But for all the drama, late nights and forests of wasted paper that went into the Finance Bill, I did love the whole thing, and there was honestly nothing like getting to the end of a long day and having Dawn or Ten-Foot Timms come over and give a genuinely profuse thanks for getting them through it, not least because I had the most enormous crush on Dawn, and my girlfriend Penny thought Ten-Foot looked like Christopher Lambert and liked hearing about his handshake.
When my parliamentary experiences switched to the big league, being Gordon’s eyes, ears and mouthpiece in the press gallery sitting above the House of Commons chamber, there were moments both of mind-fizzing joy and of stomach-splitting anguish, but – compared to the Finance Bill – there was also a sense of detachment and helplessness. He was down there on the pitch; I was just up in the stands silently willing him on, and every time he appeared, it felt like kick-off in the North London or Old Firm Derby, with the only sensation – as ever with me – the abject terror of defeat.
I never loved the experience of working in Parliament the same way I did the Treasury, No. 10 or Customs. Everything about it is hierarchical, from who gets a seat as an MP in the first place to who gets a seat in the chamber on a big occasion; from the distribution of offices to the silencing of civil servants who dare to speak above a whisper when waiting in the corridors to go and do their jobs.
Even my favourite area of the estate – the sprawling warren of little offices in the shadow of Big Ben which houses the Parliamentary Lobby – is itself a manifestation of that hierarchy: a way – in my time – of saying to The Sun’s Trevor Kavanagh that he may call himself ‘the most powerful man in politics’ in the most widely read daily newspaper, and he may be given the privilege of a pass to come and go from the House as he pleases, but he’d still have to do his work up in the attic.
And that was Trevor, let alone his country cousins from the regional papers or newswire services sat cheek-by-jowl in tiny offices or impromptu open-plan areas, and not even mentioning the poor sods at the windows who didn’t even qualify for a Lobby pass.
Yet, for all its obvious flaws – including the sense of assumed entitlement that drove the abuse of MPs’ expenses – I wouldn’t swap our Parliament for any other in the world: not the wedding speech atmosphere of the Scottish or Australian chambers, or the bureaucratic processes and stalemate of the US Congressional system.
And if I ever lost faith in the British system, I’d just go back into a Finance Bill committee debate, and see the ministers being put under real pressure and scrutiny; the stressed-out civil servants fighting to explain the legislation they’ve introduced; and today’s backbench equivalents of John Bercow sitting enthralled, engaged and amused by every second of the thing.
As Sam Cooke said, that’s where it’s at.
11
THE ART OF THE BUDGET
Working on the Budget scorecard is the Holy Grail for a Treasury official. When Gibbsy asked me to take it over in 2002, I gushed my thank-yous like Sally Field at the Oscars.
The scorecard was only an Excel spreadsheet, but no ordinary spreadsheet. It contained every single potential Budget measure: its description and the details of what it would cost or raise over the next five years, before and after inflation, all updated on a weekly basis for a Friday meeting chaired by the Eds.
Well, not every potential Budget measure. There were some ideas – like the 20 per cent VAT or national insurance options in 2002 – that were so explosive or newsworthy that they would never be put on the scorecard for fear of leaking: the Eds would just keep the figures in their heads, and add or subtract them when they saw the official bottom line.
And there were other ideas – like small brewers’ relief or VAT refunds for church repairs – that never made it onto a scorecard until some Treasury official like me got excited about them. Every year, hundreds of proposals would be submitted by members of the public, charities and businesses, and other government departments, and would usually be dismissed by arrogant or over-worked junior civil servants before they ever got near ministers or the Eds.
By contrast, if there were ideas from officials in the Inland Revenue or Customs, from Treasury civil servants, from special advisers and ministers, or from Gordon himself (and whoever he’d been speaking to lately), they would automatically be put on the scorecard for consideration, and worked up as formal proposals.
Each of them was called a ‘starter’ – as opposed, in racing, to a non-runner – and, like horses, each was given a number, corresponding to the chapter of the Budget Red Book in which they would appear if successful. If Chapter 5 of the Red Book was about ‘Fairness to Working Families’, each relevant idea would be numbered Starter 501, 502 and so on, and where there were lots of different options for a particular proposal – such as increases in child tax credit – they would be listed as 503a, 503b and so on, each with their different revenue costs.
Each starter was then given a snappy five- to six-word description to go in the Excel spreadsheet – ‘Replace Betting Duty with Profits Tax’, for example, a useful discipline to check whether it could be explained simply. Then one official, one Ed and one minister were assigned to lead on it.
All the starters – perhaps a maximum of 200 – were then placed on different sheets within the scorecard. Continuing the racing theme, Sheet 1 would contain the clear favourites, including the lead options on changes in duty rates and tax thresholds. Sheet 2 would contain strongly fancied contenders, Sheet 3 some long-odds possibilities, Sheet 4 rank outsiders and Sheet 5 those poor nags which had fallen at the first, or been got at by the handicappers.
Over the course of a few months, successful proposals would gradually be promoted to Sheet 1, and at the bottom of that sheet – constantly evolving – would be the Budget arithmetic, which said how much the entire package cost or raised. While this would change over time, the Eds and Gordon would go into each Budget with a clear sense of how much money they needed to raise in any one of the next three years, or alternatively how much they could afford to spend. Many starters which had sat on Sheet 1 from the very first scorecard meeting would find themselves jettisoned at the last minute in favour of some arriviste from Sheet 3, just in order to make the overall package tally up.
The reason that no starter ever went to the glue factory, but was kept on Sheet 5 even with both legs broken, was that you never knew if you might need one measure at the last minute to raise a certain amount of money or target support at some particular segment of society, if the final Budget arithmetic or the distributional analysis required it.
When the time came, Sheet 1 would literally be copied and pasted as a table into Chapter A of the Red Book, entitled ‘The Budget Decisions’, which is what politicians and journalists generally turn to first to see what the Chancellor has actually announced after he’s announced it.
Every Friday, Ed Balls and Ed Miliband would go through the scorecard, sheet by sheet, line by line, with a core group consisting of me, Gibbsy, James Bowler (then an adviser to the Eds – later Gordon’s Principal Private Secretary in No. 10) and Michael Ellam (my predecessor as the Treasury’s Head of Communications, and later Gordon’s official spokesman in No. 10).
Over and over again, that group would examine the same starters and the two Eds would ask a dozen questions about each one: Why are we doing this again? Who benefits? Who loses? Why does it cost so much? Does it affect pensioners? What does Dawn think?
In general, Gibbsy and I were expected to explain every measure and answer every question, but at times – on a particularly sensitive issue – the lead officials for individual starters would be summoned for a grilling, or we’d take the meeting to Dawn or Ten-Foot’s office to go through all their starters. Not Paul Boateng – that would have just been one long evening of ‘I TOO agree with this starter’ or ‘I TOO share your concerns’.
In a separate weekly meeting, the two Eds and the ministers would then sit down with Gordon and repeat the process, officials would occa
sionally be summoned for detailed discussion, additional analysis would be commissioned and digested, and from those intense sessions, emails would eventually emerge from his Principal Private Secretary, Mark Bowman, in the week or so before the Budget saying: ‘The Chancellor has taken the following decisions…’
Treasury officials would wait every night for the Bowman email like passengers at the Gatwick baggage carousel, hoping that theirs would be the next to come through unscathed, and dreading that it had somehow been diverted to Sheet 5 by mistake. And I’d wait too, slowly finalising Sheet 1, updating the arithmetic, getting ever closer to the bottom line that had been planned all along.
It was a meticulous process – and aside from all the benefits in terms of getting the measures and the numbers right – it meant that on each of the twenty occasions Gordon Brown stood up to announce his Budgets and Pre-Budget Reports (PBRs), he did so as confident as he could be that every decision had been comprehensively analysed and thought through, if not by him, by his most trusted aides.
Sometimes that confidence was misplaced, usually when it came to the uprating or freezing of rates: what the 75p pension rise in the 1999 PBR and the ‘£50 to fill your Mondeo’ outcome of the 2000 fuel duty increase had in common was a failure to look past the simple decision about whether to go ahead with an inflation rise, and what it would actually mean in the pension packet or at the pumps.
I found out to my cost how those decisions could escape attention when, not the night before, not even on the morning of the speech, but less than an hour before the 2002 PBR, Gibbsy came into my office with an intensity only usually reserved for a late tip on the 3:30 at Chepstow.
‘Erm, you need to look at this.’ He showed me the Budget Measures Table in the Red Book, and then the booklet of press notices which explained all the measures. Thousands of each were about to be trucked out and deposited at Parliament and at media outlets across London.
The Red Book said we were uprating one of the national insurance thresholds; the press notices said we were freezing it. There wasn’t a huge revenue difference between the two, but nevertheless, I’d got the Red Book wrong. Dawn’s decision, confirmed in the Bowman email, had been a freeze.
Not wanting to bother Gordon while he was getting ready for the speech, we rushed to see Ed Balls and told him we couldn’t re-print the Red Book so we would have to stick an addendum in it. He narrowed his eyes. ‘An addendum in the Red Book? We’ve never done that. You can’t do that. Look, the scorecard is sacrosanct. Whatever the scorecard says is true. You’ll have to change the press notices. I’ll tell Dawn that’s what we’ve had to do.’
So it was that half the Treasury – many of them about to troop off to the pub to watch the speech – were told instead to work on printing and stapling together fresh copies of the press notices, and the other half were told to report to the large circular car park to stack and load the new booklets into the trucks and get the old ones out. I was part of the production line, of course, but felt about as popular as the Pudding Lane baker during the Great Fire of London.
But for all the very occasional mishaps, and the one catastrophic misjudgement Gordon made over income tax and inheritance tax in his last Budget, the scorecard process allowed him to dodge hundreds of bullets over those twenty major speeches – starters which officials and sometimes even ministers had recommended rightly failed to make the final cut because of the intense scrutiny they were put under in the preceding weeks.
Whether it was a deliberate move against Gordon’s way of doing things, or simply a loss of calibre among those doing the scrutiny, there has been a notable increase in the number of basic mistakes made in post-2007 Budgets, under both Alistair Darling and George Osborne.
What most clearly marks this out is the adoption by both Chancellors of long-standing proposals which barely ever made it onto the scorecard under Gordon and the Eds, or – if they did – found themselves speedily exiled to Sheet 5, never to return. Officials who had seen those starters rejected in the past, usually by tax administration teams in what is now HM Revenue and Customs, clearly thought they would give them another whirl with a new Chancellor in charge.
In Alistair’s very first Budget, he adopted a proposal which Gordon had rejected for the past five Budgets in a row – not least at my prompting – to raise the road tax rate for older, high-emission cars to the much higher rate charged on their brand new equivalents.
The disparity between the two was something that was always going to happen after we decided to reform the road tax system so that more polluting cars would pay more, but chose not to do so retrospectively. Gordon knew that – whatever the administrative or environmental arguments in years to come – he was never going to punish millions of families for a choice of car they’d made under the old flat-rate system.
Inevitably, Alistair had to reverse his announcement in the face of a media and public outcry, but what was telling was that none of the people who worked closely with him even seemed to realise that it might be a difficult or controversial measure. Either they weren’t doing their jobs or the scorecard process was no longer functioning.
The same was true of George Osborne, who – after two very simple and straightforward Budgets, only concentrating on big-ticket measures, including some so unpopular that he didn’t need a scorecard process to ring alarm bells – came into his 2012 Budget with an obvious emphasis on scraping the revenue barrel to try and keep his deficit reduction plan on track. That is a very dangerous message to give to officials. There are many unsavoury items at the bottom of that barrel that they have been trying to entice Chancellors with for years.
As I listened to Osborne say the words in his speech: ‘We will address some of the loopholes and anomalies in our VAT system’, my ears pricked up. Worst of the lot – and notorious as it turned out – was his vow to tackle the loophole on hot takeaway food, aka the ‘pasty tax’. I’d lost count of the number of times the scorecard process had blocked that proposal, so often that Dawn had stopped letting the VAT team in Customs even put a submission in.
And of course, those relatively small errors were indicative of a lack of scrutiny – a lack of care even – that then showed itself in much bigger measures such as the ‘granny tax’, the announcement of which more than anything else determined in the mind of the media that it was an ‘Omnishambles’ Budget, and brought Osborne next-day headlines the like of which Gordon never had to endure.
And similar to Alistair with the road tax hike, one of the great indicators that the process had totally broken down was the fact that the officials and advisers to George Osborne who were on the spot taking questions immediately afterwards appeared absolutely unaware that any of these measures might be a problem, let alone how to respond to journalists’ questions about them.
Contrast that with Gordon’s 2001 Budget, when in response Leader of the Opposition William Hague stood up with a flourish – clutching a single A4 page – and revealed, like an am-dram Sherlock Holmes, that what Gordon hadn’t mentioned in his speech was that Customs were now about to start putting 17.5 per cent VAT on the sale of spectacles.
Sitting in my office, I spat out whatever I was drinking at the time, and simultaneously phoned, emailed and texted every person in Customs who could conceivably know what this was about, while seventeen different Treasury people – including half of Gordon’s private office – took turns running into mine to say: ‘Are you listening to Hague? What’s this all about?’
It took me five minutes to get to the bottom of the story, find out it was rubbish and get a message through to the House of Commons for the Treasury officials to pass to Gordon for his rebuttal and to Ed Balls for his post-Budget briefing to the Lobby. I thought I’d done a great job, but I got the message back that – when Ed was told – he’d simply said: ‘Yeah, don’t worry, I know.’
When I saw Ed at the Budget party that night, I asked him: ‘How did you know the spectacles thing today was OK?’ Recognising my interest in
VAT from my work on the secret project, he just said: ‘Well, you understand how this works: if it’s not in the scorecard, it’s not in the Budget; and if it’s not in the Budget, then it’s bollocks.’
When I came to the end of the Budget and Finance Bill in 2003, having done indirect tax to death and managed the scorecard, there was nothing more to do, and I reckoned I’d reached the realistic pinnacle for a Customs secondee to the Treasury.
I was offered a promotion to a Grade 5 senior civil service job back at New Kings Beam House to work alongside a highly rated young economist, Sue Roper. Even Customs knew I needed some help with the economics. Sue and I were invited to put together the pick of all the best Fast Streamers, writers and policy analysts in Customs and build a VAT policy team that wouldn’t require my successor in the Treasury to re-write all our submissions.
I liked the challenge, the money and the new team, and I knew at the age of twenty-eight, it put me one promotion away from the glass corner office overlooking the river and the job I’d always dreamed about. So I left the Treasury for what I thought would be the last time. They gave me a big baseball bat as my leaving present, and told me to go and bash some heads.
12
RISING TO THE TOP
Over the next few months, when I looked wistfully out of the window at Customs HQ over the river towards Westminster, one of the fondest memories that came to mind was attending the UK Corporate Games in Aberdeen in 2000 – before the height of the fuel crisis – as a ringer for the Treasury’s official mixed netball team.
The team gathered at King’s Cross station for the long journey north, each of the men – and some of the women – having had the same bright idea to bring a large case of lager or Smirnoff Ice for the journey. By Doncaster, we were hammered, and by the time we got to Pittodrie stadium for the opening ceremony, we were dangerous.
Power Trip Page 7