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UNREVISED PROOF COPY Ev 10 HOUSE OF LORDS MINUTES OF EVIDENCE TAKEN BEFORE THE SELECT COMMITTEE ON THE CONSTITUTION CABINET OFFICE INQUIRY WEDNESDAY 4 NOVEMBER 2009 SIR GUS O'DONNELL, KCB, and MR JEREMY HEYWOOD Evidence heard in Public Questions 341 - 429 USE OF THE TRANSCRIPT 1. This is an uncorrected and unpublished transcript of evidence taken in public and reported to the House. 2. The transcript is not yet an approved formal record of these proceedings. Any public use of, or reference to, the contents should make clear that neither Members nor witnesses have had the opportunity to correct the record. If in doubt as to the propriety of using the transcript, please contact the Clerk to the Committee. 3. Members who receive this for the purpose of correcting questions addressed by them to witnesses are asked to send corrections to the Clerk to the Committee. 4. Prospective witnesses may receive this in preparation for any written or oral evidence they may in due course give to the Committee. 5. Transcribed by the Official Shorthand Writers to the Houses of Parliament: W B Gurney & Sons LLP, Hope House, 45 Great Peter Street, London, SW1P 3LT Telephone Number: 020 7233 1935 WEDNESDAY 4 NOVEMBER 2009 ________________ Present Goodlad, L. (Chairman) Lyell of Markyate, L. Morris of Aberavon, L. Norton of Louth, L. Pannick, L. Peston, L. Quin, B. Rodgers of Quarry Bank, L. Rowlands, L. Shaw of Northstead, L. Woolf, L. ________________ Witnesses: Sir Gus O’Donnell, KCB, Cabinet Secretary and Head of the Home Civil Service, and Mr Jeremy Heywood, Permanent Secretary to the Prime Minister’s Office on the Cabinet Office Inquiry, gave evidence. Q341 Chairman: Sir Gus and Mr Heywood, good morning. Thank you very much for joining us. We are being recorded. Can I please ask you, although it is entirely unnecessary, to formally identify yourselves for the record? Sir Gus O'Donnell: Gus O’Donnell, the Cabinet Secretary and head of the home Civil Service. Mr Heywood: Jeremy Heywood, Permanent Secretary to the Prime Minister’s office. Q342 Chairman: Could we begin by asking both of you what you think are the most important priorities constitutionally for this Committee to consider in pursuit of its inquiry into the workings of the Cabinet Office and central government? Sir Gus O'Donnell: First of all, I very much welcome this inquiry and I have read the evidence with a great deal of interest, not least from my illustrious predecessors, which has been fun. I think it is important to note that constitutionally what matters is are we producing 2 better government outcomes. One of the things I would really urge you to look at is what are the outcomes from the process of government at the kind of centre we have had. There is a lot of talk about golden ages of the past and I sometimes think one needs to think back and associate that with outcomes. I learned quite a lot reading Bernard Donohue’s diaries over the summer about the so-called golden age. Second, constitutionally it is very important to bear in mind the evolution of the role of Prime Minister. Things are changing and have changed quite considerably, if you think about the number of overseas engagements that the Prime Minister does now. In the old days, I remember when I went into Number 10 for the first time in 1990. You would have a certain number of EU and G7 but now we have G20. If you look at the number of EU councils, for example in the second half of this year alone the Prime Minister will be attending four EU councils, some formal, some informal. The number of overseas visits for the Prime Minister has gone up. That is a trend of globalisation. Prime ministers inevitably are going to be much more involved in that global role and I think that is important. Prime ministers come in all different styles and desires, so the Cabinet Office needs to be flexible. I would stress that there are times when you refer to two different departments. There is one department. Let me be absolutely clear. In 1990 when I arrived in Number 10, my payslip made it clear I was a member of the Cabinet Office. There is one Cabinet Office and Number 10 is a subset of the Cabinet Office. There are some eternal verities you need to bear in mind. The Cabinet Office has two core functions of supporting the Prime Minister and supporting Cabinet. The other part is strengthening the Civil Service which is what we have at the minute going on as a third core function. I strongly believe they all fit together very well but it has certainly been the case that in the past that has been separated out, Civil Service departments and the like. My reading is that that has not worked very well. I am a strong believer in keeping all of those together. Those would be my main themes to bear in mind in the evolving role of the Prime Minister. Another part to mention 3 would be the media, just the proliferation of output for media and the fact that the correspondence team deals with a million letters a year, vast numbers of emails, online petitions, all sorts of things. I remember my days back when I was in Number 10 from 1990 to 1994. We were not blessed with those online features. Mr Heywood: I would underline the point Gus is making about the evolutionary way we approach the task. I have worked in Number 10 off and on since 1997 and there have been two prime ministers who had different styles in many respects and some similarities. We found it important to be responsive to their changing styles, the way they wanted to work and of course the evolving priorities of the day. Obviously for the last year or so the financial crisis, the deep recession, has been a huge preoccupation for the Prime Minister in the way that it was not in Tony Blair’s time. There was not the same challenge. We constantly ask ourselves: have we got the machinery exactly right for the challenges we are facing today? Q343 Lord Rodgers of Quarry Bank: Could I look further at the functions of the Cabinet Office and of Number 10? The Cabinet Office has a long history. The role of Number 10 is either new or obscure. Do we need a Number 10 Permanent Secretary? How has this evolved and, apart from the relationship between the Permanent Secretary of the Cabinet Office and Number 10, which is a very important issue, what is the role of the Principal Private Secretary? My memory is that there was a principal private secretary period and there was not one anywhere else. Why have we suddenly moved forward to a huge proliferation of roles? Mr Heywood: Probably the biggest difference in some ways between the Blair Downing Street and the Brown Downing Street is that Tony Blair specifically had a chief of staff who was a special adviser, Jonathan Powell. Gordon Brown did not want to replicate that model. After two or three months of trying out the idea of having a slightly more junior person running Number 10 from a Civil Service perspective, I think he decided about six months in 4 that he needed a more senior figure to run Number 10 in the absence of a Jonathan Powell type figure. That is the simple answer to the question. I was brought in not as a chief of staff but as technically a second permanent secretary as the most senior person running Number 10 in the absence of the sort of special adviser model that we had under Tony Blair. After about three or four months of that, I quickly realised that I could not play that role satisfactorily whilst also being the old Principal Private Secretary, so I recreated that role. We have a chap called James Bowler, who is the Principal Private Secretary, who runs the private office of Number 10. I oversee the whole of Number 10 from the Civil Service perspective. I act as a sort of senior adviser to the Prime Minister day to day, working very closely with Gus obviously. I do not see that as a proliferation of roles. If anything, Number 10 has got slightly smaller in the last two or three years. From my perspective, I think it is a good idea to reassert the Civil Service being in the lead in Number 10 overall. I think that is a better model than the model from 1997 onwards. Q344 Lord Rodgers of Quarry Bank: You have not exactly explained what it does. You said there has been a new role. Mr Blair wanted that, but what actually happened? You have the Cabinet Office and other advice that Number 10 wants. What do you and your own secretary do and if that went now what damage would be done? Mr Heywood: I oversee Number 10, 200 people. I make sure the Prime Minister has the advice and support he needs to carry out his multiple functions as head of government, chairman of the Cabinet, chairman of about 12 Cabinet committees, working as Gus implied very closely with the rest of the Cabinet Office. This is not some completely separate organisation. I get a lot of support from the rest of the Cabinet Office. Gus remains the Prime Minister’s principal adviser on significant issues. I think there is a case for having a senior figure in Number 10 who has the clout within Whitehall to advise the Prime Minister, give him difficult advice on day to day issues and that is what I spend my time doing.
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