Leaked letter about government’s strategy

 

There is another leak, this time from Dr Roy Spendlove to Dame Lucy Doolittle

 

Dear Lucy,

I have returned to work after the day of action about pensions. I hope you realise just how strongly many of us feel about the pensions issue. I am pleased to report strong support for our principled stance, with all my main reports joining the industrial action.

You asked me to review progress with the government’s main aims one year on. Pressure of work has made this difficult, but I am now in a position to send you a preliminary outline of our findings.

The government’s stated main aim is to cut the deficit. The civil service has consistently advised that this has to be done mainly by higher taxes rather than by inappropriate spending cuts. The government has raised VAT, confirmed the increases in Income Tax and National Insurance commenced by the previous government, and increased taxes on banks and oil companies. In their first year they were persuaded to allow increases of more than 5% in cash spending. We warned them that this was still tight, and there have been some signs of strain within the public sector as a result. This year they want to limit increases to 3.8%. The pay freeze and pensions attack are both unfortunate and will result in a further erosion of morale and the loss of some good people.

From here I am concerned about the government’s deficit cutting strategy. I think it unrealistic. I do not see  how the government can reduce the cash spending increases to the very low levels ;planned for the last three years of the strategy. I think we all have a duty to spell out the consequences, as this will represent real cuts. The government also needs to allow for the increased spending on EU programmes and on the necessary solidarity expenditures for Eurozone member states.  Our preliminary advice is the government should revisit the Red Book targets in good time for the  Autumn Statement, and should increase the spending lines. It should explain to markets that it needs to take this action to reflect the slower rate of growth being forecast worldwide, and to help avoid a worsening of the position in our main export markets in Europe. Support for EU governments is also support for European banks. If Ministers do not come to the aid of weak banks the recovery will suffer.

The government has also made much of its intention to cut immigration to tens of thousands a year from the much higher levels of recent years. In its first year immigration remained at higher levels. Our advice again is to come up  with a more realistic statement of the position. Much of the inward migration has come from within the EU. The UK is committed to common  borders with our European partners. The government in its more thoughtful statements exempts EU migration from its aspirations. It is important that the language on the overall objectives is moderated to allow for this reality. We also need to stress to Ministers the importance of the Higher and Further Education sector to the UK and therefore the need to allow foreign students to enter. International human rights legislation puts on the UK strong obligations to let in asylum seekers. We need to ensure Ministers live up to the high standards the Uk sets for itself in these areas.

In its early days the government briefed that it intended to be  radical government undertaking wide ranging reforms of public services. In the first year we have seen them largely abandon their forest sale plans, have a pause to reconsider the wide ranging health reforms, and take a more measured approach to the speed of welfare reform. We have successfully changed Ministers minds on large computer schemes, persuading them of the wisdom of such approaches to both tax and welfare reform. We have further work to do to explain to them that if they wish to push through radical reform from the centre there are limits to what they can do with their so called localist agenda. I think they may discover that some of  the welfare changes they have pencilled in for the second half of this Parliament may not look so appealing when they see the full detail nearer the time. It is also doubtful how much of the very extensive computer systems can be delivered as quickly as Ministers would like. The government is pressing ahead with  Academies and a limited number of free schools. There were troubles with their over hasty cancellation of the Schools for the future programme, and I fear there could be more legal and administrative challenges over free schools.  Some of our colleagues in DFE are concerned about the pace of the changes.

Ministers are now saying that they cannot deliver the welfare to work programme if migration continues at current levels. I suggest we put to them options for tackling this, as it is difficult to forsee a sudden collapse in migration. I fear all options will  cost more money, but Ministers will have to learn that you cannot undertake these big tasks on the cheap.

Please let me know if you would like further work on these outline conclusions. Given all that we are doing on HS2, renewable energy and the EU response to Greece, I will need additional staffing if you need a detailed paper on these large and complex themes.

 

Yours ever

Roy

This entry was posted in Blog. Bookmark the permalink. Both comments and trackbacks are currently closed.

29 Comments

  1. Elliot Kane
    Posted July 3, 2011 at 6:07 am | Permalink

    Extremely well observed, Mr Redwood.

    I didn’t know whether to laugh or cry, reading this, but I have no doubt it is an accurate reflection of reality.

    • Tim
      Posted July 3, 2011 at 6:50 pm | Permalink

      When Labour was in office it deliberately recruited and/or placed its supporters in key roles within our public services/ quangos and amended recruitment and selection procedures to ensure people who supported its ideology prevailed. The Tories need to wise up and realise that they will be obstructed by the Home Office/ public services until they have put right this abuse. Labour wanted to be in power for ever, hence their drive on mass migration and increase in public service recruitment/non jobs. Mr Redwood take a visit to the Home Office and talk to senior staff and you will see what I mean.

  2. Quietzapple
    Posted July 3, 2011 at 6:16 am | Permalink

    Time for Labour to emulate Damian Green and post narks in HMG departments to ensure the leaks come the way of the opposition rather than that of the largely foreign led UK media. We must keep the name secret from Sally Bercow …

    Credibility, dear boy …

  3. lifelogic
    Posted July 3, 2011 at 7:48 am | Permalink

    These Roy Spendlove letters are just too depressing and depressingly close to the truth I suspect. The only protection against this exploitation of the people is the government and parliament. Alas they both seem to have given up and are just going with the flow and collecting their salaries and expenses, keeping their party nominations and accumulating their fat pensions. The EU will also ensure parliament remains subdued anyway.

    Is any escape possible?

    • lifelogic
      Posted July 3, 2011 at 10:51 am | Permalink

      I see that a committee of MPs has found that the child Maintenance and Enforcement Commission costs 50p for every £1 it collected and had failed to collect £3.8bn in payments due.

      So a person works 8 hours earns say £80 looses perhaps £30 in tax (less costs of collection), then another £25 goes in the costs of extracting the £50 for the child. Of the initial £80 earned about £55 is wasted by the state. Is it any wonder if the person decides not to bother working at all or just decided to escape and go abroad or go black market?

      What percentage of state sector jobs are pointless or positively damaging I wonder. Perhaps 50% I would estimate – and the other 50% could be done about twice as efficiently if they actually wanted to.

    • lifelogic
      Posted July 3, 2011 at 11:04 am | Permalink

      Still a little good news: Boris has come out against the mad HS2 train scheme. Mind you one of his other policies is to teach Latin in some London schools – where many students cannot read, write or even speak English. So clearly he is rather mad (but entertaining) and he is clearly far better than Livingstone on any measure.

    • A David H
      Posted July 3, 2011 at 1:07 pm | Permalink

      Is any escape possible? China has a familiar feel to it and is very nice in many ways, although some may feel that the lack of social welfare benefits and relatively low cctv surveilance militates against permanent relocation there.

  4. Graham Swift
    Posted July 3, 2011 at 8:12 am | Permalink

    Sir Humphrey Appleby rules OK. Obstruct government policy wherever possible.

  5. alan jutson
    Posted July 3, 2011 at 8:37 am | Permalink

    Can I suggest we introduce “the pocket money plan”.

    It really is very simple, and is an extension of what many of us were taught as children by our parents.

    To encourage us in the ethic of work, and to prepare us for the big world outside in later years where we had to manage our own finances, our parents used to find jobs for us to do around the house, for which we received payment.
    Washing the dishes, drying up, cutting the grass, cleaning the windows, washing the cars, etc.

    This very simple plan relieved the parents of some of the more mudane duties, and spread the work load to the whole of the family members, it also enouraged the more junior members of the family, that work does pay, it could even be tax free, they could then purchase the little treats they required, themselves at no cost to the parents.

    Why not simply take the very personal family “pocket money plan” and make it national.

    The government could act the role of parents, could supervise the allocation of jobs to be done, could check on the quality of work completed, no good, no pay, do it again type of thing.
    The General public would take on the role as the children, do as they are told or else, and get tax free payment for all work allocated and completed.

    No one would need to work for anyone else but the government (keep it all in house) for agreed rates, tax free of course.

    The rewards would not have to be very high, as no competiion from outside would be needed, housing, transport and food would be provided, as would heat, light and power.

    The solution to all of our problems is therefore cured at a stroke, pay everyone pocket money, at a national fixed rate per job, so they can then buy the little treats or extras themselves and all of teir earnings are Tax free.

    This pocket money plan is so obvious, I do not now how we did not think of it before. After all who would fail to grasp the incentive that all earnings are tax free.

    Ps
    If you are worried about the tax free element, can I perhaps suggest a limit on earnings of £10.00 a week, which is significantly better take home pay than they will get under your present plans.

    • uanime5
      Posted July 5, 2011 at 7:18 pm | Permalink

      But will the Government have enough dishes that need to be washed for everyone?

  6. matthu
    Posted July 3, 2011 at 8:48 am | Permalink
  7. Posted July 3, 2011 at 9:07 am | Permalink

    I once told Cyril Ramahosa[South African ANC bigwig] what would they do now that they were in government if they lost the support of civil society,ie people putting in their tax returns
    timeously,by that I meant every person waiting until the last day of the deadline and then
    delivering it in,given that most returns were made in the first week from the period starting and the period lasted from 28th feb to 17th july.The look of horror that a perfectly LEGAL act
    could throw a giant spanner in the works was really educational,I told him I was going to spread the word amongst all my associates and ask them to do so in turn,because the ANC was breaking all it’s promises just like this conservative party is NOW.So I suggest everyone that cares about a PROPER conservative agenda LEGALLY stymies all work
    AND lets it be known that is what they are doing ,given the tone and subject of this leaked missive.All work of govt both central and local requires and needs our co-operation to function properly so legally withdrawing it is NO DIFFERENT to striking,our public sector workers given last thursday should understand NAY sympathise.

  8. Caterpillar
    Posted July 3, 2011 at 10:34 am | Permalink

    Though an enjoyable and amusing read, it is of course a pity that this checklist of failures/u-turns has to be delivered in this format and does not give much confidence in the workings of the political and civil service intitutions. [Though I will maintain most of my wrath for the Chancellor who has failed to hold the MPC/BoE to account for its abysmal/intentional performace with respect to inflation … which impacts growth].

    Specifically on the immigration issue, I read the numbers in the 26th May brief report ( http://www.statistics.gov.uk/pdfdir/mignr0511.pdf ) and see that in specific groupings there is a contribution of both emigration dropping and immigration increasing. Nevertheless in aggregate much of the net increase (by this report date) was due to a fall in emigration. I also note that immigration for formal study has continued to rise. I would like to know what are the causes and the impacts of the above. Obvoiously one hypothesis is the GBP:

    (1) H1a: People cannot afford to emmigrate due to destroyed Sterling savings
    (2) H1b: Destroyed Sterling, euphemistically, a change in terms of trade, has allowed formal education providers to appear more competitive than they are.

    With respect to H1b, I actually think it is fine for the UK to develop a competitive educational sector, and there is no reason to attach a top-university snobbery to this. (There are also positive spillovers – e.g. members of strongly opposing positions in their home country, sharing the same class in the UK). I do have some concerns though. I worry that the pricing advantage from weak GBP will allow an artificial expansion and those suppliers that are marginal in the industry and with a stronger GBP (if AP and MK ever realise their errors) these may rapidly close down (whether service or manufacturing the UK new growth should be competence based not destroyed GBP based). I worry that the UK will lose out in the professional market, when a qualifying year is required and post-study Tier 1 terms are changed. Nevertheless I would be interested in the geographic direction that post-study workers go – how many head to London (afterall many unis are alos heading there) and could there be regional restrictions rather than blanket changes e.g. could post study work visas be linked into enterprise zones?

    Overall the net migration issue needs to be unpacked in terms of cause, impacts and opportunities.

    • forthurst
      Posted July 3, 2011 at 4:26 pm | Permalink

      “I worry that the UK will lose out in the professional market, when a qualifying year is required and post-study Tier 1 terms are changed.”

      I worry that an entirely fictitious international market in professionals is being postulated as yet another wedge to flood the country the people of this country did not ask for and do not want.

      • Caterpillar
        Posted July 3, 2011 at 10:55 pm | Permalink

        All I am saying here is that for the HE sector to sell some products (particularly if the GBP ever restrengthens) the whole product needs to be available (which requires postgraduation experience). If ‘we’ don’t want the HE sector to be able to sell these products then fair enough (though they may then also not be able to produce tehn for domestic students).

        In general, in terms of students coming to spend money in the UK, I don’t think there is a large ethical difference to tourists coming to spend money in the UK.

        • forthurst
          Posted July 4, 2011 at 11:57 am | Permalink

          Are you saying that students who come to the UK to study for a vocational degree at a British university would require to purport to be Tier 1 aspirant migrants in order to remain in the UK long enough to qualify to practice their chosen profession in the UK under the rules of a UK professional certification body? Would that necessarily be relevant to their qualification to practice in their extra-EU countries?

  9. Javelin
    Posted July 3, 2011 at 10:47 am | Permalink

    I bueve the Government Strategy is to sail close to the wind without capsizing. The balance that is being struck is between economic failure and given space for Labour to propose a coherent strategy. This shows up in Milliband being unable to criticise the strikes over public sector pensions or the cost of old age health care (because the civil service told them they had to do this before the election).

    Fortunately or unfortunately there is only one course of economic action left for any Government today. I have no doubt that Labour would be doing exactly what the Tories are doing.

    It is, if course, a separate issue whether this set of policies will work in the larger context of the US and EU downturn.

    Of course there is other wriggle room for ANY party and it is the off-balance sheet policies by which I will judge this party today. For example on red-tape, human rights, health and safety, competitiveness, green taxes, work attitudes. It is no coincidence that these issues ate making the news because this is where politics IS and SHOULD be. I welcome the hiatus in economic policy because it moves politics back to it’s rightful place of ideology.

    Cameron needs to start to tackle the issue I just mentioned. He has an obligation to dismantle the state funded destructive social control mechanisms so beloved by the Labour luvvies and replace them with policies that the public see as fair and help sustainable growth.

  10. John Parkes
    Posted July 3, 2011 at 11:22 am | Permalink

    This reveals in stark terms the political battle that the government has to fight. It is not against the opposition in Parliament but against a politicised Civil Service that refuses to enable policy decisions taken by the government. The author of this socialist-inspired memorandum should now be faced by the consequences of his actions; which will include lack of further promotion and the possibility of a failure to renew his contract of employment.
    While it is for the civil service to advise, it is their further duty then to carry out the implementation of government policy. If those involved are not content to do so, the option of resignation is open to them, thus allowing them to fight for their own views outside the secure environment of a highly- paid, generously-pensioned employment. Otherwise they will continue to try to exercise “power without responsibility – the prerogative of the harlot throughout the ages.”

  11. RCS
    Posted July 3, 2011 at 11:29 am | Permalink

    I presume that this is a real letter that has been leaked?

  12. Anoneumouse
    Posted July 3, 2011 at 12:06 pm | Permalink

    I really do like the Dr Roy Spendlove to Dame Lucy Doolittle leaks, they remind me of the ‘Struggle’.

    Profesional “functiontorys” or is that ‘right wing apparatchiks’

  13. Posted July 3, 2011 at 12:23 pm | Permalink

    I feel that I am watching individuals trying to enact out a parliament of the first order, however, in fact these wealthy individuals are floundering around in a sea of total incompetence. George Osborne Channcellor of the Exchequer was invited ( summoned ) to the Bilderberg meeting in Zurich, Switerland, just recently in the later part of July 2011.
    Perhaps the first meeting in which activists like Alex Jones et al, have accomplished in bringing these 125 wealthest people in the world to public attention. Upon arriving home from the four day Bilderberg meeting of 2011, Mr. Osborne made an announcment on the economics of the U.K in a world situation. I would like to know, is Mr. Osborne merely a messenger for these secret people of a secret organisation formed just after the secound world war. I have not heard a thing about the Bilderberg meeting. Did these ruling elite who hide in the shadows instruct Mr. Osborne what to say? I would think so… . irrahayes

  14. Posted July 3, 2011 at 12:24 pm | Permalink

    I wonder how true this really is…..

  15. Mike Stallard
    Posted July 3, 2011 at 8:15 pm | Permalink

    For two years, I have been working very hard to produce a Free School here, so for once, I have first hand experience.
    “I fear there could be more legal and administrative challenges over free schools. Some of our colleagues in DFE are concerned about the pace of the changes.”
    You can say that again!

  16. zorro
    Posted July 3, 2011 at 10:03 pm | Permalink

    Another good one John, though I suspect that you must crack up sometimes with the associate dissonance involved in compiling such tricksy memos……But you are right, the ministers are being led by their noses.

    Net migration was very high and although emigration was lower, inward migration was still very high. In either case, the statistical basis for a lot of these calculations is rather ropy….We still do not know how may enter and leave the UK. We are now told it will be 2015. We will see, nearly 20 years with no embarkation control.

    I have no problem in letting in genuine students who will leave the UK on completion of their studies…but they need to be properly assessed, and that is not happening.

    On the point of migration, the majority of settlement/permanent migration is coming from non-EU countries and that can certainly be controlled if the political will is there.

    zorro

  17. BobE
    Posted July 3, 2011 at 11:00 pm | Permalink

    If you watch John he just says what he belives but he doesn’t seem to care about what happens. He just lets the world go by and collects his income. Why would I blame him or do differently.

    Reply: Unfair – I try with colleagues to make improvements, but usually do not have enough votes in the Commons to do what we think will work better.

    • lifelogic
      Posted July 5, 2011 at 10:08 pm | Permalink

      Why on earth do you not have support for such sense – what sort of mad people are MPs selected from?

  18. lojolondon
    Posted July 4, 2011 at 5:54 am | Permalink

    Dear John,

    So nice of the complainer to highlight his three main areas of activity. If the government wants to cut unnecessary, unproductive waste and spin, I can recommend no better place to start cancelling all spend than “HS2, renewable energy and the EU response to Greece”. If I was PM, this guy would have just done himself out of a job.

  19. uanime5
    Posted July 5, 2011 at 7:43 pm | Permalink

    It seems that Dr Spendlove has reveal what we have always know; that unpopular Government policies are unpopular. I guess that the public isn’t going to let the Government enact any reform they want just because the Government says it’s part of the ‘Big Society’.

    I suspect that the pay freeze and pensions attack will also discourage people from entering the public sector, which may make some low paid but essential jobs even harder to fill (nurses, teacher, social workers, police, fire fighters, etc).

    As someone who took an interest in the welfare to work programme the fact that it will cost more doesn’t surprise me as this was a danger recognised by everyone because it was funded by the saving it was expected to make. Thus an increase in unemployment would cause the Government to suffer a large loss. Though I was expecting this to come from the programmes failuring to work, since it is nothing more than a renamed New Deal, rather than high levels of immigration.

  20. david
    Posted July 8, 2011 at 10:57 am | Permalink

    Dr Spendlove must be a member of that splendid public service body.whose motto is

    Common Purpose, Vulgar Reason

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

  • John’s Books

  • Email Alerts

    You can sign up to receive John's blog posts by e-mail by entering your e-mail address in the box below.

    Enter your email address:

    Delivered by FeedBurner

    The e-mail service is powered by Google's FeedBurner service. Your information is not shared.

  • Map of Visitors

    Locations of visitors to this page