How to respond to mistakes

The sensationally good Evan Davis has a post considering what he calls:

The Bank's Worst Decision

He advances a number of lessons that should be learned after the Bank of England made a mistaken decision to cut interest rates in August 2005. Click here to see what they are.

As usual Evan argues well. But very unusually in our long friendship, I don't agree with him.

I think that learning lessons from a single mistake is a very bad idea indeed. If the Bank made repeated errors, then lessons can be learned and changes made to reduce their average propensity to make mistakes.

But if you attempt to adjust procedure in response to one mistake you may increase the total number of mistakes. It could be, for instance, that the decision by the bank was correct and the outcome, due to randomness, a poor one.

Comments

[David Moss]

Mr Finkelstein, I must warn you, every now and again your column is taken over by a strange man. He believes that decisions can be right even though they are wrong. I have warned him that this doesn't make sense [1] but he persists. He lives in a world of his own where a story only he can see plays before his eyes. But then, like the Albanian Touretter Big Issue-seller outside my local Sainsburys, he starts shouting at innocent passers-by, "you just don't get it, do you?" and "he doesn't get it". Again, I have tried to put him right [2], I just thought you ought to know.

I enjoyed the best dressed corpse article [3] and particularly this:
"Some may think that there is a brilliant, attractive, right-wing synthesis, a magical narrative that obviates the need for any concessions to the centre. Well, if there is, please don’t keep the secret to yourself. Share it with the rest of us."

I have a quiet weekend ahead of me and I intend to take up your challenge. Some time next week, I shall submit my home affairs "narrative", as you call it, and I hope others will do the same for other policy areas.

Have you read Darkness at Noon? You know, that book where the life-long faithful party member is gradually made to realise that he has been a traitor all along, without knowing it, and finally reconciles himself to abandoning academic selection ...

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1. http://timesonline.typepad.com/comment/2006/11/was_churchill_w.html
2. http://timesonline.typepad.com/comment/2007/01/simon_heffer_on.html
3. http://www.timesonline.co.uk/tol/comment/columnists/daniel_finkelstein/article1890419.ece

[David Moss]

#1 -- BRAVE NEW WORLD
"On any list of public concerns, illegal immigration, crime, terrorism and identity fraud would figure towards the top. In each, identity abuse is a crucial component. It is all part of a changing world: global mass migration; easier travel; new services and new technologies constantly being accessed". So said Rt Hon Tony Blair MP, then Prime Minister, in his 6 November 2006 article in the Daily Telegraph [1].

"The world is changing around us at an incredible pace due to remarkable technological change. This process can either overwhelm us, or make our lives better and our country stronger. What we can’t do is pretend it is not happening. Government has to respond to keep up with the hopes and aspirations of citizens and business, to remain efficient and trustworthy". That's what he said a year earlier, in the Foreword to a Cabinet Office paper on transformational government [2], of which, more anon.

That is two examples of the nearly ex-Prime Minister's belief that we live in a new world. The number could be multiplied.

Question: what are the implications if he is right? Answer: in that case, the old rulebook can be torn up.

And tear it up he has done. Or at least he has tried to:
* Early in his administration, he tried to politicise Whitehall by enlisting a group of Permanent Secretaries to sit behind him, apparently endorsing his policy announcements, at a press conference in the garden of No.10.
* The House of Lords was partially reformed.
* The attempt was made to abolish the post of Lord Chancellor.
* He tried to reduce the number of police forces, possibly aiming for the day when there would be just one, politicised, state police force [3].
* He stood by while two of his Home Secretaries lampooned judges for dispensing his own government's law [4].
* He gave special advisors power over civil servants and he bypassed the civil service and their decision-making procedures, introducing, instead, the sofa.
* He marginalised the House of Commons, announcing policy through leaks to the press, and he marginalised the Cabinet – they were not shown the Attorney General's opinion(s) on the legality of the Iraq war [5].
* The Home Office was split.
* He may, even now, as we speak, be planning to sign the UK up to the new EU Constitution (or Treaty), without providing the promised referendum, during an unprecedented six-week handover period from one Prime Minister to the next ["Mr Blair and other ministers have insisted that a referendum is not needed this time round because they claim the new treaty is different from the proposed constitution", 6].

In short, in the name of a changed world, in the name of modernisation, he has tried to tear up the Constitution [7]. It's the old story. 14 years ago, in 1993, Mr Blair went to a Party and was introduced to the illicit pleasures of deleting clauses from constitutions. Since then, he has become addicted.

Anyone who thinks about the UK Constitution will marvel at its sophistication. It is the repository of roughly 800 years of wisdom (measuring, for the sake of argument, from Magna Carta). It is the result of the efforts of a ridiculously successful country, comprising a ridiculous mixture of people, trying to rub along, among themselves and with other countries, more or less rationally, with their heads held more or less high.

Any change to the Constitution is revolutionary unless it is approached with great circumspection. Without that, changes to the Constitution are vandalistic and potentially incendiary.

It is not obvious that Tony Blair's depredations can be accurately described as "moving to the centre". That is spin, used to deflect the gaze from the vandalistic reality.

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1. Tony Blair, 6 November 2006, 'We need ID cards to secure our borders and ease modern life', Daily Telegraph, http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2006/11/06/do0601.xml

2. November 2005, 'Transformational Government – Enabled by Technology', Cabinet Office, http://dematerialisedid.com/PDFs/transgov-strategy.pdf

3. Simon Jenkins, 13 November 2005, 'It’s not a Blair police state we need fear, it’s his state police', The Sunday Times, http://www.timesonline.co.uk/tol/comment/columnists/simon_jenkins/article589709.ece

4. Please see David Leppard, 31 October 2004, 'Chief justice to quit in Blunkett row', The Sunday Times, http://www.timesonline.co.uk/tol/news/uk/article501142.ece and Nick Stadlen QC, 9 October 2006, 'Brief Encounter: David Blunkett', The Guardian, http://politics.guardian.co.uk/podcasts/story/0,,1889512,00.html

5. Simon Jenkins, 29 April 2005, 'Try the truth next time, Tony', The Times, http://www.timesonline.co.uk/tol/comment/columnists/simon_jenkins/article386415.ece

6. Patrick Hennessy and Melissa Kite, 10 June 2007, 'Dilemma for Brown as Blair plans EU deal', Sunday Telegraph, http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/06/10/nbrown110.xml

7. I appeal to the definition of the Constitution devised by the House of Lords Select Committee on the Constitution, viz. “the set of laws, rules and practices that create the basic institutions of the state, and its component and related parts, and stipulate the powers of those institutions and the relationship between the different institutions and between those institutions and the individual”, http://www.parliament.uk/documents/upload/CFE%20Final.doc.

[David Moss]

#2 -- CIVIL LIBERTY
The narrative so far? Friday 2 May 1997 was the dawn of a new world, and the Prime Minister had carte blanche.

To do what?

Apparently, to invade our privacy:
* The government have taken powers to monitor our telephone calls, and our emails and other use of the Internet [8].
* With tax credits, they have reintroduced means-testing, and thus the collection by the government of more personal information.
* Our health records are to be computerised and centralised through the National Programme for IT (NPfIT) [9].
* It is proposed that anybody charged by the police may be fingerprinted and may have a sample taken and stored on the national DNA database, however minor the offence, even if it is only littering [10].
* They want to introduce road-pricing, which involves logging all car journeys.
* Plans are underway to build a national identity register, and to make it impossible as a result to get state education or non-emergency state healthcare without an ID card [11]. Or a job. Or a pension.
* Local government has been given powers to enter our homes and photograph them, for Council Tax purposes [12] and maybe for the purposes of risk assessment and energy efficiency.
* Suspects can be detained for up to 28 days without charge.
* We are watched by millions of CCTV cameras.
* In the name of border control, our personal details are collected and shared with other countries through IATA's 265 airlines, among other international bodies [para.6.6, 13].

Large amounts of taxpayers' money are earmarked for these initiatives:
* NPfIT, for example, has cost £12.4bn so far [9].
* And the ID card scheme is likely to cost over £5bn, according to the Home Office [14], and perhaps as much as £19bn, according to the LSE [15].

Despite the money spent on them, government schemes display surprising incompetence:
* The Child Support Agency has built a mountain of backlogs and after ten years of Labour rule is finally to be disbanded.
* What is there to show for the £12.4bn spent on NPfIT? As yet, nothing [9].
* The Home Office cannot tell us how many people have absconded from open prisons, they forget to consider foreign prisoners for deportation once they have served their sentence -- even though a judge instructed them to do so -- and they cannot get round to entering the details of criminal offences committed by people while they were abroad.
* The tax credit system handed out £5.8bn to people by mistake [16].
* The tax credit website had to be taken down because it was open to fraudulent use [17].
* The latest in a series of lurid revelations is that the Department for Work and Pensions cannot account for nine million of the 57 million National Insurance numbers extant [18]. This, from a government forever warning us about the dangers of identity theft and forever warning employers that it is their responsibility to check people's right to work.

They may not be able to deliver, but what the government can do is reorganise things:
* First they undid the Tory reforms of the health service. Then they reintroduced them.
* They did the same with schools.
* In 1997, the UK Passport Agency issued passports. Then it became the UK Passport Service. Then it became the Identity and Passport Service. And now, today, ten years later, it issues passports. Very expensive passports.
* The Lord Chancellor's Department became the Department for Constitutional Affairs and then one day, thanks to the Sunday Telegraph, the Lord Chancellor and the Lord Chief Justice discovered that it was now to become the Ministry of Justice and to take over responsibility for prisons from the Home Office.

Many of these measures may seem draconian but surely they are all justified by the ever-present threat of terrorism? No [19]. Good policing will help and the security and intelligence services will help. It is to be hoped that they can maintain their strong performance to date. But the national identity register, ID cards, ePassports and biometric visas will not help. Joan Ryan MP, Under-Secretary of State for Nationality at the Home Office, has been reduced to saying that the only benefit of ID cards is to help to identify the bodies [20].

What we have here is an incompetent and spendthrift government with an over-riding desire to curtail our civil liberties. And this, presumably, is the "centre ground" on which some political commentators advise the Conservative party to join the government to survive.

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8. Regulation of Investigatory Powers Act 2000, http://www.opsi.gov.uk/acts/acts2000/20000023.htm

9. Richard Brooks, March 2007, 'System Failure', Private Eye no.1179

10. March 2007, 'Modernising Police Powers – Review of the Police and Criminal Evidence Act (PACE) 1984, consultation paper', Home Office, http://www.homeoffice.gov.uk/documents/cons-2007-pace-review?view=Binary

11. David Moss, March 2007, 'Propiska', http://dematerialisedid.com/Propiska.html

12. Leo McKinstry, 27 February 2007, 'Close your door to the mafia tax collectors in the town hall', Daily Telegraph, http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2007/02/27/do2701.xml

13. March 2007, 'Securing the UK Border – our vision and strategy for the future', Home Office, http://www.ind.homeoffice.gov.uk/6353/aboutus/Securing_the_UK_Border_final.pdf

14. May 2007, 'Identity Cards Scheme – cost report', Home Office, http://www.identitycards.gov.uk/downloads/2007-05-10CostReport.pdf

15. 27 June 2005, 'The Identity Project – an assessment of the UK Identity Cards Bill and its implications', The London School of Economics and Political Science, http://identityproject.lse.ac.uk/identityreport.pdf. It should be pointed out that the LSE have now had to give up trying to estimate the cost of the ID cards scheme as the objectives keep changing.

16. Fran Yeoman, 9 May 2007, 'Brown's 'incompetence' over tax credits has cost the public £2bn', The Times, http://www.timesonline.co.uk/tol/news/politics/article1764084.ece

17. Angela Jameson, 18 January 2006, 'ID fraudsters plunge tax system into chaos', The Times, http://www.timesonline.co.uk/tol/news/uk/article789579.ece

18. Miles Goslett, 29 April 2007, 'Fraud fear as millions of NI numbers are lost', Sunday Telegraph, http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/04/29/ninos29.xml

19. David Moss, 4 June 2007, http://dematerialisedid.com/BCSL/Constitution.pdf

20. Joan Ryan, 11 November 2006, 'Tracking Terrorists', Letters to the Editor, Daily Telegraph, http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2006/11/11/nosplit/dt1101.xml#head5

[David Moss]

#3 -- SOCIETY
It may be objected that this is a one-sided view of the achievements of Labour after ten years in power.

Certainly, it ignores the fact that we have been taken to war six or seven times during that period (I have lost count). It ignores the fact that the Cold War peace dividend has been cashed in and that our troops cannot be supplied with the equipment to fight properly.

It ignores the fact that unemployment has been held down by putting up to a million extra people on the public payroll since 1997 and that, Enron-style, the government finances have been flattered by keeping PFI projects and Network Rail off the balance sheet.

But no, say my imaginary objectors, that's not what we meant, what we meant was civil partnerships and peace in Northern Ireland.

OK, let's take a look.

Northern Ireland first. Let us hope that peace has, indeed, come permanently. If it has, it is thanks to many people, including Lady Thatcher and John Major. A nicer and wiser Prime Minister than Tony Blair would have taken them with him on 8 May to celebrate at Stormont.

As to civil partnerships, again, the honours must be shared. It's not just Tony Blair who should be thanked. What about Roy Jenkins, our swinging Home Secretary 40 years ago? And above all David Steel, the man who also brought us legal abortions?

But there is an important mistake in this reasoning. It is not politicians who are responsible at all. It is society. Our society.

Society is the engine room. It is society that creates the institutions, great and small. The monarchy. The schools and the universities and the museums and the galleries. The hospitals and the churches and the courts and the armed services and the emergency services. The FTSE 100 companies and the National Society of Allotment & Leisure Gardeners Limited.

Society is wise. It constrains itself. At one end, it decrees a personal life, people's houses, their families, into which we can retreat for privacy, away from society. And at the other end, it creates the institution of government, so that there can be a rule of law to live by.

If society doesn't like the law, it ignores it. The anti-drugs laws are ignored. Fox-hunting has thrived since it was banned. Smoking won't stop on 1 July. Fat people will continue to eat. And if pregnant women want a drink, to relax in friendly fellowship with others, rather than go like lepers into 40 weeks of quarantine and darkness [21], they will have one [22].

Society is big. It is 60m people expressing the accumulated wisdom of 32 generations (sticking to my Magna Carta start date).

The government is small. It is 20 or 30 people, at best, sitting round the Cabinet table with a hundred or so understrapper ministers. At worst, it is one man sitting on a sofa.

The government must prevail. Society knows that. It is dangerous if the government doesn't prevail. Because if they aren't in power, someone else will be – the armed forces or some self-appointed moral majority or the trades unions or big business or organised criminals or the EU. But if they are to stay in power, like King Canute and the sea, the government must recognise that there are limits, there are areas where its writ cannot run and nor should it.

Things are out of balance at the moment. There is too much government. Beverley Hughes has national responsibility for teenage pregnancies. That's what the government claims. Not families. Not the churches or the schools. Not individuals recognising their personal responsibility and thus defining their identity. But Beverley Hughes.

Commenting in February 2007 on the ability of our girls to get pregnant, Ms Hughes said [22]:
"The figures show that the strategy is pushing teenage pregnancy rates in the right direction rates for under 18s are at their lowest level for 20 years and we are successfully reversing a historic trend [biology?]. This is part of our commitment to improve the quality of life of all young people in this country. We know we cannot be complacent, however. There is still much we want to do and we have ambitious goals to reduce teenage pregnancy rates even further".

In a healthy society, no-one could read this without laughing. Since when is "the quality of life of all young people in this country" the responsibility of the government?

The Cabinet Office paper on transformational government [1] asserts that it is the job of government to provide "citizen and business centred services". "Citizen" is an old-fashioned word, inappropriate to our modern, changing world, by para.26 we have become "customers", and it is the government's job, apparently:
"To lead the transformation of groups of services to customers, especially for those which cut across organisational boundaries, the Government will appoint Customer Group Directors, each reporting to one Minister responsible for that customer group. Key responsibilities of a Customer Group Director will be to sponsor customer insight and research into the needs of that customer group; to lead the design of services including overall channel planning, joining-up of presentation and delivery, branding and communication, and service improvements; to track and communicate performance against customer related targets; and to represent the interests of their customers as necessary in existing inter-departmental governance and in the governance of this strategy".

So, you branded, pregnant teenagers, please communicate with your Customer Group Director if you think there is a gap between presentation and delivery, and don't come running to me with your whinging about performance and overall channel planning.

That is the message. This is a government looking for work to do in areas where it has no legitimate business and where we know it can't deliver.

This is a credulous government, vain and pleased to have the sense of its own importance pumped up by Birtspeaking management consultants [24].

This is a credulous government, which believes that it can transform our lives by the use of technology. The full title of the paper is 'Transformational Government – Enabled by Technology' and in the final paragraph they say:
"It is likely therefore that the planning for this era will be based upon a vision that sees citizens and businesses increasingly serving themselves – at home, in work and public places and on the move; public servants truly dependent on technology to discharge their professional roles; policy makers regarding technology as crucial to designing policy and achieving policy outcomes ..."

There is something plaintive about it. They are looking for a rôle. If we grant it to them, they acquire legitimacy. It is a bluff. It is perfectly within our power to call that bluff and to tell the government to get back in their box.

We know that centralised power doesn't work when it comes to social responsibility. None of the happiness all around us is thanks to the government and a lot of the misery is. Micro-management from the centre, whether or not assisted by the web, is more likely to do harm than good. Labour and the Conservatives both talk about decentralisation. But like St Augustine asking God to make him good, they don't want it yet and, instead, proceed, as before, to gather in the reins to the centre.

There was a French wine-grower on the TV a few weeks ago, interviewed about the decline of the industry, who asked "who will help us?". Where is Nicholas Ridley when you need him to answer "it's nothing to do with the government, mon vieux, you sort it out"?

We will know when power has been decentralised. Suppose that the GCSE results for Merton, say, come in one year and they are in the bottom quartile. If, instead of burbling about post code lotteries, John Humphrys and James Naughtie just say "tough luck Merton, you voted in some incompetents to run your LEA, better luck next time", then we're there.

The government aren't in the "centre ground". They're in some fantasy world where, whether they know it or not, they are fighting a series of turf wars with society. They can waste a lot of our money. They can cause a lot of painful and unnecessary damage in the skirmishes. But they can't win. So the sooner they stop fighting, the sooner they stop trying to invent responsibilities for themselves, the better.

Society created the government and society can uncreate it. It does happen. France, for example, is on its fifth Republic since 1789.

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21. Nigel Hawkes, 12 June 2007, 'Sun can damage unborn babies', The Times, http://www.timesonline.co.uk/tol/life_and_style/health/article1917727.ece

22. Rosemary Bennett, 25 May 2007, 'Zero – the new alcohol limit in pregnancy', The Times, http://www.timesonline.co.uk/tol/life_and_style/health/article1837653.ece

23. everychildmatters.gov.uk, 22 February 2007, 'Statement by Beverley Hughes on the 2005 conception statistics', http://www.everychildmatters.gov.uk/news/?asset=News&id=55550

24. There are good management consultants and there are the management consultants the government listens to. These are the ones who believe that the sound of one hand clapping is exactly half the sound of two hands clapping. These are the ones who believe that the job of government is stock control. Give everyone an ID card/barcode and the service level agreements fall into place. It works with baked beans in supermarkets. It doesn't work with people.

[David Moss]

#4 of 4 -- FIGHTING THE LAST WAR
The question set by the examiner is:
"Some may think that there is a brilliant, attractive, right-wing synthesis, a magical narrative that obviates the need for any concessions to the centre. Well, if there is, please don’t keep the secret to yourself. Share it with the rest of us".

My answer may not be brilliant, attractive, right-wing or magical but I do think it's Conservative. It concentrates on home affairs. I hope that others will answer for the other portfolios.

It starts with the eminently Conservative proposition that, pace Tony Blair, we do not live in a new world, we live in the same world we have always lived in. And to face the problems we encounter we are armed with one of the wisest Constitutions in the world. The Conservative Party appreciate that and so do the people but the Labour Party don't.

Their ham-fisted attempts to hack the Constitution to pieces would be regarded as revolution if it were not for one, brilliant, vulpine lie – that Labour occupy the centre ground. Too good for Campbell, it must have been Mandelson. Whichever, we have fallen for it, until now, just like the lie that Gordon Brown granted independence to the Bank of England [25].

Gordon Brown did not grant independence to the Bank of England and Labour do not occupy the centre ground. Far from it, in 60 crime bills since coming to office, they have taken a naturally liberal people and tried stealthily to remove from them as many civil liberties as they could get away with.

Why? Because they fail to understand what society is. If you want to understand society, don't ask a socialist. They believe, despite the record, especially the history of the twentieth century, that the public good is served by central planning. They do not understand the limits of government.

The Conservatives do. They know that their job is to get out of the way of society, not to make its job any harder, and to leave it to the energy and inventiveness of society to solve those problems which are society's, not the government's.

But where it comes to the government's jobs, they will be done efficiently:
* There may be fewer photo opportunities but the police will work.
* The judges will be allowed to judge …
* … and the Civil Service will be once again expected to drive a Rolls-Royce.
* No Secretary of State for Work and Pensions will last two minutes in the job if he can't account for nine million National Insurance numbers.
* The armed forces will have the equipment they need.
* And the security and intelligence services will get it the right way round – they will be "loved" (for want of a better word) by the innocent and feared by criminals and terrorists.

"People are personally responsible for their own actions". Tell me that that wouldn't go down well with the Conservative Party. "The government have to deal with society, not a crowd". Tell me that that wouldn't attract millions of loose electrons away from the Liberal Democrat molecule. "Government is not like business, it is a different job". That might even attract some Labour voters.

The examiner set his question in response to the disastrous Conservative education policy announcement of 16 May [26]. A lot of good people went down that day, in the parliamentary Party and in the Party in the country. Their life's work went up in flames. It's a shame.

Since then, there have been some bright spots. Ken Clarke, as ever. John Redwood on the Bank. David Davis pointing out that you don't preserve your liberty by sacrificing it.

It gives me no pleasure to say it and I have rarely wished harder that I am (be?) wrong but, mainly, it has been a picture of squabbling incompetence and irrelevant vituperation. Gordon Brown must be bemused. He faces no opposition in his own party. And now, it seems, no opposition across the Despatch Box. All he sees is a lot of Conservatives talking about the need to change while what they're actually doing is re-fighting the battles of 1993, trying to create a second Tony Blair and looking for another Clause 4. Forget it. That was 14 years ago.

Mr Brown is not going to stand still during the first eight years of his premiership. You've got to be ready to shoot him where he is, not where he was. As the tax revenues fall, the home affairs debate will get back to where it always should have been – the proper limits of government. And on that ground, I hope that the narrative above will provide the Conservatives with some ammunition.

In the meantime, we must hope that Mr Brown's sanity holds up against the stresses of absolute power. He's got to get some opposition from somewhere for his own sake and ours. My advice to him, not that he has asked me, is to pick a fight with the EU and the US. What's more, I know exactly how to do it. If he would care to ask.

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25. John Redwood, 11 May 2007, 'Brown did not set the Bank free', Daily Telegraph, http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2007/05/11/do1102.xml

26. David Moss, 21 May 2007, '16 May 2007 – small train crash in London. One party dead', http://dematerialisedid.com/BCSL/Hilton.html