A powerful fiefdom

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The Downing Street policy unit is the prime minister's personal fiefdom, providing a mix of strategic and tactical thinking independent of the Civil Service and straddling the divide between politics and policy. Its role has varied over the years,reflecting both the personality of the prime minister and that of the unit's heads. It was at its most political under Sarah Hogg, who played a key role in devising the Citizen's Charter, wrote the 1992 manifesto and played so prominent a part in the campaign that it brought clashes with cabinet ministers. A confidante of John Major, the former economics editor of the Times and the Independent was said to have acted almost as a shadow chancellor in the traumatic days of the pound's crash out of the Exchange Rate Mechanism in 1992. Serving a beleaguered prime minister, the unit in recent times has been accused of sacrificing strategic thought to day-to-day management. Her critics blamed Mrs Hogg for the ill-fated "back to basics" campaign launched at the 1993 party conference.

The unit was founded by Harold Wilson in 1974 to provide a political and tactical complement to the independent studies run by Edward Heath's creation, the Central Policy Review Staff. In Mrs Thatcher's first term, under John Hoskyns, the unit was even smaller than its present half dozen plus members, concentrating almost entirely on economic issues and implementing the "Stepping Stones" strategy of enforcing monetarism, reforming trade union law, laying the plans that defeated the miners in 1984-5, andde-indexing, as far as possible, great swathes of public spending.

After an interregnum under Ferdinand Mount, the unit's role and influence expanded with the abolition of the CPRS and the arrival of John Redwood as its head. Extra members - the mix of seconded civil servants, private-sector outsiders and aspirant MPs that still characterises its make-up - were recruited, and its tiny membership started to shadow all Whitehall departments.

It brainstormed radical ideas and thought the unthinkable, while providing the ammunition with which Baroness Thatcher challenged both departments and her own ministers. In what was perhaps its most creative and hawkish period, given that "Stepping Stones" was drawn up in opposition, it pushed privatisation, wider share ownership and personal pensions, undertook work which later informed the NHS review, and developed ideas which went into the 1988 Education Act - by which time Brian, now Lord, Griffithshad become its head. Mrs Thatcher has credited him with the idea of grant-maintained schools, but the later part of his tenure, from 1985-90, is seen as one of the unit's more fallow periods.

With Norman Blackwell's arrival, the unit's character will inevitably change again. Jill Rutter, a seconded Treasury civil servant who covered health and transport, has left; Damien Green, who came from television and covered the media, has been adopted as a Tory candidate; and Nick True, the unit's deputy head, a social services specialist and speechwriter, is expecting to move on. All have yet to be replaced. Dominic Morris, a seconded civil servant, covers Europe and employment; Jonathan Rees, a recent recruit, has a brief stretching from the Civil Service to transport; Katherine Ramsey, a former special adviser, concentrates on speeches, local government and women's issues.

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