Lord Croham of Croydon: Senior civil servant who helped bring about greater transparency in ministers' decision-making

It is one of the ironies of life that a man may be remembered for a very minor aspect of his career. Douglas Allen, distinguished for over half a century's service to Britain, will forever be associated with the "Croham Rules". This was the soubriquet given to the content of the letter he wrote on 6 July 1977 to the Heads of Departments in the Civil Service, advising them of the changes that, with the specific authority of the Prime Minister, James Callaghan, he had made for making available more information.

The government's policy in future, Allen wrote, would be to publish as much as possible of the factual and analytical material used as background to major policy studies. In the past, it had normally been assumed that background material relating to policy studies and reports would not be published unless the responsible minister or ministers decided otherwise. Henceforth the working assumption was to be that such material would be published unless ministers decided against it.

Allen was careful to exempt material carrying a current security classification. Ever circumspect, he pointed out that one inhibition to the publication of background material was that it had often been incorporated in submissions to ministers, which could not be published in their entirety. Rewriting material specially for publication would be wasteful of staff time and expensive. Therefore, he said, in future, background material should as far as possible be written in a form which enabled it to be published separately, with the minimum of alteration, once a ministerial decision to do so had been taken.

Allen implored his civil service colleagues to take his proposals seriously, as, above all, he wanted to avoid government action along the lines of what he called "the formidably burdensome Freedom of Information Act in the USA". In cases where it had been decided not to publish material which might be expected to be of public interest, Allen suggested that the reasons should be briefly recorded.

Douglas Allen never knew his father, who was killed in action during the First World War. From Wallington County Grammar School, by dint of his widowed mother's hard work and scraping, Allen went to the London School of Economics, where he was taught by Harold Laski, Lionel Robbins and a young Hungarian lecturer, Nicholas Kaldor, emerging with first class honours in 1938. Kaldor, who was my supervisor at King's College, Cambridge, told me that one of the reasons he was "welcomed" in the Treasury and Department of Economic Affairs, when he was economics adviser to the Chancellor, while Tommy Balogh – economics adviser to the PM – was not accepted, was on account of his pre-war friendship with his pupil, Douglas Allen.

Success in the Civil Service exam, and a year in the Board of Trade, was curtailed by the Royal Artillery and service in North Africa, Italy and Europe. When he sat in the Officials' Box to the right of the Speaker's Chair, as he frequently did, during important economic debates, I noticed that he normally wore the familiar blue and red-striped tie of the Gunners.

Returning to the Cabinet Office in 1949, he was chosen as a Private Secretary to Sir Norman Brook, Cabinet Secretary, which marked him as a high-flyer. A decade (1948-58) at the Treasury led to promotion to Under-Secretary at the Ministry of Health. The actuality is that the Treasury wanted "one of its own" strategically placed in the Ministry, where, it deemed, spending had become ill-disciplined. Allen was a fiscal disciplinarian, which is part of the reason why he was welcomed back home to the Treasury in 1960, as an Under Secretary, and promoted to the key position of Third Secretary (1962-64).

Enter George Brown. The incoming Labour government was committed to establish a Department of Economic Affairs, which was set up in the old Ministry of Defence building in Great George Street. As Brown ruefully put it in his autobiography In My Way, "the plans had its own entrance in the front of the building, but it is also approached at the other end from the Treasury. Tommy Balogh warned me strongly against allowing myself to be installed at the back side of the Treasury, observing 'that's exactly where you will end up'. How right he was!"

The truth is that Allen, albeit promoted to Permanent Secretary of the DEA, thought that splitting economic responsibilities was a hare-brained scheme, and was not unhappy to see it fail. However, exasperated by Brown, and his guru, Frank Kearton of Courtauld's, Allen was not disloyal – just. Michael Stewart told me that wen he succeeded Brown at the DEA, he found Allen congenial and realistic. It was with a sigh of relief that Allen found himself promoted to Permanent Secretary of the Treasury in 1968.

By late 1969, it would be wrong to pretend that all was sweetness and light inside the top echelons of the Treasury. Harold Lever, the imaginative Financial Secretary, complained bitterly to me that his ideas got a fair hearing from William Armstrong, but that with the arrival of Allen – "an old-time professional civil servant", as he put it – there was a rigidity, and an ingredient of Civil Service jealousy.

Allen's relations with Roy Jenkins as Chancellor were what the latter described as "easy mutual trust". On Monday 18 August, 1969, since Brooks's was closed, and Jenkins therefore had temporary dining rights, the Chancellor and Allen had dinner at the improbable locale of Boodles. Jenkins writes in A Life at the Centre: "He fortified me by expounding in detail the theory that we now (post-devaluation) had more resources than there could be strains put upon them, and I had no difficulty in getting his assurance that he accepted my determination to defend the [exchange] rates."

On Saturday 25 August, Allen along with Sir Frank Figgures, was invited to Jenkins' home at East Hendred to lunch with Paul Volcker, then under-secretary at the US Treasury, later to lead the Federal Reserve system. Allen was exceptionally impressive in dealing with heavyweight Americans in Treasury and banking matters.

In the 1970 General Election few expected a Conservative victory. Responsibility for this outcome rests heavily on two people. The first was Barbara Castle, culpably, in my view, refusing to legislate on industrial relations along the lines of the agreed recommendations of the Donovan Committee, but insisting on her contentious White Paper In Place of Strife, which soured the trade unions in their attitude to the Labour government. The second, though acting in good faith was Allen.

He was Permanent Secretary at the Treasury; before the Budget, there was, for the first time for years, no problem of having to search around for new net increases in taxation. Government accounts and the balance of payments were both at a substantial surplus. If there was a problem, it was one of high expectations. After four years of hard slog the Chancellor wanted to be cautiously generous, but Allen pressured him to present a tight budget. He argued fiercely that in 1964 his predecessor, as Head of the Treasury, had behaved weakly in his restraint of the Conservative Chancellor, Reggie Maudling, in allowing a pre-election splurge and a consequent balance-of-payments disaster.

Allen was determined not to repeat this error in his dealings with the Labour Chancellor, Jenkins. Austere advice from an austere man – and Allen was almost invariably austere – swung the balance. The Budget was gratuitously austere. And many commentators did attribute Labour's defeat, to dashed fiscal expectations.

Allen, according to colleagues, was sad about losing Jenkins as Chancellor, and, in old age, accepted that in retrospect perhaps his economic budgetary advice had been too politically cautious. Allen's relations with his last Chancellor, Anthony Barber, were said to be "professional but distant". Instinctively, he was against what came to be known as the "Barber Boom", believing that he was somewhat reckless in the same way, as Maudling had been. It was with relief that in 1974, he became Head of the Home Civil Service until he retired in 1977.

"I looked up to him as a giant of the Treasury," said Lord Butler of Brockwell, who became Secretary of the Cabinet.

In retirement, scrupulous about proper behaviour, Allen became a director of Pilkington Glass, and chairman, later of Guinness Mahon. In compiling obituaries for The Independent, I phoned him on several occasions. He was as clear as a bell into great old age.

Tam Dalyell

Douglas Albert Vivian Allen, senior civil servant: born 15 December 1917; Permanent Secretary, HM Treasury 1968–74; Head of the Home Civil Service and Permanent Secretary, Civil Service Department 1974–77; Chairman, Guinness Peat Group 1983–87; GCB 1973 (KCB 1967; CB 1963), cr 1978 Life Peer, of the London Borough of Croydon; married 1941 Sybil Eileen Allegro (died 1994; two sons, one daughter); died Croydon 11 September 2011.

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