Is Sir Jeremy Heywood more powerful than the Prime Minister?
Is Sir Cover-up more powerful than the PM?
Unelected. Unaccountable. And now under fire for a shabby, secret deal to censor the truth about the Iraq war
No 10’s Mr Fixit has his fingerprints over every major political scandal of recent years
SATURDAY REPORT By GUY ADAMS
PUBLISHED: 01:10, 31 May 2014 | UPDATED: 17:00, 31 May 2014
Just after the last General Election, a 20-page report landed on the desks of a lofty cross-section of British politicians, scientists and business leaders.
Marked ‘confidential’ and prepared by the consulting firm McKinsey, the seemingly nondescript document carried the title: ‘Rapid restructuring in pharma to navigate turbulent times.’
It advised companies in the multi-billion-pound drug industry to take steps to ensure they prospered in an ‘uncertain’ marketplace.
Firms were urged to dramatically ‘restructure’, cut costs in order to ‘burn fat’ before attempting to ‘build muscle’ by, among other things, mergers, acquisitions and ‘radical outsourcing’.
The tone was dry; academic, even. And were it not for the seismic events that have recently threatened to reshape the global pharmaceutical industry, it might have been quietly forgotten.
Instead, it has been dragged into the huge political row over the American drug giant Pfizer’s controversial attempt to take over its British rival AstraZeneca.
The £69 billion bid was formally abandoned on Monday, after weeks of fierce debate.
Supporters had described it as exactly the sort of dynamic, forward-thinking corporate move advocated by such industry experts as McKinsey.
Opponents, including the board of AstraZeneca, were adamant that Pfizer’s takeover would be bad for the long-term future of the British pharmaceutical industry.
Treading a fine line between the two camps was Sir Jeremy Heywood, the Cabinet Secretary, who was asked by David Cameron to ‘engage’ with the two firms during the contentious negotiations.
The 52-year-old Whitehall mandarin, who earns a £190,000 salary, was therefore duty-bound to assess even-handedly the impact of the deal on the national interest.
Many reasonable people might think that such objectivity would be near impossible when, as the Mail reveals, one of the four co-authors of McKinsey’s ‘rapid restructuring’ report was Heywood’s wife.
Not surprisingly there has been deep disquiet, given his wife’s strong views on the subject, over the wisdom of Heywood’s appointment. Doubtless Heywood, Britain’s most powerful civil servant, would argue that wherever his wife’s sympathies lie, he always discharges Government responsibilities entirely properly.
Not everyone involved in the deal agreed, though. Senior figures at AstraZeneca are said at times to have been incensed by his one-sided stewardship of the takeover.
Now, though, Heywood’s integrity has come under intense scrutiny again concerning his involvement in another huge national controversy.
Indeed, if anything illustrates this man’s ability to run with the hare and hunt with the hounds it is his role in the Chilcot inquiry into the Iraq war.
On Thursday, it emerged that he had vetoed the release to the inquiry of vital letters and records of phone calls between Tony Blair and George W. Bush in the run-up to the war.
The contents of 150 messages — believed to reveal the real reason Blair dragged Britain into the conflict — will be censored from the £10 million inquiry, thanks to a backroom deal cooked up by Heywood.
The shabby compromise is a triumph for Mr Blair, along with the officials who served in Downing Street with him during this highly controversial period.
And who was one of the most senior of those officials? None other than Heywood himself!
As Blair’s Private Secretary at the time, he was a central member of the inner circle that took Britain to war.
As with the Pfizer affair, many people are convinced that his dealings with Chilcot are compromised by a clear conflict of interest.
Surely he should have stepped aside and not been involved in decisions about what material should be made public?
Indeed, David Davis, a senior Tory MP, told the Mail yesterday that Heywood should have excused himself from the talks.
He said: ‘It is wholly inappropriate that the primary decision-maker in this is Jeremy Heywood,’ adding that the Cabinet Secretary had a ‘vested interest in secrecy’ and had ended up brokering a deal that represents ‘improper, bad governance’.
But then the ineluctable fact is that the entire Downing Street career of this secretive, non-accountable mandarin, who has inveigled his way into the inner sanctum of the Blair, Brown and Cameron premierships despite not having been elected, has been plagued by controversy.
During a 15-year period, the fingerprints of Heywood (who the BBC has called ‘the most important person in the country that nobody has ever heard of’) can be found on virtually every crisis, scandal and major Downing Street decision in recent history. His track record includes:
Botching the official Downing Street response to the 2012 ‘Pleb- gate’ scandal involving former Chief Whip Andrew Mitchell.
Persuading David Cameron to support the failed 2012 merger of British arms giant BAE Systems and European rival EADS, despite having close links to a bank at the centre of the deal.
Ensuring, despite opposition from elected ministers, that Lord Justice Leveson’s investigation into the Press was granted draconian Judicial Inquiry status.
Engineering the disastrous flotation of the Southern Cross care homes group in 2006, which left more than 30,000 elderly and vulnerable people facing being made homeless.
Failing to properly oversee that year’s bidding process for the West Coast main line rail franchise, which needlessly cost the taxpayer tens of millions of pounds.
Being suspected of attempting to block Iain Duncan Smith’s welfare reforms. Some even suspect him of agitating for the Work and Pensions Secretary’s sacking.
Clashing with Mr Cameron’s policy guru Steve Hilton, leading to Hilton’s move to a job in California.
Some claim he strengthened his own power base by helping his predecessor orchestrate the post-2010 election negotiations between David Cameron and Nick Clegg that led to the formation of the Coalition, which inevitably made the role of Cabinet Secretary much more important.
Little wonder that he is known across Whitehall as ‘Sir Jeremy Wormtongue’, after the Machiavellian Lord Of The Rings character who whispers gossip into a king’s ear in order to further his own agenda.
Yet as the focus is increasingly placed on his over-mighty role in No 10, more and more questions are being asked about what exactly lies behind that agenda.
Earlier this month it emerged that Heywood’s previous employer, the giant American bank Morgan Stanley, was intimately involved in the Pfizer negotiations, advising AstraZeneca.
Adrian Bailey, Labour chairman of the Commons Business Select Committee, said the revelation ‘reinforces the public view that there is an inner circle of politicians and bankers working in each other’s interests’.
Mr Bailey’s colleague, MP Debbie Abrahams, went so far as to ask in Parliament whether Heywood’s apparent ‘lack of independence is in the public interest’.
In reply, the Leader of the House, Andrew Lansley, insisted Heywood had been impartial throughout.
Commentators nevertheless described the decision to let Heywood oversee the Pfizer bid as akin to leaving a fox in charge of a hen coop.
It was doubly odd, they pointed out, since Heywood had faced a barrage of similar criticism two years ago for appearing to take a pro-active role in another proposed mega-merger, between arms manufacturer BAE and its European rival EADS.
The deal threatened Britain’s security by jeopardising sensitive military intelligence operations with the U.S. and was said to imperil 38,000 British jobs.
That time, his links to Morgan Stanley were again questioned, since the U.S. bank stood to gain millions from brokering the deal.
Though there was no evidence that Heywood would personally benefit from the merger, David Davis MP condemned his role, saying: ‘I think it highly unusual for someone as senior as the Cabinet Secretary to be involved in a deal like this.’
An analysis of Heywood’s career makes it very clear that he has an uncanny knack for placing his manicured fingers on the levers of power.
‘The fact that he’s been in the inner circle of Labour and Tory prime ministers, and had the ear of both Blair and Brown — even when they weren’t speaking to each other — tells you everything you need to know about the skills he brings to Downing Street,’ says one insider.
‘Heywood sees where the mood is, identifies the most powerful person on whom his future depends, then works his way into their inner circle.’
The son of a teacher at the private Bootham School in York, which he himself attended, Heywood’s background is classic Sir Humphrey: Oxford University, the LSE and then the civil service.
He rose seamlessly through its ranks. Today, he operates out of a tennis court-sized room at the Cabinet Office, which has discreet internal access to Downing Street.
On an average day, Heywood is believed to spend between two and three hours with David Cameron — making him a senior member of the so-called ‘chumocracy’, that small cabal of privately educated, Oxbridge graduates who make up the PM’s clique.
‘Mr Cameron trusts him implicitly,’ I’m told. ‘He’s one of the first people he calls each morning and last people he speaks to at night.’ In addition to attending Cabinet meetings, Heywood is one of the group of four — along with Chancellor George Osborne, press chief Craig Oliver and head of staff Ed Llewellyn — who attend the PM’s daily 8.30am and 4pm strategy meetings.
His influence is such that Cameron is said to have once asked, only half in jest: ‘Remind me, Jeremy, do you work for me or do I work for you?’
Like any successful courtier, Heywood can sometimes stir jealousy in MPs and ministers — who, unlike him, have actually been elected — or other colleagues.
Steve Hilton, Cameron’s director of strategy, resigned in 2012 and his departure is said to have been hastened by a clash of personalities with Heywood.
‘Almost every time Steve floated a policy, Heywood was the one in the room sucking his teeth and saying “No”,’ says one Hilton ally.
‘He saw off Steve’s attempts to reform the Civil Service and introduce more elected mayors.’
More recently, allies of Work and Pensions Secretary Iain Duncan Smith have muttered that Heywood has attempted to block welfare reforms. Some even suspect him of agitating for the minister’s sacking.
‘The night before the last reshuffle, David Cameron called Iain and said he was going to remove him from the Department of Work and Pensions and make him Attorney General,’ says one well-placed source. ‘Iain replied that if that happened, he’d resign.
‘In the event, Cameron had second thoughts. But Iain’s card has been marked and he knows who to blame.’
Another senior Tory with a less than rosy opinion of Heywood is Andrew Mitchell, who resigned as Chief Whip after swearing at Downing Street police officers in the so-called ‘Plebgate’ affair. Heywood conducted the original investigation into the incident.
A damning report by MPs later heavily criticised him for failing to take even basic steps to check facts.
A report for the Channel 4 Dispatches programme showed how easy it was, thanks to CCTV footage of the incident, to prove that Mitchell had been ‘stitched up’. According to one critic of Heywood: ‘He didn’t do that. It was a shambles.’
Bernard Jenkin, Tory chair of the Commons Public Accounts Committee, then released a report saying the Cabinet Secretary had ‘clearly failed to uncover the truth’.
Heywood’s competence was again questioned in 2012 when he was asked by Mr Cameron to look into claims that the Department for Transport was using incorrect figures while considering bids for the West Coast rail franchise.
The No 10 Mr Fixit looked into the matter and told the PM that nothing was amiss. But later it emerged that he was wrong and tens of millions of taxpayers’ money had been lost as a result.
Heywood is said to resent the adverse publicity such episodes bring. ‘He’s a classic mandarin who likes to operate in the shadows, dislikes the Press and believes he should never be part of the story,’ says one Whitehall insider.
Indeed, his distaste for media scrutiny was most evident during the phone-hacking scandal, when he is said to have been the man responsible for persuading David Cameron to appoint Lord Justice Leveson to investigate the newspaper industry.
He saw that the inquiry was granted judicial status, giving Leveson a staggering degree of power to compel witnesses to give evidence — something which, tellingly, was not available to Chilcot.
When Education Secretary Michael Gove commented that the inquiry threatened Press freedom, Leveson phoned Heywood to complain.
Heywood’s distaste for the limelight is long-standing.
In the mid-Nineties, he embarked on a romance with his future wife, Suzanne, who was then working under him at the Treasury.
Jill Rutter, a press secretary at the department, reported their subsequent engagement in the in-house newsletter.
She said that far from being honoured, ‘Jeremy was furious’ at the supposed invasion of privacy. Heywood and Suzanne married in 1997, shortly before he was picked by Tony Blair to be his Private Secretary.
His arrival in Downing Street coincided with the advent of so-called Blairite ‘sofa government,’ in which key decisions were taken by a small group of insiders.
‘It was an environment that suited Jeremy perfectly, because he’s a consummate office politician and was able to inveigle himself into that circle,’ says a former colleague.
‘There was also a time, in the darkest days of Tony Blair and Gordon Brown’s relationship, when he was the only person both camps would talk with. That gave him huge additional power.’
With power, however, came criticism. He was one of a handful of figures at the Downing Street meeting at which it was decided to publicly name weapons inspector Dr David Kelly — who later committed suicide — as a source for a BBC story about the Iraq war.
The Hutton Inquiry later heard that, in a remarkable breach of Whitehall procedure, Heywood failed to take minutes of the meeting.
If there is one thing that a civil servant should be capable of, surely, it is to keep an accurate record.
After the Iraq invasion, Heywood took a break from the civil service, joining Morgan Stanley.
This lucrative move lasted three years and helped facilitate the £1,485,000 purchase of his family home in south London. The property, to which he recently added a walk-in wine cellar, is now valued at £2.5 million.
His time at the investment bank would come back to bite him in 2011, however, when it emerged that he had been the ultimate head of the Morgan Stanley team that advised on the flotation of the Southern Cross care home group in 2006.
The controversial deal, which saw care homes for the elderly hived off from the company that ran them, was hugely profitable for Morgan Stanley.
But it led to the collapse of the firm, leaving 31,000 frail and elderly residents in its 750 homes worried where they would live, and threatening 3,000 jobs.
Heywood was said by the GMB union to be ‘up to his neck’ in the scandal, accusing him of being ‘ringside’ during the disastrous financial engineering.
Yet for all the criticism, Heywood’s star has continued to rise and he has consolidated his Downing Street power base, particularly as a result of the Coalition Government.
An insider explains: ‘When you have a coalition, you also need a moderator, someone at the centre of people pulling in different directions. He’s that man. It makes him more important than ever.’
Having helped create the current coalition, Heywood is believed to be preparing Whitehall for another one, having come to the view that next year’s General Election could well deliver another inconclusive result.
Whatever the result of next year’s vote, the chances are that however many disasters he’s involved in, this political chameleon will retain his seat at the heart of British government. And jigger the cost to the British people.