Feebleness that just deepens the crisis

After 15 years of uninterrupted growth, most people under 40 have no real memory of an economic downturn or falling house prices and, never having experienced it before, are far more panicked than they should be. This accounts at least in part for the huge coverage of the slowdown in the media — much more so than in previous years when such things languished unremarked upon in the business pages.

People also feel personally affected because house prices are in the eye of the storm, so unlike previous economic downturns this one feels much closer to home — literally and metaphorically. What comes as a surprisem, though perhaps it shouldn't, is that a similar sense of panic and headless-chicken syndrome is coming out of Whitehall.

The current economic difficulties thus far are manageable, but the deepening sense of crisis owes much to the fact that those who are supposed to be governing the country have as little idea as the rest of us about what should be done. People look for leadership and find a vacuum.

The contrast with 1992 when policy development was in the hands of mandarins who had been tempered by successive crises in the 1970s and 1980s could not be more marked. One might then still have disagreed with the policies, but at least they gave off a feeling of calm and competence as they put them into effect.

It is said that 90% of the people working in the Treasury joined after Labour came to power and have therefore served all their careers under Gordon Brown and latterly Alistair Darling. This 12-year continuing stint of Labour government came, of course, right after 18 years of Tory rule, and these long periods of one-party rule have perniciously changed the civil service culture.

In earlier years, when government changed its hue frequently, advancement and status in the civil service came from being able conscientiously to serve both governments. However, long periods of one party in power create a different dynamic. Career advancement comes not from the quality of objectively framed advice but from "being one of us" and coming up with the right political answers. The service has become politicised.

This is not just Labour's fault — Margaret Thatcher's government had external advisers and brought in Terry Burns from the London Business School to head the Treasury. But Labour made it more blatant, by forcing out Burns and others tainted by the old regime, and by importing so many more of a different hue. As time went on, those other traditional civil servants who did not want to play the political game, or were not very good at it, also decided to leave — many, it must be said, for the more lucrative pastures of the City — thereby denuding government of still more experience.

The third factor which came into play was that the last 10 years have seen the departure to retirement of what one might call the grammar-school generation — the seriously bright from a background of no particular privilege.

Unfortunately, this has happened just as a career in the civil service has become a much less attractive option, and recruitment has suffered. What was once a career of choice for many of the brightest and best university graduates now ranks a long way behind working for Goldman Sachs, or elsewhere in the City, which is where most of the top graduates now want to go. The civil service still gets bright people, but not in the same numbers.

Of course, this relative lack of talent, experience and judgment in the civil service does not excuse or explain the feeble performance of government, but it certainly does not help. This week's package of measures might as well not have been unveiled, so shallow will be their impact. It is hard to believe that a Sir Humphrey in an earlier age would have allowed such feebleness to be displayed in public. He would have had the confidence to do nothing when there was nothing which could be done.

All this matters because there are growing signs that the feebleness of the Government's performance, and its posturing, is actively contributing to the sense of foreboding and the erosion of confidence in the country which makes the economic downturn worse.

People want to be well-governed, and they do not think they are. The most often-cited reason to be gloomy is not the malaise in banking, nor the weakness of housing and construction. It is the thought there could be another 18 months of this before an election.