Obituary: Sir Leo Pliatzky

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LEO PLIATZKY was an unusual civil servant. Most of us probably have set ideas of what a civil servant is like, especially a Treasury civil servant; I certainly did when I first became Chief Secretary to the Treasury in the Wilson Government of 1974. I suppose I imagined all my senior officials (we didn't call them civil servants) would be smooth, of course highly intelligent, academically brilliant, and obviously much more knowledgeable than a mere new minister, especially one, like myself, who had no previous ministerial experience.

Leo Pliatzky had all these attributes, except "smooth". He was anything but "smooth". He spoke his mind freely, whether to ministers, fellow senior officials, junior officials, businessmen, industrialists, indeed anyone with whom he had discussions. During the course of his life, especially his years in the Treasury, he must have ruffled more than a few feathers. He spent 27 years in the Treasury, from 1950 to 1977, and by the time I arrived in 1974 he was extremely well versed in all areas of government.

Pliatzky started his serious education at Manchester Grammar School - as a fellow Mancunian, albeit not from the same school, that may have made it easier for me to get on with a man who must have appeared quite abrasive to many. His time at university was interrupted by the Second World War. In 1939, after receiving a First in Classical Mods at Corpus Christi, Oxford, he joined up and served with the Royal Army Ordnance Corps and the Royal Electrical and Mechanical Engineers for the next five years. He returned to Oxford after the war and was awarded a First in Philosophy, Politics and Economics. He then spent some time working for the Fabian Society before joining the Civil Service.

Pliatzky's early years in the Civil Service were in the Ministry of Food (1947-50), although even then, as he explained in his book Getting and Spending (1982), he was very interested in the subject of public expenditure. In 1974 he was Deputy Secretary on the Public Expenditure side of the Treasury, rising to Second Permanent Secretary in 1976. So we saw quite a lot of each other until he left to take over as Permanent Secretary at the Department of Trade in 1977.

Cash limits had been under discussion for some time in the Treasury, and not surprisingly he was in the forefront of officials planning to introduce them. Both Denis Healey (then Chancellor) and I were very much in favour, for Public Expenditure was in serious danger of running out of control. It had risen by 7.9 per cent, in real terms, in the last year of the Conservative government, and by 12.7 per cent in our first year, 1974-75.

Action was clearly needed, and cash limits was going to be one of the weapons to try to stop what he described in his book as a period of "collective madness". Whilst everyone recognised the "madness" had to stop, the action taken, with the help of cash limits and real cuts, didn't always endear Pliatzky to his colleagues - it didn't help me with my ministerial colleagues either! But the policy began to work. In one interview with a journalist in that very difficult year, 1976, he quoted the slogan "Cash Limits Rule, OK?", which had been suggested to him by a junior official, who thought he ought to wear it on a T-shirt.

Virtually the whole of the period in which we worked together was described by Pliatzky as "a period of great stress and strain". Departmental claims for more money were increasing constantly, some of them irresistible. Pliatzky advised me that if we could hold the line on the Contingency Reserve we had a chance of getting through the year 1976/77. To put it in perspective, the Contingency Reserve was pounds 700m. Today it is in billions.

During this time Pliatzky was of enormous help to me, although he must have been having a difficult time himself with departmental officials. One example of how we usually agreed, but handled events a little differently, shows something of the man. I had described how we treated some additional expenditure as a presentational "fiddle", he described it as a "special case"! He himself was a "special case".

It is interesting that the one issue that has been in the headlines in Scottish newspapers and the Scottish media constantly since 1997 was never mentioned either in Pliatzky's book, or in mine (Inside the Treasury, 1982). I refer to the now famous "Barnett Formula". It could have been called the "Pliatzky Formula" for, whilst I cannot recall exactly how it was devised, he would have been very much involved. The "formula", put simply, increased (or decreased) public expenditure by 10 per cent in Scotland; 5 per cent in Wales; and in England, 85 per cent. The reason it never appeared in Pliatzky's or my book is, as I told the House of Commons Treasury Select Committee in 1998, "I never expected it to finish up as a `formula' ". Maybe Pliatzky did.

But while it is flattering to think the "formula" has survived the governments of Margaret Thatcher, John Major, and now Tony Blair, I know that it is nothing to do with either Leo Pliatzky or myself but is purely political. Neither Thatcher nor Major would change it because they feared it would damage them in general elections. In practice, it didn't really help them in 1997 - they couldn't do worse than lose every seat in Scotland, which they did in that election. The Blair government wouldn't touch the "formula" for effectively the same reasons during the Devolution debates.

I mention this because I know how much Leo Pliatzky must have laughed at the way politicians and the media have handled an issue which they didn't really understand. I have always thought privately he may have felt that his ministers from time to time also didn't know what they were doing. I hope I was not one of them.

Leo Pliatzky, civil servant: born Manchester 22 August 1919; CB 1972, KCB 1977; married 1948 Marian Elias (died 1979; one son, one daughter); died Congresbury, Somerset 4 May 1999.