Strand Group 67: A Growth Policy to Close Britain’s Regional Divides – What Needs to be Done?

Lovely good evening everyone for the 67th strin group event I’m the director John Davis uh before we begin our exceptional panel um we’re just going to play you a very short video about our new Masters program please tell the world we are doing our best Martin the em in government studies at Kings

College London offers an unrivaled opportunity to get an Insider’s view as to how government really works the truth is as I know if you’re a cabinet minister if you’re an adviser of the treasury it’s not about textbooks and equations it’s not simply about being able to study the past it’s about

Understanding what’s happening in complex ways learning from the past and then saying on that basis what is the right way forward in that decision for our country so we look at policy what the government of the day is doing and why they’re doing it we also look at

Process so how the decision making is happening the Machinery of government and then we look at personality so who are the individuals what shape them as people how do they get on this ma program has institutional Partnerships uh with organizations like number 10 down in Street and the treasury what

That means is that classes can take place in buildings like number 10 Downy Street and the treasury but it also means that we have the highest profile guest practitioners come into the classroom and teach alongside our academics to give you an experience of how government really works in practice

We are really trying to create a very Dynamic learning environment it’s in person you’re going to be part of a small cohort so you really get to know each other you get to know us and we’re excited to be able to leverage our proximity to the heart of government the

Caliber of people you’re interacting with is like nothing else you’ll ever do specific things like going to Downey Street meeting ex Prime Ministers Chancellor senior ministers Etc but that’s what Kings does better than anybody else really is the embodiment of knowledge with purpose working really closely with the treasury we’ve had a

Good 250 different treasury civil servants come and do our class as part of their job the treasury thinks that its current civil servants can learn skills and learn from history in our class our students having studied British government uh find that it’s very useful for going into British

Government uh we have students who go on to serve in civil service or to get involved in politics more directly in business in government relations in public policy in think tanks and in journalism ultimately you’re learning a set of skills here that are transferable I’ve got to say I’d love to have done

This class when I was um in my 20s I think it would have um really helped me you see a complete picture of public policy and we use the lens of History to help us understand the challenges we face today and in the future I think these are brilliant skills which any

Politician policy maker um can learn in this class and would really equip them to go on and do those kind of jobs in the future well there we are I didn’t know that we were playing that but that’s very exciting and this is the Master’s course um kicks off I think in September

Um there’s a number of student ships available and part of that is the work that I’ve been involved in with John and Nick mcferson now for nine years is teaching that class about the treasury and economic policy since 1945 and we talk about economic analysis but also the historical experience and that’s

About people and institutions and how they work together and then we use them to get people thinking about current problems um and challenges for the future and in a way the project we’ve been working on for the last three years and which we’re talking about the final

Paper of today is an example of that because our first first paper was about economics our second paper a very big um contemporary history project and um on this panel uh John Kingman Michael go and Tom ridden are all interviewees amongst the 95 plus people that we we

Interviewed people who are involved in in policymaking um uh back then and what we’ve done in this paper is decided to look to the Future um I’m going to introduce the panel in a moment um and we’re going to have a discussion amongst ourselves about the way forward

Um and um then open up to discussion with you before we go to drinks but before we do that I’m going to ask my co-authors to give you a presentation of the recommendations of our paper um they are Nasha Weinberg who was with me at

The kendi school a few years back it is now a barrister Dan Turner who’s currently um the mayor the adviser to the mayor of South Yorkshire former Biz civil servant kendi school um also about to make a new career move uh and uh Esme Elston who is a PhD student actually at

Um at UCL the three of them are all here tonight and then the fourth co-author of Arts isn’t here anna Stansbury she is a um a a um a new professor at MIT a British um Economist out there and so I think Nasha and Dan are going to walk us

Through the recommendations and then I’m going to open it up to a discussion up here on the top table and we’re going to talk about I think in two stages first of all um what is the right way to go about um shaping policy um to to tackle

The the challenges which we’re talking about and then secondly to talk about the politics and institutional deliverability um of change in the next Parliament so over to you Nasha and to um to Dan and huge thanks to John Davis and Martin and all the kings team for making tonight possible also the Gatsby

Foundation and Harvard for their financial support and for all of you for coming along to be part of this discussion this evening it’s very much appreciated thank you very much Ed um really happy to introduce you all this evening to the launch of our paper a growth policy to close Britain’s

Regional divides what needs to be done so the background to all of this is a very simple fact UK Regional policy hasn’t worked UK Regional inequality has grown despite Decades of policy effort it stagnated over the past 18 years the gap between Southeast England and the rest

Of the UK is now bigger than that between East and West Germany or north and south Italy Britain has huge Geographic inequalities in economic outcomes health education and social mobility underperformance of the UK’s cities and regions is holding us back closing the B Gap could raise gva by at

Least 55 billion pounds per year the UK’s National productivity and Regional productivity challenges are linked tackling stagnant growth and low Regional productivity is now a cross-party imperative well what gives us the authority to say all of this our first two papers provide most of our evidence base our first paper written with Anna

Stansbury was an econometric analysis of the UK’s binding constraint that paper found as follows education we’ve moved from too few graduates in the 1990s to too few stem trained scientists today on infrastructure there’s been too little transport investment especially in lower productivity regions on Innovation public support for inovation

Currently amplifies rather than corrects for regional inequality money doesn’t go to the regions that need it most on finance there’s been too little Equity investment outside London and in respect of housing High housing cost in London is preventing Regional convergence through migration our conclusion is that

There is a new growth model for the UK but only if we pull the right levers our second paper was based on interviews that we conducted with 93 politicians and practitioners including three prime ministers and six chancellors and from those Prime Ministers and Mayors to whiteall growth Specialists our interviewees told us

What we can learn from the regional growth policy that did take place in the years from 1979 to 2015 we went through those interviews all of which are available online with the interview transcripts public published in full and identified a broad consensus amongst decision makers they

Found that politics in the 8S and ’90s drove centralization and helped to maintain that centralization afterwards those who were responsible for regional policy regret not doing more earlier during their time in government centralization in turn has enabled short-term decision making and policy chop and change which has undermined policies that work the

Mayoral combined authorities in England are reducing policy churn and there’s broadly agreement that they’re really working but more needs to be done and they are not universally spread across the UK change is possible but given our starting point one of the most centralized states in the oecd it needs

To be driven by the top this paper is our third paper in the series and what we do in our paper is set out the recommendations we aim to give the answers to the questions which those that we interviewed said that they couldn’t agree on first what are the

Most important policy levers for growth in the regions and Nations and what’s the right level for making decisions about those levers second where decentralization is part of the answer what model should we adopt for decentralization how much should whiteall drive institutional reform in order to make any map of the UK

Comprehensive and how do we fund a more decentralized government to balance Equity with incentives in conclusion what do we need to do to create political consensus behind regional growth policy and to answer all those questions I’m going to hand over to my co-author Dan great so I get the easy

Questions um good evening everybody lovely to see so many familiar faces sorry if you can’t see me in that corner um I’m going to Rattle through our 10-point plan um well-rounded in order to answer those four questions that Nash has set out and then we’ll hand over to

The panel and you can tell us what you agree with what you disagree with how you might Nuance any suggestions so first of all we say we think that the UK needs to develop a national growth and productivity strategy stick with it we’ve had a cycle of national strategies over the past few

Years um so what would make this one different we think it needs to be owned by the center of government co-designed with the regions delivered as far away from central government and as close to the communities that it will affect as possible um and set out a long-term

Vision that all parties all parts of government all stakeholders that would need to be involved in delivering this um can sign up to so it has that longevity across different ministerial portfolios political Cycles um and into an investment cycle we have our own view of what that plan should contain as Nas

Has already set out um and some specific recommendations in the reports around um investing more in local and Regional transport networks to try and increase the density effective density of our city regions in particular um investing in The Innovation assets that are relatively well spread across the country um helping connect them more

Directly into Regional economies through things like Regional Equity investment funds um more support for the Catapult Network or the strength in places Fund in inovate UK um doing more on skills to bring to life the emerging architecture around Regional skills planning um the toolkits that are available to Mayors and local

Skill uh provisioners in order to meet specific local gaps in labor markets and then finally um reforming the planning system a hot button Topic at the moment but looking to do more to have a region-wide view of strategic economic infrastructure that brings together Energy Systems Transport Systems housing

Targets um linking that into local plans and then asking if there’s more we can do with Mayors or their equivalents first ministers um to have London mayoral style powers to call in particular planning decisions now this isn’t to say that everything should go to the mayor or

Combine Authority level far from it um and we think that the role of local authorities is if anything significantly underplayed at the moment underappreciated underrecognized so we really want to stress the role of local authorities in supporting um Civic infrastructure in supporting social infrastructure in supporting Universal basic infrastructure across all parts of

The country um and their role as Place leaders in joining up Public Services whether that’s a local level Regional level National level for their communities but how do we do this and what’s that model um that we think we ought to be working towards our view is that there

Needs to be a consistent sub Regional tier of government across the whole of the UK so as well as devolve governments in Scotland Wales and Northern irland extending the subregional model from the urban areas and some of the non-urban areas where exist at the moment across

The rest of England we don’t think that we need to be prescriptive about this we think that there’s more um there’s more complexity in the current Arrangement than sometimes we give credit for we have the London mayoral model we have um the first ministers and Devol parliaments in Scotland and Wales and

Northern Ireland um but what we do think we need to see are a comprehensive tier that meets these six criteria so it’s at a sufficient scale that it’s driving scale economies it’s helping overcome parochial political interests that may get in the way of a wider Regional or local interest it’s sufficiently

Accountable and that’s not just accountable up to whiteall that’s accountable within its Community to Residents through things like local media um as well as you know your more formal political scrutiny mechanisms um and it has a single point of contact so we’re we’re kind of open to the debate

On what this looks like whether that has to be an elected mayor but we think you need a strong leader with a region-wide mandate in order to be able to drive a region-wide political agenda now having said that we recognize that the current approach which relies heavily on um volunteerism bottomup

Initiative is leading to inequities in How England especially is governed in our view so we’ve ended up in a situation where some places feel left out because or certainly some residents and particular communities feel left out because potentially their politicians can’t negotiate a deal um they’re not

High up and off the list or able to negotiate um for their interests locally so in order to make sure that um resources are fairly distributed across the UK in order to ensure that all communities feel like they have a stake in the emerging um new constitutional Arrangements within England we think we

Need a comprehensive structure and that might mean moving beyond the current bottom up voluntaristic approach towards a fir a steer from whiteall that we need Mayes everywhere and we will institute a process or say there we need subregional authorities with a leader everywhere um

And we will set up a process in order to deliver that so far we’ve really just spoken about the institutional architecture of local authorities and um the regional tier but just as important is saying White Hall needs to change its structures its culture its politics needs to adjust to this new reality of

Regional authorities everywhere and in the Devol Nations as well so that’s why we proposed a regional growth delivery unit within central government chaired by the Prime Minister and driving through the change that set out in the National growth plan um through the architecture of whiteall

So in our mind what this looks like is every budget there is a clear published transparent account of the government’s progress against its targets um the sunlight being the dis best disinfectant we can say which parts of White Hall are struggling which parts of White Hall are not delivering um as much

Expected um and they can be held to account accordingly and perhaps most pertinently given our findings in the second paper about the importance of political leadership in driving this change if you think as a cabinet minister that your next promotion or your job depends on being in the good

Books of the Prime Minister and the chancellor and they’re telling you the way you meet that goal is by delivering your Regional objectives we think it will start to shift some of these vested interests within the central state but just to make that happen we have another recommendation which is bringing Mayors

And first ministers into the legislature so that they too can hold central government to account and then the sticky question of how do you fund all of this um we don’t think that there are easy answers to this and ultimately we we think that in order to address the Deep lying

Inequities or you know deep seated inequities in um the UK’s Regional inequalities will take time will take significant investment and we recognize that in the current fiscal climate that’s a p you know a difficult ambition for some people but there are some um shortterm fixes that you could make that

Would make a significant difference one being expanding the single pot to of meds so in great Manchester in the West Midlands and the government has moved towards giving bundles or bundling up funding streams that currently sit in whiteall to local leaders so they can drive better efficiencies across those

Policy areas and make more effective use of um the resources that we currently already have we think that that should be rolled out to other regions and should in uh include a wider range of funding sources as well um we get into this in the paper but we think that

There’s a case for looking more to devolve Innovation funding employment support retrofit um and a few other nationally held Parts at the moment uh we think that local government and you can Nuance this to say reform local government if you’re of the view that we need to help drive and incentivize local

Government reform through this process as well um should be offered a multi-year spending settlement so if you’re in local government you can spend now and invest in an intervention that will drive public service reform over say a five or 10 year time Horizon so you can make the preventative

Investments that we hear so much about at the moment and then finally we think as I said earlier that there’s a strong case for reallocating Capital spending away from London Southeast and towards the other regions of the UK um within that in order to make it work we think

You would have to look at the mechanics of how we allocate funding in the in UK government so looking at the treasury greenbook the principles that are used to allocate um funds and whether we want to move towards uh alternative ways of assessing cost benefit ratios and so

On and then finally you know that’s our blue Peter has 10 recommendations we came up with earlier but won’t work for um many of the political stakeholders who need to be on board in order for this to stick which was one of the findings of our second paper we need a

Set of policies that can be agreed now that can have 10 15 20 years to bed in across political Cycles um so more than anything what we call for is a process starting now starting in the conversations around manifestos um in as cross-party a way as you can do in a highly contested

National political environment to say this is what we need to do as a country this is how we get a grip this is how we don’t find ourselves in 20 years time talking to a bunch of Harvard and KCl researchers saying oh I wish i’ have done more when I was writing that

Manifesto in 2024 so we hope the government doesn’t duck the challenge to you Ed thank you to um now we’ve got a um a great panel to um discuss this um and then we’ll open up to your questions um and the panel are John Kingman first of all who um now

A um eminent kind of corporate chair but was second permanent secretary in the treasury and um let’s be honest failed with Gordon Brown to deliver Rising Regional productivity rates and then failed with George Osborne to deliver um Rising Regional productivity rate so so John has done an interview with us when

He where he reflects upon his Collective failure so we’re contested to know um whether he thinks this would make any difference and then we have Rachel wolf founding partner of public first author of The Last conservative Manifesto um close colleague of Michael go within his his rather more centralizing phase um

Earlier in the last decade to education so um does Rachel think there is potential here Tom ridden um former head of strategy than chief executive at the Yorkshire forward the regional development agency in the period where regions meant the old large um government office uh regions of the um

The post war map um but now one of the longest serving most experienced Chief Executives in local uh government it leads city council but also very formative in setting up the leads or the West Yorkshire combined Authority then um we have Michael Gove who is the um

The SEC of State for leveling up housing and communities but also um a huge experiencing being part of a government um early in the last decade um when um George Osborne Greg Clark were pushing this agenda forward so we’re interested to know as well his Reflections on that

Period and he did an excellent interview with us where you know there are if you if you analyze it textually you can see he really supports what we’re talking about here he just didn’t quite say it overtly but it’s all it’s all it’s all there and then we’re also going to be

Joined by Alis m who’s a um merys side MP Shadow employment secretary she’s a bit late because she has to vote and quite why Michael’s here I have no idea but I’m not we’re not going to to and and what I would like to do is um so

I’ve given you a bit of a kind of tease in um but I think there’s you know there’s 10 recommendations it’s a big policy uh political Challenge and I’m going to say let’s go round twice and first of all talk about if you want a policy for raising growth and raising

Regional growth rates in the UK would you go for this this model from a policy point of view and then secondly to ask um what is the the politics of this um for central government for local authorities and combined authorities for those places who are currently putting themselves outside of this world like

Leicester or Portsmith in Southampton is this a deliverable vision is the idea that you might have a plan and then stick to it for more than um five years p in the sky so um first of all the policy model and then secondly the political institutional deliverability

And let’s go down um from here so John you’re up first uh thank you for your excellent introduction I have uh failed a lot of things of in my life of which this is high up on the list we failed together we did and interestingly under two very different chances of very

Different political Persuasions so what can you learn from uh that experience of double failure I actually think um there is something quite interesting I mean crudely to caricature um the Gordon Brown Ed Balls installment of this policy was kind of all money no Devolution crudely uh and the George Osborne

Version was the precise opposite it was all Devolution no money actually more than no money I mean Savage public spending class at the same time in the places we’re talking about and sorry I yeah try is that working is is that actually on I’m not sure it is Martin

You sort it out is that keep going and we’ll sort it um I’ll try and talk louder um all Devolution no money versus all money no Dev Devolution and so one conclusion that I draw from that experience is you’ve got to do both and one thing I like about this paper is it

Does set out genda for doing both oh that was excellent um uh so that’s good but um the other conclusion I draw from this and let’s face it as the paper says you are looking at a lot more than 50 years of policy failure here with innumerable governments trying

Innumerable things uh none of which has moved the dial um I do not draw the conclusion from that that it’s impossible um to um achieve massive turnarounds of particularly big cities that plenty of examples in the United States um and there are quite a few in Europe

And we have failed to achieve any of those turnarounds and I think one thing we should be clear about is that fiddling around the edges is not going to work um and so that what I like about the paper is that I think directionally it’s headed absolutely in the right

Course but I question whether it is bold enough uh and I will just give you three examples where I think it might not be I mean first of all I think the paper is a a Bitcoin that you were just going to need a ton of money and a serious

Financial base uh now we can come on to how realistic it is to achieve that but realistically if you look at places where this has happened you have had a ton of investment and I would be bolder about fiscal Devolution in particular which you shy away from uh similarly I

Think there’s a sort of serious attack of the SRE in the paper when it gets to the single pot which you say actually can only be spent within very stct whiteall guidelines so the man from whiteall still knows best in the world of this paper and I question whether

That is right and finally um planning policy um an area that I think um is very important here what what the paper does is it fixes a fundamental flaw in the George Osborne maral models um which I can come and and talk about the reasons why this was done but subjects um

Planning local plans in meril areas to a unanimity of all the local authorities and it fixes that problem which would be a really good thing but it leaves um cities with Mayes still subject to masses and masses and masses of national planning policy uh and subject to call-ins by the

Secretary of State and we’ve got the secret State here um and and he’s a very good man but um is he the man to decide for example The Right Use of a shop in Oxford Street a decision he took recently um I would suggest that’s the decision best

Taken um by the mayor the elected mayor of London so um I think a political scientist who looked at your paper and said if you did all of the things in this paper I suggest we would still even then be an international outlier we would still be a very centralized country by

International standards and I think you might have to go for the only thing is just on the res s’s question y um there is clearly a question about how much you spend you know we SP we underspend on local City Transport we underspend um on Innovation compared to

Other countries that isn’t the same saying you should raise the money locally that’s a different thing I agree but I would do both and and I think that um uh it’s perfectly possible to do both and um I I think one of the reasons is to give the elected politicians in these

Cities a very strong economic interest in the revenue Bas and there for the economic success of the city cool beel uh thank you um I was going to start with politics but you told me not to so I’ll try and talk about the policy first and actually

Agree with a lot of what John said um so one of the things that comes out in this paper and and I think it’s an fascinating and excellent paper is that you are orienting local areas to White Hall in a somewhat less unbearable way than they are oriented today and that

Seems to me perfectly legitimate but they’re in still entirely oriented to whiteall even to the degree that you think they should be spending lots of time in Westminster in the second chamber rather than in their own cities because that’s where influence lies and it seems to

Me that if you want to be serious about changing uh Regional gaps you need to orient people towards their regions and as John said that includes giving them real skin in the game that gives involves giving the population real skin in the game and giving them a true

Incentive to make their area work rather than ask for more redistribution in the next route and I’m not convinced yet that this does that so so I would agree I think it needs to be bolder I’m also a little more hesitant than the paper I think John about the uh perfect structural answer

To Devolution across the country and that’s partly a an energy point you know this is just where you would dissipate a lot of your time and energy from White Hall but I suppose it also links to your mild Jive about education reform earlier Ed because I would say that I was a

Centralized as well that wasn’t but but the at least one idea behind the sort of school reforms of the early 2010s and indeed pre-2010 was that they were tapping into latent desire and demand from the bottom that well below the local Authority level and I think it is potentially much more

Productive to lean in very heavily into the clear areas of latent desire and demand which is now emerging around some of the big cities than to spend vast amounts of time persuading the Northeast that once said no to now say yes so so I think that there is uh a

Need for more skin in the game which does include fiscal Devolution tax take but I I would also on the flip side be narrower um I think on policy if I take one of your examples as a test which is skills so the thing that you absolutely identify

In your first paper is that we have now got a lot of graduates we have pretty good school standards and we have a huge stem technical Gap would Regional skills planning solve that Gap and I think when we already have a system that is to a significant degree employer Le

Now and I think it would only credibly solve that Gap if that region could for example choose to double the teaching grant for every stem degree in the universities in their area or fund every in any technical area to do apprenticeships aside from the current Levy pot that’s going into White Hall in

Other words that it has both the quantum and the range of power possible to actually really quite signific iFly change um what is funded and what is done um the the final thing I’ll say and I don’t think it’s necessarily a problem but I think it’s a it’s worth discussing is

That uh what this paper doesn’t do which seems to me a very uh prevalent debate right now is have any view about what the economy in these places should really be and we’ve had in the last year um a report from say the resolution Foundation which is Broad Services is

Where it’s at and you’re either a hairdresser or you trade Services probably in London and Southeast maybe a bit of it will emerge in Manchester and on the flip side a set of government and potential opposition um incentives which are entirely designed towards driving up our industrial base I think how you would

Devolve how you would regionally plan how your fun skills are very different depending on which of those you think are credible finally I would say however um I think there is some cause for optimism because this does seem to me one of the few areas where is credible

There is some cross party consensus perhaps because it doesn’t matter enough to the electorate to really cause major dividing lines but that provides opportunity for change we’ll come back to that um I’ve got I’ve got a question to ask you but I’m going to hold it for

The second round Tom very keen to get exactly so yeah I I won’t I won’t repeat what’s been said I guess by going for for consensus which is your main conclusion at the end you you’ve you’ve compromised on some of the boldness it would be some of the answer to this but

I let me go through each of the levels and start by saying that I think one of the things that the report says which I think is easy to miss is that actually the real key to this is a new Collective Endeavor between all three levels and an

Alignment between all three levels which we’ve never had before and I my experience of um covid when I um and with baroness Blake was trying to deal with that in leads I I went into the center for for three months and tried to um build up the local bit of testing and

We actually managed in that period in six weeks to get every part of the country to have a local outright plan we had half a billion pounds from the government and we got on and did it together um and I think I think it formed the basis of a good testing

Regime that emerged to allow the vaccine process to to thrive um there were lots of other things that went horrendously that were horr horrendously difficult that I won’t comment on but um that showed to me the opportunity if you got that alignment just going through the

Levels the local level in here is quite interesting and I think is worth a read um the real the good thing about the report is that I think it it does address that question of it’s not funded properly we’re not funded to the role that we’ve got at the

Moment at a local level and if you try and deliver a growth plan even if you tried to cut local government out of it which you can’t do in the end anyway um you’ve got to Resource it properly to do the job you’ve been asking it to do so

Whether it’s any waiting times or whether it’s the um the parks of a place or whether it’s the planning system system and the economic development and and investors having confidence in a place you’ve got to get that right and that’s got to be the foundation stone actually not the other way around

Because investors only invest in places where they they’re confident in that local leadership and they’ve got a plan and they’re following it um so the local bit of this I I like and I like the idea of Civic infrastructure and social infrastructure I think it’s much missed

And a lot of the objections that you get to housing are actually around that lack of provision that there is for GP surgeries or transport or or flood defenses so so that level I would say tick and we need the we need to sort out the role and reset the money around it

Um secondly the regional tier I I I see a having done the regional role myself one of my regional you don’t mean the old I don’t mean the old regions I mean yeah I mean the combined authorities the combined authorities yeah so so the conclusion is let’s go with what we’ve

Got I think we’ve got the Democrat Democratic um element sorted I totally agree with that let’s not rip it up let’s just go with it um however the one of the other things that happened with the rdas was mission creep and I think one of the things that whiteall likes

About the Mayors is that there’s fewer of them than local Authority leaders so they don’t have to deal with as many and it’s a bit easier to understand the economic geography of the country but if you live in the East Midland you know that Derby Nottingham um Leicester leerer all of

That is you know there’s a there’s a polycentric nature to that if you live in Yorkshire you know that it’s not you can’t just talk about West Yorkshire you’ve got to talk about leads you’ve got to think about Bradford a big city right next door and if you’re in West

Midlands it’s much of an urbanized conation that fits together well but you’ve got real difference within that as well and greater manester probably the most coherent urban geography that we’ve got and the biggest history of it but all of that is different and the danger of the model at the moment for me

Is that there’s there’s a there’s a tendency to try and recreate whiteall in the regions rather than create which I think what the report is advocating a strong driver of productivity and infrastructure in in each Place tailored and empowered to make that happen and so that bit I really like like there are

Real risks around the planning stuff and I I’ll leave that for the for the second bit of the discussion but I think there’s a danger that if if people feel that things have been sucked up to that Regional level and they’re losing control of their ability to have a say

On housing policy in their back back garden and their backyard that is a big risk for the maril model in the future so I think you need to come up with something that’s slightly different which the report hints at then the third bit the the the national bit is is the

Bit that I think gets away most lightly um in this paper and I do like the idea of prime minister Chancellor driven um cabinet committee and and tasking of all the ministers I like you know I think it’s an interesting Innovation around the the the the second chamber I’d like

To see I don’t I don’t think all the local Authority leaders I’d like to see some of the local Authority leaders in there as well um ones they you they could represent the uh the counties lead is there absolutely yeah but anyway putting that to one side

Um I the the real issue is the culture of whiteall where even if you want to be a minister or a civil servant in my view and others have have been ministers so they can talk about this better than me but what I observe is that staying in

Your lane and you know not elbowing others out of the way is is a is a is the the right thing to do whereas every single issue that we’re talking about here whether it’s it’s inequality whether it’s climate change whether it’s economic growth and productivity you

Can’t stay in your lane you’ve got to work with others you got to have much more collaboration so I would like to see the values of the Civil Service change to represent having to know about and deliver for the whole country having value for money running right through what everybody does because actually

It’s very different the uh the number of jobs have gone up in whiteall the number of jobs have gone massively down at a local level um and accountability structures where the vote of parliament goes through the minister to the to the um the civil servant and the worry about

The Public Accounts committee and where’s my money going to be spent and that element of control which is of course an illusion of control a lot of the time because people just get on and do things when there’s 57 priorities at a local level occasionally unless the

Secretary of State tells me to do it of course then I would I would um but you know that the point I’m trying to make is that the whiteall system as as we see is has got to take part of the blame for the 50 years it’s the one thing that has

Endured in exactly the same form through all of that time and whiteall I’ll finish but whiteall does manage to deal with every country in the world but it doesn’t manage to deal with every place in England and that’s got to change thank you Tom Michael um well I agree with

Almost everything in the paper and it expresses uh what we’ve been trying to do far more succinctly than my own efforts in the leveling up white paper it manages to make the case with greater force eloquence and uh Vigor in 57 Pages than I managed in over 300 so I’d like

To extend to the authors an opportunity to join the government but why uh why has our progress been patchy and imperfect so far so I mentioned against the paper so first of all Devolution um uh my own personal uh uh view come to over time not government

Policy is yes we should have miral combined authorities everywhere and unitary local authorities everywhere that’s the simplest and best and most efficient model why do I like mayal combined authorities because uh as the paper brings out if you have a single identifiable person with a four-year or

Whatever term and a clear mandate and every mayor that’s been elected has had at the center of their mandate delivering economic growth and improving productivity in their area then you get a far greater degree of accountability than has been the case with local government leaders in the past there

Have been obviously great people who’ve been leading our great cities so Richard Le in Manchester and Jeremy beachman uh Newcastle and so on but it makes a difference when you have uh a mayoral election and it is a big figure like Andy Burnham Andy Street Steve RM or

Someone who’s become a big figure like Ben hchen pitching for that role um so why haven’t we got that everywhere well uh there are I’m St into the second part of it uh small P political objections I remember when um Eric pickles was doing my job great man but one of the reasons

That he always said whenever anyone came into his room and suggested reorganization of local government he took out a special pearl handled revolver for them one of the reasons for that is a time consuming but B political parties need activists and local councelors are the Key Food soldiers for

Every political party so therefore any reorganization of local government that reduces the number of elected representatives strikes potential CRA of figures who will go out and deliver leaflets and uh uh secure for you as an MP and as a minister the uh reelection that you seek so that’s one reason for

It there’s another reason as well some MPS and it applies all parties don’t like the idea of Mayors in the same way as there are some MPS in Scotland and Welles who don’t really like the idea of first ministers that much because uh strong Regional leaders Eclipse their

Capacity to be the the voice of Essex or the voice of The Valleys um or uh the voice of the highlands or wherever it might be um and again in terms of party management uh any leader of any party is going to be a bit Cherry about having

All of Essex or uh all of whales and Revolt uh uh uh to these proposals when they will need their votes for other perhaps more contentious legislation um but that’s the first thing so that on structures very much agree um that’s one of the reasons why we haven’t

Necessarily made the progress we we want um one thing I would say though is that we do incentivize it’s not simply purely organic and Buton up we have something called gain share a gain share means that um or implies that when a mayoral uh uh combined Authority is created the

Improved productivity will benefit the treasury and so therefore we can give you some of it that’s one way of looking at it another way of looking at it is a straightforward bribe from the Department of leveling up housing communities to embrace the mayoral model um um and uh uh whichever way you look

At it it’s certainly a way of greasing the wheel I I think that the gain share way of describing it is a little idealistic but it’s true the bribe is how politics often um Works overall um on uh the single pot I completely agree um uh and we’re moving towards that

That’s uh the essence of the Trailblazer deals that we’ve secured with Andy Street and Andy Burnham that they do have more control of a sing of of a single pot rather than having to leak through a variety of Hoops for ring fenced uh uh budgets uh but two things

Every single prime minister and indeed most chancellors like to have new single pots so Prime Ministers might be Keening on chess or on Parks or on this or on that and local government is an indispensible delivery partner so we just need to recognize that uh we we

Should make the perfect enemy of the good but broadly moves single pots are right um fiscal Devolution overall I completely agree with and we’ve got business rates retention for a far longer period in the West Midlands and in greater Manchester in crude terms that means that uh if Andy Street and

Andy Burnham are and they will be and have been more successful in getting more business investment in their areas they can keep more of the business rates for longer rather have the treasury take it away and centralize it problem however Manchester succeeds Burmingham succeeds the treasury has less money it

Can take in order to redistribute to those areas which are poorer overall and there is a problem if you have an area that has uh for a host of reasons difficulty in attracting business early on and also as is the case with many of the areas where we most want to see

Productivity improved a council tax base based on properties which are band a band uh B and band C so it is simply the case that there is less money to draw on locally and you need transfers you need fiscal transfers of some kind in order

To help I should say that what the paper does very well is it also points out uh uh that those fiscal transfers shouldn’t Simply Be welfare uh they should also be investment in R&D we’re doing that are we doing enough no but we are doing it

And it should also be the case that you have a easier access to Capital and credit on a regional basis there’s been a big problem in this country since the 1930s um transport completely agree whatever you think of hs2 it is economically more rational to improve transport links between the cities of

The north and within the cities of the north than uh uh uh straight for the North to the capital discussed would it be great to have both probably but if you have to choose and we did then uh intra uh Northern and Midlands and City Transport um and also the point about

Densification so important one of their big problems with our cities is that they are extremely inefficient outside London indeed in London in the way in which they use land um so that means that uh for example leads has no mass transit system um uh I think nine out of

10 people in Marseilles can get from the periphery to the center of the city under half an hour only four and 10 uh in the Leeds Bradford area so that’s wasteful in terms of time it’s bad for productivity it’s bad for the environment that’s why we’ve been concentrating on supporting

Densification and Brownfield development but that takes me on to planning as well uh the thing with planning as we all know classic I’m sure I’ll mispronounced this maner olon problem the gains are there for everyone who gets a new house but they’re not in the area at that

Point the costs are for all the people who are living there now so of course lots of different governments have tried to reform planning in lot of different ways but that is the unbudgeable I doesn’t mean that you can’t overcome it but the unbudgeable political fact um uh

One related thing about house prices is that of course Supply constraints are a problem but as the Tony Blair Institute and Josh Ryan cins have pointed out the financialization of housing big topic particularly in London and the southeast has distorted access to the market for younger people skills I completely agree

We are getting more or students those on trumpet um uh studying uh stem subjects at GCSE and at a level proportionately and in uh uh absolute terms than ever before but when we talk about that we have all sorts of people talking about the declining creativity and you know

Pressures here in all the key thing as we all know anyone who’s been involved in education ISS is that you need to make certain choices and at certain points you will be unpopular for saying do you know what we are going to privilege science technology engineering and Mathematics in the curriculum um and

Uh in the allocation of resources to universities do we need to do more yes um I won’t say too much about e at the moment but we can um on folk going to the Lords fine but um my my my my view is that Lord’s reform is something that

Obsesses people in sw1 and is irrelevant elsewhere I know that’s a cheap point but I read some in McDonald’s book recently leadership um he devotes almost 40 pages at the end of it to his plans on Lord’s reform um and I just think that is a shine of sence when someone is

So obsessed with that issue um uh two more things uh uh altering the green book absolutely um I owe one of my officials an enormous amount for pointing out to me that the treasury score reducing the amount of time it takes to get from s to uh uh waterl Victoria

Station by 30 seconds higher in terms of value cost benefit ratio BC higher than cutting the time to travel into Sunderland by 30 minutes so it’s crazy and needs to change final thing uh the you know the prime ministerial or uh uh political leader chair um uh committee

Board delivery group absolutely and this is at the heart of it you’ve got to have a prime minister who absolutely believes and is dedicated to this because Prime Ministers uh have so much with which to deal that they could can really only have at any given time about three maybe

Four strong domestic priorities if we believe this is one then great but again we have to choose and we will have to acknowledge that some of the other issues that we might consider to be truly important will not secure the Prime Minister you’ll buy in uh required

And and again one of the things is that uh sometimes if you’ve got a strong Chancellor if you’ve got a Gordon Brown or a George oror or you have a strong alternative figure elsewhere in in the government if you’ve got a John Prescott or Michael hlon you can really uh Drive

These things uh through but let’s not uh sorry let’s not forget that the critical thing here is creating the political demand for Action that any prime minister whatever their Temptations to look elsewhere cannot resist and that is why I think that the more that we can do to to move

Towards the more widespread adoption of a mayoral model overall the more any prime minister will not be able to resist uh doing what is required in order to close the G and the um the interesting thing Michael we say from all the interviews is that in the

Osborne brown period part of the problem was the Prime Minister was not interested enough yeah and that the chancer alone does not have the even if they a big strong one does not have the clap just one thing on the fiscal Devolution because I agree with you about business rates that isn’t really

Though no like big fiscal Devolution when we’re talking about like you know about localizing VAT or a local income tax pretty much all of the people we spoke to said no way um and because it’s just too hard and too politically difficult and also the the inequity it

Throws up um so when you say fiscal Devolution yes did you actually mean no no I mean I I I am in favor and we have gone further but these are baby steps um and which is a good thing uh yes so there is further to go but again the

Move from from rates to the uh uh Community charge as I still romantically think of it um P tax um um um created such inequities and Injustice that it was part of an ongoing process of meaning that the locally raised amount of tax diminished and diminished and diminished and if we’re going to

Increase it then we need to think hard about dealing with some of the fundamental inequalities in our society that cool we’re going to go around a second time and then get some questions and I think we can over by 5 minutes because we started 5 minutes late um so

John um there are some things which we were involved in contested at the time which became consensual like Bank Independence independent statistics actually the competitional authorities aut to enrollment in pensions some things get ripped up so in terms of you know what is it about this which means

That it always seems to get ripped up at the end of every Parliament at the beginning of the next one and is there any way you know is this just because White Hall is always going to be like this or is there anything you can do to

Try and give us a bit more stability um in the way in which we we make that we make policy in this space no I didn’t know the answer to that question I no one’s ever elected me to anything um uh my my hunch is that the um the thing

That will sort of get a bit of momentum into this will be some success stories if it’s actually clear that you know some of the elected Mayers have managed to make a difference and that is tricky because they are hemmed in on any fronts um but I just sort of implicit in the

Way you frame this is that the obstacles to this is sort of fundamentally political and I just wanted to say and this is this is not going to make anyone here you know feel better I I actually think as well as the large political obstacles to this there are enormous

Financial and economic obstacles which were sort of slightly ignoring I mean the fact I I happen to go Fairly frequently to leig in the former DDR and it’s an astonishing place the the turnaround that has been achieved there in 30 years which is not a very long

Time is just mindblowing but the what what what hits you between the eyes is what it took to make that happen and the truth is that it was possible because you had the sheer wealth creating machine and political will to to reallocate Resource from the West

Germany to the to the to the former and of course the former East was a lot smaller than the West now we are just not in that situation I mean the British economy is not in great shape it’s not been in great shape for um a long period

Of time now and that has accumulated and moreover the public finances are not in great shape and internation you know with with with my commercial hat you know we we do a lot of investing in cities around the country we put a billion pounds into um Central Cardiff

No one else is going to put a billion pounds into the center of Cardiff and the most depressing thing about this I mean for us it’s all good commercial stuff is um there’s no one else to do it and you know International investors and I spend a lot of my time talking to

International investors have a very very very negative perception of this country and the potential of this country and you know therefore I I I’m merely making the point that we we’ve not just got to turn around the politics of this if you want to make progress we’ve got to find

Quite a lot of money from somewhere and I think that’s going to be a tall order right now cool thank you thank you um Rachel you you sort of said that you want to talk more about the politics and you also sort of said you weren’t quite sure about the

Comprehensiveness principle um you know that is should be to to everywhere yeah uh so I suppose three challenges I think I don’t see how you create the money to do serious redistribution unless you are willing to do something serious in your existing wealth creating bit of England which

Probably means the Oxford Cambridge area so um my great hope is that an incoming labor government is willing to concrete over cambridg uh because conservative government certainly isn’t but but that seems to me a prerequisite to any of this um a but but that wasn’t actually

So I agree with that it wasn’t actually what um I had my mind about the politics I suppose the first thing on the politics in the short term is you talk about the need for sort of more funding in R&D and transport this is a zero sum

Question so it does mean that King’s College is going to get less money are we fine with that because you’re not getting your R&D spend anymore and UCL is not getting its R&D spending anymore if you want it to go to Manchester or leads or areas in the north and so I

Think there is a zero some question that that we tend to alled much more than both of those though politically in my view the challenge is that almost everything we’re talking about is basically irrelevant to the electorate what do they vote on it’s not this okay when when when they elect a government

And it goes in and the government turns around and says my first priority of my two domestically is to force every bit of government of England into a meraly when we just come out of and just coming out of a massive cost of living crisis people think public services are on

Their knees yes they think transport’s not working very well but that’s kind of actually even that’s relatively minor in their scale of concerns I don’t think it would be very hard to mount a campaign saying this government’s lost the plot so I think and actually I think you

Have a a recommendation there we haven’t really talked about this has always been my view about this agenda is that yes you need to recognize that economic growth in the regions can only come from aerating major cities and yes you need to recognize that that in itself is implausible without major Devolution and

Probably uh funding but if you cannot convince people very rapidly that actually the fabric of their daily life is improving in these areas and by rapidly I mean within a parliament why the hell should they think this is a good use of your time and your effort

And your money I think the best uh hope in your paper and the most interesting area I’ve always felt this I’m not sure Michael agrees with this um is what you call I think social infrastructure it’s broadly what are the sets of things you can do within one year two years to make

Sure that people think well this means that the Park’s not full of needles anymore and uh the High Street looks better and yes fixed potholes um and uh and yes make sure there’s a new GP surgery next to the train station in the center of town that

Persuades them that this isn’t a totally abstract decision designed to create yet more politicians that they hate I think that is the fundamental political problem although although if people think that if they think that having stronger more effective um agglomerating economies is a good thing cities I don’t

Think people think that I don’t think they have a clue so um if if if the government persuaded them that spending more money on science Innovation was going to create more good jobs um there’s quite a lot of places which by the way correlate with places which voted leave um outside the major

Conations who if you tell them yeah we don’t really care about the Innovation good jobs in your area because we all because our focus is on the cities then you make those divides worse I just kind of wonder where that so to say you can never have an economic Vision which

Makes any sense to people outside potholes is one thing but there’s you know that’s a challenge but the second thing which you say is but you should only focus on the areas where it might make a big difference and ignore the other areas isn’t that part of our our problem Al so

I guess to extend that what would you mean by putting R&D into a small town in northern England I think you could mean and I think this would be very credible that you continue to accelerate one of the few areas of political consensus you do um full expensing you incentivize any

Company that is existing in that area to spend in R&D that’s completely credible it’s perfectly credible to say if there happens to be a large University which has real R&D intensity in a small town I’m trying to think what that one would be um that you can pour more money into

It but I am not convinced I am not convinced that a realistic credible keep your promises story to the towns of England is we are going to revolutionize what your specific economy looks like I think is we make your town nicer and we make it

Better we allow you to get into the city we allow you to access good jobs and that has the great benefit this is now a whole other argument I’m sorry has the great benefit of being fast and and my main point was not so much about cities versus towns and the economic evidence

It’s that I don’t think you do this stuff that feels abstract and totally outside what people are actually voting on unless you have a very credible plan to do stuff that they do care about and fast I mean it goes to a fun fundamental question which is um are Burnley and

Blackburn happier being excluded from being part of Greater Manchester or would they rather be part of it if they’re happy to be excluded because they don’t think it’s working very well and it’s a bit IR relevant for them then then fine but if if you if you’re

Starting to win the argument that being part of successful agglomerated economies is a good thing I’m using technical language um then um then being excluded becomes a political but do they need to be excluding that’s my latent demand point I don’t care if it’s a neat Patchwork I’m very happy for Morales to

Expand if they’re successful on people like them I don’t care about imposing them on somewhere that doesn’t want it fair enough Tom um the advanced manufacturing Park is um on the site of the battle of a grave and it is in ran and it’s one of the best um Innovation

Facilities in the world it brings together the metal cutting expertise of Sheffield University with Boeing McLaren and a brilliant set of local players that was something that would not have been it would not have happened if it was a white system I was the accounting officer who signed off the first check

For 10 million it was a leap of faith it was working with the university it is possible to do this thing um leads and Manchester have been job generating engines they have built as many houses as if the rest of the country built at that rate we would hit our national

Target so I think sometimes we miss the good things that have happened and can happen when when you get the right alignment of local leadership and um the public and the private sector particularly with Academia um really working together and sticking with it the the thing that I would lead with for

The place for this agenda is the things that the places need most so in London I would make it absolutely about housing and affordable housing and I would make sure that the policies that were that were part of this were absolutely going to help deliver more quickly um affordable housing in the capital

Because that is the fundamental policy problem in in you know in in this um in this place that’s different to um you know we we have housing issues in the rest of the country but it’s not as it’s not as Fierce and and the and as white heat as

It is in London in the north we we have a joke that we don’t have a productivity puzzle you know try getting around the north it’s about transport most people don’t in the deprived communities don’t own a car the bus the buses go through arterial routes so people can’t and and

They too expensive for them so they can’t afford to get to education or training or a job so making a real difference on transport giving us more control would absolutely I think be something that would be popular um it’s not just been not getting the transport investment it’s that we’ve we’ve

Safeguarded 700 football pitches of land in the middle of leads to the outskirts ready for a project that we didn’t ask for but we were asked to get behind and you know we don’t want to get into that debate again about you know hs2 but that

That is we’ve still built we we’ve we’ve we planned our whole city around that and basically whiteall has meant that we’ve got to replan our whole syst around something else so yeah I I think you lead with the things that will appeal to people and that they will

Intuitively say of course we need better transport yeah I’ll I’ll go with that of course we need more affordable housing in London we’ll go for that okay Michael um we um I’m not saying there will be a political trans transition in the next election we don’t know what the results

Going to be U but you and I went through a transition in 2010 and you know there was this new Department called Children’s Schools and families and you know it got ripped up and um the name was changed a lot of the stuff was dismantled by a new secretary of state

Who wanted to make his Mark with a very different approach is the idea know it’s a bit different now because if you’ve been a cabinet minister then you focus on Legacy rather than change but is it just for the birds the idea that we could get to a set of institutional

Relationships which and and and a Way Forward which l Beyond um an election or is it just inevitable that when elections come it all gets ripped up um I don’t think it is inevitable um and again we I look at a of Case by case

Basis so I remember um uh I’m with your friend Andrew D saying to me that the most important thing to do um if you were in government is to create institutions institutions are more important than legislation and by that he didn’t just mean buildings he meant things like for example teach first he

Did creative he was the the the sort of principal of angel for it and uh helped it to grow he did create institutions inms and he believed that they would be proof points of how a different approach towards education would work he subsequently uh helped to Champion um uh

The equivalent of teach first and Social Work called front line um I believe that the mayoral combined authorities are institutions um and uh the situation that was required uh by Labor in London to undo what they saw as the historic wrong done by getting rid of the GLA

Um and the creation of a mayor opened the door to that uh George was initially we bit George initially we bit skeptical about uh Devolution but then became an Enthusiast for it and now the success discussed of Andy Street Andy Burnham Ben hchen and others I think means that

There will be almost no going back and it has been striking that um the East Midlands which has you know we has to be careful here but it uh the point was made earlier you know the West Midlands Birmingham in the center and then black country centry and so on East Midlands

Three um places of more or less equal significance Darby noting and leester the Eastland turned its nose up at the idea of devolution then having seen how successful it’s been under Andy street I’m sure it would have been equally successful under a very good labor leader but nevertheless

Um has now overcome its reluctance wants to go down that route there will be Memorial elections later this year for the East Midlands without Lester without Lester leester is the San Marino of the East Midlands in that sense um but eventually it will come around I’m sure

Um and and and I think that that that model will uh grow and I I think that again um whether it was Lisa Andy or Angela Raina who was opposing me and and there were plenty of things that I was getting wrong and will get wrong and

Have got wrong uh that they can make hay with the overall analysis of the need to strengthen Devolution strengthen local institutions think about uh how the center could be held better to account um uh in uh improving Economic Opportunity elsewhere was was broadly right and the

The I remember when Lisa was doing the job but one of the points that she made it was a critique and it may have been a caricature of the Blair ER is she said that her view of the Blair era was um uh let London and the southeast Go Gang

Busters that will generate the growth and then we will redistribute it elsewhere and help people to uh through transfers uh overcome the uh the pain of de-industrialization and she said that she felt that that was disempowering and that what we needed was the strong local leadership the sense of uh uh uh

Enterprise uh that she believed um uh and argues in her book would be truly transformative and imperum because uh as a sort of blue labor person it for her uh the the the view was it wasn’t just about um uh equality belonging mattered just as much as did earning and the

Dignity of Labor um now I don’t want to put words into the mouth of any labor figure now but I do think that what Lisa was arguing for more explicitly perhaps than many has actually become slightly more embedded in the way in which people across the political spectrum look at

Our challenges very very good um we we’re going to overrun very slightly but let’s just take one round of um three or four questions which we’ll answer in one go we’ll take the gentleman there stand up and shout because the microphones will come eventually go go sure all right umy offici actually behind

You um let me just check my question what I was quite curious to ask really was reflecting as a treasury official I think any future government will face significant reluctance from whiteall I think that’s been covered by the panel already and the treasury from my perspective has been far more interested

In opening an office in the north and sending some staff there but still hasn’t done anything about the green book which minister you spoke to um one of the things I thought having read the report maybe could have gone further about that point about the cabinet office committee was the role of

Potentially a regional inequality Duty that all civil servants have to consider in the same way they doing that zero targets or public sector equalities for example but where this question is going is I think there is an argument to argue at the election that is compelling to

The the electorate that you know White Hall has failed White Hall is part of the problem it’s not part of the solution but how do you create that compelling narrative then that that shows what that will then do to the regions in a way that is compelling to

Them electorally I guess my question to you is how do you think the party should pitch that in a way that is electorally appealing very cool pass your microphone to the guy next fabulous mustache um any any hands there I’ll take the gentleman there and somebody over here hi thank

You very much my name is Theodore I’m a PhD researcher in France but visiting the L right now something that has struck me today is we’re not talking about the green transition at all but the green transition has the ability to do two things first deal with the major

Problem of mankind I think climate change but also creating massive jobs especially in those So-Cal Left Behind territories because the EU right now is investing a lot in the green transition especially the industries when you look at agroecology renewable energy building renovation I don’t know bio gas production everything that has to do

With the green transition can create jobs locally and especially in these territories that used to be quite industrial just an example France the north used to be very industrial it became left behind in a way and now it’s becoming the new Valley for battery in Europe so that’s creating job for people

Who think there was no job anymore so I’m wondering why you are not discussing the green transition tonight very good question gentlemen there with the glasses just go for it just go for it just address us oh it’s arrive look um yes it’s very loadable paper um

Would uh you know disagree with lots of attempts ideas there um just wanted to get away from some of the nitty-gritty uh trying to look at the over viw of it uh it just seems that you’re trying to take on a lot of things at the same time

That haven’t been done perhaps because over 30 years or 20 years uh trying to look at central government you’re trying to change central government they trying to change local government we know all these things have been looked at before even the mayor have taken some time to

Institute over time and I was just looking at your first year of Parliament and I think one in first year you’re you’re going to have um the national plan launched and um um local um people local leaders will be picking up their um sort of things they want to develop you know

Their pop pet projects if you like their projects just um seems rather uh slightly messy in many ways very very cool um gentlemen there shut the microphone don’t actually throw it just um Nicholas Beal so John’s surely absolutely right we invest far too little in this country we’ve

Underinvested for years years and years and this transformation which is needed cannot be done on the cheap without investment isn’t part of the solution therefore to allow these authorities to borrow money from invest for investment and keep the proceeds of the growth that’s generated because if we leave

This purely to the treasury with all due respect to treasury officials and in in the audience they will underinvested reasons why central government under invests cool uh blue jumper my in which department mince Ministry of Justice good and uh my question today is how could brexit the the b word I know it

Hasn’t been mentioned yet um but I’m wondering how could brexit offer an opportunity or in hindrance to these plans very cool so um five questions you don’t have to answer all of them in fact you could only choose one um if you like but we need to answer all of them so

There’s a pressure as we go along so you have um should there be a stronger inequality Duty on the treasury um what about the green transition is it really too ambitious to try and do this this quickly should we go more slowly um is fiscal Devolution um actually should

That be about borrowing powers and stop treasury controls on borrowing rather than the green book and is brexit um um a relevant Factor John I’d like to take the you know our whiteall officials particularly treasury officials the problem uh it’s perfectly true that um uh there are strong centralizing habits in White Hall

And when we were doing the maral deals under Osborne you know the the toughest negotiations were with in some cases with whiteall departments not with anyone out in uh the country um but you know the fact is um officials will do what strong ministers tell them um I

Don’t think you did legal Duty I think um uh you know I mean Osborne managed to turn the treasury into this devolving machine I remember being sent to um uh C Michael hlin who had spent his lifetime uh fighting the treasury for more Devolution and I was sent to explain

That we’d now got religion and he spent the whole time trying to work out how I was conning him but George Osborne didn’t manage to persuade Michael go the education department or I’m not sure it was your department to devolve post 16 um apprenticeship funding and and wider

Skills funding so I mean there were constraints upon the um the the the the Osborne sway as is well documented at that time it was Vince I thought that would be the answer I knew it’s those those liberal Democrats but Rachel I think that’s an important point do we think that

Apprenticeship funding shouldn’t sit with employers and we should take it away from employers and give it it to local authorities that’s quite interesting Devolution the thing which we say in the paper is that the framework of that should be should be discussed and negotiated with employers

Not at the national level but at the um the subal level but is individual right you get to choose what you spend your appren well it’s an appren um sorry I’m diverting from the main questions but but but but I think there is an important point which is that we

Are assuming that the devolved level is local government and actually it’s perfectly credible the devolved level is an individual company a person school or an institution we haven’t really discussed that um I should take the green transition uh because your paper does talk about the green transition as one of the core ways

To do it um I think the challenge is that this is already a deeply politically contested area in which um it’s very unclear how much the next government would be be willing to invest and precisely in what and what the comparative advantage of the different things they would invest in are but I

Would fully expect that White Hall will have an industrial strategy for the green transition and they will create incentives for it and they will create um plans around it it’s not at all clear to me um how much they will allow local areas to decide exactly what it looks

Like but I think Ben hin is a good example of what a difference that kind of local energy makes um just on the on the green transition I think there’s a real um Place element to a lot of the opportunities that you mentioned so you know the north basically kept the lights

On in London over the years you know we part of the energy um industry of the country and it really can be the green um answer for the country as well with um you know offshore wind in in the Humber and and up the uh the to the

Northeast and um the nuclear capability in the Northwest and um and the opportunities of um the transition through carbon capture and hydrogen as well so I think all of that is is really it’s a point really well made and I think there is a spatial element to that

That and I think the idea of these Regional um sorry the the meral plans um on infrastructure I think that’s where the net you know the Net Zero think could really make a difference and bite and um you know a lot of the infrastructure questions about energy production and um and distribution need

To be sorted out at that level as well and and delivered locally I just wanted to me uh cover the question about whiteall as well I I don’t think it is enough um John to rely just on the the ministers I do think there’s something cultural about whiteall civil servants

Having it written into the whole culture of the the way of working that they need to know about the whole country more and how to deliver things more and I’ve never come across a civil servant who’s been obstructing things for the sake of it I I think they they’re they’re

Operating in a system that’s really waste too much energy and brain power and there’s brilliant people in the Civil Service it’s just how do we Galvanize them for a a collective effort that I mentioned before rather than rather than anything else so Michael you’ve got to do um I’m afraid um

Borrowing powers for local government is two ambitious and Brix it okay um so again yes so on the on the on the first one um uh on the treasury everyone’s right don’t believe treasury civil servants it is a matter of but I do have some sympathy for the treasury point of

View because the treasury is the Craig Revel hallwood of government Ed knows what I mean they’ve seen it all before you know I’ve Got This brilliant new plan to to spend to save if you you give me5 billion pounds now then over the course of the next 20 years there’ll

Be so many savings and increased well-being yeah absolutely it will all be it will all be a disaster darling exactly exactly so um I understand that the other thing is that there are already too many duties and and um uh placed on on government we we actually

Have a series of missions and leveling up white paper uh uh we haven’t perhaps done enough to put them up in lights there may be an argument that um as ever if Government changes that while they might change the nature of missions they should keep those missions I keep a

Mission on housing keep a mission on education keep a mission on adult skills and so on and and but that b um green transition everyone else has made the point on the ground yes so if you see what B hon is doing if you see what’s

Happening on uh uh East yor and the Humber if you see um what the economic activity is that uh uh Jamie Drisco wants to see driven in the in the the Northeast it is so much around uh a gigafactory in BL or uh making sure that TSI continues to have uh the investment

In uh offshore wind uh assembly and manufacturer that it has so absolutely um U for a variety of reasons on Nicholas Field’s point about investment um again um uh I can understand why not just treasury but all of us are a bit scarred about local government borrowing so we have a

Situation in working we have a situation uh in in slow and we have a situation in a number of local authorities all micro examples where um the local authorities borrowed in order to invest in order to save and they often borrowed in a way that was ambitious but has landed local people in

A terrible mess so um uh I think the bigger problem in terms of investment in this country is uh the bias that so many institutions show and we as individuals show for investing in property um and uh we need to change the incentives whether that’s do the tax

System or other things but one of our biggest problems as a country is uh that we are ronas rather than Venture capitalists as a as a nation um on brexit well we could change some of that um uh we could change some of the incentives for uh uh financial services and institutions in

The way they invest and at a local level we could go further on altering procurement uh principles um uh it it might be the case that uh that would militate against efficiency but it could be the case that you could have a more local procurement model but discuss I I

I’m more than happy to talk about brex and I suspect I’ll have to spend the rest of my life however long or short it is um uh talking about it in all this different dimensions so maybe I could come back and talk just about that one

Day if you want um final thing on skills um Germany has a lot to teachers say everyone points out but there are two things about Germany that people don’t necessarily like or or would might prove unpopular the first thing is that the physical establishments the Fe

Colleges in Germany are tend to be owned by businesses and they tend to be to be funded directly by uh those businesses if we were going to have a model here it would in effect be a new tax a new business tax for skills maybe that’s a

Good thing maybe it’s a bad thing the appren levy was a move that direction the second thing is that if you’re an economic liberal you won’t like the fact that in Germany they have a guild structure which means that if someone comes to repair uh your plumbing and you

Don’t like it you ring up the gu of plumbers and you say d you talk to the local Meister in charge of it and you say Fred has just done a completely terrible job here they investigate and if Fred has done a terrible job that’s it plumber no more now the standard you

Know sort of L economic liberal view of the world is that there are twoo many licenses over what people can and can’t do um and that leads to a stickier labor market and and all the rest of it absolutely correct but one of the ways in which you can ensure that you get

Investment in skills is if you have a guild system and if you have licensing like that discuss final Point Vince cable why was Vince Cable in charge of post 16 education in the Coalition Gordon Brown two things firstly well actually Peter mandon when Peter mandon came in to be first Secretary of State

And all the rest of it he wasn’t content with the existing Department he said I’m going to take over the business department okay but you this love this new dinky Department you’ve got in charge of universities Innovation and science I want that too did no not Gordon Brown gave into

Him and Gordon Brown okay yeah yeah yeah package John denim go off somewhere else okay big package that’s right Peter you are you know the most important person in white the first Secretary of State first Secretary State okay labor loses or at least doesn’t win 2010 election Coalition negotiations um the business department

Was the major economic ask for Liberal Democrats F uh I said to George Geor we can’t possibly give uh uh the Liberals control over uh skills and universities it’s in our Manifesto that we’re going to have an education department that will take back you know we the Fisher that golden brown

Was responsible for we will heal and he said you’ve got so much to learn firstly Vince is at least as vain as Peter mandon and there is no way that he will accept a department any less expansive than Peters and the second thing he said is Michael we are committed to

Introducing something called tuition fees the liberal Democrats are opposed to tuition fees the department that will introduce tuition fees is headed by a liberal Democrat this will result in political petion for them and success for us now do you really want I said fine George you’re the

Master um and that’s why I wasn’t responsible thank you thank you very much we we’ve um we’ve slightly overrun and we’re going to go up to um have a drink now just in conclusion um uh it was absolutely true that we decided to write a paper not about what we would

Ideally do a blueprint but what do we actually think was deliverable in a parliament and in two parliaments and the answer to gentleman’s question there is it is um and I think totally agree with Michael that if you have the opportunity with something starts to become embedded in a cross party way you

Grab it and run with it and that wasn’t the case with Children’s Schools and families back in in in 2010 and then you have to then decide which are the bits where you’re going to be radical and which are the bits where actually it’s just not going to work I mean there is

No way we’ll have radical tax Devolution in our country in the next Parliament and therefore putting it on the table just wasn’t part of our what we thought was a deliverable cell um it doesn’t mean you can’t can’t have step-by-step change um secondly you won’t have a devolved industrial policy um but it

Won’t work if it’s a centralized industrial policy and the really hard thing in this is finding a way in which you can actually have both Central leadership and a local shaping and delivery and that is hard it will depend very much upon the quality of the people

Um we made a decision and this is I think thinking about um if there was a labor government there is no way you’ll do this if it’s only for some places I mean it will be for a labor government unless you can say your ambition is for

All it will never happen yeah and by the way Rachel is totally right if your ambition is incomprehensible and doesn’t make any sense in terms of growth and jobs it won’t happen either that is like a prior thing but if it’s real and positive it’s got to be um it’s got to

Be comprehensive and that may not be true for the reasons Michael said about conservative government but I think for labor government it would be um and then if you go to make it work you actually have to give unblocking clout powers to the combin authority around

Transport and um uh and uh and planning and I don’t think that means you have to hand over to them individual housing members but you but there it has to be a galvanizing that is very controversial and then it won’t happen unless you do something about resource and I don’t

Think it’s going to be sold by borrowing it’s going and it won’t simply become by redistribution it will be come from deciding that these things are priorities which are things you have to do to get to growth and that is a hard argument to make at a time of fiscal

Challenge so I think that that critique of the paper you know we didn’t set out a fiscal envelope because we didn’t think that was kind of our role but that is a big big challenge but it was deliberately done thinking could this be implemented whether you have a labor or

Conservative Government after the next election or you know God forbid the Liberals um back with um with it’s so interesting hear Michael speak I mean you know uh if you respectful you call them the liberal Democrats but if you’ve served in government with them in government with them you call them the

Liberals and uh that’s what he was doing but um thank you very much indeed to John Kingman from the from the treasury and from Rachel wolf Manifesto writer Tom Reen chief executive of Le city council goodness knows what his next job will be to Alice mcgoverin who did all

The work and then couldn’t get here because of votes and Michael go who’s clearly off the whip uh tonight this Secretary of State for um for leveling up for for being such a great panelist and um to my co-authors Nasha es Dan and Anna and to Kings the strand group

Harvard Gatsby and all of you for coming along and come and have a drink with us now thank you very much indeed thank you for your