Andy Street is the Mayor for the West Midlands, winning the first mayoral election in May 2017 and re-elected in 2021. He was also the inaugural chair of the Greater Birmingham Solihull Local Enterprise Partnership from 2011 to 2017.
This interview was conducted on 11 July 2022.
Q: Could you tell us about your role in UK growth over the past few decades?
For most of the last few decades, I was still running a private a business as Managing Director of John Lewis and Partners, which was the John Lewis half of the John Lewis Partnership, run in a separate profit centre.
I was responsible for the investment decisions that that organisation made. Where we chose to invest was both a reflection of what we thought of UK growth and was how we could contribute in a small way to it.
I was also the inaugural chair of the Greater Birmingham Solihull Local Enterprise Partnership (LEP) from 2011. That covered nine local authorities based around Birmingham travel to work area.
Q: When you look back over that time, what do you think have been the key successes and what are the key frustrations?
If you look at the Birmingham and Solihull area, and the West Midlands more broadly, for the three decades of the Eighties, Nineties and Noughties we were the bottom-performing region in the country. It was a success that for the decade of the 2010s, we were the top-performing English region.
Many things contributed to that, but it was a period where we moved our manufacturing to be much more value-added high tech. We diversified our economy and managed to get good growth in some of the fastest growing sectors – professional services being the best example of that. Had we had this debate any time up to the end of the pandemic, we would have said the West Midlands appeared to have been able to improve its relative performance dramatically. Productivity here rose much faster than the national average. During that decade [the 2010s], on many measures we were closing the gap to the national average.
The fragility of that has now been revealed horribly in the pandemic. We find ourselves with the worst performing economy two years into the pandemic. You would have to conclude we’re not building as resilient an economy as we thought.
Q: What do you think drove that resurgence in the 2010s?
There was an improvement in several supply-side factors. Some of those had very long gestation periods, such as the improvement of transport across the region: New Street being redeveloped; rail becoming the predominant commuting form into the city, bringing more people into the ‘travel-to-work-area’. The skills and qualifications profile of workforce improved quite dramatically here in the period up to 2020. That’s both graduates being produced in the right disciplines that were relevant to the economic strategy and the underlying qualification level. If you look, for example, at the proportion of the population with Level Three qualifications, we moved from being the worst qualified area in the whole country in 2008, to a more competitive position recently.
There’s also a thing about having one plan that we were all working to. That’s a bit utopian, and I suspect I’m likely to fall into that trap, but there is no question that – whether it be the first Strategic Economic Plan that the LEP did in 2011, to the growth strategy that we did for HS2 in 2015 – this was a huge contributor to our acceleration in those middle years. People knew that was coming, right through to the Local Industrial Strategy under Greg Clark and Theresa May. There was consistency, like it was through a stick of Blackpool rock. We kept building on the same strategy. Whether you’re the inward investment agency, you’re a college principal, there was one plan that you could link into. I do think that was an underlying strength.
Q: How was that different to what went before under New Labour and the Regional Development Agencies [RDAs]?
I’m not fully equipped to answer that because I wasn’t involved in the pre-2010 period, but I think there was a feeling here that the LEP was a step forward. The then-Leader of Birmingham City Council, Albert Bore, who was a big thinker in this, he always described it as ‘We felt done to by the RDA. It was not an organisation that we contributed to.’ It built regional alliances, but it was very much ‘government knows best’. That might have been a unique feature of the West Midlands and our RDA, but that’s something I heard consistently.
What we tried to do with the LEP was to take some of the areas that were already working – some of the plans they did for the automotive sector recovery were very good – but we tried to make sure that everyone was committed to it. Whether you were the City Council with your spatial plan or whether you were the investment agency, whether you were a university, everyone felt they could contribute to it and then play their part in the implementation of it. Genuinely, I often heard here that the LEP was a step forward in that way.
Q: Has local government become more engaged over time with LEPs, than they were with RDAs?
As chair of the LEP for six years, from its inception to when I had to step down because I was standing for this role, I can only say local government colleagues were fully committed to it as an institution and collaborated well. I think we were in an unusual position, because Birmingham at the time was under huge scrutiny from central government for being a poor partner. They were very determined to make a success of this. Lots of people said to me, Birmingham probably needed its LEP more than any other city needed its LEP, because of its unique situation.
Q: Did you have the right geographic footprint for the area which you lead?
The footprint for the combined authority that was born in 2015 and goes back to the core West Midlands County Council area. I think we lost something important.
One of the reasons I was very keen to take on the chair of the LEP is that, for the first time, it drew the travel-to-work-area together. If you look at residents of Litchfield, Cannock, where do they work? They work in the conurbation. It’s the same in Bromsgrove; in Redditch; in Kidderminster. The commuting lines bring them into the city. Jobs being created in the city centre are taken by residents of those towns. It was the right geography to work on.
The trade-off was that the Black Country and indeed Coventry was not in the GBS [Greater Birmingham and Solihull] LEP, but it didn’t matter because as a set of three chairs we worked very closely together on our strategy. When the combined authority was then born, it was natural to bring the three together. There is still a distinction between the Black Country economy and the Birmingham economy, for example, so there was logic in what was done. I hugely regret the fact that LEP simplification – or integration, as they call it – has lost that idea of bringing the districts into the travel-to-work-area. We are lesser for that.
Q: Compared to London, Manchester or Yorkshire, there is one local authority which is dominant in scale [Birmingham City Council] in your patch. How does that affect how you have to work?
Birmingham might have been dominant in terms of geography and population, but Birmingham has been a vulnerable authority for a long time. It did not overplay its hand. It hadn’t got the resources, to be honest.
In the mayoral context – again, because of Birmingham’s relative fragility – a lot of the thinking at the time the combined authority was being put together came from Coventry and Wolverhampton. Birmingham’s scale could have been a problem, but it was not.
Q: How did you think about the economic challenges facing your patch?
I drew a lot of inspiration from Michael Heseltine. He was the one who got me into this whole gig, if I’m very honest. I drew a lot of inspiration from George Osborne as well. I thought he was genuinely committed to this project, and I wouldn’t have stepped forward to do it if I didn’t believe that. They were important. They were inspiring because I believed that they believed. Without wanting to be immodest, I think that helped draw good people into this project. If you think the government aren’t committed, you won’t draw the top talent in. There is obviously Greg Clark too. He was the Cities Minister when we started, and he moved through the ranks. He has been an absolute disciple of it all through that period. He genuinely was the person on the end of the phone who would help you steer your things through.
More academically, our approach was a fairly conventional, fairly dry economist approach. It was an honest assessment of where we had competitive advantage by sectors, and where we could grow. The first plan we did was back in 2011. We had heat maps of the sectoral strengths that we had, how we thought they were ebbing and flowing. We were very focused around sectors. Then there was a study into the interventions required to grow some of those sectors. A couple of the schemes were kicked off right at the beginning: a big scheme for the automotive supply chain; a big scheme for clean growth in manufacturing. They weren’t huge sums of money, but at least they were pointers.
Then there was the spatial lens over this sectoral lens. Which sector was going to grow where? We were very clear right from the outset of the LEP that there were two major growth nodes – Birmingham city centre and Solihull – as the places we thought jobs could be created. It was then the whole question of building the infrastructure to connect citizens to those nodes. That led to a very early decision about basing an Enterprise Zone in the city centre, which in our case proved to be a good decision. It’s a good case study. It was that theory of relative competitive advantage that really drove the whole piece.
Q: Over the longer term, what has been holding the West Midlands back? What would you prioritise to turn the dial on productivity?
That takes us back to 1980. The driver of our underperformance – and this isn’t very insightful, it’s just a description – was relatively late deindustrialisation. Up until the mid-1970s, we had escaped some of the deindustrialisation that others faced because our industry was different. That meant that we were less ready to face the repositioning of our economy in the Eighties. The relative decline in the Eighties was most deep here.
The biggest issue was deindustrialisation in certain sectors where we lost our international competitors in that period.
What could we have done? You have to ask, why did that occur? Was it all macroeconomic factors like the exchange rate (particularly in 1981-82)? Or was it more that we weren’t investing in competitiveness? I think you come to this question: if you say the question is productivity, why was it that our manufacturing was not made more competitive through those periods and so much of it went under?
We were not winning the new high-tech manufacturing investment through that period of the Eighties, when arguably the North East established its car factories. But we were also moving to a service-led economy. I’ll get it wrong off the top of my head, but I think in 1979 41% of people in Birmingham still worked in manufacturing. That number fell by 60% in that next decade. It’s a dramatic reduction. The question comes: what type of service industry were they moving into? I think what happened – and I suspect we are unique in this – is that average pay and productivity in manufacturing was above the rate that it was in the new service industries here. That’s why we fell down. We needed to do more thinking about what type of high value-added knowledge-driven service industries were replacing the manufacturing jobs. We were moving down the value chain, hence why productivity was falling as our economy reshaped. It wasn’t like that, for example, in London.
Q: When you became chair of the LEP in 2011, did you did you still feel as though you were dealing with those these legacy issues, or had the area got beyond that?
No, we still felt it. This region had performed very badly in the Noughties, during the jobs boom, as we call it, of the Blair-Brown years. This region had not had a private-sector jobs boom. We lost private-sector jobs between 2000 and 2008. Again, I think we were unique in that.
The immediate backdrop to the LEP wasn’t just the financial crisis: it was something much more deep-seated about the shape of our economy. It was a continuation of the process I was talking about. We were still deindustrialising and still replacing relatively high value-added jobs with relatively low value-added jobs in service sector.
Recently, people see the West Midlands and the likes of Jaguar as the exception, as a post-deindustrialisation success story. But that did not come until much later. The immediate backdrop to the LEP being formed was the potential closure by Jaguar Land Rover (JLR) of its second factory in the West Midlands. It only came good after the Tata purchase, expanding through the 2010s.
We were the worst qualified area of the country. How the hell can you win footloose high-tech industries when the qualification level here is worse than anywhere else? How can a city that had the highest pay in the Union in 1975 have moved to having the worst qualified people – and therefore low pay rates – in no more than 30 years? We were very conscious that we had got to turn around that incredible malaise.
I actually think it’s been hugely significant both in our decline in our more recent rise. We were very conscious: we couldn’t get our act together; we couldn’t tell a story; we couldn’t win competitions for investment. We just kept losing everything. Birmingham City Council, as the biggest authority in the region, should have been magnanimous authority in leading that. Instead, the decade of the Noughties belonged to Manchester. They just kept winning everything. We had a dysfunctional local authority at the heart of it. We couldn’t even get a bloody national football stadium for here. That was why the mere act of getting one plan, with everyone bought in, was important.
Q: Earlier you talked about connectivity. How much of your challenge is connectivity to the region, and how much is it about connectivity within the region?
It was both. I absolutely swallowed a very detailed Economist piece, talking about how the productivity of cities was dependent upon how easily it is to get to them and around them. There were lots of things comparing Birmingham with second cities in other European countries. I remember an Economist article in the first few months when I was LEP chair slagging off Birmingham’s connectivity in every way. ‘Second city, second class’ was the headline. We knew that this was really important.
From the very first LEP meeting, I was an ardent supporter of HS2. It was just coincidental timing that Andrew Adonis did his paper. Then Philip Hammond, who was Transport Secretary in the Coalition government, was behind it. We saw this as an opportunity to shift things. Then there was a piece about Birmingham airport, which remains relatively weak for the economic area. We’re very conscious of that.
Within the region, we had to have a connectivity plan and to get investment into public transport here. I used to joke with everybody that the bus routes were still the same as when I went to school thirty years before. The sort of revolution that had gone to London and was going to Manchester, we’d missed. Again, you come to competence. We had just not made the case for investment.
Q: How did you think about innovation?
Right from the start of our LEP, I was determined that our universities were going to be absolutely drawn into it. They played less of a role with the RDA – partly because it always takes two to tango, and partly because the personalities of the Vice-Chancellors of the universities have.
We’d got new Vice-Chancellors of Birmingham and Aston, both brilliant people. David Eastwood, who just retired, was the new kid on the block then and wanted the university to turn to being a civic university again, as when founded by Joseph Chamberlain. He was absolutely at the heart of everything we did. He was absolutely clear that his university had to provide the research for it. That was another deliberate switch.
We’ve made huge progress in the universities’ commitment, but we’re still miles away from being best in the country or the world, in terms of investment in spinouts from our universities. Our best universities for that, by the way, is Coventry, not in Birmingham. But there was a sea change in commitment to this endeavour.
Q: Which powers were you lacking? What would have most helped you to unlock more value?
The truth is, the LEP had almost no powers. I don’t think it really mattered at the beginning. We used to talk about this: it was a coalition of the willing. We were not in any way mature enough to have lots of formal powers. We did, in 2014, get a very large sum of money – you’ll probably say it wasn’t large, but it felt it at the time. We had the single biggest Growth Deal of anywhere in the country, which was an endorsement. We had lost everything in bids before, and here we were suddenly with the best deal in the country. That mattered because it told people that working together would generate results. The Growth Deal funding was unfettered – unlike now – and that put us at the table for all the strategic decisions. We had some cash to play with. That was important, in terms of official power.
If you think of the City Deals, frankly we didn’t get anything of substance from it. Probably it was too early for us, and I don’t think anybody got anything meaningful – maybe Manchester did better because they were much more on their journey. It didn’t matter, because it was a signal to everyone that this was about working with the government and being able to influence things. Fast forward to the Devolution Deal, and that began to be meaningful in terms of responsibilities.
I wasn’t sitting there through my time as LEP chair thinking, ‘Give me this formal power.’ If I’m honest, I was very alert to the fact we were not democratically elected, so we weren’t arguing for that. We were arguing to be the coalition builder; the glue in everything. I think we did that quite effectively.
Q: How important is democratic accountability for economic development in the West Midlands?
The different stages of the history over the last thirty years give you different answers. Up until 2010, everyone was arguing amongst themselves and using the excuse that local authorities were democratically elected. That held us back hugely. It was a perversity.
I think it was important in the LEP’s convening role that we did have round our board table people who were democratically elected. But that was insufficient, given the weakness of our economy. Given the institutional failure that we’ve seen here, all those local authority leaders knew they’ve got to make a success of the new thing. I remember a meeting of leaders where they said, ‘If we do not make a success of this, the private sector will never forgive us.’ There was a very special sort of expectation on their shoulder. They gave us that legitimacy, and I would always make sure the decisions were bought into by all the leaders. They had to implement a lot of it, like the Enterprise zone mentioned earlier on. Since the start of the mayoralty, it has been absolutely mission critical that the individual accountability as Mayor gives you the authority. There are different stages in this journey.
Q: The Mayoral Combined Authority model still relies on brokering across local authorities, who still hold lots of the levers for implementation. What additional independent powers would you like to have across the whole geography?
The difference between the combined authorities and London or Scotland or Wales is that we haven’t had an extra elected tier like the Greater London Assembly or a devolved parliament created. The other big difference is that most of the mayoralties have much simpler political majorities. We are in a unique position in the West Mids to be as politically balanced as we are.
I am comfortable that we have made that political balance work, in terms of being able to take decisions, but I do want reform of it in one way. At the moment, any individual authority can veto anything. That is wrong, because that means that it could work either side of the political divide, and that you only go at the pace of the slowest. It’s not right.
I’m not saying we have to have everything installed into the power of the mayor. I think it’s helped us considerably that we’ve had to draw people together in coalition, and I agree with that as a way of making this model work. But at the moment, it’s far too skewed to the power of the veto.
Q: Does the lack of fiscal devolution – of taxation powers especially – constrain how far the current model of devolution can go?
We had more unfettered cash in the LEP, that was not democratically elected, than we have now. This has played out because we don’t have an income line which is unrestricted. We raise money for the levy for transport services, but we don’t have an unrestricted line. It means we are always appealing to London for the investment funds that we need now.
That drives behaviour, which I think some of my colleagues –I’ve told them to their face – have not played as skilfully as they might. That has brought about attention from central government that I think is unhelpful and unnecessary. It leads government to be the ultimate decision makers: we can put our proposals together – and there’s a huge power in what you choose to put forward – but they’re ultimately saying yes or no. Any mayor, if they don’t get what they want, is then going to be critical of government, so this approach doesn’t work for either side. I’ve said this to Michael Gove, in the devolution deal proposals, and to the Treasury as well in previous papers.
The next big step in this journey is: are they going to give us some form of tax-retaining or -raising powers? This is going to take a piece of legislation. The simplest way of doing it is, of course, that there are taxes that are levied in the region. You know exactly how much comes from here – in airport passenger duty, vehicle excise duty… the list goes on – which have been given to Scotland that could be given to us without charging a citizen a single extra penny. The deal would then be ‘You have that cash, you live within it. If you spend it in a way in which your citizens don’t want, you’re responsible.’ It’s that notion of accountability, that we are up for that. We’ve put that in papers, and it also appeared in our housing deal: we had an agreement where we only got the money in tranches subject to outcomes being achieved. All of those tactics I’m up for, because I’ve got to get Whitehall steadily happy with it. To be clear, the starting point is we just retain the national tax rates. You may get discretion, but other places in the country with that discretion haven’t used it yet. These fiscal issues are mission critical to the next stage of devolution. Find me an effective government anywhere in the world, at any level, that doesn’t really have control over its income line.
Q: How does the willingness to engage with you vary across Whitehall departments? Has it varied over time?
There’s no homogeneity at all. Some are real believers. It is largely dependent on the personality of the Secretary of State. We had a very good relationship with the Department for Education recently, because Nadhim Zahawi was a believer. Prior to Nadhim, Gavin Williamson and Justine Greening were basically ‘over my dead body’. It can change very quickly with the Secretary of State. That’s not right, because it should become policy overall. Grant Shapps has been brilliant in Transport, whereas Chris Grayling was not a believer in devolution. There is a huge variability, driven entirely by who’s in the top chair.
Q: Has there been a point where the West Midlands has felt it has control over the skills agenda for the region, rather than essentially tinkering at the margins from a national plan?
I think the honest answer is, ‘To some extent.’ When the adult education budget [AEB] was devolved, we genuinely had full devolution there and so we have made a difference in what we have done. Nobody’s second guessed that. We’ve been able to direct content of course programmes because of that devolution. But that is very far from the full post-16 system.
I can demonstrate that in three years of the AEB we already have improved the region’s skills in terms of lifting outcomes. We stopped the historic flows of cash just going where they had all been gone before. We stood back and asked, what are we trying to achieve? If you said to me, you take the further adult education funding streams and stand back and decide what you really want for your economic plan, I’m convinced we can make an enormous difference.
Q: Has London, in economic terms, in policy and in resource allocation, been more of a help or a hindrance to the West Midlands?
This won’t surprise you: the answer is ‘both’. Blindingly obvious point first of all: it has paid a lot of taxes to this place. If we didn’t have a successful global city to contribute, we would be less affluent overall and I recognise that.
The second thing is that some things London has done are good examples for us to say, ‘Look at that. That’s how it can work.’ The fact that the Mayors of London across both parties have been big figures and have done some good work helps as well. It’s an exemplar.
There is clear evidence, though, that it continues to hold us back. Just look at where public research and development [R&D] spending is focused. I had an example just last week of a big, internationally-known pharmaceutical company looking to invest in the UK. The government was in discussions with them, and they hadn’t even given us an opportunity to pitch. It was just assumed it would invest in the greater South East. You just want to scream when you discover that. I’m sure Andy Burnham would say exactly the same because that is not right. There’s just this instinct: it’s easy in London, we’ll do it there. That’s what they want. I know we can serve that company extremely well and through backdoor routes I get to weigh in. But that is not right.
My strategy, as ever, is to deal with the facts and try to win the argument – whether it be Select Committees or whether it be going to the individual ministers or the individual executives in UK. It’s about confronting people with the facts. The Levelling Up White Paper talks about 55% of R&D being outside the greatest South East. I don’t know. But I’m absolutely sure that the fact we organised the Select Committee to come to the West Midlands and look at this and that Select Committee report was on Michael Gove’s desk just before he wrote the White Paper is not coincidence.
Q: What’s the main lesson we should take from this discussion?
The positive is that we have built institutional capability, possibly sometimes against all the odds. We’ve proven we can work together and we’ve got a democratic mandate. We’ve built something that can be used and I think has huge buy-in across the region. It’s evolved over 10 years, and that is significant. We are in a much better place than we were when this all started, helped by the LEP coming good with the cash. We cannot go to the next stage of devolution without answering the funding line question.
ENDS