1
00:00:39,964 --> 00:00:42,558
Hello, darling. Good Cabinet meeting?

2
00:00:42,724 --> 00:00:45,716
- Hmm.
- Good Cabinet meeting, darling?

3
00:00:45,884 --> 00:00:49,638
- I want a triple Scotch!
- As bad as that? Why?

4
00:00:50,844 --> 00:00:57,033
The financial crisis is much worse
than we thought. All the Cabinet must make cuts.

5
00:00:57,244 --> 00:01:01,681
- Bernard, would you like a Scotch?
- Yes, a large one, please.

6
00:01:01,884 --> 00:01:05,036
Humphrey should have seen this coming.

7
00:01:05,245 --> 00:01:09,442
I don't think he understands Economics.
He did read Classics.

8
00:01:09,605 --> 00:01:11,993
Sir Frank is head of the Treasury.

9
00:01:12,204 --> 00:01:17,154
He's at an even greater disadvantage
in understanding Economics. He's an economist.

10
00:01:17,365 --> 00:01:22,359
- Can't they see there's got to be cuts?
- In other departments, not in their own!

11
00:01:22,525 --> 00:01:24,959
So you ordered a clampdown?

12
00:01:25,125 --> 00:01:30,153
- I can't do that. I'm only the Prime Minister.
- But you're in charge.

13
00:01:30,365 --> 00:01:34,323
A leader can only lead by consent, consensus.
That's democracy.

14
00:01:34,525 --> 00:01:37,517
- So who IS in charge?
- Nobody, really.

15
00:01:37,685 --> 00:01:41,963
- Is that good?
- It must be. That's what democracy is about.

16
00:01:42,165 --> 00:01:48,274
And I've got a deputation of MPs coming
to see me about a pay rise I promised them.

17
00:01:48,484 --> 00:01:52,079
- What will you say?
- That I deeply sympathise. I don't.

18
00:01:52,245 --> 00:01:54,634
That they fully deserve it. Not true.

19
00:01:54,805 --> 00:01:59,594
And that I shall make it my first priority
as soon as the crisis is over. I shan't.

20
00:01:59,765 --> 00:02:03,758
If they vote themselves
a whacking great pay rise,

21
00:02:03,925 --> 00:02:08,157
it doesn't do very much
for the dignity of Parliament. It doesn't.

22
00:02:08,365 --> 00:02:13,359
- Are they underpaid?
- Underpaid?! Backbench MPs? Darling...

23
00:02:13,564 --> 00:02:16,557
Being an MP is a vast, subsidised ego trip.

24
00:02:16,724 --> 00:02:22,640
You need no qualifications, no compulsory
hours of work, no performance standards.

25
00:02:23,645 --> 00:02:28,673
A warm room and subsidised meals for a bunch
of self-opinionated windbags and busybodies

26
00:02:29,685 --> 00:02:34,679
who suddenly find people taking them seriously
because they've got ''MP'' after their names!

27
00:02:34,844 --> 00:02:39,634
How can they be underpaid when there's
about 200 applicants for every vacancy?

28
00:02:39,805 --> 00:02:44,401
You could fill every seat 20 times over
even if they paid to do the job!

29
00:02:44,605 --> 00:02:47,199
You were a backbench MP only 5 years ago.

30
00:02:47,365 --> 00:02:49,753
I was the exception.

31
00:02:49,925 --> 00:02:52,519
I was the cream. I rose to the top.

32
00:02:55,125 --> 00:02:58,674
- Do you think you'll shut them up?
- Who knows?

33
00:02:58,884 --> 00:03:04,356
The public will never stand for an MPs' pay rise
when we cut back on nurses and teachers.

34
00:03:04,564 --> 00:03:07,318
Oh, that's a much more serious problem.

35
00:03:07,525 --> 00:03:12,314
No, darling, much LESS serious. They can't
vote against me till the next election.

36
00:03:12,485 --> 00:03:15,283
Backbenchers can do it at 10 o'clock tonight.

37
00:03:17,645 --> 00:03:20,557
Humphrey, I've just had a very stormy meeting
with my backbenchers!

38
00:03:20,724 --> 00:03:24,718
- I'm so sorry.
- If I had warning, I'd have softened them up.

39
00:03:24,884 --> 00:03:29,276
- Papers only arrived the night before Cabinet!
- Most regrettable.

40
00:03:29,485 --> 00:03:35,117
It's up to you, Humphrey. You must insist
that we get papers circulated earlier.

41
00:03:35,325 --> 00:03:40,115
Alas, there are grave problems
in circulating papers before they are written.

42
00:03:41,444 --> 00:03:43,515
Why the sudden crisis?

43
00:03:43,724 --> 00:03:49,003
- Prime Minister, you must ask Sir Frank.
- What would Sir Frank say?

44
00:03:49,205 --> 00:03:51,673
It is not for a humble mortal such as I

45
00:03:51,844 --> 00:03:56,634
to speculate on the complex
and elevated deliberations of the mighty,

46
00:03:56,805 --> 00:04:01,594
but, in general, I think Sir Frank believes that
if the Treasury knows something must be done,

47
00:04:01,765 --> 00:04:04,757
the Cabinet shouldn't have time to think about it..

48
00:04:04,965 --> 00:04:06,364
Outrageous!

49
00:04:06,564 --> 00:04:11,355
- Yes, indeed. It's known as Treasury policy.
- Suppose the Cabinet has questions?

50
00:04:11,564 --> 00:04:16,319
His view is on the rare occasions
when the Treasury understands the questions,

51
00:04:16,485 --> 00:04:19,477
the Cabinet doesn't understand the answers.

52
00:04:19,685 --> 00:04:22,677
- Do you subscribe to that view?
- I, Prime Minister,

53
00:04:22,845 --> 00:04:26,076
I merely try to carry out your wishes.

54
00:04:26,285 --> 00:04:31,074
I wish that in future all Cabinet papers
be circulated at least 48 hours in advance.

55
00:04:31,245 --> 00:04:34,237
- Would you tell Sir Frank?
- Yes, of course.

56
00:04:34,405 --> 00:04:38,000
I shall seek an audience with him at once.
Thank you.

57
00:04:39,764 --> 00:04:44,156
Who does Frank think he is?
At least Old Humpy knows his place.

58
00:04:45,324 --> 00:04:50,603
It was very loyal of him to tell me the truth.
They usually all stick together, don't they?

59
00:04:50,805 --> 00:04:56,401
He's rather anxious because of your threat
to make Sir Frank head of the home Civil Service.

60
00:04:56,605 --> 00:05:00,598
Of course.
I wonder if I should do something about that.

61
00:05:00,764 --> 00:05:05,441
Or if there isn't something to be gained
out of keeping them both in suspense.

62
00:05:05,644 --> 00:05:09,478
You gain an anxious Cabinet Secretary.
Is that what you want?

63
00:05:10,564 --> 00:05:12,362
Hmm...

64
00:05:13,764 --> 00:05:16,153
He wasn't just unhappy about the cuts, Frank.

65
00:05:16,324 --> 00:05:20,637
He was very unhappy about your papers arriving
at such short notice.

66
00:05:20,845 --> 00:05:24,439
I hope you explained
it was because of America's policy change.

67
00:05:24,605 --> 00:05:27,596
My dear Frank, I defended you gallantly,

68
00:05:29,125 --> 00:05:32,595
leaving the Prime Minister in no doubt
as to the real cause.

69
00:05:32,805 --> 00:05:35,399
Oh, good. Thanks.

70
00:05:36,805 --> 00:05:39,194
- I'll need his goodwill.
- Why?

71
00:05:39,405 --> 00:05:43,795
We shall obviously have to bring in
some form of pay restraint.

72
00:05:43,965 --> 00:05:48,560
The problem is,
the MPs are being denied their pay rise

73
00:05:48,725 --> 00:05:52,559
just as we bring forward
the proposed Civil Service pay rise.

74
00:05:52,764 --> 00:05:55,153
- Ah. That's an awkward one.
- Yes.

75
00:05:55,324 --> 00:05:59,762
- One isn't interested for oneself...
- Of course not.

76
00:05:59,965 --> 00:06:04,355
But one does owe it to one's junior colleagues.
Ironic, isn't it, Frank?

77
00:06:04,524 --> 00:06:09,519
Trying to help them involves raising our own
salaries, which we don't care about at all.

78
00:06:10,564 --> 00:06:14,319
And then we get accused
of feathering our own nests!

79
00:06:14,524 --> 00:06:17,163
That's just another cross we have to bear.

80
00:06:17,365 --> 00:06:19,925
Yes. Envy, pure envy.

81
00:06:21,165 --> 00:06:25,636
You'd better get that proposal in fast
before the pay restraint begins.

82
00:06:25,845 --> 00:06:28,233
The night before next Thursday's Cabinet.

83
00:06:28,405 --> 00:06:32,398
We can't let Ministers spend two days
talking about it.

84
00:06:32,564 --> 00:06:35,158
They'll come up with stupid objections!

85
00:06:35,365 --> 00:06:38,004
And try to delay it until the pay restraint.

86
00:06:38,204 --> 00:06:42,197
Mm. Do you think it's all right
to bounce the Cabinet two weeks running?

87
00:06:42,365 --> 00:06:46,358
- No alternative.
- I-I-I was thinking, Humphrey.

88
00:06:47,365 --> 00:06:52,393
Perhaps it would be better
if the proposal came from both of us.

89
00:06:52,564 --> 00:06:57,274
- Both of us?
- Well, we are joint heads of the Civil Service.

90
00:06:57,485 --> 00:07:00,396
Not as I understand it, Frank.

91
00:07:00,605 --> 00:07:04,644
- Oh, I think so, effectively.
- I think not, effectively.

92
00:07:04,845 --> 00:07:08,918
I look after the financial side
and you the establishment side.

93
00:07:09,125 --> 00:07:14,643
But, Frank, with respect, the Cabinet Secretary
is the de jure head of the Civil Service.

94
00:07:14,845 --> 00:07:19,634
With respect, Humphrey, the Cabinet Secretary
and the Permanent Secretary to the Treasury

95
00:07:19,805 --> 00:07:22,365
are de facto joint heads of the Civil Service.

96
00:07:22,564 --> 00:07:27,161
Be that as it may, Frank,
we can't put up the proposal together.

97
00:07:27,324 --> 00:07:29,713
I must remain aloof and judicial.

98
00:07:29,884 --> 00:07:35,278
You must make the running. After weighty
consideration, I will come down on your side.

99
00:07:37,405 --> 00:07:40,043
All right. One other point...

100
00:07:40,245 --> 00:07:43,680
We don't want Cabinet to adjudicate on this.

101
00:07:43,884 --> 00:07:48,083
- They must refer it to an impartial committee.
- Who should chair it?

102
00:07:48,245 --> 00:07:52,033
- What about Professor Welsh?
- That silly old buffer?!

103
00:07:52,245 --> 00:07:54,554
- That silly old buffer.
- Why?

104
00:07:54,764 --> 00:07:59,759
He's asked me to put him forward as the next
chairman of the University Grants Committee.

105
00:07:59,925 --> 00:08:04,521
He's desperate for the job,
so he'll understand what's required of him.

106
00:08:04,725 --> 00:08:07,523
What an excellent choice.

107
00:08:07,685 --> 00:08:10,074
Humphrey, I'm astonished.

108
00:08:10,245 --> 00:08:15,035
The Treasury has just cancelled half
our spending plans due to the financial crisis

109
00:08:15,204 --> 00:08:20,643
and now they have the temerity to put forward
a plan for a Civil Service pay rise!

110
00:08:20,845 --> 00:08:23,233
And you're bouncing it through Cabinet!

111
00:08:23,405 --> 00:08:28,843
I wanted all papers circulated 48 hours in
advance. Do you think I'm a complete idiot?

112
00:08:32,164 --> 00:08:35,236
It is not for me to speak for Sir Frank.

113
00:08:35,445 --> 00:08:39,916
I'm asking you. Speak for yourself.
You're head of the Civil Service.

114
00:08:40,125 --> 00:08:44,835
- Am I indeed? How gratifying!
- For the moment.

115
00:08:45,044 --> 00:08:49,436
As Cabinet Secretary,
I am most eager to reduce public spending,

116
00:08:49,605 --> 00:08:54,599
but as head of the Civil Service I'm responsible
for the real dangers that arise administratively

117
00:08:54,764 --> 00:09:00,556
if a pay rise does not come through very soon.
It's so difficult for me. I'm wearing two hats.

118
00:09:00,764 --> 00:09:03,233
Yes, isn't that rather awkward for you?

119
00:09:04,085 --> 00:09:06,678
Not if one is in two minds.

120
00:09:06,884 --> 00:09:09,159
Or has two faces.

121
00:09:13,445 --> 00:09:15,834
Perhaps I should relieve you of one of them?

122
00:09:16,044 --> 00:09:19,923
- Oh, no, no, no. I'm perfectly happy with both.
- Faces?

123
00:09:20,125 --> 00:09:22,240
Hats!

124
00:09:22,445 --> 00:09:27,837
You see, Prime Minister, the problem is that
low morale will lead to the danger of a strike.

125
00:09:28,004 --> 00:09:31,998
Think of the effect of that
on the social services.

126
00:09:32,164 --> 00:09:35,952
And we are already experiencing difficulties
in recruitment.

127
00:09:36,164 --> 00:09:40,841
- 10 applicants for every vacancy?
- Yes, but the applicants are very low quality.

128
00:09:41,004 --> 00:09:46,398
With very few First Class degrees.
Most of them...have Lower Seconds.

129
00:09:47,644 --> 00:09:49,840
I got a Third.

130
00:09:51,205 --> 00:09:55,596
That's all right for Prime Ministers.
Sir Humphrey means civil servants.

131
00:09:55,804 --> 00:10:00,798
The point is, I couldn't get this through.
There's already a backbench revolt looming.

132
00:10:00,965 --> 00:10:05,799
MPs will never agree to a pay rise for civil
servants. And the Cabinet will be hostile.

133
00:10:06,004 --> 00:10:10,953
May I suggest that we just ask the Cabinet
merely to agree to look at the application?

134
00:10:11,125 --> 00:10:15,515
Then we'll put the matter
before an independent group of assessors.

135
00:10:15,725 --> 00:10:20,719
- Who would lead these assessors?
- There's a very good man I could recommend.

136
00:10:20,884 --> 00:10:24,594
Professor Welsh.
Very sound, very sensible, very careful.

137
00:10:24,804 --> 00:10:27,193
I heard he was a silly old buffer.

138
00:10:27,404 --> 00:10:31,398
I can't imagine
who could possibly say such a thing!

139
00:10:33,205 --> 00:10:36,355
Since the most senior grades of the service
really bear the heat of the battle,

140
00:10:36,524 --> 00:10:39,119
they should receive the greatest increase.

141
00:10:39,284 --> 00:10:41,673
Seems very fair to me.

142
00:10:41,845 --> 00:10:45,633
- So this would be the scale.
- Right.

143
00:10:45,845 --> 00:10:49,803
- I haven't seen this, by the way.
- Of course not. Most improper.

144
00:10:50,004 --> 00:10:55,601
Quite. Well, they're very significant increases
for Under Secretaries,

145
00:10:55,764 --> 00:10:58,153
Deputy Secretaries and, um,

146
00:10:59,164 --> 00:11:01,725
those of us who, um...

147
00:11:01,924 --> 00:11:03,721
Exactly.

148
00:11:03,884 --> 00:11:06,274
About 43%.

149
00:11:07,164 --> 00:11:10,952
- Alas.
- But no more than we've earned.

150
00:11:11,125 --> 00:11:13,558
I take it this paper is not for submission.

151
00:11:13,764 --> 00:11:18,155
My dear Humphrey,
those are the submission papers.

152
00:11:20,565 --> 00:11:22,953
Oh, yes.

153
00:11:24,164 --> 00:11:28,397
- It only goes up to Appendix K.
- Sorry. Six more to follow.

154
00:11:28,605 --> 00:11:31,995
Oh! No danger of their wading through all those.

155
00:11:32,164 --> 00:11:35,395
Where's the one-page summary for the Cabinet?

156
00:11:35,605 --> 00:11:37,994
The Janet and John bit?

157
00:11:38,205 --> 00:11:40,594
Here it is.

158
00:11:40,764 --> 00:11:45,554
It's more or less the same as last time.
Comparable jobs in industry.

159
00:11:45,725 --> 00:11:50,845
- On whose salary are the comparisons based?
- The directors of BP and IBM, naturally.

160
00:11:51,044 --> 00:11:56,278
You don't think that might be challenged
as untypical and above average?

161
00:11:56,485 --> 00:12:01,479
No. Of course, we don't mention them
by name. Just ''typical industrial firms''.

162
00:12:01,644 --> 00:12:06,399
Then we take our own examples of increases
from the lowest point of the incremental scale.

163
00:12:06,605 --> 00:12:11,803
- As before.
- Principal examples are there at the end.

164
00:12:11,965 --> 00:12:16,561
£3.50 a week for a messenger.
£4.20 for a registry clerk.

165
00:12:16,725 --> 00:12:19,716
£8.20 for a scientific officer. Hardly anything.

166
00:12:19,884 --> 00:12:23,274
So it would be £26,000 a year extra for us?

167
00:12:26,404 --> 00:12:29,202
More or less.

168
00:12:29,365 --> 00:12:33,073
- You haven't mentioned that, I hope.
- My dear Humphrey...

169
00:12:34,164 --> 00:12:39,158
Frank, you don't think there's a danger
that someone might go into this in detail?

170
00:12:39,325 --> 00:12:44,318
- Not that there's anything wrong with it.
- But who? Ministers are only briefed by us.

171
00:12:44,485 --> 00:12:47,044
We're all loyal members of the service.

172
00:12:47,245 --> 00:12:51,841
Yes. I'll get it in last item before lunch
on the Cabinet's agenda.

173
00:12:52,004 --> 00:12:55,918
- They won't spend more than 5 minutes on it.
- Plain sailing.

174
00:12:56,125 --> 00:13:00,118
Apart from the rigorous scrutiny
of Professor Welsh.

175
00:13:02,725 --> 00:13:05,477
Your Chief Political Advisor is on the phone.

176
00:13:05,685 --> 00:13:08,562
Thank you. Put her through. ..Dorothy?

177
00:13:08,764 --> 00:13:15,033
I'm doing a paper on this Civil Service pay claim,
but I can give an immediate response.

178
00:13:15,245 --> 00:13:18,999
- Yes, please. What's your answer?
- It's a series of questions.

179
00:13:19,205 --> 00:13:21,798
- For me?
- For Sir Humphrey.

180
00:13:21,965 --> 00:13:26,799
The claim is self-serving and inappropriate,
and significant for what it leaves unanswered.

181
00:13:27,004 --> 00:13:31,794
- Right. Fire away.
- You should treat this as highly confidential.

182
00:13:31,965 --> 00:13:34,604
First of all, you should ask what deduction...

183
00:13:36,565 --> 00:13:38,953
Yes...

184
00:13:44,205 --> 00:13:46,196
Triffic!

185
00:13:48,965 --> 00:13:54,163
Oh, George, that's for you, I think.
All right for me to go in, Bernard?

186
00:13:54,325 --> 00:13:58,716
Uh, yes. Sir Humphrey,
can I just mention one thing?

187
00:13:58,884 --> 00:14:01,274
Yes, Bernard?

188
00:14:01,445 --> 00:14:05,916
- There has been movement.
- On what subject?

189
00:14:06,125 --> 00:14:09,720
On a subject we hoped for no movement.

190
00:14:09,924 --> 00:14:14,634
The Civil Service generally hopes
there will be no movement on any subject!

191
00:14:14,845 --> 00:14:19,839
Uh, yes, what I mean is it's in relation to
a subject that is normally wholly and exclusively

192
00:14:20,004 --> 00:14:24,157
within the control of the Civil Service
that developments have developed.

193
00:14:24,365 --> 00:14:27,163
- You're speaking in riddles!
- Oh, thank you.

194
00:14:27,365 --> 00:14:31,677
That was NOT a compliment, Bernard!
Make yourself clear, please.

195
00:14:31,884 --> 00:14:34,274
I'm sorry, Sir Humphrey, my lips are sealed.

196
00:14:34,445 --> 00:14:39,235
I am referring to minutes that I was duty bound
to make of a confidential conversation

197
00:14:39,404 --> 00:14:41,714
between the Prime Minister and an advisor.

198
00:14:41,924 --> 00:14:44,961
- Which advisor?
- I cannot divulge her name.

199
00:14:45,164 --> 00:14:51,161
Thank you, Bernard. And this confidential
advice was to do with the financial crisis?

200
00:14:51,365 --> 00:14:55,073
- No, much more important.
- Not his silly nuclear strategy?

201
00:14:55,284 --> 00:15:00,200
- Much more important.
- You don't mean the Civil Service pay claim?!

202
00:15:01,445 --> 00:15:03,834
I see. What do you advise, Bernard?

203
00:15:04,044 --> 00:15:09,038
I advise you consider your position carefully,
perhaps adopting a more flexible posture,

204
00:15:09,205 --> 00:15:13,995
while keeping your ear to the ground,
covering your retreat and watching your rear.

205
00:15:14,164 --> 00:15:16,918
Thank you, Bernard. You've been a great help.

206
00:15:17,125 --> 00:15:19,355
Actually, I haven't told you anything.

207
00:15:19,565 --> 00:15:24,558
- I should hope not. That's most improper.
- Prime Minister, Sir Humphrey's here.

208
00:15:25,725 --> 00:15:27,681
Flexible.

209
00:15:29,164 --> 00:15:32,759
- Ah, Humphrey! Come in.
- Thank you, Prime Minister.

210
00:15:32,924 --> 00:15:35,313
Tell me what you think of this.

211
00:15:39,085 --> 00:15:41,279
What do you make of it?

212
00:15:41,485 --> 00:15:46,274
- It is rather large for instant judgement.
- Only read the one-page summary.

213
00:15:46,485 --> 00:15:49,955
- Ah. Oh, good.
- Well?

214
00:15:50,164 --> 00:15:51,644
Well?

215
00:15:51,845 --> 00:15:56,235
Prime Minister, you place me
in a very difficult position.

216
00:15:56,445 --> 00:16:02,360
Do I, Humphrey? You have to have loyalty
to your colleagues, but also to Cabinet policies.

217
00:16:02,565 --> 00:16:05,637
- I agree.
- You agree?

218
00:16:05,845 --> 00:16:07,562
- Yes.
- With me?

219
00:16:07,764 --> 00:16:12,394
- I agree with you.
- I...ah... I don't... Who do you agree with?

220
00:16:12,605 --> 00:16:15,596
- With you.
- Not with Sir Frank?

221
00:16:15,764 --> 00:16:18,278
- No.
- You're not arguing with me?

222
00:16:18,485 --> 00:16:20,282
No.

223
00:16:21,284 --> 00:16:23,673
Perhaps I haven't made myself quite clear.

224
00:16:23,845 --> 00:16:26,278
I agree with you!

225
00:16:27,685 --> 00:16:30,073
Well, what do you make of that pay claim?

226
00:16:30,284 --> 00:16:32,673
Well, it's not excessive in itself,

227
00:16:32,845 --> 00:16:37,839
but at a time of national stringency
it is neither wise nor in the national interest.

228
00:16:38,004 --> 00:16:40,599
I don't like to criticise my colleague, but...

229
00:16:40,764 --> 00:16:45,554
In my view, Sir Frank,
though no doubt acting from the best of motives,

230
00:16:45,725 --> 00:16:50,719
should have placed the good of the nation
before the narrower interests of civil servants.

231
00:16:50,884 --> 00:16:53,604
You see, this claim raises serious questions.

232
00:16:53,804 --> 00:16:58,514
That's interesting.
I've made a note of some questions, too.

233
00:16:59,565 --> 00:17:02,921
Good questions. Where did they come from?

234
00:17:03,125 --> 00:17:05,513
- Oh, occurred to me.
- Yes.

235
00:17:05,724 --> 00:17:08,238
They're...VERY good questions.

236
00:17:08,404 --> 00:17:11,680
Yes, that's what I thought. What should we do?

237
00:17:11,884 --> 00:17:14,478
- We should ask them.
- Ask who?

238
00:17:14,684 --> 00:17:18,279
Sir Frank.
You ought to invite him here to discuss them.

239
00:17:18,444 --> 00:17:22,835
He may well know the answers.
Indeed, he should know them.

240
00:17:23,004 --> 00:17:25,279
That's his job, after all.

241
00:17:25,484 --> 00:17:28,317
Yes. Thank you. Arrange that, Bernard.

242
00:17:28,484 --> 00:17:30,873
I must say I appreciate your impartiality.

243
00:17:31,044 --> 00:17:34,832
You'd gain quite a lot yourself
if it were to go through.

244
00:17:35,044 --> 00:17:37,433
Well, I suppose so, Prime Minister,

245
00:17:37,604 --> 00:17:42,200
but I see the rewards of this job
as the knowledge...

246
00:17:42,364 --> 00:17:48,041
..that we've been of service to the nation, not
to ourselves. Don't you agree, Prime Minister?

247
00:17:49,044 --> 00:17:53,515
- I agree. Thank you, Humphrey.
- Thank you, Prime Minister.

248
00:17:56,284 --> 00:18:00,197
- Humphrey's very fair-minded, isn't he?
- Oh, yes, Prime Minister.

249
00:18:00,964 --> 00:18:06,322
If there were a conflict of interests,
which side are the Civil Service really on?

250
00:18:06,524 --> 00:18:08,992
The winning side, Prime Minister.

251
00:18:15,964 --> 00:18:21,960
Ah, thank you, Billy. It was very painful for me
not to be able to support Frank's case.

252
00:18:22,125 --> 00:18:25,116
- Deeply distressing.
- But he was going to lose.

253
00:18:25,284 --> 00:18:30,881
And that Wainwright female had suggested
that they stop us handling our own pay claims

254
00:18:31,044 --> 00:18:33,683
and let a Select Committee decide on them!

255
00:18:33,884 --> 00:18:38,275
Appalling! Next thing you'd have
is politicians removing civil servants

256
00:18:38,444 --> 00:18:42,562
on the grounds of incompetence!
The thin end of the wedge.

257
00:18:42,764 --> 00:18:47,155
Arnold, I need your help.
Clearly, Frank's claim is discredited,

258
00:18:47,324 --> 00:18:51,715
but I need to get us the pay rise
to consolidate my position.

259
00:18:51,884 --> 00:18:54,000
What did you do?

260
00:18:54,204 --> 00:18:58,402
- You say Frank used the normal formula?
- That's right.

261
00:18:58,564 --> 00:19:02,159
- And you need 43%. Hm.
- Thereabouts.

262
00:19:02,324 --> 00:19:06,317
Well, since virtually all the relevant staff
work in London,

263
00:19:06,484 --> 00:19:11,274
start with a big increase in the London allowance.
Allowances count as expenses.

264
00:19:11,444 --> 00:19:16,199
- They don't show in the percentage calculation.
- London allowance.

265
00:19:16,404 --> 00:19:21,000
Then introduce a special graduate allowance
for those with Firsts and Upper Seconds.

266
00:19:21,164 --> 00:19:25,396
- To aid recruitment.
- Oxford doesn't give Upper Seconds.

267
00:19:25,604 --> 00:19:29,995
A second at Oxford counts as an Upper Second,
at least.

268
00:19:30,164 --> 00:19:35,158
Then you double the Outstanding Merit awards.
I take it people still get them?

269
00:19:35,364 --> 00:19:37,400
Oh, yes. Everyone.

270
00:19:37,604 --> 00:19:40,880
They don't count as rises either. Getting there?

271
00:19:41,084 --> 00:19:45,600
- That gets us down to only about 18%.
- Since last time?

272
00:19:45,804 --> 00:19:50,400
Then don't calculate from last time.
Calculate from 1973, the high point.

273
00:19:50,564 --> 00:19:56,355
And don't just take it to this year. Take it up
to two years' time, the end of the claim period.

274
00:19:56,524 --> 00:19:59,641
Correcting for inflation, that should do it.

275
00:19:59,844 --> 00:20:05,237
Excellent. The percentage increases will sound
all right now, but that still leaves a problem.

276
00:20:05,404 --> 00:20:09,443
The overall Civil Service pay bill
will still be too high.

277
00:20:09,644 --> 00:20:14,035
- Easy. Reduce the size of the Civil Service.
- What?!

278
00:20:15,924 --> 00:20:22,033
If the service were smaller than last time,
a comfortable rise for individuals looks smaller.

279
00:20:22,244 --> 00:20:25,202
Real reductions in the size of the service?!

280
00:20:25,364 --> 00:20:29,039
It would be the end of civilisation as we know it!

281
00:20:29,244 --> 00:20:33,635
No, my dear Humphrey.
All you do is stop calling them civil servants.

282
00:20:33,804 --> 00:20:36,193
Take the museums, for instance.

283
00:20:36,364 --> 00:20:41,961
If you turn them into independent trusts,
the staff stop being classified as civil servants.

284
00:20:42,125 --> 00:20:46,914
They're still the same people doing the same job
and still paid by government grants,

285
00:20:47,084 --> 00:20:52,078
but as it's a grant it doesn't count in the pay
statistics. Unless anyone inquires closely,

286
00:20:52,244 --> 00:20:55,042
it will look like a cutback.

287
00:20:55,204 --> 00:21:01,279
- Can we set up so many trusts in time?
- You won't have to. It only has to be planned.

288
00:21:01,444 --> 00:21:04,038
If it doesn't happen, it won't be your fault.

289
00:21:04,204 --> 00:21:09,039
Meanwhile, you should be able
to get the rise to work out at 6% overall.

290
00:21:09,244 --> 00:21:14,034
- Thank you, Arnold. That's a great help.
- Always happy to oblige.

291
00:21:14,204 --> 00:21:17,196
Especially with the birthday honours coming up.

292
00:21:19,884 --> 00:21:22,273
Should I talk to Frank about this, too?

293
00:21:22,484 --> 00:21:27,956
Em...oh, no, Arnold. Leave it to me.
Frank's got a lot of problems coming up.

294
00:21:28,164 --> 00:21:33,113
- Really? He hasn't mentioned them.
- Because he doesn't know about them yet.

295
00:21:35,044 --> 00:21:38,957
And Civil Service pay has fallen significantly
behind comparable jobs in industry.

296
00:21:39,164 --> 00:21:41,359
What comparable jobs?

297
00:21:41,524 --> 00:21:46,154
Well, it's quite a complex formula,
but it has been accepted for some time.

298
00:21:46,364 --> 00:21:51,154
I understand that a Permanent Secretary
earns over £45,000 a year.

299
00:21:51,324 --> 00:21:56,352
Cabinet Secretary and Permanent Secretary
to the Treasury earn in excess of £51,000.

300
00:21:56,564 --> 00:21:58,839
Um...maybe you're right.

301
00:21:59,044 --> 00:22:03,754
Don't you know how much you earn, Frank,
or has it just slipped your memory?

302
00:22:03,964 --> 00:22:06,637
Yes, but if that's what industry is paying...

303
00:22:06,844 --> 00:22:10,837
- What do you think, Humphrey?
- It's not for me to say.

304
00:22:11,004 --> 00:22:13,996
Sir Frank is in charge of Civil Service pay.

305
00:22:14,204 --> 00:22:17,799
- Prime Minister, may I ask a question?
- Yes.

306
00:22:17,964 --> 00:22:20,876
What deduction do you make for job security?

307
00:22:21,084 --> 00:22:25,680
- I beg your pardon?
- Top people in industry can get sacked.

308
00:22:25,844 --> 00:22:28,642
They can go bust, but your jobs are guaranteed.

309
00:22:28,844 --> 00:22:32,837
- There are swings and roundabouts.
- What roundabouts?

310
00:22:33,004 --> 00:22:35,996
- Long hours.
- Don't those happen in industry?

311
00:22:36,164 --> 00:22:39,042
Industrial leaders must stand by decisions.

312
00:22:39,244 --> 00:22:43,556
- So do civil servants.
- Really? I thought ministers took decisions.

313
00:22:43,764 --> 00:22:48,758
- And the blame. That's the deal, isn't it?
- Yes, ministers do take the decisions.

314
00:22:48,924 --> 00:22:52,075
Civil servants must decide how to carry it out.

315
00:22:52,284 --> 00:22:55,879
- Like a secretary laying out a letter.
- Yes.

316
00:22:56,884 --> 00:22:59,842
No! Um... Sir Humphrey knows what I mean.

317
00:23:00,044 --> 00:23:04,401
It's up to you, Frank.
You're in charge of Civil Service pay.

318
00:23:05,764 --> 00:23:08,881
What about the service element?

319
00:23:09,084 --> 00:23:11,552
Service element? What do you mean?

320
00:23:11,764 --> 00:23:13,561
Er...

321
00:23:17,164 --> 00:23:21,043
- The job has a strong element of service.
- Absolutely.

322
00:23:21,244 --> 00:23:25,635
Rewarded by CBs and KCMGs
and knighthoods...Sir Frank.

323
00:23:25,844 --> 00:23:27,880
To an extent.

324
00:23:28,084 --> 00:23:32,875
I wonder whether we shouldn't compare
civil servants with directors of charities

325
00:23:33,044 --> 00:23:38,038
rather than industries. They get £17,000 a year
on average, rather than £75,000.

326
00:23:38,204 --> 00:23:42,994
- That's an interesting proposal.
- Oh, no, I don't think... We'd never recruit.

327
00:23:43,164 --> 00:23:47,077
Morale would plummet.
I'm sure Sir Humphrey would agree.

328
00:23:47,284 --> 00:23:50,674
- Humphrey?
- Well, it's my opinion that...

329
00:23:50,844 --> 00:23:53,438
..Sir Frank is in charge of Civil Service pay.

330
00:23:53,604 --> 00:23:58,598
I do think the Prime Minister is entitled
to an answer, Frank.

331
00:23:58,804 --> 00:24:04,879
- Then there are indexed pensions.
- Oh, well, those were agreed a long time ago.

332
00:24:05,084 --> 00:24:09,077
- They're of considerable value.
- Of value, yes, but modest.

333
00:24:09,244 --> 00:24:15,194
I have an estimate that it would cost £650,000
to buy back a Permanent Secretary's pension.

334
00:24:15,404 --> 00:24:17,679
- Absurd.
- How do you value it?

335
00:24:17,884 --> 00:24:22,480
- Er, about £100,000.
- In that case, I'll make you a deal, Frank.

336
00:24:22,644 --> 00:24:27,434
The government will buy back your pension
and anyone else's who is willing to sell

337
00:24:27,604 --> 00:24:33,201
at your own valuation. We'll pay you
£100,000 in cash for your pension rights. OK?

338
00:24:33,404 --> 00:24:39,195
I was talking out of my...off the top
of my head. It could be...that is...

339
00:24:39,364 --> 00:24:41,639
I haven't calculated it myself.

340
00:24:41,844 --> 00:24:46,474
The figure of £650,000 comes from the Society
of Insurance and Pension Actuaries.

341
00:24:46,684 --> 00:24:51,519
Yes, but when it was agreed
I'm sure it was nothing like that.

342
00:24:51,724 --> 00:24:56,514
What about this for an idea? An indexed
pension could be an alternative to honours.

343
00:24:56,684 --> 00:25:01,314
Every civil servant could choose
to take his reward as honours or cash.

344
00:25:01,524 --> 00:25:03,833
- That's preposterous!
- Why?

345
00:25:04,044 --> 00:25:08,003
- Yes, why?
- Well, it, it, it, it, it...

346
00:25:08,164 --> 00:25:13,284
It would put us - put THEM - in an impossible
position. Some already have honours.

347
00:25:13,484 --> 00:25:18,274
They could choose whether to renounce
their honour or their pension indexing.

348
00:25:18,444 --> 00:25:23,438
What do you think, Sir Humphrey?
Or will you be Mr Appleby?

349
00:25:24,564 --> 00:25:29,035
I'm sure that Sir Frank has gone into this
very thoroughly.

350
00:25:29,244 --> 00:25:33,920
Not thoroughly enough.
You'd stand to gain quite a lot personally.

351
00:25:34,125 --> 00:25:36,877
Prime Minister, that is not a consideration.

352
00:25:37,084 --> 00:25:40,963
You'd be happy to be personally excluded
from this rise?

353
00:25:41,164 --> 00:25:44,156
I know the Cabinet Secretary would be.

354
00:25:44,324 --> 00:25:49,523
Well, of course, the question is...
in essence...not as a precedent...

355
00:25:49,684 --> 00:25:52,278
..thinking of the service as a whole...

356
00:25:52,444 --> 00:25:57,643
..fr-fr-fr-from the long-term point of view...
as a matter of principle...

357
00:25:59,564 --> 00:26:03,762
- Go on.
- Well, of course...

358
00:26:03,924 --> 00:26:05,721
..IF...

359
00:26:05,884 --> 00:26:08,876
..if...the government did believe

360
00:26:09,044 --> 00:26:13,037
that senior people should be paid less
than their subordinates,

361
00:26:13,204 --> 00:26:17,800
and if the principle were extended
to Cabinet ministers and junior ministers.

362
00:26:18,004 --> 00:26:21,519
Anyway, Frank,
thank you very much for coming in.

363
00:26:21,724 --> 00:26:24,522
Thank you, Prime Minister.

364
00:26:28,564 --> 00:26:33,957
- What do you make of that? A bit hard?
- No. Most proper and penetrating questions.

365
00:26:34,125 --> 00:26:37,116
- What happens now?
- I'd like a word in private.

366
00:26:37,284 --> 00:26:40,481
- I was just going.
- Good.

367
00:26:40,684 --> 00:26:43,278
- Thank you very much indeed.
- Dear lady.

368
00:26:43,444 --> 00:26:46,641
Not as dear as a Cabinet Secretary, Humphrey.

369
00:26:46,844 --> 00:26:53,158
This is so difficult for me. One does so hate
to be disloyal to one's colleagues.

370
00:26:53,364 --> 00:26:56,356
Clearly you've never been a Cabinet minister!

371
00:26:56,524 --> 00:27:01,314
I'd felt all along, at a time of stringency,
that the Treasury claim was too high.

372
00:27:01,484 --> 00:27:03,873
Not in the nation's interests. Very nice for us,

373
00:27:04,044 --> 00:27:09,038
but not something the Cabinet Secretary
with his higher loyalty could recommend.

374
00:27:09,204 --> 00:27:14,597
It's why we don't let the Permanent Secretary
to the Treasury be head of the Civil Service.

375
00:27:14,764 --> 00:27:19,360
So I've taken the liberty of drawing up
a much more modest submission

376
00:27:19,524 --> 00:27:24,314
which is only 11% over two years
with the top grades rising by only the average

377
00:27:24,484 --> 00:27:30,161
and the overall Civil Service pay bill
going up by only 6% a year over the period.

378
00:27:30,364 --> 00:27:32,514
This looks much more reasonable.

379
00:27:32,724 --> 00:27:37,320
Yes. The lower grades will have to go through
the normal procedures,

380
00:27:37,484 --> 00:27:41,796
but I suggest that the First Division claim
should be processed with secrecy.

381
00:27:42,004 --> 00:27:45,394
- Secrecy? Why?
- If there were widespread discussion,

382
00:27:45,604 --> 00:27:50,394
it might backfire. Some of our people
might want to put in a much bigger claim.

383
00:27:50,564 --> 00:27:53,158
Much better to present a fait accompli.

384
00:27:53,324 --> 00:27:58,159
And may I advise against letting...advisors see it?

385
00:27:59,164 --> 00:28:02,236
Are you sure your colleagues would accept 6%?

386
00:28:02,444 --> 00:28:05,436
If I had your support and co-operation, yes.

387
00:28:05,644 --> 00:28:11,037
It's still got to get through Parliament.
Backbenchers hate Civil Service pay rises.

388
00:28:11,244 --> 00:28:13,633
Oh! How interesting you should say that!

389
00:28:13,804 --> 00:28:18,195
I was just about to make a suggestion,
a major reform.

390
00:28:18,364 --> 00:28:23,358
Well, if MPs' salaries were to be linked
to a grade in the Civil Service,

391
00:28:23,524 --> 00:28:27,517
they wouldn't need to vote themselves pay rises
all the time.

392
00:28:27,684 --> 00:28:30,676
If the Civil Service got one, they'd get one.

393
00:28:30,844 --> 00:28:33,642
And if MPs' pensions were index-linked,

394
00:28:33,804 --> 00:28:37,717
it would make them much less hostile
to Civil Service pay claims.

395
00:28:37,924 --> 00:28:40,722
It certainly would. Excellent.

396
00:28:40,884 --> 00:28:43,876
- Thank you, Humphrey.
- Prime Minister.

397
00:28:44,044 --> 00:28:46,399
What grade ought backbenchers be?

398
00:28:46,604 --> 00:28:50,597
- Senior Principals.
- Isn't that rather low?

399
00:28:50,764 --> 00:28:53,073
Backbenchers are rather low.

400
00:28:53,284 --> 00:28:57,675
- And what grade for Cabinet ministers?
- Under Secretaries.

401
00:28:57,844 --> 00:29:00,074
And the Prime Minister?

402
00:29:00,284 --> 00:29:04,277
Well, at the moment,
you earn even less than I do.

403
00:29:04,444 --> 00:29:09,234
Why don't you grade yourself
as a Permanent Secretary?

404
00:29:09,404 --> 00:29:13,716
- Thank you, Humphrey.
- After all, this is a partnership.

405
00:29:13,924 --> 00:29:18,714
- Yes. A real partnership.- Yes, Prime Minister.

406
00:29:20,887 --> 00:29:30,321
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