Paul Gray’s resignation as Revenue and Customs chair set a constitutional precedent of immense significance for anyone who works in Whitehall.
The full implications have not yet been fully appreciated in all the furore about lost computer disks and files at the department.
This is unlike the usual inward-looking Westminster row about ‘sleaze’ or ‘spin’, which makes little impact beyond the political and media worlds. Millions and millions of people are affected — everyone with a child under 19. Coming on top of Northern Rock, the affair has cast doubt on the competence of the government.
The threshold for reassuring the public about personal data will be much higher and there will be pressure to scale down and severely limit national databases of information: in tax and benefits, health and so on.
The main focus has been on identity cards, which both the Conservatives and the Liberal Democrats are pledged to scrap. The legislation has gone through and ministers insist that the biometrics in the cards, and new passports, will be fraud-proof. But polls point to a big fall in the previously high level of public support for ID cards.
The least discussed aspect has been for senior civil servants themselves. Scratch your head and think when a senior official publicly resigned at the height of a political crisis. Of course, some have been shunted sideways or out of jobs later on, but very few have left at the time of the incident.
Look at Gray’s words. He quit because of a ‘substantial operational failure’. And the more we have learned of working practices in R&C, the more correct that term looks. Yet that involves a redefinition of the constitutional balance between ministers and senior civil servants. The cause is the big changes in public sector management over the past two decades.
Senior civil servants have been given managerial responsibilities, targets and performance-related pay for running distinct chunks of administration, whether in agencies or within departments. They have been publicly identified and held to account by parliamentary select committees and the media.
So a resignation when something goes fundamentally wrong, as it has in this case, is the logical consequence.
Lax internal procedures — and not, as we now know, just at a junior level — are clearly the responsibilty of the chair. They are operational matters.
This redefines the relationship with ministers. There were endless, and largely fruitless, debates in the mid-1990s after both the sacking of Derek Lewis as Prison Service director general and the misnamed ‘arms-to-Iraq’ affair. Where did the buck stop?
There is now general agreement that ministers should not be held culpable, or directly responsible, for actions in their department which they did not authorise, approve of, or know about, as is clearly the case over the lost files.
In these circumstances, the duty of a secretary of state is to find out what happened, order action to remedy the problem and report promptly to Parliament. That is what accountability means.
In these respects, Chancellor Alistair Darling appears to have behaved correctly in constitutional terms. However, critics point to earlier incidents of files being lost, suggesting a systemic problem that should have been known to him well before the recent major loss.
Moreover, Darling, or rather Gordon Brown, can be criticised for the decisions leading to the merger of the Inland Revenue and Customs & Excise, and the subsequent cost-cutting (when the merger legislation went through Parliament, some MPs, including Conservative spokesman Andrew Tyrie, warned that it could threaten efficiency and confidentiality).
But this is not the first time that R&C has been criticised for administrative failings. It has regularly been in the headlines for huge, costly errors in the management of tax credits. But this has not been seen as a resigning matter for senior officials: rightly so, because the shambles over tax credits is the result of political decisions by ministers.
But none of them has, of course, resigned: Brown is in Number 10, and Dawn Primarolo, who was responsible for tax credits for so long, moved to the Department of Health.
Ministers, of course, resign only when they lose support among their own backbenchers. Talk of honour is a smokescreen. But what does that mean for senior officials running big agencies?
If, or when, there is a mass prison breakout, or records on immigrants are found to be faulty, will the senior official in charge have to quit — if only to save the skin of the Cabinet minister heading the department?
There is a lot of personal sympathy for Paul Gray among those who know and respect his work. He might find that one of his legacies is to establish a new constitutional doctrine.
