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By Ned Simons - 28th October 2010
The head of the civil service has denied he overstepped constitutional boundaries during the coalition negotiations when he warned the Conservatives and the Liberal Democrats that the markets would punish a minority government.
Sir Gus O'Donnell told MPs on the Commons public administration committee today that he was merely "passing on what the markets were saying" when he advised the negotiating teams from the two parties that a coalition government was the best outcome.
The cabinet secretary has publically stated that he told MPs in the tense days following the general election that while pace was important "the more comprehensive the agreement the better".
"As people were meeting for these things over that weekend we had a full blown financial crisis happening in Greece," he told the committee.
"They all knew what was happening; I merely reinforced the point that there were serious negotiations going on."
But Tory MP Robert Halfon questioned why Sir Gus had felt it necessary to offer his opinion at all.
"Is it necessary, given the political depth of skill in that meeting, for you to have given that advice? It sounds like you weren’t even asked your opinion, so why was it volunteered?" he said.
"It might have proved to be better to have a short term minority government and another general election…and yet you made a judgement".
But Sir Gus said he wanted a "level playing field" between the Conservatives, Labour and the Liberal Democrats and that his job had been not to offer "bland advice" but rather to "provide the same advice to all parties".
He said that while there was one party, Labour, involved in the detailed financial negotiations with other European finance ministers, the Conservatives and Lib Dems were forced to observe from the sidelines.
"The governing party were involved in the detailed negotiations," he explained.
"I wanted to level the playing field."
Halfon persisted: "In essence, by those remarks, you threw weight of civil service behind supporting coalition."
But Sir Gus said that he was simply telling the politicians that a coalition would be better from a "markets point of view" backed up by "what market commentators were saying".
He said: "I didn’t argue for coalition on these grounds, I merely said what the markets expected from different forms of government".
And he told committee chair Bernard Jenkin that he had not put any public pressure on the negotiating parties to form a coalition as he had only made his advice public after the negotiations had been completed.
Sir Gus also revealed the civil service had costed "one or two" of the policies contained in the coalition agreement at the request of the negotiating teams but he declined to tell the committee which policies these were, as he said it had been done on the understanding it would remain confidential.
He said this was entirely proper and in line with the rules he had laid out for civil servants to follow when aiding the parties in their talks. Asked what would have been inappropriate help he said: "If Party A, in dealing with Party B, had asked them [the civil service] to cost a manifesto commitment from Party C."
Sir Gus said the main role of the civil service during the negotiations was "facilitation and background support" and confirmed that there were only politicians in the room when the actual discussions took place.
Jenkin wondered whether it would not be better for civil servants to be present in future as the British are suspicious of coalitions "doing deals in smoke filled rooms".
"Only there was no smoke," he added. "Only the deputy prime minister afterwards" – a reference to Nick Clegg's recent admission he likes the occasional cigarette.
The Tory MP concluded he would have to wait for Lib Dem negotiator David Laws' book to be published, before he learned what really went on in those rooms.
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