Lord Andrew Adonis worked in the No 10 Policy Unit from 1998, becoming Head of the Policy Unit in 2001. He entered government as a life peer in 2005, serving as Minister of State for Education until 2008 before becoming Minister, and then Secretary of State, for Transport (2008-10).
This interview was conducted on 5 November 2021.
Q: Could you tell us about your role in growth and regional policy over the past few decades?
I was in government and was concerned about place-based and regional policy, particularly in respect to the public services. If we take it in order, I was working in Number 10 from 1997 through to 2005, then Minister for Schools, and Transport Secretary and Minister from 2008 to 2010. There, regional policy is a big part of what I was doing. The HS2 plan was about transforming the connectivity between the conurbations in the regions.
After 2010, I had a few different engagements. I worked closely with Michael Heseltine immediately after 2010 on the referendums on regional mayors, which I was very keen on. We did a big tour. The referenda, I think, were held in 2011, maybe it was 2012. I was also asked by the North East Chamber of Commerce to lead an economic review similar to the one that Heseltine led for Merseyside. I led a panel including Will Hutton, Bridget Rosewell and others. We spent a year developing a whole economic plan for the North East. That was 2012-13.
Then Ed Miliband asked me to do a regional growth review for the Labour Party, which came out of and applied lots of the work on the North East to the country at large. That was a report which came out, I think, in in 2013.
There was a separate piece of work led by Sir John Armitt on a National Infrastructure Commission, one of the key limits of which was to transform regional growth and interregional growth. Though that was in Labour’s manifesto for 2015 it was set up by the Cameron government immediately after the 2015 election, I was then its first chairman. I chaired it for two years. Ironically, my vice-chairman was Sir John Armitt, who is still chairman of the National Infrastructure Commission and it still produces reports, one of its key remits being what we now call levelling up.
Q: What’s your overall assessment of policy over that period?
I think a clear success was London. A phenomenal success. Indeed, part of the reason you couldn’t have used the term ‘levelling up’ thirty years ago is because there was no consensus that London and South East were doing particularly well. In terms of income levels and all that, they were doing well. But London was, in many respects, regarded as a national basket case.
When I was first getting going in government in 1997, London was regarded – for many of the public services – as the architect of the problem. The first big priority for education reform, which we addressed obsessively for the first five or six years of the Labour government, was the underperformance of schools in London, particularly inner London comprehensive schools. The quality of public services wasn’t good and London transport was a byword for catastrophe. It was regarded as up there with the worst of American underfunded and malfunctioning public transit systems in the mid-1990s.
The setting up of the mayoral team in London – and with it Transport for London with a really big investment programme agreed, not without tension, with the Treasury – with key objectives led to a transformation of London transport and the concurrent place-based public service reform and investment policies of the Labour government. This was mostly the London Challenge, but equivalent programmes in health and crime turned London, in the course of about 10 years, from being regarded as a national laggard in terms of public services, to a national model, and much more so than any of us thought was going to be possible.
Professor David Begg, a great friend of mine who was appointed by John Prescott to be the founding chairman of the Integrated Transport Commission, did a very important piece of work in the late noughties on why London was such an international success in terms of transport policy. It was by then regarded as an international leader in the application of technology in urban transport, such as: the Oyster Card and now contactless regarded as an absolute model; The doubling of usage on the tube and the near trebling of buses and bus services; the introduction of a congestion zone, one of the first in the world, which helped to push people towards public transport in big, big numbers, whilst also improving flow of traffic through London. It was regarded as a national success and the same with the other public services.
Another, more muted success – in that you wouldn’t want to turn the clock back – is devolution to Wales and Scotland. That’s definitely given them much more political empowerment. Nobody would now want to reverse either of those moves and the creation of the London mayor. Now it is in the English regions, with what we now call the metro-mayors, and economic plans for their regions has been one of the key things that they’ve done.
I think in the case of London, my own view is it’s a spectacular success. London is generally regarded, and on most measures as a world class city, in many respects the world class city, and that is without any doubt, in part the result of really sustained regional investments and also regional political leadership.
Q: And the biggest frustration over the period?
That we couldn’t do for the other big cities of England what we did for London. If we had had similarly intensive place-based policies of public service reform and investment and the encouragement of local and regional leadership – we did do things, such as the Regional Development Agencies (‘RDAs’), we all could go through a list of them, but they clearly weren’t as successful as London. In many cases they didn’t even begin to get on the same trajectory of reform an improvement as London. If we had been able to concurrently apply the London model and London success more widely, then I think that would have been a greater legacy. To some extent that’s happening now in other cities, but it’s still not happening systematically enough I think.
Q: How much of an obstacle has the existing local government map been when developing city-region executives with appropriate accountability?
There’s clearly been a massive problem. I would qualify it by saying, whilst I think some of the transformation in London is definitely because of a new tier – the transformation of public transport in London, the Ultra-Low Emissions Zone, the congestion zone – it was also about focusing existing tiers more successfully at place-based transformation. The London Challenge was largely the institutional focusing of central government on systematic, place-based reform in London and working often directly with the boroughs, the existing tier. London’s success was both a refashioning of central government to be able to address regional problems more effectively and the creation of the new tier.
You could argue too that creation of the Greater London Authority was just the restoration of a tier. Although the mayoral tier of London was new, we had no argument over boundaries in London because they were the Greater London boundaries. Indeed, the establishment of the mayor was partly because there was a general desire and recognition – on the part of business, political parties at large – that you needed a Greater London-tier of government back again. You just need to look at what was happening to transport and the police and all that to see that, but people didn’t want what they regarded as a very bureaucratic tier of government, aka the Greater London Council back again.
We hit on a happy medium: we essentially restored functionality of the Greater London Council. We operated entirely according to its boundaries. We gave this new tier of government most of the functions, but not all of them. We didn’t give it the housing functions. We gave it all of the public transport functions of the Greater London Council as was, but we did it in a way that commanded, I think, much greater consent and effectiveness through the institution of the mayoralty.
That point is of some significance because when the Thatcher government abolished the Greater London Council in in the mid-1980s, they also abolished all of the other metropolitan councils – West Yorkshire, Yorkshire, Humberside, Tyne and Wear, Merseyside, West Midlands, I don’t know how many there were. It’s interesting as I look back at it, but we never even considered properly – and I think maybe we should have done – whether alongside creating the Greater London Authority (and therefore to some extent restoring the Greater London Council), whether we should have done the same with the other metropolitan regions. We never even considered it at the time.
Q: Would you say, given developments over the past decade [the emergence of Mayoral Combined Authorities in the other metro areas], that we’ve ended up with a version of that anyway?
It’s been very piecemeal and slow, not systematic. If you look at the other devolutions that we did – London, Scotland, Wales and Northern Ireland as a special case – they were big and systematic. And there was the one time we did contemplate a big and systematic devolution with the Assembly in the North East. That was clearly a massive missed opportunity in retrospect. We were half-hearted about it, I’ll be completely frank. I was quite half-hearted about it. The Prime Minister, then Tony Blair, was extremely half-hearted about it because he thought it might be an electoral disaster.
Q: Does this point to the problem of what we do about areas where a regional or sub-regional identity is weak or absent, and local identities stronger?
It’s an interesting question. You just always regard what has actually happened as inevitable. But part of the reason why the Greater London Council (‘GLC’) was abolished was because of this endemic conflict between inner London and outer London. Remember when Ken Livingstone did Fair’s Fare? The battle in the first instance wasn’t with the central government; it was between the GLC and the outer London boroughs that didn’t want to pay. A legal case led to Fair’s Fare being struck down in the courts. The legal case was brought by a member of a Tory-led, outer London borough. This was partly straightforwardly politically, against Ken Livingstone, a left leader of the GLC. But it was also because of real resentment that they were going to have to pay a lot more. They were basically paying more than the inner Londoners to use the Tube. That was very much the argument.
Interestingly – I think it may be because it was good policy – when the Mayor of London came around second time, the referendum was won by a big majority, and there’s been no inner-outer London conflict at all. The degree of London identity behind the mayoralty and its policies has been much stronger.
It’s an interesting question: why Greater Manchester? On the face of it, there are a lot of rivalries there. My God, I mean, anyone who knows the areas like Altringham, the more middle class areas. In some policy areas there’s outright civil war. Parts of Greater Manchester still have grammar schools. I used to have agonised conversations in my office at Education with Sir Graham Brady, as he now is, and what was going to happen to the grammar schools in his patch. He had this constant fear that there was a plot by Manchester City Council to abolish them, and anything that led to a stronger Greater Manchester would lead to the abolition of his grammar schools. But again, because I think sensible leadership and what’s regarded as a mainstream mayor in Andy Burnham, there hasn’t been this degree of rivalry, which you might have expected. I think a lot of it has to do with the character and quality of the political leadership and where the character and quality of the regional political leadership is inclusive.
Q: You mentioned the rejection of the North East referendum. Referenda were not used in agreeing the Devolution Deals. Does that matter? Is there enough accountability?
I don’t think so, because the model that they’ve got is that the Combined Authority fulfils the role of the London Assembly. I think there’s a lot to be said for it. It was a different model which we could have used in London, which was to have the Mayor of London directly elected, accountable to and drawing some of his key political people from the leaders of London boroughs. It’s definitely a tension in London between the mayoralty of London and the boroughs. It’s actually been managed, and it worked. But the London Assembly members are pretty anonymous. Could you or I name more than two or three members of that Assembly? We could name quite quickly a whole string of leaders of the London boroughs. That model, of the metro mayors being accountable to the leaders of all the constituent local authorities, some of whom become deputy mayor, I think is a pretty good one myself. And I think it’s six of one half a dozen of the other, whether you’re better off with greatly elected assembly.
Q: Where were the tensions across Whitehall (officials and Ministers) over regional policy?
I think it varies by departments. There was no lack of willingness in any of the departments I was in – the Cabinet Office, Number 10, the Treasury – to have a regional strategy. There was a constant awareness of two things: that we needed much more effective place-based leadership and policy (hence the London Challenge), and that we needed to focus on interregional inequality much more systematically.
If you read my command paper on HS2, one of the last documents published by the Labour government in March 2010, a large part of it is on making the argument for transformed, modernised infrastructure between the regions as a way of driving ‘levelling up’ as we would now call it – regional growth and connectivity.
I don’t think there’s any lack of willingness nor was there actually a lack of investment. We gave huge amounts of money. Look at the figures. Huge amounts of money to the RDAs, huge. There’s a big step backwards when they were abolished in 2010, a massive withdrawal of regional-based funding.
There wasn’t a lack of money. Where there was clearly a lack of awareness, as I look back on it, was in the importance of investing in local and regional political leadership outside London. It was a clear weakness. In our defence, it wasn’t easy to address because local leaders in these regions were never very keen on regional mayors or indeed on regional assemblies. I think part of the reason – answering my own question earlier of why we didn’t revive the metropolitan authorities, which, outside London, which has been abolished by Thatcher in the 1980s – is that the constituent local authorities at the time [1997] were very opposed to that, whereas the London boroughs weren’t.
It is an interesting question why London boroughs were strongly in favour, Tory and Labour, of the Mayor of London being established. That wasn’t true of local authorities outside London in regard to regional bodies. Therein lies an important issue in terms of being able to generate local leadership. Even if you take the greatest success outside London – the Mayoralty of Greater Manchester – Richard Leese, who was the long-term leader of Manchester City Council through this, was strongly opposed to a metro mayor. He was in favour of what became the Combined Authority, as long as it was just about working together in an institutional way among local authorities.
Indeed, the Combined Authority in Manchester was set up by Labour – one of the very last acts of the Labour government. But we didn’t introduce the mayor, and I remember the conversations about that. I was Transport Secretary. We were engaged in fighting what powers we were going to give it. I remember being party to a conversation with Richard Leese where he was very strongly opposed to there being a mayor because he thought that that post would be in constant rivalry with the leader of Manchester City Council. Part of the thing about London, of course, is it’s got 32 boroughs, and it doesn’t have one disproportionately large local authority, which feels it’s going to be dwarfed by Greater London. Indeed, the great irony is that one of the tricky things always with London government has been the smallest local authority, which is the City Corporation, right at the centre, which has somebody called the Lord Mayor. I remember when I was in Number 10 I spent a lot of time negotiating between the City Corporation and … I can’t remember, the Department of the Environment? We were doing legislation, because we wanted to keep business on side and the City Corporation was the voice of business. They thought that the Mayor of London would dilute the City Corporation. You have that problem in spades outside London, where Birmingham dwarfs the West Midlands and Manchester the Northwest, and so on.
Q: Were any departments opposed to the regional agenda?
Education. I’ll be completely frank, and we need to engage in that self-analysis, as in all things. We weren’t a great devolver in education. But that isn’t because we lacked a commitment to place-based and regional policy. It was because – I’ll be completely blunt – we regarded local education authorities, in many places, as the problem not the solution. Now that may have been a mistake. It may have been that the right thing to have done was to invest in better and stronger leadership in local authorities rather than seeking to do place-based initiatives from the centre. That’s a debate to be had.
I got a lot of flack from Labour local authority leaders for what they regarded as centralising policies in schools. But my defence of it always wasn’t that we were neglecting the local, but that our view as a responsible central government with education a key issue of concern to national voters, is it simply wasn’t being done well enough locally. We needed to have a much more intensive, place-based approach from the centre. Actually, the truth is probably, in retrospect, that we should have done more investing in local leadership as well as investing in place-based policies. And that’s probably a fair criticism.
Q: Is this true of post-16 education too?
No. The difference there is that we were addicted to regional QUANGOs. Remember, the Learning and Skills Council had all the Regional Learning and Skills Councils too? We didn’t set up regional bodies for schools. The models were different. But I think you’re right to say that part of the reason why we didn’t just give the money to local authorities, which we could have done on some regional basis, was because of two real fears.
First, there was a ‘not invented here’ syndrome and not wanting to let go control in education, and that may have been excessive and mistaken. There was also a real fear about education and funding being transferred to other areas. Our government had decided that we were making education a key priority. Part of the reason why we ringfenced the school’s budget, which led to the biggest institutional conflict between Education and other departments – massive conflict with John Prescott, with the Treasury not really on side either. Prescott fairly said that this was massively reducing local authority discretion. Our argument in reply, which is also fair was, ‘well, we’ve given all of this money in Red Books for education, but we can’t guarantee it’s going to schools.’ The schools themselves are telling us it’s not getting through. That both of us were right, actually, is the answer on that. But it was a real concern about funding in retrospect, looking at amounts of money we were given for other services too, these were the heady days, weren’t they?
I think it goes partly back to the big service we haven’t talked about, which is health. The Labour Party has always been very ambivalent about devolution for two reasons. Firstly, because the NHS, which is regarded as the greatest success of all the public services, was a national service which never devolved powers of local authorities. Indeed, it was the result of a great battle between Bevan and Morrison in the 1945 Labour government as to whether health should be managed by a national agency, which became the NHS or – as Morrison wanted done – by local authorities. This is a founding argument.
The other reason – which we heard less of over time, but was still a significant concern and indeed still is – is that you can’t get redistribution without a strong central authority. If you’re not careful, too much devolution just reinforces postcode lotteries and regional disparities. The richest regions by far are London and the South East, and that second concern is still a problem because glibly saying ‘more devolution to the regions and we want more fiscal autonomy’, doesn’t really work unless you’re going to have significant redistribution on top of it. There’s no region outside London which could begin to afford its current levels of public services without massive redistribution from London. And getting that balance right is a key issue.
Where we (and the government after us) were prepared to give more fiscal autonomy to London, it wasn’t in enabling it to keep more of its existing resources. The Treasury still kept tight rein on that. But we did allow both London local authorities and the Greater London Authority to raise more money on their own account. A third of the funding for Crossrail came from supplementary business rates in London. I think is completely right and indeed that’s part of the reason why Crossrail happened: because London and Londoners are directly paying by the democratic decision of the mayor and Greater London Assembly for a large part of the costs. However, you can’t really read that across so much because giving the Mayor of Greater Manchester the power to tax Manchester more when he’s got such a weak tax base to start with isn’t a great step forward in terms of fiscal devolution, is it?
The only part of the United Kingdom which has really taken advantage and does it to the maximum extent of the fiscal autonomy given by central government is London. That is undoubtedly part of its success story, the higher level of spending on infrastructure and public services. Almost everything in London is there because London has used its autonomy to its maximum level. And it has very rich regions.
Q: Is the implication that other regions have lagged London because they don’t have the same self-generating economic capacity to begin with, and central government has not done enough capital spending in non-London areas to counter that?
Yes, I think that does follow. It also leads me to another issue we haven’t talked about, which is council tax. We had a debate on levelling up in the Lords recently. The debate started by Roger Little, who is a Cumbria County Councillor and is very keen on regional equality. There was an absolutely brilliant speech in the debate by Dale Campbell-Savours, Lord Campbell-Savours. He forensically compared council tax levels for equivalent properties in London with the North because of what happened with the banding. The average council tax in London, I think he said, is a third as much as it is in the North West, even though average wages in London are 30% higher or whatever than they are in the North West. The council tax is a systematic tax, but it is redistributing from the North and the Midlands to London, which is really just absolutely unconscionable given the relative wealth level.
I hadn’t realised it was so stark. I am speaking to you from my flat in Westminster, where I pay a council tax at £100 a month. The equivalent tax in Workington, it’s about £300 a month. So it’s not just that London has more fiscal autonomy which it can use because it’s got a wealthier tax base. The main property tax to fund local services – which we inherited, and to be blunt, we should have reformed council tax by stealth – by the end of that Labour government, the council tax should have been fundamentally different than the one that we inherited. In fact all we did was add one extra band. This massive regional inequality in the incidence of the property tax at the moment is really serious.
There is a defence of the Treasury – and, to be fair, of the post-2010 government – that they raised the Stamp Duty. But Stamp Duty is a very haphazard and random tax because it depends upon on properties changing hands. I completely support what they did with Stamp Duty. I think that’s given a much better approximation to a real property tax affecting London. But we should have done that and it still should be done in respect of council tax. If you did that, that would give significant additional resources, which will be available for local and regional government outside London.
Q: Which international examples did you have in mind as examples of good practice?
Constantly Germany. Constantly, in my mind. It’s such a phenomenal success as a country, maybe the most successful country in the modern world, post-1949 Germany. Its devolution model has been a phenomenal success because it has been rules-based. It’s a complicated but rules-based systems, redistributing tax revenues whilst also giving a lot of autonomy to the 16 constituent Länder. They’ve managed to do that despite big income inequality divergences particularly post-1989 and even before 1989 (the contrast between the northern German cities like Bremen, which were going through real deindustrialisation challenges as against, say, Bavaria were very stark). But the Germans made it work and all of their institutions manage to combine and still do manage to combine massive regional empowerment and leadership. These minister-presidents of the regions are really powerful figures and provide most of the national leaders in Germany too. The ex-mayor of Hamburg [Olaf Scholz] has just become the new Chancellor of Germany. They combine all that with quite high levels of redistribution across the country.
Their institutional design at federal level also reflects it. My own view of reform of the House of Lords, which is a bit of a parochial issue but is quite significant for how you have regional relations, is that it shouldn’t become a directly elected second chamber. It should become a United Kingdom equivalent to the Bundesrat, which is the House of the States, the second chamber in Germany, where the minister-presidents and their representatives are on it. That is the forum in which all of these rules-based deals are done on interstate relations within Germany. And my view is that we need to federalise. I didn’t see it so clearly when I was in government. I was a very strong supporter of devolution to Scotland, Wales and London, but I think we need to federalise United Kingdom, probably without using that word. Because the ‘federal’ word, a bit like the European Union, is a sort of a crucifix term in British politics. But our strategy should be to federalise the United Kingdom with a reformed second chamber, an institutional structure in London, which, which reinforces and gives a political dimension to the interstate relations.
Q: Are we too narrow in focusing on economic rather than social policy as an object of devolution?
I think that point is very well taken. Regional strategies and place-based strategies are needed for key areas of public service provision, two of the biggest of which are social care and under-fives policy. I think that’s a significant issue. I haven’t really given much thought to it, actually. Is there a kind of regional dimension to dealing with the social care crisis? I don’t know. Should you give social carers an accountability to the mayors? I don’t know.
Q: How do we manage the ‘Russian doll’ of different interventions at the neighbourhood, local authority, city-region, region and national levels?
I think it’s a classic case of ‘you need city-based and town-based strategies for each of these regions. Don’t choose between them’. They need both. I know there is a Centre for Towns and the head of the Centre for Towns would go to some meetings arguing about how HS2 was just a strategy for the cities. I was simply astonished by that argument. Unless you’ve got strong cities, you’re not going to have strong feeder towns. You’re not going to a strong Wolverhampton, a strong Coventry without a strong Birmingham. You’re not going to have a strong Sunderland without a strong Newcastle, and so it goes on.
Q: How should we think about “drawing boundaries” and not missing places out?
I think as always a bit of history helps here. It’s only quite recently – in the long run of government reform and all that – that what we now know is Greater London has become a unit. This was a massively contentious issue, right from the foundation of the London County Council, which was in 1888 right through until the 1980s. When the MacMillan government set up the Greater London Authority in, I think, 1963, its boundaries were hugely contentious with lots of what’s now outer London and places beyond it. There was a debate about whether they should go in or not. Basically they didn’t want to go in because they thought they’d be paying higher taxes. That was the case all the way through the eighties. It’s only really in the last 20 years, since London has been regarded such a success story, that there’s been a consensus on its boundaries. And indeed, now, ironically, if you went to Stevenage and said, “would you like to become part of London?”, I think they’d probably vote to go in, maybe the Medway towns too. Why? Because they would think they get the Oyster card. They get better public transport, better levels of service and all of that.
I think a lot depends upon the success or otherwise of political leadership, and the reason I think London is so interesting is that we take its success now for granted.
Now when you look at those other city regions outside London, they’re having similar debates. My only comments are that it’s an art, not a science. How do you divide Yorkshire politically is definitely more art that it is a science, and it’s a political art of quite a high order: work out how you do it, which generates enough consensus and critical mass around the key cities. But there is also a One Yorkshire movement, pushing for a single Yorkshire authority. I myself don’t have a view as to whether it’s a good idea or a bad idea. But it’s very clear to me this massive rivalry and conflict between different places and different political parties and how you generate consensus on it. Who decides is a big thing as well: what’s the process of deciding? I think is a really big issue for place-based and regional institutions outside, outside London. The great advantage of Scotland and Wales is that they have defined boundaries.
Q: What do you think the most important lessons for us to take?
One of my reflections is that the thing to do in government is to be really hot about R&D – ‘rob’ and ‘duplicate’. When something is working – and there’s not that much that works in this life, particularly in government – here or internationally, you copy it relentlessly. Literally, you seek to duplicate it. In terms of these big issues of regional policy and regional institutional structure in England, it is very clear that there is one big success story of the last half century, and that’s London. I think a really significant issue is how do you learn the lessons of London and create institutional structures which copy London for the other regions, and do so with political success.
ENDS