John Kingman is the Chairman of Legal & General since 2016, alongside being Chair of Tesco Bank and Deputy Chair of the National Gallery. He was the first chair of UK Research and Innovation between 2016-2021 and is the former Second Permanent Secretary to HM Treasury. He led on creating the National Infrastructure Commission and negotiating the Greater Manchester devolution deal.
This interview was conducted on 2 July 2021.
Q: Can you tell us about your role in policy? What do you think were the key successes and key frustrations?
I was an official at the Treasury over the years. On regional policy I first got stuck in in 2001 when we set up a team called the Productivity and Structural Reform team. We did a number of papers, the third of which was on regional productivity. I had various roles in the Treasury and, as I climbed up the ladder, I was still responsible for that area until 2008 and the financial crisis. With the collapse of Northern Rock, regional growth went on the backburner.
I was asked to come back in 2012. At that time George Osborne was starting to get interested in regional devolution. I negotiated the Greater Manchester devolution deal, which led to the creation of the elected mayor of Greater Manchester. Negotiating with Manchester was the easy bit. The hard bit was getting Whitehall people to accept any devolution of powers. There were also similar deals negotiated around that time; I was less personally involved in those. Manchester was the most ambitious.
My theory about this is that there was a New Labour, RDA [Regional Development Agency]-type agenda and a George Osborne, city-devolution agenda: if you put those two together, you might really have something. The Labour government had a real blind spot about devolution of powers. Having failed in the North East, where the local referendum was lost, it was clear that doing anything on powers and devolution wasn’t where Labour was coming from. What was really driving John Prescott, and others at that time, was getting some resource into the poor regions of the country, just redistributing cash. I think it was a very large part of the agenda.
George Osborne was really onto something about mayors and devolution of powers, and it would have been good if we could have gone even further. But he had a blind spot on resources. If anything, he had absolutely slashed any resources going to the poorer regions of the country through local authorities.
So my overarching theory would be that this problem has basically not been solved, and if you really want to solve it you need to do both.
Q: What extent of devolution do you think is appropriate?
I would chalk up the Greater Manchester mayoralty as a real success; it’s to some extent about personalities. You’ll get lucky in some places and you’ll get unlucky in others, and that’s just chance. Let’s take the mayor of Greater Manchester. I would prefer the Mayor of Greater Manchester to have quite a lot more resource at their disposal. It’s amazing, looking back on it, at the fights we had about really quite petty powers.
For instance, I was very keen to give the mayor of Greater Manchester the powers to re-regulate bus services which had been deregulated under the Thatcher governments. That was probably the biggest single battle we fought, and even Osborne was initially very reluctant. I think transport, skills, they need money that they can invest in infrastructure of various kinds. There’s a for some form of unconstrained local tax powers. I don’t know how far they would use them. I’m not talking income tax, but some form of property tax. Business taxes are a bit tricky because of the history of what Labour local authorities did in the 1970s on business taxes. Once the area’s developed more of a track record you might be able to go there.
Manchester really cared about health and social care. That was a very big deal for Howard Bernstein at the time. I don’t really have in my head a prescriptive model for what the answer is. But my hunch is you could go quite a lot further.
Q: In the early 2000s, but how far did you view what you were doing as a break from what you had inherited from the 1990s?
When Labour introduced the RDAs, it wasn’t quite a blank sheet of paper. But it was a pretty blank sheet of paper. They were completely new entities, and they were a bit of a disaster to be honest. The RDAs just weren’t very good. I think there was an element of handing over very large cheques to committees of well-connected local people who were of patchy quality and didn’t really have any accountability to anyone.
I haven’t done a full audit, but I think there was quite a lot of silly decisions taken and money wasted. You know there was this ludicrous thing of literally every RDA wanting a biotech cluster. I don’t think it’s the central government that should sit in London saying, ‘Where should there be a biotech cluster?’ But I do think somehow, whether it’s through stronger local accountability or some form of challenge, you’ve got to have some scrutiny of the logic of what they’re doing and how they’re doing it.
There was the whole fiasco of the regional venture capital funds. That was basically a question of capability and competence. The running of a venture capital fund is hard. Finding good people who can do it anywhere near the public sector is hard. It was not a success. I don’t think the answer to that is central control. I think the answer is sunlight, transparency, scrutiny – local democracy, to some extent. But if you try these experiments you are going to get some disasters. That was true of the other Osborne thing – some of the mayors have not been great triumphs.
The big-spending departments are very centralising. So I think the fact that the Local Government Department was an ally was really a function of John Prescott’s political drive rather than the culture of the department. I think the Treasury is not instinctively devolutionary either. In both times you had slightly semi-detached bits of the Treasury with ministers who essentially said, ‘We want you to pursue this agenda, go off and pursue it.’ I think there were individual officials in the Treasury who were very sympathetic in both periods, but the culture of the spending departments in Whitehall are massively centralising. I suppose that’s the natural thing if you’re sitting there on a big budget, you just don’t want to give it away.
Q: If you don’t have effective local accountability, that’s a reason not to devolve but in London there has not been a huge amount of devolution even with local accountability?
The first place you would give more powers to, rationally, would be London, which has the most mature mayoralty by a mile. I certainly think it’s interesting that you’ve had three very different mayors of London, including a hard left one in Ken Livingstone. But all three, one way or another, have tended to be very pro-growth. I don’t think that’s an accident. I think if you are the mayor of a city you will tend to want that city to grow, whatever your political instincts.
Ken Livingstone was very pro-growth, particularly on planning decisions which are the big power that he did have as mayor. A very important thing to understand about the other flaw in Osborne’s mayoral model is that – and this is particularly true on planning – he gave each of the 10 local authorities a veto on any planning decision that the Mayor of Greater Manchester makes. Which is a disaster. The reason he did that at the time was that there were nine Labour councils and one Conservative council. The Tory council was terrified that the Labour machine under this mayor would force all the unwanted housing into the Tory council; and therefore, it was done for purely political reasons. It totally hobbled the mayor on planning. It’s a structural thing that needs to be fixed if that mayor is going to have anything like the London role.
I would give London more powers and I would give the major cities across the UK more powers. To some extent you can only win this argument based on a track-record. London is a long way further down the path. But if politics weren’t a factor, and you could just do whatever you wanted, I’d have mayors of all the great cities of the UK.
Q: Do you think that convergence across regions or places is achievable?
That is a big question to which no one really knows the answer. First, this is all about cities: the gap between London and all the other major cities in the UK is far wider, especially gaps in prosperity, productivity, than in any other developed world country.
It’s also the case there are many major cities in the world that have seriously turned themselves around. There are numerous case studies in the US, there are cases studies in Europe, run down, grim places that have sorted themselves out. I don’t think the sheer act of devolution is a guarantee that you’ll do that; but at least it gives you a chance of doing it. What was very noticeable, sitting in the Treasury, was that some cities got their act together and some didn’t. Manchester was just extraordinary and I think it was that was down to two people, Howard Bernstein and Richard Leese, who drove it by sheer force of drive and personality. They knew what they wanted to do with their city and they had a relentless ask of government and they just never stopped.
I’ll never forget the day, after we did the Manchester deal, Howard called me after and said, ‘Right we want another one. These are things we want in the next one.’ No other city was even bothering to pick up the phone. It’s not to do with prosperity. Leeds is probably a richer city per head than Manchester. But Leeds, even though Tom Riordan is really good, did not have its act together at all. Then there are tragic cases like Liverpool. Sitting in the Treasury what we wanted to do was back the places that had something they wanted to do. That was why we put so many eggs in the Manchester basket, as well as the fact that Osborne happened to be interested – I don’t think that was the only reason. The other city I think that did have some vision was Newcastle. Pat Richie particularly, the main council chief executive, was good news and was relentlessly asking us for things. Which I regard as a good thing.
My basic thesis is just shoving money out the door didn’t work. I think that by giving places some freedom, you’ll get some successes and some failures but I think that’s worth it. I think we would have greatly enhanced the chances of success if we’d attached more money to it.
Q: How do you think about places like Preston, Blackpool, Warrington, Wakefield, Stockton, Gateshead?
My personal view, which you’ll probably disagree with, is to prioritise ruthlessly. If after all these decades we haven’t really managed to get Manchester to go, what are our chances of sorting out Preston? I think you’ve got to focus firmly on the big cities that have some chance.
By the way, I found it very disappointing when at several times in the Treasury I asked very bright people to go away and look at the studies of places that had really turned themselves around – the Pittsburghs, there are famous cases – and tell us if are there any lessons from those stories. The answer is basically no. There’s a lot of serendipity in these stories. But I just believe that you’re going to enhance the chances of serendipity giving you a successful turnaround if the city’s got some powers to sort itself out.
Q: Do we have the right powers and levers constitutionally to get transparency in place to enable those regions to have enough autonomy to be able to take off?
Let me give you a very specific example. I think the abolition of the Audit Commission was an absolute catastrophe. It is probably true the Audit Commission had had some mission creep, and one can understand why there was a political agenda to get rid of it. But they really threw the baby out with the bath water.
I think the Audit Commission was a very important thing in this country. It was introduced by Michael Heseltine as a device to embarrass Labour councils who spent lots of money. But they were also a massively important force in rooting out local corruption. I was asked to do an arcane report by Greg Clark on the Financial Reporting Council and I went off-piste and effectively recommended the re-creation of the Audit Commission. The old Audit Commission should be recreated, with its original remit, and that would be a massively positive thing from lots of points of view.
Q: Should we be investing in people or investing in places?
My hunch is you need to do both, I don’t see why local people can’t make that decision for themselves. The problem with investing in people is they move. If you look at the great cities of the UK, they do tend to have one important economic asset, which is generally they all have great research-intensive universities. Even in places like Liverpool, Liverpool University is a very serious university. Glasgow has a fabulous university, Sheffield has a really good university. But the best graduates tend to leave, and there’s no magic policy thing that’s going to make them stay. My hunch is you need to do both.
As chair of UKRI [UK Research and Innovation], I’ve spent a lot of time at all the universities I’ve just mentioned. They spend a lot of time chasing their REF [Research Excellent Framework] scores, but all the big universities are big players in their cities. What they don’t do for sure is vocational training because that’s not their mission. That also means, for example, they don’t train technicians which can be very important for some of them.
One good thing about our current government is they do seem to have an interest in Further Education. One of the weird things about the Brown/Blair government was they wouldn’t take an interest in FE – it was chronically under-resourced and I don’t understand why in those years it was. I think the Education department structurally will always focus on schools because that’s where the politics is.
Q: What was your experience of the capacity of local government leadership, political and official?
I think it’s very patchy, but I don’t think local authority capability is at the heart of it. I’d give you the example of Leeds. I think Tom Riordan is absolutely one of the best – now that Howard’s gone, he may be the best council chief executive in Britain. But Leeds was just not at the races for political reasons. There was all this tension with Bradford and a very competitive situation. You need the local authority capability for sure, but it’s not enough on its own.
Q: What’s your overall assessment of regional policy and growth over this period?
This probably sounds rather downbeat, but I think there were two serious attempts by two really dominating serious politicians of that age. Gordon Brown and George Osborne. Very different people obviously. I think they both failed at this. I am proud of having done the Manchester Deal. I think it was a serious attempt and you never know it might yet go places. It’s interesting that no Prime Minister has really seriously engaged in this, I don’t really know why that is, there must be a political answer to that. The one message I would give you is I think my hunch is to get somewhere you’d need over quite a long period to do both the devolution and deliver the resources.
ENDS