Pants On Fire: John Major and the crisis of the state

I have been blogging quite a lot about Ronald Coase and the problems of outsourcing but this is ridiculous.

DHL announced in November that it had been appointed alongside QSL to manage the supply and distribution of food products and packaging for more than 850 KFC outlets in the UK. DHL said it would manage the physical warehouse and distribution service. KFC added it had specifically chosen the pair for their reputation of “innovation in logistics” across other industries.

The innovation is apparently “not delivering any chickens”. You’ve got to admit it, that’s a major innovation in chicken logistics. Anyway, enough with the laughs. Here are two really important pieces by the BBC’s Chris Cook – on the fate of fire research in Britain and some of the consequences.

Astonishingly, it turns out that the fire regulations of 1988 were heavily influenced by the tobacco lobby. Is there anything evil they didn’t get up to? (Well….actually the story of who sponsored Jimmy Savile’s cigars is considerably stranger than I was expecting and eventually down to communists with an assist from the royals.)It gets worse, too – the same guy who they hyped as their friendly fireman front ended up chairing a lobby for fire retardant companies, who wanted essentially what the tobacco people wanted.

This is terrible, but if you just read that you’d miss something really important. They were only able to get what they wanted because structured, expert pushback against them was removed. For that we have to go to Sky News, of all outlets.

…the Government has relied on fire safety advice from a group which also makes money from the plastics industry.
BRE, formerly the national Building Research Establishment, was privatised in 1997 and made to pay its way, with the plastics industry providing a significant revenue stream. In 2005, following the 1999 Garnock Court fire, BRE helped the Government to manage the risk from plastic insulation and cladding by creating a fire test called BS 8414.

Twelve years later it remains the only facility in the western hemisphere capable of conducting the test. Although BRE won’t say how much it has earned from BS 8414, its biggest plastic insulation client told us privately that BRE is currently being paid up to a million pounds a year.

The upshot of this is that although the incidence of fire has fallen quite dramatically, fires are much worse when they happen. Also, it’s important to see the problem from a systems perspective. In the second link, Cook points out that fires now tend to get worse faster, challenging the assumptions on which the fire brigade’s response times are based.

A really grand tour d’horizon would say this was something like a structural tendency of neoliberal capitalism to go short of volatility, but this is crude argument by aesthetics. It’s more likely that the policy simply doesn’t work, as the decline in fires is caused by the decline in smoking. Now let’s do a focus-pull onto something apparently different.

Here’s Nigel Lawson standing up in the Lords to say that he never agreed with PFI and thinks we should seriously consider abandoning it. It’s always possible that the guy from the Global Warming Policy Foundation is bullshitting us. If he means it, though, what should we make of this?

I think Lawson is expressing the important difference between Thatcherism and Majorism. The radicalism of John Major’s premiership is vastly underrated (also, the man is waaay more interesting than anyone gives him credit for). Thatcher’s privatisations concerned firms whose shares the government had acquired, sometimes less than a decade earlier in the case of BAE or the shipbuilders although 70-odd years earlier in the case of BT. The big exception to this was Right to Buy, which involved assets that the state itself had created.

Major’s privatisations, contractorisations, and trading funds carried this into the functioning of government itself. One of the least discussed and most significant elements of this was the closure or sale of great swaths of the state scientific apparatus, like the BRE. Tony Blair’s government was just as much at fault on this one, but as with PFI, it was Major’s government that invented it. In trying to “steer, not row”, they threw away the compass. Michael Heseltine promised to intervene before breakfast, dinner, and tea, but his colleagues got rid of the instruments. I think this is actually worse.

The lesson I am trying to pick out from the Grenfell story is that if you don’t do your own sums, someone else will do them for you and you might not like the answers – and you will only find out the hard way.

14 Comments on "Pants On Fire: John Major and the crisis of the state"

  1. I have probably mentioned it before but I have a book (published I think whilst they were still going i.e. before the reorganisation into the research councils) about the history of the industry research associations [the origin of my employer, n acquisitions and m name-changes ago lies in one of the things that was always government run because the relevant industry was always municipal – there were various other of these including the TRRL]. There was a long list at the end. There is probably a book to be written about what happened to them all, and who, if anyone, became rich.

    The most amusing story, which again I may have told you on your blog, was that when it was privatised (as a company limited by guarantee) (before my time) the management all stood up and said ‘just because we’re in the private sector doesn’t mean there’ll be any more money for you etc’. Then the senior management awarded themselves company cars. ‘Fuck off, you just said…’ said everyone. ‘OK’, they said, ‘we’ll have 5 days holiday a year less’ (with flexitime and a fairly generous entitlement this was no great hardship).

    But wait, there’s more. The bit I worked for was set up as a separate subsidiary and the MD and his acolyte decided they wanted the holiday so changed the terms and conditions to get the 5 days back, but neglected to tell the sales director for a couple of years.

    ‘Back in the DSIR, you don’ t know how lucky you are boys’


  2. Interestingly the BRE was privatised much later than my erstwhile employer.
    Next to where I work is what was a NERC thing – when the research councils were set up the thing was divided into two bits, a NERC bit and a SERC bit. The SERC bit was privatised early, the NERC bit not at all really, even now.


  3. Outsourcing – the chickens are coming home to roost.

    Have you seen any convincing explanation of the DHL thing? It all sounds a bit ‘The IT Crowd’. Indeed, on some level, you could argue that it is the ITisation of the world again, in the sense of companies taking things on they are ludicrously underqualified to do.
    One of my over-used mantras is ‘can you play the piano? I don’t know, I’ve never tried’. We seem to be in that sort of territory.


    1. DHL is hardly inexperienced in logistics – it’s the German post office!

      There’s a great joke in Peter Schneider’s novel Die Mauerspringer to the effect that Lenin said the state should be like the German post office, but since the East German state had been trying, the [East German] post office had begun to function like the East German state.


      1. I’m sure there’s a lot more to come on this, but I heard a little from an acquaintance who works in the area who suggested that the DHL tender cut costs via centralisation, but in short this can also be read as “single point of failure” and “didn’t account for increased congestion when pulling everything back into a single site.”


  4. Thatcher’s privatisations concerned firms whose shares the government had acquired, sometimes less than a decade earlier in the case of BAE or the shipbuilders although 70-odd years earlier in the case of BT. The big exception to this was Right to Buy, which involved assets that the state itself had created. Major’s privatisations, contractorisations, and trading funds carried this into the functioning of government itself.

    Well, kind of. Royal Ordnance was Thatcher-era, and it had never been private sector; the Royal Ordnance Factories had been part of government since they were set up in the sixteenth century. British Gas is tricky but a lot of that had previously been public sector, lots of little town gas companies; Attlee didn’t so much nationalise it as centralise it. Same for all the English and Welsh water companies, privatised in 1989. BAA ran airports that had been government-owned from their construction. And surely BT was never private-sector; it was spun off from the General Post Office.


    1. Post Office Telephones originated with the 1911 nationalisation of the National Telephone Company (and a lot of others) plus the centralisation of the municipals except Hull.


      1. I have always been surprised that the National Telephone Company being cut down in its prime isn’t more of a cause célèbre of the right – we could have had AT&T if it hadn’t been for you pesky kids etc.


    1. That is more of a chamber of horrors than I was expecting. British Electric, ugh. ‘The stuff we deliberately made National Power big enough so that it could cope with, then we bottled it, then changed our mind and flogged it off as a collection of dodgy stuff, oh dear it turns out it can’t meet its liabilities’


  5. The funny thing is, the British state went through this experience in reverse from 1750 through to 1820. The 17th century state was largely contractual. As they tried to get more bang for their buck in the wars with France, this was progressively replaced with direct provision as cheaper in the longer term and meeting higher quality standards (navy victualling was an early move; the army was slower but learned a few lessons with some major bankruptcies among key suppliers).

    Even where there was substantial contracting, this was overseen by experienced technical staff from the in-house counterpart (eg Royal Dockyards). One historian noted that major ship-building costs pre World War I were kept within bounds in all but the one area – armour plate – where the state had no tech expertise of its own.

    I don’t know what made people think that the ability to write contracts had improved over the centuries.


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