Sir Douglas Wass obituary

Sir Douglas Wass, who has died aged 93, was reputedly the model for Sir Humphrey Appleby in the BBC television comedy Yes Minister – the caricature mandarin (portrayed by Nigel Hawthorne) who would always defer insincerely to his minister and then go his own way. But Wass was an outstanding civil servant who, as permanent secretary at the Treasury (1974-83), worked for some formidable chancellors. They appreciated his intellectual rigour and ability to analyse complex economic problems and propose sensible courses of action. From 1981 until 1983 Wass was also joint head of the civil service.

He was a member of a civil service largely shaped by the Whitehall giants of the 1940s and 1950s, Lords Bridges and Normanbrook. They regarded public service as a high ideal and active government as usually a force for good. They saw themselves as among the best and brightest, upholders of the public interest, and spoke confidently to ministers.

Wass was born in Wallasey, Merseyside, son of Arthur, a customs official, and his wife, Elsie. He attended Nottingham high school and won a maths scholarship to St John’s College, Cambridge, graduating with a double first. During the second world war he worked in advanced weapons research in the Royal Navy. He joined the Treasury in 1946 and learned by doing, and by observing his seniors. With his penetrating intellect, self-confidence, stamina and good judgment, he was obviously going to be a high flyer. Like several colleagues in the Treasury, he accepted Keynesian economics: as well as the confidence bred by its success in the postwar period, it probably appealed to the mathematician in him.

Much of his career was spent in the Treasury. Under Douglas Allen (later Lord Croham) he helped to restore good financial relations with the US after the Suez fiasco in 1956. Allen ensured that Wass was a private secretary to two chancellors, Derek Heathcoat-Amory and Selwyn Lloyd, between 1959 and 1961. He then rose steadily up the ladder, spending two years in Washington as economic counsellor at the British embassy and an alternate executive director at the International Monetary Fund (IMF).

After his return to the Treasury in 1968, he was promoted to undersecretary, deputy secretary and finally second permanent secretary in 1973. In the fiscal policy division, he shaped Treasury thinking about taxation. Until then, remarkably, taxation had been a matter for the Inland Revenue and Customs, and the Treasury had little expertise on the subject. Wass was considered Allen’s natural successor, and this promotion duly happened in 1974.

Wass’s main challenge was the combination of economic recession and inflation that followed a steep rise in Arab oil prices and high wage increases. He had good relations with the Labour chancellor of the exchequer, Denis Healey, and believed that low unemployment was the key goal of economic policy, and that inflation should be curbed by an incomes policy – despite the travails of the Heath and Callaghan governments with incomes policies.

However, the Conservative opposition under Margaret Thatcher was wedded to monetary discipline and determined not to adopt a statutory incomes policy. It believed that price stability was more important and that unemployment might be a necessary price in the short run. Unfortunately for Wass, the dominance of Keynesian ideas about economic management was coming to an end.

The biggest challenge facing the Callaghan government was the negotiation in 1976 for an IMF loan to save the pound. Before the crisis, Wass, who supported a “competitive pound”, wanted sterling to fall. Healey, despite the great mutual respect between them, overruled Wass. The IMF wanted substantial spending cuts to restore international confidence and the cabinet and Treasury were split over the extent of the cuts. Wass favoured modest cuts, but Treasury hawks and Healey thought more were needed. On Healey’s watch the Treasury declined in influence and Callaghan, not Healey, did much of the negotiation with the IMF.

Wass was supported by a formidable team including Derek Mitchell, Leo Pliatzky and Bryan Hopkin. Before long, all had left. Wass’s dominance and reluctance to delegate to his senior colleagues were a factor in at least two departures. When he had doubts about their advice to Healey, he would intervene, despite their greater expertise in the field. He believed his task was to see that the “official Treasury view” (his phrase) formed round his table stood up to rigorous analysis. Although he once compared himself to the anonymous second violinist at Covent Garden, he was more of a conductor.

In a public lecture in 1978, he had signalled his doubts about undue reliance on monetarism as a tool against inflation. Given the Conservative opposition’s monetarist approach, there was some apprehension in how he would get on with the new chancellor. Geoffrey Howe came to like him, although temperamentally they were chalk and cheese. Howe was lawyerly and collegiate, Wass austere and analytical.

The new government pinned its anti-inflation policy on the medium-term financial strategy devised by the financial secretary, Nigel Lawson, providing for a gradual reduction in the money supply over future years. Wass did not think it would work, and his doubts were widely shared among the economic establishment. For the most part, Howe and his junior ministers turned to younger officials rather than the old guard for work on the strategy. Ministers slowly abandoned their obsession with monetary targets and concentrated on reducing the public sector borrowing requirement.

In 1981 Thatcher abolished the civil service department, forcing the early retirement of Ian Bancroft, head of the home civil service. For the next two years, the headship passed jointly to Robert Armstrong, the cabinet secretary, and to Wass. They made recommendations for the top posts but their recommendation for Wass’s successor to head the Treasury was turned down by Thatcher and Howe. Wass had been knighted in 1975, but when he retired in 1983 it was without the peerage traditionally granted to a departing head of the civil service. After his departure, Thatcher sought to change the Whitehall culture. Wass never appeared scarred by her hostility: his charm, kindness and imperturbability remained intact.

In 1983 he gave the BBC Reith lectures, which were published in book form the following year as Government and the Governed. He became chairman of Equity & Law and Nomura, and a director of Barclays and De La Rue. He was also in demand as a visiting lecturer and a member of advisory groups. He relaxed with trips to the theatre, morning swims at Tooting Leisure Centre, and walks in Richmond Park.

Wass was a civil servant in the classic mould. He regarded one of his tasks as testing the policy of ministers, but as a good mandarin he would ultimately carry out their will – and on their heads be it.

His wife, Milica (nee Pavičić), whom he married in 1954, a daughter, Sasha, and son, Andrew, and four grandchildren survive him.