Lining up the next U-turn

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It has emerged that beneficiaries of the government’s scheme to pay a lump sum of £60,000 to the families of health care staff killed by the coronavirus pandemic will automatically lose the right to claim any other benefits, including universal credit, because of the rule that ‘savings’ cannot amount to more than £16,000. There is no doubt that this is a ‘correct’ interpretation of the benefit rules, nor that there is a certain logic behind the rule about savings (even if I don’t entirely accept that logic). At an entirely ‘logical’ level, one could even make out a decent case that the source of those ‘savings’ is, and should be, irrelevant and that no exceptions should be allowed. But the payments are more to do with a populist political gesture than with a thought-through attempt to deal with the financial consequences of the sacrifice that so many health care workers have made, and the political consequences of then stopping, or refusing to pay, other benefits are obvious.

The report makes it clear that the DWP, HM Treasury and the Department for Health and Social Care all agreed that these payments should not be disregarded for benefit purposes. What that tells us is that civil servants in three separate ministries sat around a (virtual, presumably) table and agreed that the benefit rules should not be waived. That in turn requires us to believe one of two things: either none of them even considered the potential political backlash when their interpretation became public so that none of them thought to inform their respective ministers, or else that one or more of them did inform the relevant minister and the minister(s) signed off on the decision without challenging it. There are ways, of course (and ‘Yes, Minister’ was good at highlighting them) in which ministers can be ‘informed’ of something without realising what they’ve been told. Given the traditional caution of the career civil service, that seems more likely to me than the suggestion that none of the civil servants involved realised the implications of what they were doing. It’s in their nature to ensure that they have political cover for anything likely to be controversial, and they’re paid to know what will be controversial. Ministers, on the other hand, are paid to take the responsibility. In the current ‘never explain, never apologise’ government, it’s not a responsibility which I expect any of them to fulfil.

Gotcha!

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If there was one aspect of the UK Government’s handling of the pandemic which they got totally right – up until last Saturday at least – it was keeping the Home Secretary off the airwaves.  The extent to which that was the right decision only became fully clear when they finally let her loose. Perhaps their objective in changing the policy was to make the rest of them look half-competent by comparison, but I suspect it failed even in that limited aim. Incompetence comes in many forms – and one of those is allowing someone even less competent to take a lead role.

I can’t imagine that the government’s media advisers didn’t anticipate the demand for an apology for the lack of PPE for front-line staff but if they did anticipate it and briefed her on how to answer, she either forgot or ignored the advice she was given and ended up using the forbidden ‘s’ word to apologise for the stupidity of the public at large in choosing to believe the people working without PPE rather than the government’s spin doctors who insist that there is plenty.  It’s not far short of Trump’s claim that doctors are only complaining about lack of PPE so that they can get on tv. It didn’t work too well for him either.

That said, I’m not a big fan of the ‘demand an apology’ style of journalism. It sometimes seems that some journalists are playing some sort of game of ‘Gotcha’ rather than trying to get at the truth.  It’s true that getting ministers to admit that any mistakes at all have been made is hard (for some reason they seem to need us to believe that they’re as infallible as they believe themselves to be – always a dangerous position from anyone in authority), and a forced apology is an admission of failure, of sorts; but apologies don’t really move things forward.  There’s even a danger that, once an apology has been given, lines will be drawn under events and the important analysis of how and why it happened and what we do to get out of the problem and/or avoid it in future goes undone.

Perhaps, though, for reporters who have failed to get straight answers to straight questions for weeks on end and have instead been subjected to a torrent of demonstrable untruths, ‘Gotcha’ is all that they have left in their armoury.

Top salaries

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There have been two main arguments advanced by those who support the payment of massive bonuses to bankers.  The first is that such bonuses represent payment for results, and the second is that the banks are in competition with each other for their top management and therefore have to pay competitive packages.

Those arguments are, however, based on two assumptions.  Those assumptions are self-evidently true to those making them; but I’m not convinced that they stand up to more objective scrutiny.  The first assumption is that the actions of the individuals concerned make such a significant difference to the performance of the organisation as a whole that it is essential to retain them, and the second is that there is a vanishingly small pool of talented people who can undertake such roles.

The question about the extent to which the performance of an organisation is affected by the performance of an individual is far from straightforward.  It’s probably true that poor decisions by individuals can wreck an organisation – and the banking industry has seen the effects of that probably more than any other sector.  It’s far less obvious that the actions of top management can make an organisation succeed. 

That doesn’t stop them claiming the credit for success when it happens – but there’s often a huge amount of luck.  They just happen to be in the right place at the right time.  And if things go wrong, there’s usually someone else to blame.  So when things are going badly it’s down to the problems of the Eurozone; when they are going well it’s due to the brilliance of the top bankers.  (And it’s hard for politicians to criticise bankers for pulling this trick when they do it so often themselves.)

Competent management teams at banks will generally do better than incompetent ones, but I suspect that a huge proportion of the factors which affect overall success will always be outside their control.  If that’s true, then the pool of people who could manage a bank competently is much larger than we are led to believe.  And if that pool is much larger, then the need to compete by paying huge salaries is correspondingly reduced.

To look at things another way, do we really believe that we couldn’t find competent people to run our banks at salaries very much lower than those being paid currently?  After all, it’s not so very long ago that the banks were indeed run by people whose salaries, in both absolute and comparative terms, were very much lower than today.  And the banks were, I recall, rather more successful too.