Hello, darling. Good Cabinet meeting?
- Hmm. - Good Cabinet meeting, darling?
- I want a triple Scotch! - As bad as that? Why?
The financial crisis is much worse than we thought. All the Cabinet must make cuts.
- Bernard, would you like a Scotch? - Yes, a large one, please.
Humphrey should have seen this coming.
I don't think he understands Economics. He did read Classics.
Sir Frank is head of the Treasury.
He's at an even greater disadvantage in understanding Economics. He's an economist.
- Can't they see there's got to be cuts? - In other departments, not in their own!
So you ordered a clampdown?
- I can't do that. I'm only the Prime Minister. - But you're in charge.
A leader can only lead by consent, consensus. That's democracy.
- So who IS in charge? - Nobody, really.
- Is that good? - It must be. That's what democracy is about.
And I've got a deputation of MPs coming to see me about a pay rise I promised them.
- What will you say? - That I deeply sympathise. I don't.
That they fully deserve it. Not true.
And that I shall make it my first priority as soon as the crisis is over. I shan't.
If they vote themselves a whacking great pay rise,
it doesn't do very much for the dignity of Parliament. It doesn't.
- Are they underpaid? - Underpaid?! Backbench MPs? Darling...
Being an MP is a vast, subsidised ego trip.
You need no qualifications, no compulsory hours of work, no performance standards.
A warm room and subsidised meals for a bunch of self-opinionated windbags and busybodies
who suddenly find people taking them seriously because they've got ''MP'' after their names!
How can they be underpaid when there's about 200 applicants for every vacancy?
You could fill every seat 20 times over even if they paid to do the job!
You were a backbench MP only 5 years ago.
I was the exception.
I was the cream. I rose to the top.
- Do you think you'll shut them up? - Who knows?
The public will never stand for an MPs' pay rise when we cut back on nurses and teachers.
Oh, that's a much more serious problem.
No, darling, much LESS serious. They can't vote against me till the next election.
Backbenchers can do it at 10 o'clock tonight.
Humphrey, I've just had a very stormy meeting with my backbenchers!
- I'm so sorry. - If I had warning, I'd have softened them up.
- Papers only arrived the night before Cabinet! - Most regrettable.
It's up to you, Humphrey. You must insist that we get papers circulated earlier.
Alas, there are grave problems in circulating papers before they are written.
Why the sudden crisis?
- Prime Minister, you must ask Sir Frank. - What would Sir Frank say?
It is not for a humble mortal such as I
to speculate on the complex and elevated deliberations of the mighty,
but, in general, I think Sir Frank believes that if the Treasury knows something must be done,
the Cabinet shouldn't have time to think about it..
Outrageous!
- Yes, indeed. It's known as Treasury policy. - Suppose the Cabinet has questions?
His view is on the rare occasions when the Treasury understands the questions,
the Cabinet doesn't understand the answers.
- Do you subscribe to that view? - I, Prime Minister,
I merely try to carry out your wishes.
I wish that in future all Cabinet papers be circulated at least 48 hours in advance.
- Would you tell Sir Frank? - Yes, of course.
I shall seek an audience with him at once. Thank you.
Who does Frank think he is? At least Old Humpy knows his place.
It was very loyal of him to tell me the truth. They usually all stick together, don't they?
He's rather anxious because of your threat to make Sir Frank head of the home Civil Service.
Of course. I wonder if I should do something about that.
Or if there isn't something to be gained out of keeping them both in suspense.
You gain an anxious Cabinet Secretary. Is that what you want?
Hmm...
He wasn't just unhappy about the cuts, Frank.
He was very unhappy about your papers arriving at such short notice.
I hope you explained it was because of America's policy change.
My dear Frank, I defended you gallantly,
leaving the Prime Minister in no doubt as to the real cause.
Oh, good. Thanks.
- I'll need his goodwill. - Why?
We shall obviously have to bring in some form of pay restraint.
The problem is, the MPs are being denied their pay rise
just as we bring forward the proposed Civil Service pay rise.
- Ah. That's an awkward one. - Yes.
- One isn't interested for oneself... - Of course not.
But one does owe it to one's junior colleagues. Ironic, isn't it, Frank?
Trying to help them involves raising our own salaries, which we don't care about at all.
And then we get accused of feathering our own nests!
That's just another cross we have to bear.
Yes. Envy, pure envy.
You'd better get that proposal in fast before the pay restraint begins.
The night before next Thursday's Cabinet.
We can't let Ministers spend two days talking about it.
They'll come up with stupid objections!
And try to delay it until the pay restraint.
Mm. Do you think it's all right to bounce the Cabinet two weeks running?
- No alternative. - I-I-I was thinking, Humphrey.
Perhaps it would be better if the proposal came from both of us.
- Both of us? - Well, we are joint heads of the Civil Service.
Not as I understand it, Frank.
- Oh, I think so, effectively. - I think not, effectively.
I look after the financial side and you the establishment side.
But, Frank, with respect, the Cabinet Secretary is the de jure head of the Civil Service.
With respect, Humphrey, the Cabinet Secretary and the Permanent Secretary to the Treasury
are de facto joint heads of the Civil Service.
Be that as it may, Frank, we can't put up the proposal together.
I must remain aloof and judicial.
You must make the running. After weighty consideration, I will come down on your side.
All right. One other point...
We don't want Cabinet to adjudicate on this.
- They must refer it to an impartial committee. - Who should chair it?
- What about Professor Welsh? - That silly old buffer?!
- That silly old buffer. - Why?
He's asked me to put him forward as the next chairman of the University Grants Committee.
He's desperate for the job, so he'll understand what's required of him.
What an excellent choice.
Humphrey, I'm astonished.
The Treasury has just cancelled half our spending plans due to the financial crisis
and now they have the temerity to put forward a plan for a Civil Service pay rise!
And you're bouncing it through Cabinet!
I wanted all papers circulated 48 hours in advance. Do you think I'm a complete idiot?
It is not for me to speak for Sir Frank.
I'm asking you. Speak for yourself. You're head of the Civil Service.
- Am I indeed? How gratifying! - For the moment.
As Cabinet Secretary, I am most eager to reduce public spending,
but as head of the Civil Service I'm responsible for the real dangers that arise administratively
if a pay rise does not come through very soon. It's so difficult for me. I'm wearing two hats.
Yes, isn't that rather awkward for you?
Not if one is in two minds.
Or has two faces.
Perhaps I should relieve you of one of them?
- Oh, no, no, no. I'm perfectly happy with both. - Faces?
Hats!
You see, Prime Minister, the problem is that low morale will lead to the danger of a strike.
Think of the effect of that on the social services.
And we are already experiencing difficulties in recruitment.
- 10 applicants for every vacancy? - Yes, but the applicants are very low quality.
With very few First Class degrees. Most of them...have Lower Seconds.
I got a Third.
That's all right for Prime Ministers. Sir Humphrey means civil servants.
The point is, I couldn't get this through. There's already a backbench revolt looming.
MPs will never agree to a pay rise for civil servants. And the Cabinet will be hostile.
May I suggest that we just ask the Cabinet merely to agree to look at the application?
Then we'll put the matter before an independent group of assessors.
- Who would lead these assessors? - There's a very good man I could recommend.
Professor Welsh. Very sound, very sensible, very careful.
I heard he was a silly old buffer.
I can't imagine who could possibly say such a thing!
Since the most senior grades of the service really bear the heat of the battle,
they should receive the greatest increase.
Seems very fair to me.
- So this would be the scale. - Right.
- I haven't seen this, by the way. - Of course not. Most improper.
Quite. Well, they're very significant increases for Under Secretaries,
Deputy Secretaries and, um,
those of us who, um...
Exactly.
About 43%.
- Alas. - But no more than we've earned.
I take it this paper is not for submission.
My dear Humphrey, those are the submission papers.
Oh, yes.
- It only goes up to Appendix K. - Sorry. Six more to follow.
Oh! No danger of their wading through all those.
Where's the one-page summary for the Cabinet?
The Janet and John bit?
Here it is.
It's more or less the same as last time. Comparable jobs in industry.
- On whose salary are the comparisons based? - The directors of BP and IBM, naturally.
You don't think that might be challenged as untypical and above average?
No. Of course, we don't mention them by name. Just ''typical industrial firms''.
Then we take our own examples of increases from the lowest point of the incremental scale.
- As before. - Principal examples are there at the end.
£3.50 a week for a messenger. £4.20 for a registry clerk.
£8.20 for a scientific officer. Hardly anything.
So it would be £26,000 a year extra for us?
More or less.
- You haven't mentioned that, I hope. - My dear Humphrey...
Frank, you don't think there's a danger that someone might go into this in detail?
- Not that there's anything wrong with it. - But who? Ministers are only briefed by us.
We're all loyal members of the service.
Yes. I'll get it in last item before lunch on the Cabinet's agenda.
- They won't spend more than 5 minutes on it. - Plain sailing.
Apart from the rigorous scrutiny of Professor Welsh.
Your Chief Political Advisor is on the phone.
Thank you. Put her through. ..Dorothy?
I'm doing a paper on this Civil Service pay claim, but I can give an immediate response.
- Yes, please. What's your answer? - It's a series of questions.
- For me? - For Sir Humphrey.
The claim is self-serving and inappropriate, and significant for what it leaves unanswered.
- Right. Fire away. - You should treat this as highly confidential.
First of all, you should ask what deduction...
Yes...
Triffic!
Oh, George, that's for you, I think. All right for me to go in, Bernard?
Uh, yes. Sir Humphrey, can I just mention one thing?
Yes, Bernard?
- There has been movement. - On what subject?
On a subject we hoped for no movement.
The Civil Service generally hopes there will be no movement on any subject!
Uh, yes, what I mean is it's in relation to a subject that is normally wholly and exclusively
within the control of the Civil Service that developments have developed.
- You're speaking in riddles! - Oh, thank you.
That was NOT a compliment, Bernard! Make yourself clear, please.
I'm sorry, Sir Humphrey, my lips are sealed.
I am referring to minutes that I was duty bound to make of a confidential conversation
between the Prime Minister and an advisor.
- Which advisor? - I cannot divulge her name.
Thank you, Bernard. And this confidential advice was to do with the financial crisis?
- No, much more important. - Not his silly nuclear strategy?
- Much more important. - You don't mean the Civil Service pay claim?!
I see. What do you advise, Bernard?
I advise you consider your position carefully, perhaps adopting a more flexible posture,
while keeping your ear to the ground, covering your retreat and watching your rear.
Thank you, Bernard. You've been a great help.
Actually, I haven't told you anything.
- I should hope not. That's most improper. - Prime Minister, Sir Humphrey's here.
Flexible.
- Ah, Humphrey! Come in. - Thank you, Prime Minister.
Tell me what you think of this.
What do you make of it?
- It is rather large for instant judgement. - Only read the one-page summary.
- Ah. Oh, good. - Well?
Well?
Prime Minister, you place me in a very difficult position.
Do I, Humphrey? You have to have loyalty to your colleagues, but also to Cabinet policies.
- I agree. - You agree?
- Yes. - With me?
- I agree with you. - I...ah... I don't... Who do you agree with?
- With you. - Not with Sir Frank?
- No. - You're not arguing with me?
No.
Perhaps I haven't made myself quite clear.
I agree with you!
Well, what do you make of that pay claim?
Well, it's not excessive in itself,
but at a time of national stringency it is neither wise nor in the national interest.
I don't like to criticise my colleague, but...
In my view, Sir Frank, though no doubt acting from the best of motives,
should have placed the good of the nation before the narrower interests of civil servants.
You see, this claim raises serious questions.
That's interesting. I've made a note of some questions, too.
Good questions. Where did they come from?
- Oh, occurred to me. - Yes.
They're...VERY good questions.
Yes, that's what I thought. What should we do?
- We should ask them. - Ask who?
Sir Frank. You ought to invite him here to discuss them.
He may well know the answers. Indeed, he should know them.
That's his job, after all.
Yes. Thank you. Arrange that, Bernard.
I must say I appreciate your impartiality.
You'd gain quite a lot yourself if it were to go through.
Well, I suppose so, Prime Minister,
but I see the rewards of this job as the knowledge...
..that we've been of service to the nation, not to ourselves. Don't you agree, Prime Minister?
- I agree. Thank you, Humphrey. - Thank you, Prime Minister.
- Humphrey's very fair-minded, isn't he? - Oh, yes, Prime Minister.
If there were a conflict of interests, which side are the Civil Service really on?
The winning side, Prime Minister.
Ah, thank you, Billy. It was very painful for me not to be able to support Frank's case.
- Deeply distressing. - But he was going to lose.
And that Wainwright female had suggested that they stop us handling our own pay claims
and let a Select Committee decide on them!
Appalling! Next thing you'd have is politicians removing civil servants
on the grounds of incompetence! The thin end of the wedge.
Arnold, I need your help. Clearly, Frank's claim is discredited,
but I need to get us the pay rise to consolidate my position.
What did you do?
- You say Frank used the normal formula? - That's right.
- And you need 43%. Hm. - Thereabouts.
Well, since virtually all the relevant staff work in London,
start with a big increase in the London allowance. Allowances count as expenses.
- They don't show in the percentage calculation. - London allowance.
Then introduce a special graduate allowance for those with Firsts and Upper Seconds.
- To aid recruitment. - Oxford doesn't give Upper Seconds.
A second at Oxford counts as an Upper Second, at least.
Then you double the Outstanding Merit awards. I take it people still get them?
Oh, yes. Everyone.
They don't count as rises either. Getting there?
- That gets us down to only about 18%. - Since last time?
Then don't calculate from last time. Calculate from 1973, the high point.
And don't just take it to this year. Take it up to two years' time, the end of the claim period.
Correcting for inflation, that should do it.
Excellent. The percentage increases will sound all right now, but that still leaves a problem.
The overall Civil Service pay bill will still be too high.
- Easy. Reduce the size of the Civil Service. - What?!
If the service were smaller than last time, a comfortable rise for individuals looks smaller.
Real reductions in the size of the service?!
It would be the end of civilisation as we know it!
No, my dear Humphrey. All you do is stop calling them civil servants.
Take the museums, for instance.
If you turn them into independent trusts, the staff stop being classified as civil servants.
They're still the same people doing the same job and still paid by government grants,
but as it's a grant it doesn't count in the pay statistics. Unless anyone inquires closely,
it will look like a cutback.
- Can we set up so many trusts in time? - You won't have to. It only has to be planned.
If it doesn't happen, it won't be your fault.
Meanwhile, you should be able to get the rise to work out at 6% overall.
- Thank you, Arnold. That's a great help. - Always happy to oblige.
Especially with the birthday honours coming up.
Should I talk to Frank about this, too?
Em...oh, no, Arnold. Leave it to me. Frank's got a lot of problems coming up.
- Really? He hasn't mentioned them. - Because he doesn't know about them yet.
And Civil Service pay has fallen significantly behind comparable jobs in industry.
What comparable jobs?
Well, it's quite a complex formula, but it has been accepted for some time.
I understand that a Permanent Secretary earns over £45,000 a year.
Cabinet Secretary and Permanent Secretary to the Treasury earn in excess of £51,000.
Um...maybe you're right.
Don't you know how much you earn, Frank, or has it just slipped your memory?
Yes, but if that's what industry is paying...
- What do you think, Humphrey? - It's not for me to say.
Sir Frank is in charge of Civil Service pay.
- Prime Minister, may I ask a question? - Yes.
What deduction do you make for job security?
- I beg your pardon? - Top people in industry can get sacked.
They can go bust, but your jobs are guaranteed.
- There are swings and roundabouts. - What roundabouts?
- Long hours. - Don't those happen in industry?
Industrial leaders must stand by decisions.
- So do civil servants. - Really? I thought ministers took decisions.
- And the blame. That's the deal, isn't it? - Yes, ministers do take the decisions.
Civil servants must decide how to carry it out.
- Like a secretary laying out a letter. - Yes.
No! Um... Sir Humphrey knows what I mean.
It's up to you, Frank. You're in charge of Civil Service pay.
What about the service element?
Service element? What do you mean?
Er...
- The job has a strong element of service. - Absolutely.
Rewarded by CBs and KCMGs and knighthoods...Sir Frank.
To an extent.
I wonder whether we shouldn't compare civil servants with directors of charities
rather than industries. They get £17,000 a year on average, rather than £75,000.
- That's an interesting proposal. - Oh, no, I don't think... We'd never recruit.
Morale would plummet. I'm sure Sir Humphrey would agree.
- Humphrey? - Well, it's my opinion that...
..Sir Frank is in charge of Civil Service pay.
I do think the Prime Minister is entitled to an answer, Frank.
- Then there are indexed pensions. - Oh, well, those were agreed a long time ago.
- They're of considerable value. - Of value, yes, but modest.
I have an estimate that it would cost £650,000 to buy back a Permanent Secretary's pension.
- Absurd. - How do you value it?
- Er, about £100,000. - In that case, I'll make you a deal, Frank.
The government will buy back your pension and anyone else's who is willing to sell
at your own valuation. We'll pay you £100,000 in cash for your pension rights. OK?
I was talking out of my...off the top of my head. It could be...that is...
I haven't calculated it myself.
The figure of £650,000 comes from the Society of Insurance and Pension Actuaries.
Yes, but when it was agreed I'm sure it was nothing like that.
What about this for an idea? An indexed pension could be an alternative to honours.
Every civil servant could choose to take his reward as honours or cash.
- That's preposterous! - Why?
- Yes, why? - Well, it, it, it, it, it...
It would put us - put THEM - in an impossible position. Some already have honours.
They could choose whether to renounce their honour or their pension indexing.
What do you think, Sir Humphrey? Or will you be Mr Appleby?
I'm sure that Sir Frank has gone into this very thoroughly.
Not thoroughly enough. You'd stand to gain quite a lot personally.
Prime Minister, that is not a consideration.
You'd be happy to be personally excluded from this rise?
I know the Cabinet Secretary would be.
Well, of course, the question is... in essence...not as a precedent...
..thinking of the service as a whole...
..fr-fr-fr-from the long-term point of view... as a matter of principle...
- Go on. - Well, of course...
..IF...
..if...the government did believe
that senior people should be paid less than their subordinates,
and if the principle were extended to Cabinet ministers and junior ministers.
Anyway, Frank, thank you very much for coming in.
Thank you, Prime Minister.
- What do you make of that? A bit hard? - No. Most proper and penetrating questions.
- What happens now? - I'd like a word in private.
- I was just going. - Good.
- Thank you very much indeed. - Dear lady.
Not as dear as a Cabinet Secretary, Humphrey.
This is so difficult for me. One does so hate to be disloyal to one's colleagues.
Clearly you've never been a Cabinet minister!
I'd felt all along, at a time of stringency, that the Treasury claim was too high.
Not in the nation's interests. Very nice for us,
but not something the Cabinet Secretary with his higher loyalty could recommend.
It's why we don't let the Permanent Secretary to the Treasury be head of the Civil Service.
So I've taken the liberty of drawing up a much more modest submission
which is only 11% over two years with the top grades rising by only the average
and the overall Civil Service pay bill going up by only 6% a year over the period.
This looks much more reasonable.
Yes. The lower grades will have to go through the normal procedures,
but I suggest that the First Division claim should be processed with secrecy.
- Secrecy? Why? - If there were widespread discussion,
it might backfire. Some of our people might want to put in a much bigger claim.
Much better to present a fait accompli.
And may I advise against letting...advisors see it?
Are you sure your colleagues would accept 6%?
If I had your support and co-operation, yes.
It's still got to get through Parliament. Backbenchers hate Civil Service pay rises.
Oh! How interesting you should say that!
I was just about to make a suggestion, a major reform.
Well, if MPs' salaries were to be linked to a grade in the Civil Service,
they wouldn't need to vote themselves pay rises all the time.
If the Civil Service got one, they'd get one.
And if MPs' pensions were index-linked,
it would make them much less hostile to Civil Service pay claims.
It certainly would. Excellent.
- Thank you, Humphrey. - Prime Minister.
What grade ought backbenchers be?
- Senior Principals. - Isn't that rather low?
Backbenchers are rather low.
- And what grade for Cabinet ministers? - Under Secretaries.
And the Prime Minister?
Well, at the moment, you earn even less than I do.
Why don't you grade yourself as a Permanent Secretary?
- Thank you, Humphrey. - After all, this is a partnership.
- Yes. A real partnership.- Yes, Prime Minister.
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