Hamish McRae: Sarkozy could teach Brown a lesson

Two new leaders take over the UK and France within six weeks of each other. Both are well-known and controversial politicians, for both are stepping up from being finance ministers to take the top job - though after an interval and a national election in the case of Nicolas Sarkozy, rather than the simple process that Gordon Brown's elevation seems likely to follow. So both come with experience but also with baggage.

Both face somewhat different sets of problems and opportunities - but only somewhat different. The public perception, rightly, is that the UK has made more of the market reforms that France now needs to do. Yet both countries face similar global challenges. In particular both have to identify how they can continue to reap the economic rewards from globalisation, yet find ways of coping with the social pressures that globalisation helps to generate.

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There is a further parallel. Both leaders want to get off to a quick start. I happened to be in Paris yesterday and caught the headline that Sarkozy was planning "un big bang" with his new cabinet appointments. More of that in a moment. As for Gordon Brown, well, the string of stories emerging suggests that he too wants to create a lot of new initiatives in his early days. Expect "un big bang" here too.

But is that what we want? The past few days have seen two substantial reports criticising two of his key initiatives as Chancellor, the tax credits and the so-called New Deal. Last week the Public Accounts Committee found that nearly £2bn had been wasted on overpaid tax credits. Already £557m had been written off and a further £1.4bn was unlikely to be recovered. There is another £3.8bn still outstanding, and much of that clearly won't come back either.

What has happened is that the system that the Chancellor has introduced is far too complicated both for the people receiving the credits and for the staff that have to administer them. This unfortunately is the result of a flaw in many politicians' understanding: they think that by asking for something to happen means it will happen and they don't like people telling them that their plan is too complicated to work.

Exactly the same problems occur in the business world: that it is impossible to get a management to carry through a top-down initiative if it does not have a key role in its planning as well as its execution. People will go through the motions but either nothing will happen or, when it does, there will be a huge mess. Because the Chancellor had no experience of management and apparently adopted a bullying manner towards officials and colleagues who tried to explain the problems, this is what happened.

Much the same seems to have happened to another of his flagship policies, the New Deal. On Monday a report by Frank Field, the former welfare minister, noted that there were more young people out of work now than there were when the plan was put into practice in 1998. Not surprisingly, the conclusions of his report were challenged by the Department for Work and Pensions, but Frank Field is in my judgement one of the most honourable and intellectually honest members of the Commons.

This is not a man who would spin statistics. As for the DWP, it acknowledges: "We need to refresh the New Deal so it continues to deliver jobs and opportunities to those hardest to help." Whenever you hear that a policy has to be "refreshed" you need to look rather sceptically at its success so far.

Some people would add the PFI to these twin examples of a policy that intellectually appears sensible but in practice cannot deliver the outcomes claimed. Others would point to the complex tax incentives that the Chancellor has introduced, only in some instances to remove them a couple of years later.

But the failure of those two key policies, both aimed at reducing inequalities, raises an absolutely central issue about the ways in which the state can - and cannot - succeed in achieving laudable social objectives. I think we have learned that using complex tax-and-spend policies to do so are at best clumsy and inefficient ways of helping people who need help. And at worst, they make things worse.

I am afraid that, Brown being Brown, he will simply press on "refreshing" existing policies and bringing in yet more complex new ones, rather than think laterally about other ways of attacking social problems and helping the disadvantaged. But if it is hard to teach an old dog new tricks, maybe there will be a new trainer across the Channel.

By chance in Paris I had an insight into the new president's thinking from a conversation with one of his potential new ministers - he was still at that stage trying to decide whether to take up the invitation to serve. France, it seems, has been looking a lot at the UK and how we were trying to tackle social problems.

That was partly a response to French failure. Over the past decade or so there had been only one social policy that had been an unequivocal success. That was the programme to cut road deaths carried out by Sarkozy himself as transport minister - though to his credit, it was President Chirac who initiated it.

My colleague pointed that Sarkozy had directly saved thousands of lives, something that could not say of many people let alone many politicians. So he has had direct experience of a programme that harnesses social pressures and which succeeded.

Now you could say that this was a special case. And, as noted above, France will be looking at the Blair/Brown government's work and seeing what it can learn. But I would be astounded if France under its new president did not seek in addition to harness social pressures to try to tackle social problems. It will seek to change behaviour, as it did with French drivers, using the leverage of the state to do so. The more that behaviour changes in a positive way, the more manageable those problems become and the less the state has to scramble expensively and ineffectively to cope with social disaster.

One of the many interesting things about France under its new presidency is the feeling that it has to find a new way of running a government. We don't have that feeling. Or rather we don't have it within government, because our government elite does not have the same sense of failure as does the French one. So if, over the next couple of years, France will start to bring in some British-inspired policies, let's look at French ingenuity and innovation in return. Somehow, though, I can't see our new leader wanting to learn from anyone else, even an Anglophile across the Channel.

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