MRS THATCHER'S KINDERGARTEN
The star pupils of the government school of policy-making are jockeying for position in
the future Conservative party, writes Michael Trend Now this has changed. Policy formulation has become an industry, and much of it a privatised one at that (thus cutting out much of the extensive control that formerly the civil service — and especially the Treasury had over this area, particularly since the No. 10 Policy Unit superseded the Central Policy Review Staff). And it is surely one of the greater ironies of our time that not Only have the Conservatives stolen the march on their political opponents in terms of policy development but they have also captured the qualifying adjective 'radical' to hallow their political objectives. 'Our radical policies' would have scared most Conservatives half to death even in 1979, but now it is their battle cry. Policy: the word itself has had an in- teresting history. If you look it up in the largest dictionary of quotations you find this simple message — 'Policy: see Cun- ning'. Under Cunning it adds — 'see also Deceit and Hypocrisy'. What it shows is the older meaning of the word — a policy: a device, expedient, stratagem or trick. Now, however, politicians have chosen to make the word respectable. Policy is thought to be a good thing and parties must have lots of it.
Nothing has so shaped the Conserva- tives' need to work out fresh policy objec- tives as electoral defeat. After the disaster of 1945, R. A. Butler at Conservative Central Office's research department and other 'bright young men' — Maudling, Powell and Heath among them — began to frame a clear and distinct general policy outline for the next election. Later, Harold Wilson's victories of 1964 and 1966 found Edward Heath playing a central chief-of- staff role, first for Sir Alec Douglas-Home and then for himself as leader of the party, in setting up a much more detailed review through a network of policy groups run and serviced by the Central Office research department. But although these exercises began to suggest a new pattern of policy formulation, they cannot begin to compare with that carried out in the wilderness years of 1974-79 when an utterly different way of Conservative policy-making came into being. The policy groups continued and they still do at election time — but the real thrust of policy formulation came from outside the old system. Mrs Thatcher demanded that things should be thought out from first principles and the machinery and the will to do this simply did not exist in the old order.
A new order came into being: And its inspiration was the Insti- tute for Economic Affairs, founded in 1957 by Antony Fisher of Buxted Chickens. Un- attached to any political party, for many years the IEA worked in adversity, but with the arrival of Mrs Thatcher at the top of the Con- servative Party things began to change. 'It is the hen who lays the eggs,' said Mrs Thatcher — in what may have been a reference to where the money for the IEA had first come from — at their recent 30th anniversary celebra- tions. Along with Sir Keith Joseph and Sir Geoffrey Howe, Mrs Thatcher learnt a great deal from the IEA in the dark days of the Wilson/Callaghan government. 'We three', the Prime Minister has said, 'set out from first principles to create policies which would do justice to the British character. . . . What we have achieved since could never have been done without the leadership of the Institute of Economic Affairs.'
Under the inspiring leadership of Ralph Harris (ennobled in 1979) and Arthur Seldon, the IEA became a centre for new economic thinking, challenging the post- war Keynesian-collectivist consensus: the writings of Hayek, in particular, made their way to a much wider and potentially influential audience through the IEA. The IEA's pamphlets and publications were eagerly seized on in some universities: by a few teachers — such as Alan Walters, Brian Griffiths and Patrick Minford and, perhaps, in some ways more impor- tantly, by undergraduates of the 1970s seeking to question the received wisdom of their elders. Some journalists — like Sam Brittan and William Rees-Mogg — began to pay attention and, following the 1974 electoral defeats, Conservative politicians beat a path to its door. (In its earliest phase Enoch Powell was the only major Con- servative to show a real interest in its work; but Sir Keith Joseph also saw its potential. Lord Harris told me that Sir Keith had first been to see him in 1964 following Wilson's election victory; but this had been a false start. He was back after 1974, and this time he really had changed his mind.) In 1974 Sir Keith and Mrs Thatcher established their Centre for Policy Studies: this was to be their own research depart- ment and the engine of their specific political thinking. Despite ups and downs, it has had a tremendous effect on Con- servative policy-making. Many of the lead- ing figures behind the thrust of Mrs Thatcher's Government have been closely associated with it — Hugh Thomas, now a peer; Alfred Sherman, John Hoskyns and Alan Walters, all now knighted.
These two bodies, and there are many lesser ones such as the Adam Smith Insti- tute and the Social Affairs Unit, are an almost completely new feature of the British political scene: and their influence has been extensive and profound. Many foreign political powers and parties have come to London to see for themselves how they work. Oliver Knox of the CPS told me that even the Chinese have been over to examine the theories of the market eco- nomy in their quest for what they told him was 'the people's road to socialism'.
But how are these policy bodies faring in the third term in this surprising burst of new legislation? And how much effect are their views having at the moment? In the case of the IEA its past successes have taken their toll: much of what they prop- ounded for many years has come to be the new conventional wisdom and that com- bined with a slow transfer of leadership at the top has meant that the first chapter of their own history has effectively been closed: the IEA is now in a hiatus. One commentator told me — affectionately, rather than in a spirit of criticism — that he believed Lord Harris had given more farewell performances than Frank Sinatra.
It is, rather, the CPS that seems to have grasped the opportunities of the third term with greater confidence and potential for success. A new vigour in the CPS has been especially obvious in recent months, evi- denced by a stream of pamphlets about the nature and detail of reform for the educa- tion system. The centre is also working on local government reform and the NHS, and did much on the details of electricity privatisation, one of the first great tests of the third term. It is close to the policy objectives of the Prime Minister and her 10 Downing Street Policy Unit, now under the direction of Brian Griffiths. No more does Professor Griffiths need wide-ranging proposals for major shifts in policy. He wants — and gets — detailed descriptions of how to get things done in the areas upon which the Prime Minister has now trained her guns.
How is the CPS achieving this? In answering this question we find the heart of the new system in its full development; we find after all that it is not too dissimilar to that which beat in the Conservative Party in the past. It is a matter of personali- ties and what access they have to the corridors of power. The central figures no . longer sit in club chairs and give their opinions for free, but behind desks doing it for a living. They are, however, essentially fulfilling a role quite familiar to Tories they are the new 'insiders'. The policy institutions themselves have become less important now than the individuals — with their experience and their connections who work for them.
David Willetts, now the director of studies at the CPS, is a particularly interesting example of the new breed committed but eminently practical. Unlike many others who have worked their way into the 'system' over the years, Willetts has been slowly working his way out of it. He began in the Treasury as a civil servant and went into the No. 10 Policy Unit. From there he went to the CPS; he is also on the board of the Conservative research depart- ment: His contacts throughout the world of Whitehall are extensive and — unlike many MPs — he knows how to get things done. From speaking to him you can begin to get an idea of the landscape and the figures of his 'Whitehall village' of policy formulation. Here, he indicates with a wave of his hand, is the Central Office research department; just down the road the IEA, the CPS and the ASI; then there are the ministerial special advisers essentially party figures — and the useful officials known to be in tune with current thinking in the departments of state. In the middle is the Policy Unit which has direct access to the boxes which the Prime Minister reads every night and at the weekend.
Individuals begin to make their appear- ances: Oliver Letwin, ex-Policy Unit, who fought a nursery seat in the last general election, now selling privatisation for a merchant bank; Hartley Booth, a Con- servative candidate before joining the Poli- cy Unit, now running British Urban De- velopment, a huge financial initiative for the inner cities; Sheila Lawlor at the CPS, heading their work on education, ex- Central Office research department (as are about half of the current ministerial special advisers); Robin Harris, now running the research department, ex-ministerial special adviser; John O'Sullivan, ex-Times, now Policy Unit; Christopher Monckton, ex- Policy Unit, now London Standard.
This, then, is the network of the new world of policy research and formulation in the hands of a new generation (Willetts himself is 32). Their heroes are the pre- vious generation: Lord Joseph and Sir Alfred Sherman have already entered the mythology — in the latter case demonolo- gy might be a better word, though all of those I spoke to regard his earlier role in energising the former as central. The movement is already beginning to compile its own history: many of them speak with great devotion of, say, Lord Joseph's `Great Preston Speech' in 1974; and of his touring the country having eggs thrown at him at the universities (Imagine anyone bothering to throw eggs at Bryan Gould at a Labour Listens meeting and you can see the real difference,' Willetts said); or of the reading list he presented to officials on arrival at the DTI. And in the centre, of course, the sun around which these planets have resolved is the Prime Minister.
But how much of this will survive her? Many civil servants will hope not much. One experienced old Whitehall hand told me that he thought that once Mrs Thatcher went, 'the whole thing will collapse; but the Treasury will go on for ever'. The future of the CPS, in particular, after Mrs Thatcher must be in some sort of doubt. Some feel that she might fall back on it once she is out of power as a watching- station to make sure that the purity of her revolution remains unsullied in the hands of her successor — part of the great movement of 'entrenchment' that many senior Conservatives talk of today. Others feel that its fate is more likely to be one of steady atrophy; it is hard to imagine what use most of the obvious contenders for the leadership would have for the CPS.
And then where will the bright young men be? Many of them — Willetts in- cluded — are hoping that by then they themselves will have been called to Parlia- ment. In this respect the career to date of John Redwood is the model. From impor- tant early work at the CPS he headed the Policy Unit and then, via a merchant bank, went to a blue chip home counties Con- servative seat. He is frequently spoken of at Westminster as a future prime minister — more frequently than the others 'fre- quently spoken of — although he is said to suffer from his young colleagues' acute jealousy. It is rather like Milner's Kinder- garten all over again: young men who have been at the centre of power and responsi- bility at an early age, and for a continuous number of years now, setting out to get it for themselves in their later life; and this her Kindergarten eventually coming to power — would be the real entrenchment of Thatcherism.
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