Let’s have a bonfire of the quangos

‘If you have a look at democracy it hasn’t done a lot of good for many countries – including this one.’ (1)

Formula 1 motor racing boss Bernie Ecclestone got into hot water this week when he took the opportunity of an interview in The Times (London) to express his admiration for despots. The context was the accusation that the former head of Formula 1 – Max Mosley, son of Thirties fascist leader, Oswald – had been behaving like a ‘dictator’ before he recently stepped down. Ecclestone chose to throw the accusation back at Mosley’s accusers: ‘I prefer strong leaders. Margaret Thatcher made decisions on the run and got the job done. She was the one who built this country up slowly. We’ve let it go down again. All these guys, Gordon and Tony, are trying to please everybody all the time… Max would do a super job, he’s a good leader.’

It was Ecclestone’s implication that Hitler was doing a good job before he got sidetracked by others that really caused controversy: ‘In a lot of ways, terrible to say this I suppose, but apart from the fact that Hitler got taken away and persuaded to do things that I have no idea whether he wanted to do or not, he was in the way that he could command a lot of people able to get things done.’

It’s hardly a surprise that a 78-year-old multi-billionaire might have some unpalatable and cantankerous views about the world. But Ecclestone should have known better than to talk of Hitler with even a shred of sympathy.

However, his retraction in The Times yesterday was perhaps more considered and more enlightening, because Ecclestone’s broader views about democracy are echoed throughout the political and business classes. ‘During the 1930s Germany was facing an economic crisis but Hitler was able to rebuild the economy, building the autobahns and German industry. That was all I meant when I referred to him getting things done.’ (2) It is the sense of stasis in political life that Ecclestone is really commenting on, the way that our leaders seem incapable of ‘getting things done’.

Unfortunately, Ecclestone concludes that the problem is too much democracy. ‘Politicians live in fear of public opinion. If they weren’t so nervous, they might have anticipated the economic problems and the banks wouldn’t have been allowed to get away with what they did’, he writes, adding: ‘The downside of democracy is the belief that everyone should have a say in how things are run; but it’s not that easy.’

For all the attacks on Ecclestone, this idea that democracy ‘gets in the way’ of dealing with society’s problems is commonplace. There are plenty of people, for example, who speak fondly of the authoritarian capitalism of Singapore or even China. Even radicals have been driven to questioning the future of democracy. In a letter to the London Review of Books in 2008, the Slovenian philosopher Slavoj Žižek asked: ‘What if the promised second stage, the democracy that follows the authoritarian vale of tears, never arrives? This, perhaps, is what is so unsettling about China today: the suspicion that its authoritarian capitalism is not merely a reminder of our past… but a sign of our future. What if the combination of the Asian knout and the European stock market proves economically more efficient than liberal capitalism? What if democracy, as we understand it, is no longer the condition and motor of economic development, but an obstacle to it?’ (3)

If Žižek ponders this question at a philosophical level, the powers-that-be in the UK have been dealing with it at a rather more pragmatic level. Inch by inch, power has been shifted away from democratic accountability. One reminder of this in the past week has been the feverish debate about quangos. ‘Quango’ is an acronym of ‘quasi non-governmental organisation’ – in other words, a body that isn’t directly part of a government department and may even appear to be independent, but is actually funded mostly or entirely by government. In recent discussions about how and where state spending should be cut, both the major parties have launched a broadside against these institutions, despite the fact that they seem equally responsible for their creation.

The exact number of quangos and the money they spend is a matter of some debate. The Cabinet Office lists 790 non-departmental spending bodies. But these are just the organisations wholly funded by the UK government. There are others that are part-funded by the UK government, part-funded by the European Union, and others that have money-raising powers of their own. Taking this into account, a report published in May 2008 by the Taxpayers’ Alliance claimed that at the end of March 2007 there were 1,162 quangos and agencies in the UK, employing 714,430 people and costing £63billion (4) – about one-tenth of total UK state spending.

These quangos and agencies include: funding bodies like Arts Council England; regulators like the Charities Commission, Food Standards Agency and the Office of Communications (Ofcom); media bodies like the BBC and Channel 4; innumerable advisory committees; the much-ridiculed Regional Development Agencies; nationalised businesses like Royal Mail; and many, many more.

In a speech on Monday this week, Conservative leader David Cameron declared war on quangos: ‘The influence of quangos can be seen in almost every part of our life. They determine what we can watch on TV and online. They control what our children are taught in school. They tell us what medicines we can take, and what treatments we can receive. The growth in the number of quangos, and in the scope of their influence, raises important questions for our democracy and politics.’ (5) But Cameron was beaten to the punch by Liam Byrne, the chief secretary to the Labour government’s Treasury, who has apparently written to all government departments asking them to review their expenditure on quangos.

There is much bad faith about this discussion. As a means of resolving the problems of government finances, a ‘bonfire of the quangos’ – as Gordon Brown promised while shadow chancellor of the exchequer in 1995 – would make only a small dent. No doubt there are bureaucratic functions that could be done away with, pointless duplication and even competition. But it is also the case that these bodies have generally been set up to deliver a public service. Bringing that service back under departmental control may not, in itself, actually save very much money. The sticky questions of the role and extent of the state still need to be tackled.

Much more important is the question of accountability. Cameron quite rightly noted in his speech: ‘In a healthy democracy, the contract with the voters is simple. I voted you in. You’re responsible for what happens. If things go wrong, I’m going to make you answer for it. And if I don’t like the answer, I’m going to vote you out.’ Unfortunately, it quickly becomes clear that Cameron is just as keen on quangos as his opponents and predecessors. For Cameron, there are areas of life that must always be ‘protected from political influence’.

This is precisely the problem: the tendency to see the functions of the state as merely technical matters that should be removed from the sphere of politics. This reduces government to a series of managerial decisions, where the views of the ‘experts’ are rarely open to question. This is most starkly seen in the decision by the Labour government in 1997 to give the power to set interest rates over to the Bank of England’s Monetary Policy Committee. Setting interest rates is one of the main levers of economic control that a government has at its disposal. Rather than the decision being made by the chancellor of the exchequer, someone answerable directly to parliament, the decision is now made by an independent committee (all appointed by the chancellor) aiming to achieve certain targets (also set by the chancellor) but without any democratic accountability.

This may have pleased the City of London, but such things are not merely technical tasks. The rate of interest has a significant impact on everyone in society, be they borrowers or savers. Yet now we cannot vote out the people who take decisions about the rate of interest. Notably, in his anti-quangos speech, Cameron explicitly mentioned the setting of interest rates as something that should not be a matter of politics.

There are undoubtedly frustrations with the way in which government is conducted and decisions are made. Why, for example, does it seem to take a decade of planning disputes before a major building project can begin? For example, the formal planning application for Heathrow Airport’s fifth terminal was submitted in 1993, but the terminal only opened in 2008. The inability of government to make a decision about nuclear power, genetically modified crops and a host of other issues indicate a society in governmental gridlock.

But the failings of Britain’s bureaucracy and politicians are no excuse to attack democracy. In fact, the inability to ‘get things done’ is precisely a consequence of the weakening of political life, not of its noisy vibrancy. Only when a self-interested and active citizenry really start holding government to account will there be the essential pressure to get things done.

Rob Lyons is deputy editor of spiked.

(1) Bernie Ecclestone, the Formula One boss, says despots are underrated, The Times (London), 4 July 2009

(2) I was a fool to talk about admiring Hitler, The Times (London), 7 July 2009

(3) Letters, London Review of Books, 24 April 2008

(4) The Unseen Government of the UK, Taxpayers’ Alliance, May 2008

(5) People power – reforming quangos, Conservative Party website, 6 July 2009