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Economics: The Users Guide
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Penguin Random House UK

First published 2015

Text copyright © Anthony King, 2015
The moral right of the author has been asserted

Book design by Matthew Young

Cover Design by Matthew Young

ISBN: 978-0-141-98066-9

Contents

PREFACE

CHAPTER 1
Inheritance

CHAPTER 2
Foreigners

CHAPTER 3
Partisans

CHAPTER 4
Politicians

CHAPTER 5
Voters

CHAPTER 6
Ideas

CHAPTER 7
Interests

CHAPTER 8
Media

CHAPTER 9
Ministers

CHAPTER 10
Officials

CHAPTER 11
Prime Ministers

CHAPTER 12
MPs

CHAPTER 13
Judges

CHAPTER 14
Who Governs?

GOVERNMENTS AND PRIME MINISTERS, 1945–2015

REFERENCES

A SHORT GUIDE TO FURTHER READING

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Preface

This short book seeks to answer the single question asked in the title. It is not a textbook, one of those hefty tomes in which all possible questions are asked and answered, mainly in the interests of people who have to pass exams. Instead, it merely seeks to point out that the governing arrangements of the United Kingdom are not quite what they seem and, along the way, to raise some questions – some explicit, some implicit – about whether Britain’s political system, as it stands, is all that it should be. The book is not yet another reformist rant, yet the reader may detect in the author a certain unease about the way we are governed now – an unease not confined to the governments of this, that or any other political party (or parties). Our grand old ship of state seems to have sprung some leaks.

What follows is about the central government of the United Kingdom: the government based in London, at Westminster and in and around Whitehall. It is not about local government, and, more important, it is not about the governments of Scotland, Wales and Northern Ireland. The author is acutely conscious that those other governments – especially the ones in Edinburgh, Cardiff and Belfast – exist and are hugely important. Their existence has changed fundamentally the UK’s whole governing geometry, a fact that is frequently alluded to in the pages that follow. But the Westminster–Whitehall system is still sufficiently important – and certainly still sufficiently intriguing – to make it worth a short book of its own. The other governments are for another day.

The order in which the chapters are set out will probably strike some readers as idiosyncratic. They will be right. It is. The deliberate aim of the exercise – for example, giving foreigners pride of place in an early chapter and leaving prime ministers until towards the very end – is to disturb the order in which topics like these are customarily approached, an order that in a curious way encourages readers to think along conventional lines when new times perhaps require a less conventional approach. No chapter, or even any large part of a chapter, is devoted to the House of Lords, a body over which much ink has been spilt. The reason is simply that, as it currently stands, the House of Lords is able to vex ministers and take up their time; but – for better or worse – it is nowadays an essentially peripheral body, not a core part of this country’s governing arrangements. Time spent discussing the Lords is time not spent discussing other, more important matters.

What follows is the view that one person – the present author – has of Britain’s political landscape as it appears from, so to speak, the window of a passenger aircraft cruising at 35,000 feet. Snow-capped mountains are clearly visible, as are lakes, plains and wide river valleys; but enormous amounts of detail, visible and highly significant down below on the ground, are lost. Cars and lorries moving along dual-carriageway roads are only dimly visible, and it is quite hard to make out individual houses, even big ones. This is no more than a book about the landscape’s most prominent features and, in particular, about those that are relatively permanent and seem least likely to change in the short term. That said, Britain’s political landscape is changing – very rapidly – and this particular book, through no fault of the author’s, may fail to detect the most recent seismic shifts. We live in interesting times.

Although the author’s mistakes and misinterpretations are entirely his own, he was prevented from making even more of them by seven generous and patient friends who read the entire manuscript at short notice and at great speed: Ivor Crewe, Alun Evans, Peter Kellner, Penelope Phillips, Anthony Stamp and Stephen and Melinda Varcoe. They contributed much, almost certainly more than they realize. The same is true of Andrew Gordon of David Higham, Laura Stickney of Penguin Books (the two of whom first conceived of the whole enterprise) and Kit Shepherd, who copy-edited the manuscript – also at short notice and at speed – and who made still more corrections and substantially improved the overall quality of the manuscript. Valuable research assistance was provided by Katerina Balta and Rob Kemp. All of them deserve, and herewith receive, the author’s enormous gratitude.

Anthony King

Wakes Colne, Essex

January 2015

Chapter

This book is about the United Kingdom’s contemporary governing arrangements. It is about Britain today. However, if we want to understand British politics in the present, it is a good idea to begin by acquainting ourselves with a period of its history in the not-too-distant past – with the quarter-century following the end of the Second World War: the two and a half decades between 1945 and 1970. It was during those decades that the British way of doing government and politics assumed its classic form. That form was one of rugged simplicity. It was also one that was widely admired across the liberal democratic world. A French commentator wrote wistfully in 1958, ‘The British political system is … an enviable model of democratic government. One can only regret that it could not possibly be transplanted to any other country.’1

What did that system consist of? An answer to that question is provided in the rest of this chapter. The answer provided here may lack subtlety and nuance, but it should capture the system’s main features.

Perched atop the apex of power in that system, visible for miles, was HMG, His Majesty’s Government (from 1953, for several generations, Her Majesty’s Government). The role of the monarch him- or herself was overwhelmingly symbolic and ceremonial, scarcely at all political or governmental; for all practical purposes, the United Kingdom, despite its name, had long ago become a republic. The government of the day was most of what really mattered. It was led by the prime minister and his cabinet, the latter comprising some twenty ministers, most of them heads of government departments. Serving under members of the cabinet were some sixty junior ministers, whose titles varied. A scattering of ministers at all levels of government were peers, members of the House of Lords; but by convention most were MPs, members of the House of Commons. Apart from being peers and MPs, at that time they came from a wide variety of backgrounds. Clement Attlee’s postwar Labour administration included a heavyweight trade-union leader, other trade-union officials, a prominent (and seriously rich) barrister, an economics lecturer, a school teacher, an eminent surgeon and a former leader of the London County Council. Winston Churchill’s postwar Conservative administration, the successor to Attlee’s, included a well-known publisher, the manager of a large department store, a research physicist, a retired army general, the managing director of a metals firm and a number of senior barristers, one of whom had prosecuted Nazi war criminals at the Nuremberg trials.

The government of the day stood at the apex of the system in almost every respect. It was in total control of foreign policy, defence, the public finances (both taxation and public expenditure) and Britain’s many colonies (so long as Britain had them). The government initiated all important legislation, and it controlled completely the machinery of government – the state bureaucracy both in Whitehall and across the rest of the country. It also had effective control, although at arm’s length, over the many post-1945 nationalized industries, with names such as British Railways and the National Coal Board. Moreover, the UK was then effectively a unitary state, with the UK government, dominated by the English, legislating for Scotland and Wales as well as England. The scope of the UK government’s activities was wide, its effective jurisdiction within the UK immense.

The only exceptions to this general rule were Northern Ireland, whose government for historic reasons enjoyed a substantial degree of autonomy within that province, and the institutions of local government on the British mainland. Local government in Britain existed on the sufferance of national government – the government in London could in principle do whatever it liked with local authorities, including abolishing them altogether – but, in practice, local authorities had long-established, quite substantial powers and responsibilities. The creation of the National Health Service in 1948 deprived them of many of their health-related functions, but education and housing, in particular, remained largely in their hands – that is, in the hands of elected local councillors and their officials. In the field of education, there was no national curriculum. In the field of housing, local authorities after the Second World War built hundreds of thousands of houses and flats and then rented them out to tenants while continuing to own and manage them. The municipal councils of London and Glasgow were among the largest landlords in the Western world.

Government at the top – in Downing Street and across Whitehall – was remarkably collegial. At the time, commentators usually described the British system of government as being one of ‘cabinet government’ – and it largely was. Postwar prime ministers believed that they should abide by the conventions of cabinet government, and by and large they did. Almost all major policy decisions were at least referred to the whole cabinet, and many important decisions were actually taken there. An elaborate structure of cabinet committees, developed after the war, was intended to make cabinet government more efficient, not to supplant it. Few postwar prime ministers were inclined to be imperious. Most depended heavily on their cabinet colleagues, especially the more senior and experienced ones. Positive prime ministerial initiatives were rare. Harold Macmillan in 1959–60 took the lead in trying to find the UK’s way into what was still called the Common Market, but at the same time he went to extreme lengths to carry his colleagues with him. Few prime ministers sought celebrity status. Clement Attlee, notoriously monosyllabic, was seldom seen or heard outside the House of Commons. Harold Macmillan and Harold Wilson were more image-conscious, but even they never affected a presidential style, let alone attempted to govern as though they had presidential powers.

Men (in those days they were always men) became prime minister by virtue of becoming the leader of the majority party in the House of Commons, either because their party had just won a general election or because the incumbent prime minister had resigned. Changes of prime minister within the lifetime of a parliament – that is, between elections – occurred quite frequently. Becoming leader of one’s party was entirely in the hands of one’s fellow Westminster politicians. In the case of the Conservative party, party leaders until the mid-1960s were not formally elected; instead, they ‘emerged’ following consultations conducted by party elders among the party’s supporters in parliament. The Conservatives adopted a system of choice by formal election only after the emergence in 1963 of Sir Alec Douglas-Home as party leader and prime minister had been hotly contested within the party. Labour leaders had always been elected by their fellow MPs. Once in office, prime ministers were hard to oust and seldom were ousted. Most of those who departed without their party having been defeated at a general election resigned voluntarily, though the position of several of them – notably Anthony Eden and Harold Macmillan – had become decidedly precarious.

The party system during this classic period was simple and straightforward. It comprised two, and only two, parties that counted for anything. The Conservative and Labour parties totally dominated British electoral politics. Both were well organized, both at party headquarters in London and throughout the country, with substantial professional staffs and large grassroots memberships. Their structures, however, were not especially hierarchical. In particular, constituency Conservative associations and constituency Labour parties selected their own parliamentary candidates, with only minimal interference from above. As party leader, Winston Churchill, for example, found it almost impossible to obtain a winnable seat for his wayward son, Randolph, who was often the worse for drink.

Because the two major parties were deeply divided ideologically, because they appealed strongly and separately to class-based warring ‘tribes’ among voters and because Britain’s first-past-the-post electoral system discouraged voters from wasting their votes on minor-party candidates who had no chance of winning, the vast majority of those who went to the polls at general elections backed one or other of the major parties. At the 1950 general election, nearly 90 per cent of those who turned out to vote voted either Labour or Conservative. At the 1951 general election, held a year and a half later, that figure soared to nearly 97 per cent. Until well into the 1970s, the total voting for one or other of the major parties never fell below 87 per cent. The two parties between them appeared to have a lock on the electorate as a whole. With very few exceptions, voters seemed determined – by voting for one major party or the other – to play an effective part in choosing the government of the day. Their votes were, indeed, not to be wasted.

In the British system, voters cast their votes, not directly for either of the two major parties nationally, let alone for either of the two parties’ leaders, but for the local parliamentary candidate of their preferred party. Not invariably, but usually, the party winning the most votes nationally also won the most seats in the House of Commons. Either the existing government was returned to power or a new government was formed. Britain’s voters at that time never voted in national referendums, and almost no one ever suggested that they should. British government was to be strictly representative government. Moreover, British voters, unlike voters in some other countries, did not elect other office holders, such as the prime minister, members of the cabinet or judges. Strictly speaking, they elected only their own local MP, but in doing so they played a part in deciding which party would form the next government. The system was rough and ready, but a skein of power linked the mass of voters directly with those who held, or were about to hold, power in London. Votes mattered. So did individual voters. As a University of Chicago professor put it:

The line of authority between people and Government [in the United Kingdom] rises singly and directly; the line of responsibility of Cabinet and Parliament to the people descends singly and directly … In the British parliamentary system [the line of authority and responsibility] is undivided and crystal-clear.2

That was, to be sure, a simplification, but it was by no means an over-simplification.

Once elected as their party’s standard-bearers, MPs’ role in the House of Commons was essentially secondary. The job of those MPs who belonged to the majority party was to sustain that party in power, to maintain the Chicago professor’s ‘line of authority’. More specifically, their job was to ensure that the incumbent party was able to enact all of its legislative proposals substantially unchanged. Party loyalty was intense, party discipline tight. Backbench MPs of the governing party rebelled in any numbers only very occasionally. The government of the day quite often made concessions to placate restive MPs on the back benches; but ministers, if they insisted, almost always got their way. That was true over Labour backbench opposition to the Anglo-American Loan Agreement in 1946 and over Conservative opposition to decolonization and the Suez war during the 1950s. Only very rarely did backbench opposition stop a government in its tracks. As for MPs belonging to the main opposition party, they could make a nuisance of themselves, but they seldom counted for much. They were mostly, so to speak, noises off – raucous noises perhaps, but seldom ones that ministers listened to.

In the classic system, parliament as a whole could be effective as a forum for the airing of opinions – in effect, as a debating society – but it was generally quite ineffective as a legislative assembly. The government was in total control of the parliamentary timetable. In the House of Commons, the first reading of any government bill was a formality. At second reading, a set-piece debate usually took place, but, if the bill was voted upon, the outcome was almost never in doubt. The committee stage of a bill, following its approval in principle on second reading, should have given MPs an opportunity to discuss it in detail, with a view to their making practical improvements; but the committee stage was typically also a formality, with MPs on the government side remaining largely silent and opposition MPs, knowing that they could not possibly win, mostly just going through the motions (or dealing with their constituency correspondence). Amendments to government bills likely to be accepted by parliament were usually proposed by ministers, seldom by opposition or backbench MPs. The latter frequently knew little or nothing about the substance of what they were supposed to be discussing. The report stage in the full House of Commons, and the third reading there, were also little more than staged rituals. The House of Lords, for its part, was almost totally irrelevant. It had lost most of its substantive powers as long ago as 1911, and there was a common understanding in the Lords – known as the Salisbury convention – that the Lords would not significantly obstruct government bills, especially if the proposals they contained had been included in the governing party’s election manifesto. It is only a slight exaggeration to say that by the end of the Second World War parliament had become, in Walter Bagehot’s terminology, a dignified rather than an efficient part of Britain’s governing arrangements.3

Grouped just beneath the apex of governmental power in the old system were Britain’s senior civil servants: the cabinet secretary and head of the home civil service (often the same person), the twenty or so permanent secretaries of government departments and their immediate subordinates. These senior ‘officials’ performed two functions. Looking upward, they functioned as their minister’s principal – sometimes his or her sole – policy adviser. Looking downward, they were responsible for the administration on the ground of the work of their department. To these twin tasks, senior officials were meant to bring, and usually did bring, substantial knowledge and long practical experience of the field that they were dealing with – whether it be foreign affairs, defence, health, education, pensions, transport or whatever. They were expected to bring to their tasks both substantive expertise and institutional memory. Although permanent secretaries themselves usually took command of departments that were new to them, most senior officials were ‘lifers’, men and women who had spent almost the whole of their careers in one department, which was commonly referred to as their ‘home’ department.

Officials of that generation were famed for their complete neutrality in party-political terms. The same civil servants could be, and sometimes were, deeply involved in the nationalization of industries under Labour administrations and their denationalization under subsequent Conservative administrations (and, on occasion, the other way round). Senior officials, with their long experience of working in the same department, could, of course, be set in their ways, cautious, dilatory and sometimes positively obstructive; but they could also be creative, imaginative and initiators of radical change. They worked not so much under their ministerial bosses as with them. The acute American observer Richard E. Neustadt, author of Presidential Power and adviser to successive American presidents, someone who had befriended many British politicians and senior civil servants, was not wide of the mark when he wrote of ministers and officials:

Theirs is an intimate collaboration grounded in the interests and traditions of both sides. Indeed it binds them into a society for mutual benefit: what they succeed in sharing with each other they need share with almost no one else, and governing in England [as Americans then called the UK] is a virtual duopoly.4

Neustadt added that senior civil servants in Britain, once they had been consulted by ministers and had given them their advice, invariably implemented their decisions ‘without public complaint or private evasion, even though they may have fought what they were doing up to the last moment of decision’.5 Officials gave their advice confidentially and anonymously, but a few of them – Sir Norman Brook, Sir Burke Trend, Sir Otto Clarke, Sir Frank Lee, Sir Leo Pliatzky and Sir William Armstrong – became legends in the Whitehall world. One of the tiny band of female permanent secretaries, Dame Evelyn Sharp, was formidable both intellectually and temperamentally. The diaries of Richard Crossman, one of the half-dozen cabinet ministers she worked with, are replete with references to her. Crossman found her simultaneously daunting, infuriating and admirable. They were an uneasy duo, but a duo all the same. He was indubitably her boss – but only just.6

Unlike in the United States and many countries on the European continent, Her Majesty’s judges were not really decision-makers in the governmental system. In the absence of a written-down, codified constitution, Acts of parliament could not be challenged in the courts; the doctrine of parliamentary sovereignty reigned supreme. Even ministers’ own actions, however perverse, provided they were in accordance with the law, could not be, and were not, challenged in the courts. The judges themselves were passive, showing no disposition to act as a check on either parliament or ministers. Their job was to judge individual cases, not to make law and certainly not to second-guess the wisdom and sound judgement of democratically elected ministers. The judges deferred alike to both Labour and Conservative administrations. So anxious were they not to appear biased against Labour in the years immediately after the war that they leaned ‘over backwards almost to the point of falling off the Bench to avoid the appearance of hostility’ to Attlee and his colleagues.7 Americans spoke, and still do, of the legislative branch of government, the executive branch and the judicial branch. But Britons in the postwar period almost never used the language of three branches. After all, legislation in the United Kingdom emanated almost exclusively from the executive (that is, from the government of the day) and, so far as law and policy making were concerned, Her Majesty’s judges were almost totally out of it. During the classic era in Britain, the judiciary was at most a twig of government, never a branch.

Although the government of the day remained firmly in charge, successive governments, both Conservative and Labour, drew heavily on wartime experience and, after the war, showed a willingness – even an eagerness – to consult, co-operate and even come to formal agreements with organizations outside government: for example, the Trades Union Congress, the Federation of British Industries (later the Confederation of British Industry), the National Farmers Union, the British Medical Association, the National Union of Teachers, the Bar Council and the Law Society. The British state briefly showed signs of becoming a quasi-corporatist state, with government policy no longer simply handed down from on high but instead negotiated with the government of the day’s ‘social partners’. In the case of economic and industrial policy, ministers of both parties frequently spoke of their desire to co-operate with ‘both sides of industry’ (the employers and the trade unions). Harold Macmillan’s administration in 1961 even went so far as to establish a National Economic Development Council (‘Neddy’), with a view to promoting co-operation between the government and both sides of industry in the interests of what was then known as ‘indicative economic planning’. Along with this big Neddy came a host of ‘little Neddies’, based in the regions and on individual industrial sectors. This foray into corporatism never became firmly established, and bodies like the TUC and the CBI never became fully a part of Britain’s governing arrangements; but it looked for a time as though they just possibly might.

Five general points need to be made about this simple and seemingly sturdy set of governing arrangements.

One is that the British system of government of that time was highly centralized. Local government existed, was taken seriously and enjoyed considerable autonomy; Northern Ireland was then, as it still is, a province apart. But otherwise the writ of Westminster and Whitehall ran throughout the whole of the United Kingdom. There was neither a Scottish parliament nor a Scottish government. Today’s Holyrood institutions did not exist. The same was true of Wales, with no Welsh national assembly and no Welsh national assembly government. Edinburgh and Cardiff were capitals only in name. Apart from Northern Ireland, the UK system was not remotely federal. The government in London did not have to share its power with the likes of American or Australian states, Canadian provinces or German Länder. The UK system as a whole more nearly resembled that of France, with power concentrated in Britain’s equivalent of all-conquering Paris.

The classic UK system was not only highly centralized: it was also a power-hoarding system as distinct from a power-sharing system. The government of the day was meant to govern – full stop. Only on special occasions – for example, during a world war or when dealing with the ‘troubles’ in Northern Ireland – was the government of the day expected to co-operate with the opposition parties or to involve them in any way in decision making or policy making. British government was one-party government in spirit and style, not merely in the sense that a single party was usually able to govern on its own. ‘We are the masters,’ a Labour minister coolly informed opposition Conservative MPs in the House of Commons in 1946. He was quite right: for the moment, the minister and his Labour colleagues were the masters.8 When the Conservatives won the general election in 1951, they in turn became the masters. British governments were almost never in the business of engaging with other political parties. They were also seldom in the business of dealing on a basis of equality with organizations and bodies of opinion outside government. Governments consulted outside bodies, to be sure, but the outside bodies in question remained outside, and the final say remained in the government’s hands. The title of one former cabinet minister’s memoirs captured the spirit perfectly: Ministers Decide.9 For a time, as we just noted, it looked as though that power-hoarding way of doing government and politics in Britain might change. But it never did.

This centralized and power-hoarding system was also a highly establishmentarian system. It was not, and was not meant to be, overly democratic. Rather, the business of governing was to be left in the hands of persons equipped by background, training and temperament to perform that task. In the first place, the people were to be accorded only the power to vote at general elections, and general elections were not to be held too often, ideally no more than once in every four or five years. Voters in Britain, unlike voters in U.S. primary elections, were also to have no say in the selection of parliamentary candidates – and they were certainly to have no say in deciding controversial and important issues. Attlee spoke for his generation when he said in 1945:

I could not consent to the introduction into our political life of a device so alien to all our traditions as the referendum, which has only too often been the instrument of Nazism and Fascism. Hitler’s practices in the field of referenda and plebiscites can hardly have endeared these expedients to the British heart.10

More generally, British politicians felt that they were under no moral obligation to be guided by public opinion. Prudence, of course, dictated that they had to pay some attention to what members of the public were thinking: general-election outcomes depended ultimately on voters’ opinions and their mood. But British politicians did not regard themselves as merely the public’s agents, there to do whatever the public wanted. Instead, they felt they should be guided by their consciences and their own judgements about what should be done in the national interest. The MPs who voted to abolish capital punishment in 1964 actually took pride in the fact that they knew that they were defying majority opinion in so doing. Aneurin Bevan, a leading figure in the postwar Labour party, is said to have complained that merely consulting opinion-poll findings risked ‘taking the poetry out of politics’. L. S. Amery, a Conservative (and conservative) constitutional theorist, chose to paraphrase Abraham Lincoln’s Gettysburg Address. ‘Our system’, he said, ‘is one of democracy, but of democracy by consent and not by delegation, of government of the people, for the people, with, but not by, the people.’11 His was the prevailing view, not just in his own party. Governing was for the elite, an elite of talent and experience, not the masses.

At the same time, the old two-party system was nothing if not adversarial. On top of personal rivalries, often intense, the differences of opinion between the two parties’ leaders, not to mention their rank-and-file members, were profound. Although less so as time went on, the two parties were deeply divided along both ideological and tribal lines. During the 1945 general-election campaign, only weeks after the defeat of Germany and the break-up of the wartime coalition government, Winston Churchill insisted in a radio broadcast that a socialist administration under Clement Attlee, his long-serving and loyal second-in-command, ‘would have to fall back on some sort of Gestapo’.12 Several years later, in a speech in Manchester, Aneurin Bevan, Attlee’s minister of health, was even more splenetic:

No amount of cajolery, and no attempts at ethical or social seduction, can eradicate from my heart a deep burning hatred for the Tory Party … So far as I am concerned they are lower than vermin.13

The debates at the time of the Suez crisis of 1956 were sometimes just as rancorous. Personal friendships could cross party lines and did, but ill will, not good will, characterized postwar party politics. Whatever the other side said or did, whatever it was, must be wrong. It was during those decades that the phrase ‘adversarial politics’ was coined.

Finally, the system, whatever else it was, was one that had deeply embedded within it the idea of accountability – the idea, that is, that the system made it possible for the electorate collectively to hold the government of the day to account. The government of the day was responsible for whichever of its own actions and inactions affected the UK as a whole. Voters knew perfectly well, or else could easily find out, which political party was in power (i.e., which party constituted the government of the day). Therefore, voters collectively could either reward that government by returning it to power or else punish it by ejecting it and installing in power instead the principal opposition party. Voters might not have superordinate powers – they might not be in total control – but they could nevertheless easily identify which party was in power and collectively punish that party and privilege its opponents. The voters knew who the rascals were, as the Americans put it, and could act accordingly. The arrangement might be brutally primitive, but it could also be brutally effective. Governments knew as much and accordingly behaved responsibly and appropriately. The skein of power was taut. Power-hoarding had that simple, straightforward advantage.

The classic British political order – the one that has been described in this chapter – no longer exists in its original form. Today’s system is like a very old building. Although large parts of it still stand, much of it has either fallen down or been torn down. New walls have been built and new extensions added. But, strangely, many of those who live and work in the old building – both politicians and voters – still imagine that it has not really changed in any significant way. They are wrong; but, as we shall see in later chapters, their error has already had, and continues to have, important consequences.