Dan Corry was the head of the Number 10 Policy Unit and senior economic advisor for British prime minister Gordon Brown. Corry began his career in the civil service as a labour market economist at the Department of Employment, then worked at HM Treasury from 1986 to 1989. He was a special adviser at the Department of Trade and Industry from 1997 to 2001. Then he was at the Department of Transport, Local Government and the Regions from 2001 to 2002, special adviser in the Department for Education and Skills (United Kingdom) from 2005 to 2006 and the Department of Communities and Local Government in 2006 when he returned to the Treasury as Chair of the Council of Economic Advisors.
Q: Could you tell us about your role in growth and regional policy over the past few decades?
I was an economist in the Department of Employment and then the Treasury, in the Nigel Lawson days. I actually worked on industrial strategy, as well as agriculture and things. It was an interesting time. For instance, I remember doing a review of the Scottish Development Agency for the Treasury, which ideologically the government didn’t like, but we couldn’t find reasons why it wasn’t very good.
Then I worked with the Labour Party for a number of years, and then I was at the Institute for Public Policy Research. I did quite a lot of work on economic policy of different types. When Labour won in 1997, I was special advisor in what was then the Department of Trade and Industry (‘DTI’), for the first term. The Secretaries of States were Beckett, Mandelson, Byers. That was a lot of work, from macro growth to micro policy. The department worked a lot with Prescott’s people as well on the regional agenda.
Then I turned up at the Department for Transport, Local Government and the Regions which only lasted for a year, with Steve Byers. A lot of my time was taken up on Railtrack and local government, on the regional assemblies, for instance. So, we were pushing on that. Then I came out of that world. I ran what is now called New Local. I got a very local government perspective of the world.
I then came back to government in Education. I still think one of the things that gets missed out on the whole levelling up debate is just how much we in government were making sure that the formulas were massively biased towards deprivation. That has all gone in the last decade. It was stealth levelling up, which we didn’t talk about as much as we should have.
Then I was in the Treasury for that last 18 months of Gordon [Brown]’s time as Chancellor and then in Downing Street. In those periods we were all trying to keep the economy going and all the rest of it after the financial crash. That was the main thing. The issue of industrial policy was there, though. Peter Mandelson was doing his second time at Business. He had switched from the earlier period when it was all ‘knowledge economy, make it easier for entrepreneurs’ etc., to a much more interventionist industrial strategy. From Downing Street, we were keeping a bit of an eye on that.
Q: Was that shift towards a more active state purely a function of the financial crisis, or did it reflect deeper changes over the decade?
The department itself [DTI – Business] was very hostile to industrial policy when I came in. It liked horizontal policy, always, the Treasury even more so. It didn’t like sectoral policy by instinct, so it was much happier in the end dealing with the world of general competition policy or R&D tax credits. The Department for Trade and Industry didn’t like industrial policy. There was still – and probably some of the politicians had it as well, although none particularly that I worked for – a sense that Labour and industrial policy equalled Concord and Neddy. We didn’t want to do that, or to be seen to be doing that, even if we did want to do some of it.
We also had great trouble with the unions because, in a sense, we wanted to engage with them a lot more. They’d been shut out for many years, and they absolutely didn’t have the capacity anymore when you wanted to talk to them and get involved. There were a few people like Tony Woodley who would know more about the car industry than anybody else, but in general they had no capacity anymore. When we set up working groups, which would be with the unions and industry and all the rest of it, the unions could hardly field people that really knew their stuff.
I always remember the department, when I first arrived at DTI. The officials prepare all your papers for you about what they think you’re going to do. They’d misread the manifesto. They’d worked out that I’d written stuff with Will Hutton, so they prepared papers about how we produce a stakeholder economy or something and reproduce Germany. It was all very bizarre. They didn’t really understand what was going on.
Again, in the early days, I do remember having battles. I remember Margaret [Beckett] early on wanted to publish a paper on manufacturing, to show we cared about that sector. The officials were saying, ‘does the Secretary of State know better than the market which are the right sectors?’ There was all that kind of stuff. A lot of the Competitiveness Unit people that had been with [Michael] Heseltine, Bob Dobbie and people like that, who are very good people, and Stephen Haddrill. After a while they got on to the right page, as it were.
I don’t know whether the department got more sectoral. The Treasury were always leaning on us because the Treasury’s view was the DTI was just a bunch of sponsor departments. They were soft. There was some chemical industries unit or something, and the Treasury tended to believe that the DTI’s main job was lobbying for more aid. There was a sense that we shouldn’t be too sector focused. And as for regional policy, I think the DTI – officials, not the ministers – was slightly suspicious of Regional Development Agencies (‘RDAs’). ‘What was this all about? Would it really help, was it more bureaucracy?’
I think it was quite deep, and clearly it had changed by the later 2000s. I don’t think it’s just that Peter had the great conversion that he had. I think academic thinking had changed. Also, we’d moved further away from the idea that the incoming Labour government was just going to repeat the 1970s, propping up lame ducks.
I don’t know how its attitudes to devolution changed. From what I could see from afar, there were still great battles going on with whatever the Communities and Local Government department was at the time, and all other departments that were more in favour of decentralisation than DTI. I can’t remember in my time at DTI – four years or so – us ever taking local government very seriously.
Q: What do you think have been the key successes and the key frustrations in regional policy over the past few decades?
I think we tried a lot. It’s very frustrating at the moment hearing commentators saying, ‘They didn’t know that there was a regional problem, and they didn’t do much about it’. We did do a lot about it. You can argue that we didn’t do enough and that actually you have to throw even more at it.
I think we got into a confusion about local government. I think when we came in there was a suspicion – certainly from Tony Blair and others – that local government was a bit useless. There’d been the loony left, and we now had a local government modernisation policy. I think therefore we didn’t use local government nearly as much as we should have. I got more and more keen on elected mayors, probably when I was running New Local, because I got to meet some of them. I got the feeling that an elected mayor, who gets elected for the whole area and doesn’t feel themselves just as a representative of the council, feels they represent the whole area. They could bring all the different stakeholders like business, the voluntary sector together. They also get a four-year term, so they’re not looking over their shoulder all the time at whether they’re going to be deposed.
I think we still had things like Regional Selective Assistance, which we were using to some degree to try and influence where people set up businesses. There was always that great problem where the Treasury would look for value for money at a national level. So, if you encourage this thing into this region, it just means it wasn’t going into another region and has no net national value. I don’t think we ever put enough weight on the argument that that’s what we wanted to happen.
I remember discussing at the time: how do you look after what we call the left behind places now? The big cities were benefitting, and we were doing good stuff. The RDAs on the whole focused on the cities. But they also focused on the bits in between.
The RDAs themselves, I think they were variable. They were a good thing. There was a great attempt to try and see if we could put a democratic accountability frame around them. How could we give them planning powers if they didn’t have some democratic accountability? But we, for one reason or another, messed that up. The North East referendum was a travesty. I remember Prescott, because Steve Byers worked quite closely with him on that, was furious. He couldn’t get enough powers out of any of the cabinet members, to give to them. We were all aware that we were asking people to vote for another set of politicians, which they didn’t really want, who would have almost no powers to start with. Our argument was that they would get more powers over time. Once we couldn’t get the elected assemblies, we had a problem. I’m not sure we quite knew where to go.
Then you always had the problem like the North West RDA. Manchester hated it, but we never had an answer. I remember trying to persuade Gordon that it would be a good thing to have a city mayor in Manchester. His argument, which was fair enough, was ‘if they ask me for it, I’m not against it’. I remember having meetings with Richard Leese, leader of Manchester City council. They didn’t ask for it because he never wanted it. The local politicians were very unlikely to want it. So we never moved on that.
For the local mayors in the 2000s, unless you have a real focus on the area and its importance, the danger was that people voted in a non-serious way. It sort of worked in London, like in Hackney, which had been a bit of a basket case. We kept being worried, I remember having meetings about whether we were going to have to take it over, which we didn’t want to do, take over a Labour Council. In the end, when they got a directly elected mayor, he started to sort it out.
Obviously, we also had Public Service Agreement targets including on regional growth, and the Treasury usually was decent to the RDAs in terms of funding. It was always hard to prove that the RDAs were actually changing the world. We have various evaluations and historically I think academics and others have said they were creating some change, but it’s difficult to prove that sort of stuff.
I think we made a big difference to regional inequality. I think it would be much, much worse if we hadn’t thrown a lot of what we threw at it. That is hard to prove, though.
Q: What was the goal? What were you trying to achieve? Was it to reduce regional inequality? Was it something else?
Certainly it was to reduce spatial inequality. Regions were important and the RDAs obviously were around regions. But there were other initiatives – the coalfield community programmes and so forth. People think that we’ve only just woken up to the coal, the coastal communities and so forth. But there were programmes and stuff of all types in there. And as I say, for me, the massively and most important thing was how those formulas worked for funding of education, local government, and even health. They were all being biased very strongly towards helping those in need.
We saw tackling inequality as a way to raise national productivity too. There was always the macro debate which went on: ‘we’ve got to stop London overheating, because then we have to put on the brakes nationally.’ Interest rates go up, all the rest of it. The rest of the country doesn’t need it: it’s kind of a single currency problem. There were all these McKinsey productivity studies for the Treasury, some of which were slightly bizarre.
But I think there was also a social thing there. Our people had suffered, all over the place and had been ignored. We wanted to do something about it. But you also then drifted into the crazy stuff where every area was ‘going to have a high-tech cluster’. It all got a bit mad. We didn’t have the nerve to say, ‘well, you’re not all going to have a high-tech cluster. This is ridiculous.’ But that’s difficult politics apart from anything else.
Q: Were there other cases or places you looked to for inspiration?
A lot of what we did in that department [DTI] were influenced by some great UK academics that I had got to know when at IPPR. We had the minimum wage and other labour market policy and people like Alan Manning, Paul Greg, Steve Machin, were very helpful and I talked to them a lot.
On the growth side, there was all the Krugman-y stuff and endogenous growth theory. I didn’t know the UK academics who looked at regional policy that well. There was a lot about agglomeration economics, which I think we probably bought, and I still think is true. I know a lot of people get angry about it. I think it’s led to a focus on the cities, and people say that’s why we’ve forgotten about the left behind towns. But I think most of the evidence shows it’s right, and that, in many ways you have to link the outlying towns to the big city. The idea that they will have their own growth that works, it’s kind of impossible.
As ever, we did look to how Germany was performing. Obviously a massive thing in most countries, but not ours, is – even where there is a bit more regional autonomy – they have tax raising powers, which we never really considered. That makes a big difference. Regions in the UK were never going to be able to attract business in by lowering corporation tax or whatever. They could do other things through giving them some free land for development, gap funding and that kind of thing. But tax powers were never really on the agenda for us.
I remember actually, in 2000, I went on one of these US State trips. I was looking at urban regeneration, and I went to Cleveland and various other places. I learned a bit, but I think the only thing that came out of that comparison were things like Business Improvement Districts. Useful but very small, with small tax raising powers, if everyone agreed to it.
Q: What were the conversations around the development of the single pot like? Why limit the scope of RDAs to purely ‘economic’ policy levers?
I think there’s a problem – and I think the current government’s about to do it again – which is to go for physical infrastructure and property-led regeneration, missing out all the other stuff. A lot of the funding available was capital, and they’ve got the same problem now.
I think a lot of other bits of government were worrying about all those other issues. I remember in my couple of years at Education, we were quite heavily trying to think what we do in places where educational attainment is terrible. How can we help them? How can we give them more money? There was a bit of experimenting with the models, like academies. We were aware that one of the problems is that when people get educated, they often leave the area. You had the old debate: are you trying to help the people, or help the place? Different parts of government were thinking about it.
I’m not sure whether we brought it all together as a government. The advantage that Heseltine had is that he was very dominant figure when he was Deputy Prime Minister. He could bring everybody into it. Maybe we didn’t quite have that. There was a lot of stuff going on, but did it all join up? I don’t know.
One thing we failed on is skills. We tried all sorts of stuff, lots of reviews. None of it massively worked. I still think it’s a shame we dumped – and I know why we did – the Individual Learning Accounts. We got scared off quite early on because there was lots of fraud. Maybe we didn’t quite have an understanding of sustainable growth in deprived areas, smaller than regions. I would say that maybe we didn’t see the social side enough. By that I don’t just mean the education and health and so forth, but community infrastructure and all the rest of that. Comparing it to the government now, they’re even worse. I mean, we put quite a lot into encouraging community organisations and social capital which has gone missing from a lot of these places.
Universities were another thing. I think the universities did well during our time and we were very encouraging in trying to get universities to think about business spinoffs and liaising much more with their local business community, and all the rest of it. There was funding to do that. I think that’s a lot of evidence that having a good university that attracts people helps a lot, but so too do the spinouts in the area.
I think if you put it all together, it was probably not too bad. Whether it was all thought through coherently like that is another matter, and I’m not sure that it was. And in a funny sort of way, when Prescott had gone, maybe there wasn’t anyone that was handling all that stuff, in a way. The Treasury was doing certain bits, but the Treasury comes from a certain angle, and it’s fighting battles on public spending as well at the same time.
Q: Which departments were the most supportive of decentralisation? Did that evolve over time?
DWP was never in favour of decentralisation. It had a brief moment, when James Purnell was Secretary of State. The Department for Work and Pensions just never gets it and that is a problem because it makes it much harder to devolve your skills policy and so forth. I mean, you can understand that social security and benefits should be the same everywhere. But that was always a problem.
For HMRC, it’s very difficult. I engaged recently with HMRC on something to do with charity tax reform. One idea was very familiar from the Enterprise Zones: I was trying to say, ‘if we want more people giving money to poor people in poor areas rather than Surrey, let’s differentiate Gift Aid’. And of course, I know there’s thousands of problems with that, but you know, HMRC immediately says, ‘well, that’s completely unenforceable. It’d be crazy. It’d just move activities.’ You get those kind of push backs.
I think the trouble in other departments – let’s say Education – is about priorities. I was working for Ruth Kelly and there was a real concern about attainment gaps and where schools were doing worse. But at the end of the day, the Secretary of State knows she would more likely lose her job if there’s a crisis in the schools than if the attainment gap did not close. She’s an economist, so she cared about this, she liked looking at the data. I never thought she and me made a great pair because we both liked looking at the data too much and not thinking about the politics. But a lot of departments are like that. That then feeds down to what the rest of the civil service are thinking about.
I think a lot of Civil Servants came on board. The moment we brought in Total Place, which was one of the most stupid things for the Coalition to get rid of, was potentially transformational. And most departments were up for that. The Treasury was up for it because the Treasury tends to see, if you like, from a narrow point of view, that if you can bring all public spending in an area together, there must be efficiency savings. Of course there was the suspicion that they’d say you can have all the money together in Total Place, but we’re cutting it by 10% or something. But nevertheless, the Treasury were up for that.
Transport was always tricky because they’ve got a certain way of doing cost-benefit analysis, which doesn’t really take account of regional issues. In the same way, ministers have to get quite involved in that, because otherwise the thing just churns out the value for money and so on. They’re a bit blind to that. I remember a simple case in Hastings, which was a falling-behind coastal town. There was always great debate about whether to dual the road to Hastings. It didn’t count on the cost-benefit, partly because when you put in better road and rail access to a struggling place, the main thing happens is it becomes a commuter town. Everyone wants to get out of it. It doesn’t actually help growth in the area.
I don’t think departments, when they think, ‘here’s a policy we’re going to do’, usually have a geographical map of impact assessment at the back of their mind. They cannot say, ‘this is how we think it will play spatially; what it will do; how’s it going to affect different kind of people’. They do it for income deciles and other things, which is all good. But you don’t really think about how it changes the geography.
Q: What was the role of the political centre (No 10)?
To be honest, I don’t remember Number 10 in Tony’s period being particularly interested in the regional agenda per se. Tony was always suspicious of local government. And that’s one of the reasons, in a sense, that some of the local government modernizers set up NLGN (now New Local), to try and show that it could modernise.
But local government does stuff, they’re often experimenting with stuff. I think York was a great one, before 1997, that we all used to go on about.
Number 10 wasn’t putting a lot of pressure on the regional work. When the Prime Minister is pushing things it is picked up by Whitehall very quickly, not only by ministers, but civil servants. So it matters if they’re not getting a feeling that this is important in the Prime Minister’s mind. On the other hand, within public services, I think Number 10 would push you and say ‘we’ve got to get public services that work for everybody, tackle failing schools, not enough GPs in deprived areas’ and all that kind of thing. And we’ve got to do something about that.
In terms of economic policy, that pressure came from the Treasury. That was probably more from the productivity angle than that spatial inequality angle. Obviously, it always helps when you’ve got a lot of MPs from places that are deprived, shouting, including cabinet ministers.
Q: What do you think accountability at the regional tier ought to look like? You mentioned the RDAs having the advantage of being comprehensive earlier, but they were also challenged for having a democratic deficit?
I think it’s an enormous issue if you don’t have the full map, as it were, filled in. The Tories are finding that now, with the Shires saying, ‘hang on, how about us’. What we were trying to do, when we didn’t get the elected regional assemblies, was to empower cities a bit more – including through colleges of local leaders and so forth.
I haven’t mentioned the Government Offices of the Regions which were quite important as well. That was important, I think, not only because it was a presence of Whitehall in the regions. It could feed knowledge back and forward. It could try and bring together the public sector in that region. But it’s also a great signal back into Whitehall centrally, that this agenda mattered.
With boundaries, you get stuck between: do you want to have a top-down approach which says we’re going to draw these maps because we want complete 100% coverage and some places will have to go into areas they don’t really feel a great affinity for (or even hate for various reasons); or you’re going to have a more bottom-up approach, which is where we’ve gone in recent years, and you get a patchwork which also leaves some people out (although I presume that if you just let the thing run then eventually some of the places ‘left out’ would say they want to join in).
. It then becomes a question of how much you’re going to lean on those places financially to say, ‘you’ve got to part of this’. Outside London, these regional or big city geographies – outside the town you live in, people often don’t feel that identity that much. Maybe they will feel they’re from Yorkshire or something. Obviously, we all look to Manchester. How the hell did Manchester, with a whole bunch of areas who don’t feel they’re really Manchester, manage in the end to create a great deal of unity and get themselves an elected mayor?
Q: And how did local government capability vary across the country?
It’s interesting. There was a real nervousness in government about empowering local government. One of things we did, which local government hated, was called ‘earned autonomy’. We had a kind a system for a comprehensive performance assessment, which I’m still proud of being involved in designing. They were scored on this, and if they did really well, we would give them a lot more powers. That was the idea. If you behave well, we’ll give you more powers. In some ways, from the way Whitehall was, that was quite a big decentralising thing. But for people who believe in devolution, it was awful.
As to where they were, that was pretty random. The good councils tended to be in the places that had already got their act together. There was a problem that the areas that could really do with great sort of local leadership didn’t have it. Take Doncaster as an example. I mean, the Labour Party that ran Doncaster was in absolute chaos and corruption. And we tried with an elected mayor, that worked for a bit, then that all collapsed.
Local government, by definition, is elected locally. What can you do for areas if you see that – if they had the right leadership – they could do quite a lot to help regenerate that area, and get it going, and encourage investment in and all the rest of it? What if they keep failing to get that leadership? If it gets to a become complete failure, then you can take it over. And that happened in a few places. But you can’t do that generally.
I think that in countries that are already heavily devolved, people will blame the mayor if things go wrong. We – central government – are still absolutely terrified that if things go wrong in town X, we will be blamed for it. Partly with some legitimacy, because almost all the funding will come from Whitehall, and the powers that local government has is quite limited. This massive nervousness links to a deep suspicion in Whitehall that local government capability is pretty poor.
In my time working with New Local, I would say that on average the chief exec of a local council is better than most senior civil servants, quite honestly. They have a difficult job, balancing a lot of stuff. But that is not the view in Whitehall whatsoever. And so we’ve always had this chicken and egg: until you give more responsibility, who on earth wants to be a councillor? It’s all a bit pointless. You just administer central plans and stuff like that. So, we often get lousy people doing it and then, because we got lousy people, we don’t give them any powers. So that remains a problem.
Q: Is the mayoral model an exception to that?
Again, you’ll get hit and miss. You know, Tony [Blair’s] dream was always that people like Richard Branson would pitch to become these things. It would be business people, the equivalent of Bloomberg. I guess Andy Street is just about that, in the West Midlands. But I think from Whitehall’s point of view, certainly the Treasury’s, a directly elected mayor gives you have someone who’s accountable in some way, and then politically, also, they are, they feel more like people will hold them to account rather than saying it’s all Whitehall’s fault. I think it has changed perceptions.
I remember talking to Steve Bullock, who was elected mayor of Lewisham. Steve’s total vote was the biggest in the country at that time, bigger than MPs get. He’s got a legitimacy. When he speaks, including on stuff he’s not responsible for, people listen, because the people of Lewisham voted for him. That makes an enormous difference to feelings about the willingness to devolve.
It doesn’t have to be a single elected mayor. There are other models, if you want. But the idea that there’s something accountable and visible matters – the real problem with those earlier mayors, to start with, was the turnout was miserable. What legitimacy do you have then? It’s still not brilliant. But they seem to sort of work. Funny enough, COVID helped with the profile of a number of them. It’s helped, quite frankly, that there’s two Tory ones at the minute, because otherwise the Tories will think, ‘what on earth have we done this for, they’re all Labour. This is madness’. They’re already trying to change the rules, so it may unravel.
The other opposition to elected Mayors was from MPs. They were quite right: probably more people know who the mayor of Bristol is than have got a clue as to who the MPs are. And MPs never like that. So they’re a bit hostile too.
Q: What affect do you think the rise of London has had on the country over the past twenty five years?
The London Mayor is a funny thing because it has mainly only strategic responsibilities. There’s been a number of good council leaders that have gone to work with the Mayor – both on the Tory side when Boris [Johnson] was there and now, with Sadiq [Khan]. They’ve been great councillors, including my own in Lambeth. They more or less ‘disappear’ the minute they go into the mayoral world. When they were council leader, they had a lot of powers, including educational. The mayor only has strategic authority powers. Yet it’s been very important on spatial planning. It also has been able to bring everybody together, including during COVID.
It’d be quite hard to understand, ‘what is it that the mayor has done which has added to London’s growth’? Was it going to happen anyway? Was it that some of the strategic plans have helped on skills and so forth? Has it been the ability to bring people together? Has it been that London quite likes the idea of having a mayor, and it’s a civic pride thing? It’s been an interesting relationship with the councils: most of them in London will be Labour but they worked okay with Boris’s lot as well. They also have their own separate organisations.
There’s a bit of me that thinks like London is the agglomeration, a centre of the country. It always has been. Whatever you do to London, it will grow in terms of productivity and all those things. Did the Mayor make a lot of difference? Probably not. But most of what they’ve done seems positive.
A massive thing – which is slightly different, where the Treasury comes into the story again – is TfL. They have been tremendously successful and the Treasury trusted them. They had talented people. I remember the Ken Livingstone period; I was doing the transport stuff for a year and over time we came to trust them. But there was nervousness about the devolution blame thing. It all happened with the introduction of the congestion charge. If it turned out to be absolutely terrible, a fear it would be the government that got the blame, not the Mayor? But TfL matters because they did earn that trust. We had all sorts of issues about the public-private partnership and all the rest of it, but in the longer run it has been a success, and must have contributed to London’s success. We’re now in a terrible situation where due to central government decisions on funding post Covid, they’re even daring to take some of the rights away from those of us who have only just recently got our 60 plus pass!
Q: Has London’s success been a benefit or disbenefit to the rest of England?
I always think it must have been a benefit. The idea that if you clamp down on London, it helps everywhere else – I mean, we always used to argue in the old days that most of the kind of companies who wanted to set up in London, if we said, ‘no, you can’t set up in London, you’ve got to go set up in Newcastle’, they’d have said, ‘well we’re going to set up in France. Don’t try and play that game with us’. London will always attract. The great hope is that if you come from, for example Burnley, you will get educated and you will decide, ‘I want to spend my career in Burnley’. And that you don’t want to have at least a spell in Manchester or London or something. I mean, it’s just not going to happen very often. But politics at the minute make it very, very difficult to say good things about London. I mean, everyone hates London at the moment.
Q: Which one idea or innovation do you think has really worked?
I do think that the elected Mayor model does focus accountability, brings everyone together in a place, and does make Whitehall feel more confident about devolving. There are problems, but something like that that does seem to work. We’ll never take the other steps that we need to do, I think, until we roll out the mayors.
ENDS