great story out of it? So it's a very, very intense period and you're trying to get them

to take their time, not make decisions too quickly, but on the other hand, there are some things that are quite urgent. Back in 97, Gus, when Tony first arrived in Downey Street, and I was there also exhausted starting a new job. But I was really struck by Robin Butler, who was your predecessor, the Cabinet Secretary at the time, who very much, a bit like me and Rory, very different backgrounds, very different

characters and personalities. But I was very struck by the first conversation I had with them. He essentially was saying to me, look, people know you're going to want to change things. My advice is that you're just very straight with people about the changes that you want to make. And they know that you've got this unusual role of being able to give advice to civil servants, even though you're a political figure. And I was very struck by that. I got the feeling he'd thought through that first conversation.

And that really, really helped me to then get on with the people who were there, make the changes that I did feel needed to be made. And likewise, I felt with Tony. I remember Tony Blair saying to me and to Jonathan Powell, saying, you know, you have got to make sure you get on with these people because we can't do stuff unless we've got them. Now, do you think that has been the attitude in recent years? Well, first of all, it's absolutely essential. If I said to one thing about any prime minister coming through, you've got to work well with the civil service. This is your big delivery arm.

It's crazy if you operate in a way that destroys that trust between the two. For example, by sacking a permanent secretary of the Treasury on day one, right? So, no, it has not gone well. Let's be absolutely frank. That relationship of trust has broken down. There's a great opportunity if there is a change of prime minister for that to be restored. I know that unusually, Kirstama, when I was cabinet secretary, he was one of the people sitting around the table when we had our weekly meeting of Perm sex. Yeah, so he was a civil servant seeing how you operated. Absolutely. He's seen me operate as cabinet secretary. Sue Gray was my head of

propriety and ethics who's Chief of Staff for Keir. So they start with a really good understanding of what the civil service is about and how to get the best out of the civil service. So I'm really quite optimistic.

You know, when I look at other countries that do government well, I look at Singapore, for example, there's massive permeability between the civil service and ministers.

Most ministers, there have been civil servants at one point. So there's a lot of respect and understanding about how they need to work together to deliver the very clear who gets to set what we're trying to do, which is the ministers. There's a very interesting thing I always observed as a minister, which is how charming the permanent secretaries have to be, how friendly they have to be to the incoming minister or secretary of state. And it doesn't matter. You know, I remember I had Liz Truss as a boss, then Pretty Patel, then Boris Johnson, you know, pretty, pretty eccentric human beings. And in every case, you've got a charming person like you, Gus, trying to get along with them, trying to work out what they want to do, trying to direct the whole thing.

How does one get the balance right? Because sometimes, you know, I remember thinking this, I'm going to be a bit unfair to Simon McDonald's. He was Johnson's permanent secretary at the foreign office, yeah? Exactly, yeah. I remember walking around with Boris, laughing at all his jokes, slapping him on the back. really seeming as though he was having a terrific time with this guy and he was the funniest guy in the world. And it now turns out now that Simon's left from all the stuff that he's been saying that he really despise this guy. And I'm sitting there as the junior minister thinking, why are you being so creepy and laughing at all this guy's jokes if you don't agree with it?

So you're absolutely right, Rory. It is a balance, right? You need to develop that trust. The trust is hugely important. But I've said many times, you're not their best friend. You know, I've had conversations with John Major, Gordon Brown, Tony Blair, David Cameron, Nick Clegg, and they can be very tough. You can be saying, look, this isn't working. You should not be doing this, I'm afraid.

You know, this is inappropriate, or one member of your staff is operating inappropriately. I'm sure there were times when Robin Butler might have had to say to Tony Blair that this chap, Alistair Campbell's not quite doing what I'd like him to do all the time. I think it was more Richard Wilson than Robin. Richard Well said, yeah. Well, you know, and it's, that's our job, right? It's not to be best friends. It's because quite often it's behavior of people around them or their behavior at times that you have to say, look, I'm doing this for your best interests, you know, like this stops

obviously during an election campaign, but I cannot understand why someone didn't say to Rishi Sunak, you are kidding me about going home early from D-Day. And I would have expected, for example, David Cameron, a former Prime Minister, who knows the importance of these things, to be saying, you are kidding, you want me to stand in for you? I just don't understand. Gus, I think if that would have been ours, I think every single member of the staff would have said it. Yeah, exactly. Gus, just on that one, how do you avoid the other risk, which is that sometimes it can feel,

as a minister, slightly patronising, as though the Senior Soul Service is trying so hard, but they're slightly thinking about us as slightly victimized children. You know, these poor ministers, they're all run off their feet, are so exhausted, they don't know anything about what they're doing. So we're going to try to help them, guide them, discipline them, steer them, but slightly as though we're child emperors who need to be steered. Well, I mean, this comes back actually to my biggest request. David Cameron, when I had the access talks with him, asked me, what was my number one request?

He told me all the things he wanted me to do. He said, there's anything you want from me? And I said, the one thing I'd like more than anything is to keep ministers in post as long as possible. Because, you know, during my time, I had nine ministers of pensions in five years. Now, pensions turns out to be quite a long-term issue, right? So, you know, you're dealing with someone and it's a complicated subject, pensions. So it is difficult. You're absolutely right, Rory, because sometimes, you know, you think, where do I start this conversation?

How much does this minister know about pensions? You know, do they, are they going to understand all the complexities of all of this about tax announces, lifetime allowances, all those sorts of things? So, yeah, you're right. The risk is you appear condescending, right? And you appear taking them as idiots. And the degree of knowledge different ministers bring to when they step through that door is very different. And then suddenly, you know, you've got someone, you're having a great relationship, they're Minister of Defence, it's fantastic, and the next minute they're in charge of work and pensions. And, you know, that's hard for them and it's hard for you to assess where to start the conversations. And the worst thing is to take things for granted that they get

it. And then you've lost them right from the start. Gus, you worked closely for four prime ministers, John Major, Tony Blair, Gordon Brown, David Cameron, four very, very different people. Do you get emotionally attached to somebody that you work with like that? And if so, is that a danger for a civil servant? Yes, is the short answer. Yes and yes. You do get attached. You do get emotionally involved.

I remember my first prime minister that I worked closely with John Major. I remember that he was from southwest London. There were lots of people going back to your point, Rory, who were very condescending towards him because he hadn't been at Eton or Harrow and he hadn't been to university. But he genuinely cared about public services. You know, the whole Citizens Charter stuff was well ahead of its time. He cared about Northern Ireland. I remember central office telling him, oh, don't worry about that.

There's no votes there. And he really went out of his way to get that first ceasefire, the truce. And then you try very hard to be objective in these things. But I was there in the war cabinet when we were talking about getting Saddam Hussein kicked out of Kuwait. And the IRA land mortar bombs in the garden, you know, if they've been slightly more accurate, you certainly wouldn't be interviewing me now. I'd have been dead. And when you go through those sorts of things, the idea that that doesn't create some emotional bonds is completely wrong.

And I, for all my prime ministers, you know, there have been things where I look with very great affection on them, you know, with Tony, you know, the fact he made me cabinet secretary, the fact that he gave me some room to try and modernise the civil service. With Gordon, you know, the way he handled a global financial crisis. with David Cameron and Nick Clegg the way they kind of sorted out and helped me make a coalition work which had never happened before and it lasted through a five-year parliament so you see that, but you also see

of course those are things that work well but you see them through disasters so let me talk about Black Wednesday right I was always going to bring that one up Gus I thought you were yeah and well let me let me tell you about Black Wednesday Gus sorry just remind listeners who can't remember what Black Wednesday is when it was

when it happened going on, just give us a little bit of basics. September the 16th, 1992, remember it well. So, Black Wednesday, one of the core features of economic policy at that time was we were members of the exchange rate mechanism. This meant that our exchange rate had to stay within a band. And that meant that if it was going outside that band, we had to intervene. At one point, we were intervening to the tune of a billion dollars an hour.

And this was really expensive. Actually, it was a policy I wasn't particularly keen on myself. And out of it came a rather good policy called inflation targeting, which we have to this day. But it was a disaster for the economy, a political disaster as well. I remember being with John Major when this was happening. And the Chancellor at the time was Norman LeMont. And John Major told me to go with Norman LeMont to his press conference afterwards, which we were putting together very hurriedly in the courtyard of the Treasury. And the reason he wanted me to go is just to make sure that Norman LeMont stuck by the words they'd agreed he would use. So we have this press conference being

set up and these steps are put in there because we need the cameras to be above the hoard of all those journalists like this chap, Valister Camel there. And cameras looking down on Norman LeMont. And then one of the journalists comes up to me and says, you know what? That angle doesn't look great because there's the camera, Norman LeMont and a drain. And it's like, you can see the headlines coming out. And I said, yeah, you're right. Okay. So we cover it up. That journalist was someone who I'd accused of being a labor propagandist many times. And that was Alistair Campbell. Can you believe that? I was looking out for you there, Gus. You were, and I'm very grateful. It was going to be bad enough as it was. Gus, just going back into this. So it's a very interesting system, this British system. And maybe again for, we've got a huge range of listeners, many around the world, many different generations. Just take us back to the basics.

What is this permanent civil service? Why have we got it? And broadly, why is it very different from the US system? what's the advantages and disadvantages of what we got? So we have a civil service based on the four values, honesty, objectivity, integrity, and impartiality. And that bit about impartiality means the civil service is there permanently to serve whoever it is that you elect. And I say you, because for some bizarre constitutional reason, they don't let me vote anymore.

Now I'm in the House of Lords, mad. So you've got this system where we prepare and are, they're permanently through. And we basically are there to discharge the objectives of the democratically elected government. And that allows continuity of our system when there's big changes. If you look in the United States, I remember through the global financial crisis, there'd been a change. Tim Geithner was there in Treasury. It was really difficult getting in touch with them because the change of president, all of the senior civil service go and they're trying to get new people in. And it takes them while to get them through Congress. And interestingly, ex-president Trump has said that not only will he get

rid of all of the senior cadre, he's going to go a layer further down. And he's already got people, what he calls pre-qualified, to come into those jobs. And one of the reasons for that, Gus, is interesting, because one of the reasons is that he was frustrated. I mean, you know, presumably the three of us don't like Donald Trump. So we sympathize for the people who frustrated him. But the truth is, his whole administration was about him saying, I want troops out of Syria and the military blocking him and not taking troops out of Syria. And then him having to send a tweet a year later saying, I said get the troops out of Syria and troops and counter Syria. And people have been very open after Trump has left, talking about not showing him bits of paper, not giving him bits

of information, not implementing the policies that he asked them to implement. And they're doing it because they think it's for the good of the world. But you can understand in a democracy, why a democratically elected president is like, wait a second, whether or not you agree with me on getting troops out of Syria, I told you to get those troops out of Syria. I do not expect 18 months to pass, and you've just kept them in there by secret. Yeah, and that's the bizarre part about it, right? You've got a partial civil service in Washington that is not fulfilling a democratic mandate. And in the UK, actually, it's our job if a minister says, look, I want you to do X or Y, to say, well, really, you know, are you sure? Here are the downstead.

sides, you know, here are some other options that might achieve the outcome you really want better. But in the end, if they say do X, we do X, right? Let's be absolutely clear. If they say implement Brexit, we implement Brexit, right? And that's what you do. So to be honest, just having a partial civil service kind of, I think, makes things worse. In our system, it's very clear. The policies are determined by the democratically elected government. And if they say jump, you might say, are you really sure that jumping's the right thing to do now? But in the end, if they say, thank you, yeah, all that, jump, you jump. Gus, you said in an earlier, when we're talking about the Black Wednesday,

you said you didn't actually like the policy very much. Are there ever, for somebody who gets a senior in the civil services, you or some of the team who were involved in the Brexit negotiations, does there ever come a point where you just say, I can't put up with this, I actually cannot do this policy? Let's say, for example, if a new very right-wing government came back in and made it, without a free vote, made it a policy to, I don't know, bring back the death penalty. Would there be civil servants who would say, well, you may have been elected on that, but no, I can't do it? There might be some, and in which case they would resign.

That's the right option for them. You don't really have any alternative. But most would abide by that principle that the government's been elected on a mandate. You have to help them deliver it. I'm afraid that's true. There are limits to that, of course. if you ask to do things which are illegal, I'm not saying, you know,

if Herod comes in and says, please slay all the firstborn because, you know, population is getting out of control. No, no, Prime Minister. Absolutely no. So there are very clear limits to this, which are set by the law.

So it's not just, you know, do all of these things. But you're looking for the rest of the checks and balances in the system, which is why I think, you know, this is quite topical. You need a decent opposition. You know, the House of Lords,

I think may well. in the next parliament have quite a key role to play in scrutinizing legislation that comes through a house which has a large majority from one party. So I think the checks and balances, and of course the media. So it's your job, Alistair as well. Happy to do it, Gus. One of my experiences as a minister, and I suppose I had six different ministerial jobs, is that dozens of times, maybe hundreds of times, I would ask civil servants to do things and they wouldn't do them. And when I talk to people like you, the sort of grandees at the top. And I repeat the story. They're always like, oh, that's terrible. Give us an example. Give us an example. Okay. So one example I didn't put in my book, but I discovered,

I was asked to sign off on 150 million pounds to Yemen. And I knew Yemen recently well, and I knew we didn't have any staff on the ground in Yemen. So I said, how do we know what's happening with that money? And the civil servants said, well, we do Skype calls with Yemenis. So I said, well, great, can I see one of these Skype calls with Yemenis? And I said, well, great, can I see one of these Skype calls with Yemeni and everyone looks a bit uncertain and I say okay take a month but I want to see a clip of a Skype call so a month later these very senior civil servants come back and they say minister why are you so interested in seeing this Skype call with the Yemeni and I say look I could give 11 pompous reasons why if you're spending 150 million pounds year in a country you better find out what's doing

something more basic I told you to do it I don't fake it up as far as I'm so just give me something right another month passes I go and see the permanent secretary and of course you're He's a very charming chap like you. So he says, oh, Minister, this is terrible. I'm so sorry to hear this. I'll look into this. I'll try to find out what the problem is. Another month passes.

Another month past is. Finally, I'm reshuffled, and I never see this thing. And I can produce literally dozens of them. I mean, so many of them that I don't bother to put them in politics on the edge because it just becomes boring. So what's going on here? What is this world where my lived experience as a minister is that many, many of the things that I'm trying to get done, never get done? And yet whenever I talk to someone like you, they'll say, oh, I don't know what's going wrong there. That's not the way our system is supposed to work.

Roy, on that particular case, it'd be quite interesting. I'd be quite intrigued as to why you weren't shown this. And I can think of one or two reasons. What would those reasons be? Well, it could have been intelligence reasons. There might well have been things going on that this has happened sometimes where I've had a secretary of state tell me that they don't want a minister involved in a subject, that they're, that they're going. They don't want me to show papers in a particular area to that minister because they don't trust them. They think they'll leak stuff.

This has happened quite frequently, actually. And it's really difficult. And that minister then completely loses trust in you because you're playing them along. As it sounds like you were played along, Bori. The other point I would say is actually there may be something about the way you asked. You're a persuasive guy. It's like surely there will be ways to get this done. Did you try getting the Secretary of State to intervene?

Because this shouldn't happen. It is slightly bizarre to me. That's not something I've come across with ministers I've worked with. But that's what they always say. I mean, that's the very odd thing, right? And often I think it's because the ministers that you often work with are not specialists on the subject. So one of my problems is that when I'm the Middle East Asian minister and I'm dealing with Afghanistan, the people briefing me haven't spent any time in Afghanistan, don't speak Afghan languages.

So when I'm saying, do not put this money into the Afghan police, that's on the basis of having written books about Afghanistan, spent a lot of time thinking about it. And they then go and put money into the Afghan police at the end of six, nine months of my trying to block them. One of the things I conclude is that often ministers actually are quite nice people who don't know very much about the subject, don't challenge many of these operational decisions. And so the push never comes to the shove. You never really see what happens if you try to challenge this. system because it's quite rare that actually the minister cares enough about what's happening in Yemen to even know that we don't have staff on the ground. They'll tend to just sign it off. Well, again, I would very strongly say you should confront the civil service on things like

that. I'm with you and it's slightly bizarre to me. These are things I'm not used to. I'm afraid in my career, I've dealt with ministers who knew a lot about the subject, you know, like, and special advisors when I was in Treasury with Gordon Brown and Ed Bors. You know, they were very keen understood the economy well, I can't think of a single occasion where we frustrated the things they wanted to do. I mean, frequently, I would question them. I would say, I think you're doing the wrong thing on this or that, and I would do it in a different way. But in the end, you know, if that's what they wanted to do, we do it. Maybe it's a question of the best ones being in the bigger departments. I don't know. My general experience of the civil service was actually quite

positive. I never felt that they were frustrating. I sometimes felt some of them were incompetent, and I sometimes felt they didn't understand things, but I never felt that it would be frustrated. Just one point, Gus, on this kind of relationship between ministers and the civil service. And I want you to explain a little bit the difference between impartiality and independence, because during the election, we've had Rishi Sunak leading the charge on this thing about the labour are going to put your taxes up by £2,000. And keep saying this is put together by independent civil servants. There's no such thing as an independent civil servant. They're impartial civil servants. So how have you felt watching that argument unfold and then seeing them double down on it?

Well, I intervened because I felt really annoyed by what they were doing. I mean, one of the grubbiest things I've ever done in my life was put together costings. And to be honest, this is completely cross parties, done it here, the conservative administrations, labor administrations. It's horrible. You're asked to produce costings on something with some assumptions which you know have been chosen to show that that policy is stupid, right? And then you, you know, you come up with these numbers and they say, oh, you know, the Treasury has said this or whatever. So I would really fervently hope that both parties will sign up to never doing this costing business again in this way. If you want to during the current election, work out what the costs of the various policies are, listen to what the Institute for Fiscal Studies is. saying, I would say.

We regularly recommend that. And just one similar theme, Gus, through the various administrations you work with, just give us a feeling for the relations between civil service and special advisors. A lot of focus on special advisors, not at least during our time. But, you know, how does that work and where did it work well and when does it work badly? So I've always said that good special advisors are worth their weight in gold. And bad special advisors are absolutely disastrous for their ministers. And, you know, to me, it's like I've worked with very good special advisors.

Eb Borset Milibam, for example, Rupert Harrison. And Gus, just remind people what a special advisor is. So special advisor is a political appointee, right? They are not bound by the impartiality code. They are clearly working for the political party. And they're appointed by the Secretary of State. You know, they used to be in the old days two per Secretary of State, but sometimes that's got rather larger, not dramatically larger, it has to be said.

there's more. So yes, when we the Treasury say this policy is good for the country, it does this and the rest of it, the political advisor might come in and say, yeah, but you do realize that the big gainers from this policy are people who support the other party and the big losers are people who sport our party. You know, it's a perfectly valid thing for them to say, but it's not something that the Treasury analysis would have shown. So they have a really important role. They can be incredibly useful if they understand what their master's going to say. So, you know, I could talk to ed balls and say, look, you know, we think this is a good idea in terms of improving the way people get back into work to give greater incentives.

He would say, well, yeah, I think Gordon's instincts are along the same lines. And so you'd say, okay, we'll work this up. And on other things say, you know, you've got no chance. He's not interested in that subject. Doesn't want to do anything about it. Go away. That's really useful. But when you get special advisors who make stories up, who do things they shouldn't do in my day, Damien McBride stepped across the line. There have been various people who stepped across the line. And it's my job then to go in and say, this is just not on. You know, this cannot happen.

And these are the difficult conversations where you realize and the ministers realize that you're not their best friend. You're telling them things they don't want to hear. And it can get quite difficult. I think let's take a short break. everybody, it's Dominic Zavarik here from The Rest is History. Now, some of you may have heard me on your show, The Rest is Politics, when Rory was away and I was filling in and enjoying Alistair Campbell's tremendous banter. And I'm back to tell you about our new series on The Rest is History, which is all about Britain in the 1970s, a period with a lot of uncanny resemblances to our own.

So right now we're living through a moment when oil shocks generated by war in the Middle East are rippling through the world economy, when Britain feels like it's sunk in a bit of a malaise, people are arguing about Europe, the government has got a few issues with the trade unions, and we have a kind of, I suppose you'd say governing elite, a kind of political class that is really struggling to come to terms with all of these issues, and people are asking if Britain is governable at all. So there are a lot of parallels between that Britain that I'm describing, which is our Britain and the Britain of the mid-1970s. So in this series that's coming out on the rest is history, we're looking at these and other issues. We'll be talking about the

rise of Margaret Thatcher, obviously a colossal figure in our political life even now, whether you love her or loathe her. We'll be talking about the very first Brexit referendum of 1975, a subject that I'm sure Rory and Alistair will have strong opinions about. We'll be talking about the fall of the Labour Prime Minister Harold Wilson and we'll be talking about one of the grimmest moments in Britain's economic history, the moment in 1976 when we had to go cap in hand, as people said at the time, to the International Monetary Fund, the IMF, for a then record bailout. Now, if that sounds good to you, how could it not sound good to you? Of course it sounds good to you. We have a clip for you to listen to at the end of this episode. And if you want to hear more, just search for

the rest is history wherever you get your podcasts. Gus, one of the narratives which is very strong and will be very strong for you because you love the civil service, you ran the civil service, you're a cheerleader for the civil service. It's essentially civil service good, politicians, bad. But I wondered whether you could talk a little bit about the flaws of the civil service, ways in which a civil service isn't all that it could be, ways in which it isn't working rather than just defending it all the time. Most certainly.

But what I would say is under no circumstances. status is the civil servants think civil servants good, politicians bad, right? You only need to work in the civil service for a very short time to realize the admiration that we've got for you that have to be up front. We write you the boring speeches, you have to deliver them. You're the front person, you're up there. You know, you see it with MPs putting their lives at risk. So no, we have a lot of admiration for people who've actually gone that step and decided that they're going to be politicians and you see great things about politicians. Now, coming to your questions, I'm not going to be a politician and deflect completely. There are lots of things wrong with the civil

service, right? When I interviewed for the cabinet secretary job with Tony Blair, I said that I'm my, because I knew he liked these kinds of things, my four P's were pride and passion about a civil service because we should be passionate about the public services and improving public services and making citizens' lives better. But we also need to do that with pace and professionalism. And this comes back to your point, Rory, about the Afghanistan or not the thing I hate is when we're not professional enough, when we don't know the subject. We need to be experts, right, and we need real expertise.

And then the bit about pace was that there can be too many layers, there can be too many hierarchies, there can be too many checks and balances in the system that don't allow you to fight their way through. You know, look at what happened during COVID, you know, the fact that we got those vaccines turned around, we got through the regulatory system so quickly. So why was the regulatory system so slow in the first place? You know, like why can't we do that all the time? There's all those reasons why I would say we need to get better.

The second part is we have these crazy restrictions about pay. If you want really good people, you're going to have to pay for them. So those areas where the market pays much higher than the same. civil service, you're going to find we are very weak. They will be areas like procurement, delivery skills. We get a really good negotiator of contracts, right? And we're paying them 60, 70,000. And the private sector comes in and says, well, we'll pay you 450,000. Because this contract's a massive contract. And so you lose talent in specific areas. You take something like AI. Are we going to be able to bid the best experts in AI into government, although some of the

most important decisions are going to be made within government. No, you know, we're going to be outbid by Google and Amazon and all the rest of it. If you were an incoming Labor government, if there is one, what would you do about that? So I would basically make a switch. One of the stupidest things we do at the moment is we pay civil servants most after they've retired. How bonkers is that, right? So let's reduce the pensions and increase the pay. I would also reduce the numbers because I remember saying to my civil servants, this will probably horrify the Labour Party. We needed to have more Labor tribunals.

We were not being tough enough on underperformance. We were not sacking enough people. I strongly have always felt that we need to be tougher. And in fact, it's not just me. I started this thing called the Civil Service People Survey. If you ask the Civil Service, how good is the civil service at dealing with underperformance? They will tell you, we're rubbish, right?

That's been consistent across parties, across time. It's true actually globally around the world of different civil services. So we need to be tougher and we need to accept the fact that we should get rid of people that aren't performing well because the people who are most annoyed by that are the people who are actually working their butt off to make up for the useless people that are alongside them. One of the things I noticed is that the civil service can get very coarse up in agendas which don't have very much to do with the job I think that's supposed to be doing. Let me give you an example. So I noticed that the Syria team in Diffid during the war when we were saying this was our biggest national security

priority suddenly announced that they were going to shift up to East Kilbride in Glasgow. They were leaving London. And they were going to do it because it was going to be great for the economy of East Kilbride. So I said, this is a problem, right? We're having these meetings with a foreign office in the MAD and you're not in the room. The answer was, don't worry about that, minister. We'll always be able to jump on a plane and come down and join you in the committee meetings. Then I don't see them for a few months, right? And go up to East Kilbride. First thing that happens is some cheerful deputy director says, we're pursuing wonderful climate objectives, and we've just discovered that all these people were wasting time getting on airplanes down to London when they

could be doing it. And so we've stopped anyone flying down to London. And at no point in the conversation is anyone saying, we are involved in a war here. It's a loss of good stuff as being down in London, which is happening outside the margins these meetings, can't be picked up in Zoom calls. The MOD and the Foreign Office are plossing away and doing stuff, and you're just out of the conversation because you're pursuing an agenda about regeneration in East Kilbride and carbon. This is a classic example, Rory, that why do you think they're going up to East Kilbride? Why do you think they're worrying about their carbon footprint? Because another part of government is saying to them, this is massively important. We need to get everybody away from Westminster,

We need to stimulate local economies. We need to think carefully about our carbon footprint. So here are the things we need to do. And that would have been ticked off by the Secretary of State for climate change, whatever the department was called at the time. The Treasury will have been saying, yeah, yeah, we need to stimulate these areas. On the other hand, you're saying, actually, this is making things much more inefficient. And I remember having this argument when we move people up to places like Sheffield and Eastfield,

that there was going to be a serious problem. Now, I think working from home and the fact that we can do all of this on Zoom or Teams has changed this quite radically. But I personally believe that we are still far too centralised. I've been up to Darlington to see the Treasury offices there, but it's not just the Treasury. It's a number of different departments working out of the same building. It's actually a really healthy thing. I would like to see us get more of the civil sermons out of London.

one of the problems we always have with that is ministers would say, well, I'm not going to Darlington. They've got to come to me. But it's not, I'm not going to Darlington, Gus. It's that I'm on a three-line whip voting in Westminster four days a week. I cannot get to Darlington. So if you're seriously expecting me to manage this department and focus on the subject, this moving of people to Darlington is undermining that ability to manage people deal with them on a daily basis. I mean, give you another example. Well, hang on, Rory. Rory, three-line whip. When was the majority such that it will make much difference if you were there or not? Throughout my entire time in Parliament, I was on a three-line whip.

Yeah, but I mean, even, no, no, but this is the new world, Gus. I mean, you don't understand. Literally, the three-line whip was three days a week. As a minister, as a minister, well, no, Gus, I promise you, even under the coalition government, we can get the chief weapon to talk about this. Even under the coalition government, when we had a decent majority, even after 2015, it was almost impossible because the slips were given to MPs, who had a family illness, who had a serious sickness.

There was a huge, senior MPs. But as a working minister, very, very difficult to get out of London and completely unrealistic to design a system that imagines were going to be in Darlington. And I would say that's completely unrealistic of the whips, because I bet you weren't dealing with one or two majorities. They were mostly quite substantial majorities. So why weren't they? You know, like the chancellor, you know, when I was permitting the Treasury,

if the Chancellor said to me, I can't go to a G7 summit because there's a three-line whip, I'd have said, are you kidding me? You know, like, let's get this straight. You know, what's more important? You're dealing with something that's massively important internationally. And are you really going to lose by one? No. Can I take you back to the period of your career when I first came across you way, way, way back?

This is when you were a press secretary. First of all, to John Major as Chancellor, then as Prime Minister. What's your take on the role of the press and the media in our political debate? and how much easier or harder do they make it for government? I have always been a big fan of a free press. I mean, I think they have a massive role in a democratic society. I mean, day to day, you're extremely annoying. Let's be absolutely clear about that because, you know,

basically whatever the government's doing, it's going to be challenged by part of it. I remember with John Major, you know, they love that his name created, you know, major triumph, major disaster. And those are the headlines for the same policy but in different newspapers. You know, that's kind of the way it works. And so you learn to live with that.

But it's changed so radically since my day as press secretary. You know, we were not dealing with social media the way they are now. There's so much disintermediation, if you like. Young people are not reading newspapers. You know, they're picking up their news and their opinions. The biggest thing I worry about is confirmation bias. You know, people are signing up to follow people who views they believe in. And so all they hear all the time is things which coincide with what their prior prejudices are.

You know, I make a point of listening to people who I strongly disagree with. Just to find out what the arguments they're making and to see if it turns out I'm right or not. And if you're someone like me, I always go back to the evidence and want to look at evidence and find out from first principles, you know, Who's right on this? Is Rory right about Afghanistan and the money going to the police or not? We're coming to the end now, guys. My final question before I hand back to Rory, you've been very keen on the whole well-being agenda, mental health and well-being, almost at times I've felt being a rare voice in British public life. You're almost going towards Bhutan, you know, let's think about gross national happiness as much as GDP.

Where has that interest come from? Where do you think that debate is right now? and what more do you want to see done on it? So this is probably the most important question you put to me. I am a very big fan of governments having as their success measure improving people's lives. The words we could use is improving well-being. As an economist, I am very frustrated that a lot of economic journalists have forgotten that GDP was created as a measure of activity, not as a measure of success. So, for example, if certain activities increase, they will increase.

GDP. Let me give you a classic. If you all stop doing your volunteering for mental health, Alistair, and started selling crack cocaine instead, or getting into prostitution, both crack cocaine and prostitution will increase the amount of GDP. Volunteering, the fact that you're not doing that will not show up anywhere. So GDP measures activities. It doesn't care if they're good or they're bad. They can be digging coal up. If you want to increase the growth rate of GDP, we open all the coal mines. You know, know, dead easy, no problem, that will increase GDP. It's not a success measure. So success is do improve people's lives. That's, you know, one of the things we've been doing since 2010 now is

basically asking people all the time, how satisfied are you with your lives? Do you feel your lives are worthwhile, talking about their happiness and their anxiety? And we're finding that really important things are determinants of that that are really important for public policy. And you will know, Alistair, that one of the key things, we could do is tackle mental health issues. You know, we have so many people with diagnosed mental health problems who are getting no treatment at all. And if we were to do the things like that, we know that, for example, unemployment is not just bad because people don't have any income. It's bad because it helps their self-esteem, their feeling of being needed in society, their social

connections. You know, I would love for a government to say, we're going to try and improve people's lives, are going to try and improve well-being. And that's going to be the test for whether we've succeeded or not, and reduce inequalities in well-being. The way you do that is really getting rid of those with very low well-being. They're people who've got mental health issues, their people who've been in lucky in life, they're unemployed. There's all sorts of issues. And to be honest, you know, when you look at the upper ends of the income scale, a billionaire becoming richer by a few million, that will show up as an increase in GDP. It basically makes absolutely no difference to them whatsoever. Gus, final thing from me, the big challenge, I guess, all over Europe and the US,

represented by far right populism, a massive deterioration in trust and politicians, government. It's partly driven by a sense that we're just not performing, that the old idea that, you know, lovely technocrats and evidence-based policy is going to make us all better off. People look at the NHS, They look at the train systems, they look at the prisons, and they're just like, this is rubbish. And a government's about a takeover, which has said it's going to stick to 18 billion pounds worth of spending cuts and that it's not going to raise taxes significantly and it's going to reduce borrowing or not any cash. So is it actually possible to bring reforms to these organisations that's going to end up with a radically different performance for people? I mean, how do you really reform those bits of the civil service that are running the health service, etc, rather than what we tend to assume, which is this is just a question of more money because there's not going to be any more money.

Yeah. A, I'd say there probably does need to be a bit more money because the way you would reform these would be by investment. And that would be investment in individuals, investment in services. You take the NHS, you know, like we've all had this problem of getting letters, letters, you know, like in this day and age to come to an appointment. And it turns out the letter tells you to come yesterday. You know, like there's all sorts of things that are wrong.

with this. So you have to start off by admitting. You're exactly right. There's all sorts of things wrong with the way we deliver public services, but the opportunities are great and our expectations are even greater. But there will be tough choices, you know, with health. You know, I will be spending a lot more on prevention and a lot less on cure. And I'm afraid that would lead you to some really difficult decisions about what you do in those last few months of people's lives. We're spending huge amounts of money at the end of life for very little gain at times. And I do think these are really difficult topics to talk about politicians hate talking about the issue of actually we are all making decisions which do involve us putting implicitly a number on value of life. And you can't

have those discussions, I'm afraid. It's really hard to get a logical discussion about how we should do our money. But you're absolutely right. We need to improve efficiency. But remember, also the expectations just keep going up and up as to what you get from public services. You know, when you do your car tax and you can pick up a phone or go online and do this in 30 seconds, you will remember, or you're probably old enough, that you've been to the post office with your certificate of insurance, your registration book, you know, your check and all the rest of it. Things have got a lot better. A lot of public services. are a lot better. So let's not denigrate at all, but we have become used to life getting better and

better and better. And that's becoming harder, but it does mean we need to invest more. Great. Well, listen, Gus, thanks for all your time. It's been great to know you for so long. My final point is not a question, but you wrote a piece recently for something called the Haywood quarterly, one of the finest civil servants that we worked with both of us, but certainly during our period in government was Jeremy Hayward, sadly no longer with us, and his, wife Suzanne is keeping his name alive in all sorts of different ways, including the Haywood Quarterly, where you had a fabulous piece about transition, about which we've talked today, but we'll put it in the newsletter so that people can read that as well.

Yeah, Jeremy's a classic example. I've always thought your light is football analogy, about leadership, and this is all about leadership. You know, there are level four leaders, Alex Ferguson being one, who are brilliant while they're there, and when they go, it all falls apart. Level five leaders are the ones that when they leave, it gets better. I'd like to think that when I handed over to Jeremy, if only he'd taken Cabinet Secretary and the head of civil service together, it would have got even more better. But he was a kind of civil servant that I think across the whole parties. You saw his memorial service in Westminster Abbey where we had party leaders from all the parties

there acknowledging a great civil servant. Absolutely. Thank you, Gus, very much. Thanks to both of you. We'll see you soon. So, Rory, Lord Gus O'Donnell, I guess if there's a change of government this week, then his successor, Simon Case, will be quite an important player in the week's events. Do you think the podcasters of the future will be talking to Simon Case about how to do transitions? Well, yeah, I'm a bit worried about Simon Case.

But I do think the idea of a series of interviewing the cabinet secretaries would be really, really interesting because they are such big players. And we often talk about this. And we talk about the fact that, you know, you pretend the sexist. safe health. We had a great infue with West Streeting. It's going to come out, come in and sort it all out. But the truth is, over a million people, 365 million GP visits a year, all this kind of stuff, right? And really, it's the civil service, the core of this, and it's these people, Gus O'Donnell, Richard Wilson, that I think we should try to actually infuel the ones that are still alive. Yeah, well, there's a few of them. Andrew Turnbull, Robin Butler, who was the first with us. Yeah,

that could be a good idea. That could be a very good idea, as long as they sort of open up and quite frank and don't talk delphically too much. I think Gus still does a bit of Delphick. There's a little Delphick, yeah. Gus has got a great profile, though, because he's not a classic Mandarin in his manner, in his background and so forth. But he's still a very, very effective string puller. And he's still, I guarantee you that at the moment he'll be having regular cups of tea

with Sue Gray, he'll be keeping tabs on Simon K's. He'll know the permanent sex and what's going on. He's a very, very smart guy. But he's a very good guy as well. And I love the fact he was one of the first onto this whole mental health and well-being agenda and really understanding why it matters. I warmed to him first back in 1997. I was a diplomat in the embassy in Indonesia. There was this big Asian financial crisis.

And Gordon Brown and Ed Balls turned up with Gus O'Donnell, who I think was then at the IMF World Bank. And I was given the job for the afternoon and showing him around Jakarta. I remember going through a big department store with him. And I really liked him, really warmed him. What I would say, though, is that if I was going to grumble a little bit, you're absolutely right. On the surface, he's this very, very kind of modern contemporary with it guy, but just under the surface, a little bit of the old style to Humphrey hidden, not far below. And one of the things that, you know, I didn't want to get an argument with him about it, but he really doesn't like criticism of the civil service at all. So, you know, I told this story about Yemen, you know, these guys saying we do Skype calls and they're not showing it to me.

And he said I was probably an issue of national security. I was often asked not to share things in that. Intelligence. Yeah, yeah, yeah, yeah. Which implies that somehow, A, I'm a security risk. Yeah. B, there was a really good reason for this. In fact, actually, almost certainly the answer to the question is that the civil servant

briefing me panicked and lied and said they did Skype calls with Yemenis. And they didn't do Skype calls with Yemenis. And they were completely unable over three months to bring themselves to saying, I'm so sorry, Minister. Actually, we don't know really what's happening with the money and we don't really do Skype calls. You've got me banged your eyes. I was bullshitting. Yeah.

Which actually, if you'd said it sort of day two, I probably wouldn't like fine and laughed and we would have gone on with it. So I think it's probably necessary, isn't it, at somebody right at the top of the civil service, but I see it a lot, that they have a kind of pride in the same way as senior generals have a pride in the army. They really don't like criticism of it. And sometimes I think he's sort of convincing himself things he can't quite believe. So when I said, listen, often civil servants have a pretty skeptical idea of politicians,

He said, oh, absolutely not. No, no, no, we see you as absolutely extraordinary. We write the boring speeches. You're doing something. Exactly. Exactly. So the point is that if you took the transcripts and then read it in that voice, you'd see much more about him.

Okay, we should do that. We should get our AI to take the transcripts and put Gus O'Donnell's voice into Robin Butler's voice and see whether it comes over very, very different. That's not a bad idea. Anyway, I think it was a very interesting, very enlightening. I think for a lot of people who will be thinking, what on earth happens when a government changes hands? If a government does change hands on Thursday,

that's going to be a very, very useful interview for lots of people. And I hope encourages some listeners to think about joining the civil service. Because I almost think it's more important than becoming a politician, getting really talented civil servants. So I hope the Gus O'Donnell of the future heard that and thought maybe that could be me. Excellent. See you soon. See you soon.