Patricia Hewitt served as Member of Parliament for Leicester West from 1997 to 2010. She joined the Cabinet in 2001 and served as Secretary of State for Trade and Industry from 2001 to 2005, and Secretary of State for Health from 2005 to 2007. She is the Independent Chair of Norfolk and Waveney Health and Care Partnership and is an adviser to the Board of Trade.
This interview was conducted on 24 March 2022.
Q: Could you tell us about your role in the growth and regional policy over recent decades?
I was one of the founding staff members of the Institute for Public Policy Research, a New Labour thinktank in the early 1990s. Regional economic policy, supply-side policy and productivity issues were very much on our agenda. One of the first staff members we recruited was David Miliband, then a Kennedy Scholar from Harvard.
We set up the Social Justice Commission at the request of the then Labour leader John Smith, with Gordon Borrie as the chair. I was the deputy chair. We had a team of four or five people at IPPR purely working on that. One of the strong themes in that Commission was the idea that the UK is far too centralised and local communities are the experts in their own areas, people are the experts in their own lives. That I strongly believe, and had done for a very long time. Although it wasn’t an economic commission as such, that sense of needing to build more resilient communities in the face of industrial and technological change, and demographic and social change, was really important. That clearly required a much more decentralised and bottom-up approach.
In 1997, I became one of our new Labour MPs and in 1998 I became Economic Secretary to the Treasury. The following year I became e-Commerce Minister and a Small Business minister over at the Department for Trade and Industry. I started getting much more involved in these issues. Then in 2001 I became Secretary of State for Trade and Industry. At that point, I became responsible for the Regional Development Agencies [RDAs] and regional policy. I was very much a fan of the RDAs, while recognising they were a mixed bunch. They seemed to me to be about decentralisation. They were about trying to get much more local ownership of economic policy and the necessary investments and changes. The issue of scale is always really important. It bedevils us in health, which is where I now focus my efforts. The regions felt like a perfectly sensible scale at which to be working and we had nine RDAs, one of which was London.
I could sit down as Secretary of State with a couple of junior ministers and the nine Chairs and Chief Executives of the RDAs and you could have a really good conversation about what each of them were doing, what they could learn from each other, what we needed to do to help. Certainly, you can make a good argument that the emphasis should be for doing work at a smaller unit, on a smaller footprint. That’s got many advantages. But from the point of view of really trying to support all regions at once, that RDA-level felt really helpful.
I put a fair degree of time and energy into RDAs and working with officials around them. There were some big successes along the line. I always felt the North West RDA really got its act together, the way they brokered the university merger around UMIST [the University of Manchester Institute of Science and Technology] and [the University of] Manchester. That was hugely impressive. The work on transport links and the backing for Liverpool Airport, that felt really good. There were a number of examples like that. There were others that were less effective. I never thought the East Midlands one, which was my local one as it were from Leicester, was great. It did some useful stuff but, fundamentally, so much depends on the quality of leadership that you can mobilise, whether it’s an RDA or a LEP or a Metro Mayor. If you’ve got good, energetic leaders who can then make things happen in whatever the geography is, it will fly. And if you haven’t, it won’t.
Q: What was the policy goal?
I thought of it as being: identifying and understanding the strengths but also the challenges of that particular geography, and building agreement around – and implementing – a strategy to maximise that area’s economic potential and productivity for the benefit, especially, of the most disadvantaged. The strap line I used to use was, ‘The more you had globalisation, the more you needed localisation.’ It wasn’t about Westminster thinking about the whole of the UK and the context of the global economy. Different parts of different countries would have their own relationship with the opportunities of the global economy as well as the national economy. They were the best people placed to identify their strengths and build on them, and build – amongst other things – the transport connections. But national government had to be supportive and enabling.
Q: As Secretary of State how did you balance the work that DTI [Department of Trade and Industry] was doing for sectors (often from a national perspective) and the question of local variation?
The first thing was to get a grip on the DTI because it had become very obvious to me in the two years I spent as e-Commerce Minister that it was not fit for purpose. When I first became Economic Secretary, Michael Scholar was the DTI Permanent Secretary. Michael very sweetly comes along to my ministerial office and sat down and explained to me about the DTI and how it had been built up in the old days of the 1960s when it had been 10 different departments. I sat and listened to this and I thought, ‘He is describing to me a failed merger – I don’t think he realises that that’s what he’s sitting on top of.’ He was describing all the silos. You could trace the silos back to, for instance, Tony Benn’s old Post Office Department from the 1960s which had been merged with something else. The very first thing I did when I became Secretary of State – by which time Robin Young had been appointed Permanent Secretary during the election period, to avoid any ministerial interference I assume – he came in to see me for our first meeting and he said, ‘I think we need a review of this department.’ I said, ‘Absolutely: here are my draft terms of reference.’ I’d knocked them off during the election campaign because I thought there was a good chance I was going to get the job.
We set to work and we put some bright officials on to it. We had a bit of extra capacity from some consultants, but we didn’t put the consultants in charge. Some good stuff came out of that but in the analysis one of the things we found was that, regardless of who was in government or who the minister was, the proportion of department spend that had gone on different things was utterly unchanged for about 20 years. A very interesting little insight into the permanent government at Whitehall. We started getting a grip on that and I kept saying, ‘Do we have any economists in this department?’ We had lots of economists doing all kinds of stuff, but we didn’t have an economic function. So we created a Chief Economist post, and that was the key prize. We started getting some econometric analysis, for instance, of the pretty large sums we were pouring into propping up coal mines. Very important politically, very important to certain areas, but I’m afraid an absolute waste of money.
We also had a quite large science budget going through the Research Councils: it was a big proportion, but we didn’t really have much control over it. There was almost no resource being put into building ‘the new’. Not surprisingly, colleagues at the Treasury were saying, ‘Hang on a minute.’ We had to do some challenging stuff, including running down the coalmine subsidy in order to both free up resource but also to start winning some credibility for a focus on the future.
Now that’s not a direct answer to your question. Every sector had its own regional specificity. For instance, there was a lot of quite established work around the motor manufacturing industry which, of course, had a very heavy Midlands, particularly West Midlands, dimension to it. I have a vague recollection that we tried to play the RDAs into those sector strategies but the sector strategies were a bit variable themselves so that was another problem. Some of what we were trying to do, for instance, with the Technology Strategy Board which we set up as a direct result of this review and eventually became Innovate UK, was really effective. The Manufacturing Advisory Service [MAS], which David Sainsbury had seen in the US and brought back, was very much constructed on a regional basis. I think every one of the MASs had a sector as well as a geographical focus.
Q: Were you trying to close gaps in productivity between regions (was convergence an objective)? And was London a problem or an opportunity?
I think more an opportunity. I’m not sure whether we were using the actual word convergence but that sense of needing to close the gap between regions and do something about low productivity in far too many of our regions, that was absolutely on the agenda. ‘Levelling Up’ in the modern slogan. I remember discussions with the South East RDA. That was really interesting because, like every other RDA they could say, ‘Well okay our average may look alright but look at these deep pockets of deprivation within a generally reasonably affluent area.’ What I found so interesting about the whole thing, as I went round the country, was wherever you went you could see the really outstanding stuff that was being done. You could go to Swindon, and just see the extraordinary growth of the IT services sector and the technology sector and that whole London to Bristol corridor and how you could build out from that.
I remember going down to Cornwall and going to the Eden Project. Which was a really interesting story because it was a social enterprise. I was passionate about that because I was setting up the Social Enterprise Unit, backed by the RDA. It was having the most extraordinary impact on the economy of Cornwall and they were describing to me the way the cruise ships were pouring into the harbour in order to bring their clients to Heligan and Eden. Just extraordinary. There was a whole strategy just beginning to emerge around supplying nurseries and growing plants and bringing business away from Amsterdam. It was just fascinating, and those kinds of discussion were happening pretty much everywhere.
I remember in Yorkshire – Denis MacShane would have been very involved in this – the discussions around new kinds of steel and the collaboration that we were in the process of creating between the university and the steel industry – that three-way link with government backing industry alongside the university. To access the opportunities in the global as well as the national markets, you needed to understand local economies from a much more granular perspective than you would get in London, in Westminster.
Q: We have seen a shift in recent years towards cities or sub-regions – where do you fall on the cities versus regions debate?
Charles Clarke and I both felt the RDAs and that regional approach should be really strongly backed. They could each work out for themselves what would then happen on a smaller footprint. It didn’t all have to be decided by us, very much not.
It’s interesting because now I live pretty much full time in Norfolk. I chair the Integrated Care System here for health and social care. It’s fascinating because we’ve got a LEP for Norfolk and Suffolk which, as far as I can see, is almost completely useless. That’ll be partly resource and partly quality of leadership. But I think a lot of it has to do with very long standing and historic rivalries between Norfolk and Suffolk.
I felt with the East of England RDA, there was a really interesting story and strategy which obviously took Cambridge as a key point, but also looked at Norwich and UEA [University of East Anglia] and a whole set of really interesting stuff there. Also down in Suffolk and the amazing BT Research and Development cluster based at Martlesham, just incredible stuff there. You needed, amongst other things, a transport strategy, as well as a whole set of other things that again would begin to give you a lot of dynamism. That really has never properly happened. A lot of this is down to parochialism and rivalries. At one point, Cambridgeshire, Norfolk and Suffolk were talking about having a Metro Mayor and a devolution deal, and with great pain had almost got to an agreement. Then the story from Norfolk and Suffolk is Cambridge and Peterborough shafted them and went off and got their own Metro Mayor. Norfolk and Suffolk were left with a LEP and will now each have a county devolution deal. This whole business of local rivalries, relationships, leadership quality, capability.
Q: In 2010, the RDAs were abolished and the government moved towards evolutionary, voluntary Mayoral deals. This allowed local variation but left some places out. Should we be prioritising flexibility, or comprehensiveness?
Instinctively I prefer the latter. I don’t live in a mayoral area, I’m not close enough to it. I do see Andy Street really making a go of Greater Birmingham. I’m chair of Speed Up Britain, which is about 5G connectivity around the country. In the course of doing that, I met the then Metro Mayor for Bristol. He lost the next mayoral election. It was interesting talking to him because I did have a very strong sense that they had a really clear view of how you could use 5G connectivity to support a whole series of industries including tourism around their footprint. They had a very good account of the assets and then how they would use the technology and all of that.
In the case of both Birmingham and Glasgow, Andy Street plus local leadership up in Glasgow, has put those two patches at the forefront of 5G in Europe. As a really deliberate enabling of a whole host of other innovations, strategies and sectors so that’s really impressive. But it would certainly raise a question for me – and that was the concern Charles and I had about what we thought about alternative to the RDAs – that if you started from the city and a bit of hinterland, what about all the bits in between?
Q: Did the RDAs have the right powers for what they were expected to be doing?
It’s a great question. I don’t recall them asking for powers that we weren’t willing to give them. Around the same time in Leicester, we were creating Urban Development Companies. But they were special purpose vehicles. My recollection is that you had to have a real commitment from the council and the wider public sector and the private sector, I think other key partners, and the university. Leicester, if I remember correctly, got one of the first of these Urban Development Companies and they did a really good job I thought. They mobilised people, they created a masterplan and they started land purchasing so they had power to do it. They were able to shift stuff around. It was a bit too slow for my liking. They were able to create, in a very derelict old industrial canal side in the middle of the city, what became a quite large-scale science park. The flagship tenant connected with the space centre at the university which is Europe’s top space research centre. Another example, there was a whole space cluster around Leicester which I had no idea existed until I became relevant minister and started discovering it. That was one of the things you could build out from. All part of a great engineering tradition. I don’t recall RDAs asking for compulsory purchase land acquisition powers or something of that kind.
Q: We have heard regularly that the frustration that the skills system in particular was unresponsive to local influence?
Skills was really frustrating. There was an optimistic period early on where whatever it was we were doing on skills felt like it would work. We were reorganising stuff, creating skills bodies and trying to get the private sector to take the lead on it. I remember my own further education college in Leicester doing some good stuff. Then, partly I suppose because the adult education voucher system didn’t work (we ran into all the problems with fraud), it did feel a bit like one of those where we were constantly changing it and it wasn’t in alignment with the RDAs. So that did feel like a disconnect and a frustration.
Q: The RDAs felt that education and skills policy was centralised and kept away from them – the Learning and Skills Council was based in Coventry but part of Whitehall as far as the regions were concerned?
That’s really interesting. I would have been absolutely in favour of fine RDAs taking over the Learning and Skills Councils and that sub-regional focus. Charles and I had a very close working relationship when I was at DTI and he was at the Department of Education and Skills, so we may have made common calls for some reason on that one which I now can’t remember.
Q: Was Whitehall always centralising or were there differences of view?
I saw massive divisions inside Whitehall, and all kinds of arguments between departments. I felt one of the problems was each department was pursuing its own strategy and had its own view of what should be happening at the regional or more local level.
I would guess for the Learning and Skills Council, there’s the Department of Education: ‘We’re decentralising this we’re gonna have a Learning and Skills Councils all over the country that’s what we will do.’ Meanwhile, DTI is doing Regional Development Agencies. Meanwhile, umpteen other people, including the Department of Health, are getting on with their bits.
One of the horrific memories I have – which would have been fairly late, maybe in 2005 while I was still at DTI – is from a Whitehall meeting and somebody, probably the Cabinet Office, had done a wiring diagram. They had mapped all the programmes and entities that we had created at a local level. This thing took up an entire vast table. Even then it was completely incomprehensible. What you could see was, let’s say, 15 government departments, and then this unbelievable number of vertical lines coming down from each department – some of them crossing over here and joining up to this and coming down here. I thought, ‘Oh my God, I recognise this from my constituency.’
I was going around my constituency and I would see a new community hall, a lift building for the primary care, a new sports hall. Fortunately, at least at that very local level, people had the wit to say, ‘We’ve got 16 different programmes and five different bits of CapEx budget. Maybe we could put them together and put two or three things into one building.’ But they didn’t do enough of it and we ended up with stranded assets. There was no revenue to fill the building.
It was a very vivid illustration, both of the fragmentation in Whitehall and of almost a failed attempt by each bit of Whitehall to push resource down, often with really good intent. Neighbourhood development plans were a good, sustained effort to tackle the most disadvantaged, small neighbourhoods; but there were umpteen of these programmes and an awful lot of the time the geographies bore no relationship or just overlaid each other in the most higgledy-piggledy fashion.
Q: Is that part and parcel of how policy development works, or could it have been avoided?
It is part and parcel of how things work, in this country at least. But I also think we could have done an awful lot more to avoid it if we’d had a clearer ideological position that the UK is far too centralised; that we are, very deliberately, going to devolve in a strategic way. You can see this in the constitutional area: if we’d really had a bit more thought, possibly even before we went into government, and been able to say, ‘Let’s say we are going to bet on regions but within regions everybody has to be included. This is going to be an absolute focus on getting productivity convergence with a particular focus on those most disadvantaged areas within each region as well as the overall disadvantaged regions.’We wouldn’t necessarily have created exactly the same structure within each region, we could absolutely have allowed for some local flexibility there, but we might have been more sensible about how we devolved resource and power in ways that then didn’t have skills, which is absolutely critical, sitting in a completely different sphere from the core regional economic strategy piece.
One reason why the neighbourhood development piece had a real impact because we committed to it for nine years from the outset. We knew we’d be around for at least two terms – but, of course, you need longer. It’s exactly the same in health: we’ve spent a good five years building relationships and in many of these systems nobody was talking to each other. We’re at the point now, where we’re going to get new statutory powers and most of us can really start to motor. Then we say, ‘We’ve done that, now we need to move on to something.’ Ahh no we don’t. These things take time.
Q: So this added up to: local government scepticism about the RDAs; Whitehall scepticism about local government; insufficient accountability and an attempt to address that at a regional level in the North East in a referendum failed?
I think there was more thought and more political strategy than I was suggesting just now. In that North East case, which obviously was going to be our strongest possibility and we thought we would win that referendum, it became, ‘Yet another layer of government’. It didn’t become devolution down, it became centralising up from local government and therefore massively unpopular.
This local government issue: it is fascinating how it’s playing out at the moment. I chair a health and social care system which is the whole of Norfolk plus 15 per cent of Suffolk. It was drawn like that because it was the Department of Health and NHS England who invented these things and that’s the health economy boundary. It’s quite interesting because Great Yarmouth, which is Norfolk and Waveney, is a single labour market. They’re an economic unit and they’re an energy focus and all of that. There is more than just a health logic to it. Matt Hancock wanted to reorganise things on a county-only basis, we went through an inordinate amount of work across England on this and it ended up with Sajid Javid, after he became Health Secretary, making a few changes in a few other places but leaving ours untouched.
All this was being played out against the backdrop of constant discussions in the current government: were they going to have a White Paper on unitary government and force unitaries? Was Norfolk going to be one unitary or two? In the end, that’s gone into the sand and where they’ve ended up with these county deals and county mayors.
I’m now sitting in on these riveting discussions between all these Tory councillors with half the Tory district council leaders being vitriolic about what they regard as a power grab by the Tory group at County Hall.
Q: Can effective devolution in England, whether it’s in terms of economic policy or more broadly, come bottom-up, asked for locally, or does to have to be mandated?
It’s a really tricky one, and in a geography like our which is enormous. It’s only a million people but it’s an enormous geography and Norwich is an awful long way from Kingsley. Therefore, although the thought of two unitary councils fills me with absolute horror, because we would have two lousy social care and children’s services, we’re only just getting them sorted out now at a single county level. Running it as a single unitary, people would need more trust than I think they have. A unitary council that was genuinely run equally out of Kingsley and Norwich, that would be about where the council met, where the offices were. Even within that, [it would be about] a really strong sense of area teams within that overall framework to respond to these, in many ways quite disperate communities, within this relatively small population.
Q: The RDAs were administrative units rather than underpinned by an elected accountability across the whole region – does that necessarily limit how much devolution you could do?
I think if you do it purely as an administrative unit, there’s a danger that it becomes a branch of national government (very ‘French-style’, in a way). It then becomes terribly vulnerable to what happened in the North East – ‘This isn’t our thing, this is something that’s taking away from our things’ (which are the locally elected bits).
Although you can clearly make progress doing it on that administrative basis, I think it probably does have to be underpinned by the democratic leadership and accountability that you appear to have in Greater Manchester.
Q: When you look back over time, what do you think has been the key success and where has been the biggest frustration?
The big success was building this recognition that regions, however defined, more local areas, have to take charge of their economic fortunes. That’s gone through all kinds of iterations and there’s still a very long way to go but I think that was the big win.
That was important: rather than people either expecting Whitehall and government to do everything, to put the onus there and empowering people. Genuinely supporting them to get on with that – and that took a variety of forms including the neighbourhood development commitment.
I think the failure was that we didn’t get enough of the best business leaders. We got some of them because, to be honest, good business leaders should get this. We didn’t get enough of them. For a business that’s got a footprint all over the country – or the world – asking them to relate to and share responsibility for different regions was quite a big ask. We might have found a more effective way of selling that to them. I also think it was a real failure of understanding of what modern economies need. Looking back I wish I’d done more to really try and promulgate that argument.
ENDS