Obituary: Sir Claude Hayes
Thursday 05 December 1996
Hayes, the son of a Sussex village carpenter, confounded local belief in the 1920s by gaining scholarship after scholarship to advance him from village primary via Ardingly College to a First at St Edmund Hall, Oxford, followed by a fellowship at the Sorbonne. He returned to Oxford in 1938 briefly as a tutor at New College, before being called up on the outbreak of the Second World War.
Commissioned into the Royal Army Service Corps, he saw service in France with the British Expeditionary Force, and thereafter in North Africa, Sicily, Italy and North-West Europe; from 1942 to 1945 as Lieutenant-Colonel, with a mention in dispatches.
On demobilisation he joined the Civil Service Commission, becoming Director of Examinations and Commissioner in 1949. He transferred to the Treasury in 1957, ultimately as Under-Secretary responsible for Overseas Expenditure, with particular reference to the emergence of major colonies to independence.
By this time Hayes, always an avid traveller, had seen a great deal of the world. Army service apart, he had secured two travelling scholarships or fellowships pre-war, and in 1953-54 a Nuffield Foundation Fellowship had enabled him to tour widely throughout the Commonwealth. His appointment as financial adviser to R.A. Butler, on the break-up of the Central African Federation and Rhodesian independence, added yet further to the overseas background which from then on governed his career.
In 1964-65 the Wilson government established the Ministry of Overseas Development - an innovation viewed with some apprehension by the Treasury and the Foreign and Commonwealth Office, for two reasons: first because each foresaw some encroachment on its own preserves and second, because they had qualms about the formidable pairing of the new Minister and Permanent Secretary - Barbara Castle and the late Sir Andrew Cohen. They saw, in the Elephant and Castle, as they were known, a blend of political exuberance and intellectual impatience that might upset the established order. They deemed it essential that a strong, scrupulous, no-nonsense Principal Finance Officer be added to the duo, and in Hayes they had by background and character the ideal choice.
So it proved. The frenetic Cohen and laconic Hayes worked well together. New initiatives in the management of the aid programme, conceived at the top then anchored to reality by Hayes and his staff, met with success. Because the ministry was new, so were many of the staff, particularly those serving overseas. Hayes drove them hard as he drove himself; he gave them his trust and absolute support, and expected - and got - loyalty and trust in return.
Aid philosophy was not his forte. His interests focused on the practicabilities of aid - its use, effectiveness, and value to donor and recipient alike. He sought closer links with the private sector in the provision of goods and services - an issue of increasing importance as colony after colony moved to independence and hence freedom from direction. Throughout, as ever, Hayes travelled widely; he had to see for himself.
In 1968 the post of Chairman of the Crown Agents for Overseas Governments and Administrations fell vacant. This curious organisation was neither a body corporate nor part of the Civil Service. Lawyers described it as "an emanation of the Crown". The Minister of Overseas Development appointed the Chairman but had no control over his activities. Nor, indeed, had anyone else. The Chairman was however, generally responsible to the Minister for the efficient running of this office.
The staff numbered some 1,600 with headquarters in London and offices abroad. They operated through seven directorates and 10 departments, reflecting the diversity of their work - basically the supply of goods and services to the colonies. With the advent of colonial independence, that base had to be broadened if the Crown Agents were to survive, and to that end the Finance Directorate had set out in 1967 to offer a wider range of financial services, including own-account activities embracing merchant banking operations, equity participations and property ownership. In none of these fields was any member of the staff involved an expert.
Hayes was offered and accepted the chairmanship. He knew something of the Crown Agents' work, as liaison officer between them and the Ministry, and from his travels. He was aware of the burgeoning own-account activities but not of their extent. He sensed a need for the recruitment of a senior figure from the City to head the Directorate, citing his own lack of relevant knowledge and experience. However, he accepted assurances about the calibre of the director in situ - until it was far too late.
By the end of 1970, the Finance Directorate, living dangerously, was in effect operating as a high-risk bank, with over pounds 400m wrapped up in loans and properties world-wide. Then came the crash. By 1974, with major loans worthless and the property market in tatters, the Crown Agents faced bankruptcy.
The Government stepped in, provided a rescue package of pounds 175m and commissioned an inquiry into the causes of this huge disaster. The resultant report, 200 pages long and two years in the making, reads today like some preview of the collapse of Barings' bank. For in a widely critical assessment of what went wrong, the commission identified rogue traders in the Finance Directorate as central to the debacle, their lack of expertise and firm control contributory factors. The commission added a rider to the effect that what went wrong was a part only of the Crown Agents' activities, themselves only part of their total business, otherwise well conducted through a devoted and loyal staff. It was the actions of just a few individuals that had brought catastrophe for all.
But Hayes sought no excuses. He publicly acknowledged his responsibility for all actions of the Crown Agents and refused to shift the blame for financial disaster. This was the year that saw his retirement.
Hayes the official was not always an easy colleague, always a combative opponent. Strong-willed, quick-thinking, a touch autocratic, he was never other than fair, straightforward and supportive of his staff. Herein, paradoxically, lay perhaps both his strength and his weakness; for once assured of a subordinate's loyalty and integrity he gave his trust, and expected like return. But such assurance is self-assessed, and in the case of the Finance Directorate, proved wholly misplaced. And the price of his error was calamitous.
Hayes in private was a generous, unassuming, dryly humorous man, deeply devoted to his family, his home and his garden. The pride of his retiring years was his listed medieval hall home, Prinkham, in Kent, which he and his wife had meticulously restored and furnished throughout a decade. Their joint talents were great; so was this achievement.
Claude James Hayes, civil servant: born West Hoathly, Sussex 23 March 1912; Deputy Director of Examinations, Civil Service Commission 1945-49, Director and Commissioner 1949-57, Secretary 1955-57; Assistant Secretary, HM Treasury 1957-64, Under-Secretary 1964-65; Principal Finance Officer, Ministry of Overseas Development 1965-68; Chairman, Crown Agents for Overseas Governments and Administrations 1968-74; CMG 1969, KCMG 1974; married 1940 Joan Fitt (died 1984; two sons, one daughter); died 20 November 1996.
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