LEADING ARTICLE:Judges and bankers to the rescue

What does the "fartocracy" do when people grow angry with its incompetence and failures? The Rugby Football Union took the easy way out this week. Faced with outrage at the sacking of Will Carling, the top brass simply caved in and reinstated him as captain of England's World Cup rugby squad. In contrast, when we get fed up with "old farts" running the country and the economy, they adopt a different strategy. When they are in trouble, they don't surrender. They seek help from some other, apparently independent, as yet unflawed part of the establishment that retains public respect.

This week, the judiciary rescued politicians from sleaze. Lord Nolan, a senior Law Lord, offered MPs and ministers a new code of conduct, imbued with all the esteem in which judges are still held. His contribution will soon be followed by that of another judge, when Sir Richard Scott reports on the arms-for-Iraq scandal. These initiatives will be briefly humiliating for politicians. But like paying a visit to the confessional, the process is intended to cleanse MPs of their sins.

Something similar has happened in the economic field. In 1992, Britain's exit from the Exchange Rate Mechanism left the Government's reputation for monetary policy in tatters. So the Bank of England, considered politically neutral and untainted by failure, was given a more prominent role in the management of inflation. This week, we saw the tensions that can produce, as the Governor and the Chancellor appeared divided on whether to raise interest rates.

These developments represent important constitutional innovations. They will surely prove permanent, and also suggest the future course of reform. The power of government is slowly being circumscribed in a very British and evolutionary way. They do not, however, provide a complete solution to our problems. It may be tempting to think that all would be well if only the judges or the Bank, being non-political, could have an even bigger influence on public affairs. Yet these institutions share many of the problems that afflict politicians and run the risk of being just as discredited.

Judges look good compared with sleazy MPs, but it was not long ago that a Royal Commission had to be set up because the judicial system failed to tackle miscarriages of justice such as the Guildford Four case. Some critics are already upset about the stream of judgments that are hostile to government policy. If Britain had a Bill of Rights and judges were delivering controversial rulings, people would soon want a more transparent system for appointing these powerful but frequently out-of-touch figures.

Likewise, Eddie George cuts a reassuring pose at the Bank when compared with a Chancellor whose preoccupation must be winning the next election. But the Bank is an opaque institution with archaic ways. The BCCI scandal and the collapse of Barings raise serious doubts about its competence.

We may be witnessing a permanent shift of power from the Government and Parliament because of policy failures and the whiff of impropriety. But the present solution is likely to be no more than a stopgap as Britain struggles to design a system of public administration that can inspire lasting confidence.

We have not yet found a model to follow. A new system of checks and balances, such as characterises American government, appears to be evolving on an ad hoc basis. But we cannot import wholesale from the United States. The federalism of that continent-wide country, involving strong devolved powers at state level, would be quite foreign here. Likewise the republican nature of Western European democracies seems strange to the British eye.

Our problem is that we are better at reinventing other people's states than at remaking our own. Germany can thank its British post-war occupiers for providing a political framework which avoided many difficulties that plague our system. Britain helped to endow the Federal Republic with decentralised government, a written constitution and proportional representation. Yet for fifty years we have remained stuck with a substantially unreformed political system.

Against this background of much-needed change, the activities of Lord Nolan, Sir Richard Scott and Eddie George are vital and welcome. But they represent little more than Britain's first stumbling steps into the 21st century.