What do you do when the brown stuff hits the fan? Whether you are a politician, an official or a business executive there are three golden rules. First, own up. Once it is clear that something has gone wrong and it has happened on your watch, do not try to wriggle out of responsibility or change the subject or pretend that everything is hunky dory. Just take it on the chin and ’fess up.
Second, apologise – and make it a big, generous apology. Extenuating circumstances beyond your control and the dastardly role played by others should of course be mentioned – but save that for later. Third, say what you are going to do to put things right.
I have tried and tested the formula when running media training courses, but I first learned about it in Whitehall. It was a former permanent secretary who told me that the shrewd move when there’s a foul-up and you or your minister are caught bang to rights is to put your hands up.
As she explained, once you admit there’s a problem and say how sorry you are, even the most aggressive inquisitor finds it hard to keep up the attack. It takes the wind out of their sails when, yet again, you agree that what happened was not good enough and express your heartfelt regrets.
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Apologies can even win unexpected plaudits. One CEO who apologised publicly after a tiny handful of complaints – all caused by customers failing to follow instructions properly – was amazed afterwards at how many people praised him. How refreshing, they said. What a contrast with politicians.
So why is it that “sorry” is so often the hardest word for those in public life? Metropolitan police commissioner Bernard Hogan-Howe has caused outrage by his foot-dragging reluctance to apologise for the distress caused to those falsely accused in the now discredited investigation into VIP child abuse. The fiasco over Kids Company’s finances was marked by the unwillingness of ministers to apologise. Or take the debacle over Google’s failure to pay more than a risible amount of tax in the UK.
Chancellor George Osborne said it was a “victory” that HM Revenue and Customs had secured back tax payments from the internet giant worth £130m. The reaction was explosive. Ordinary taxpayers, British businesses and the media erupted in fury.
They pointed out that Google was paying far less than the 20% corporation tax paid by everyone else in the UK.
Some railed against Google but the real blame lay elsewhere. As Tory Boris Johnson wrote in The Telegraph: “It is absurd to blame the company for not paying their taxes. You might as well blame a shark for eating seals. It is the nature of the beast – and not only is it the nature of the beast, it is the law. It is the fiduciary duty of finance directors to minimise tax exposure. They have a legal obligation to their shareholders [...] The fault lies with our national arrangements.”
In other words, the fault lies with our government. As Boris pointed out, Google and the rest have acted within the law, and if the law stinks then it is up to ministers to change it. The puzzle is why Osborne and his officials did not recognise this and try to forestall public wrath.
Why did they not (rule one) admit that the tax system is not fit for purpose in 21st century Britain? Why did they not (rule two) say how very sorry they were for their failure to reform it? And why didn’t they tell us (rule three) about their plans to force Google – and others – to cough up their fair share of tax? Had they done so, they could have given themselves more room to explain the difficulties of tax reform, which are truly horrendous.
Today, countries compete to attract international investment by offering low tax rates. And what can we do if global giants funnel their money through Ireland or Luxembourg? Invade? HMG itself is schizophrenic about tax. HMRC wants to maximise the tax take; others in Whitehall offer tax breaks to foreign companies willing to create new UK jobs. Do we tell them to take their jobs elsewhere? Shouldn’t we cut our 21,000 pages of tax regulations? Well, yes... but aren’t some of the rules designed to help our own small and medium-sized businesses?
Tax is a dangerous thing to get wrong. Why did the barons rebel against King John? Tax. What were major causes of the English Civil War and the French Revolution? Anger over unfair taxes. What brought down Margaret Thatcher? The poll tax.
The current Google tax row has fed into widespread public resentment about inequality. If those in government want to avoid revolt, they must not only try harder to make tax fairer, they must also show more humility about their failure so far – and they must get their apologies in early.