Sir Patrick McLoughlin reflects on his long experience of government, describing how the whips manage Parliament, how different Prime Ministers manage Cabinet and how he dealt with crises as Transport Secretary.
Daniel Thornton (DT): Perhaps we can start at the beginning, when you became a minister under the Thatcher Government. Do you remember when you got a call from the Prime Minister?
Sir Patrick McLoughlin (PM): Oh yes, you do remember those sort of days, like nothing else. I was sitting, working at my desk and got this phone call: would I go and see the Prime Minister? It’s always nice when you’re not a member of the Government to be asked to go and see the Prime Minister, especially when a reshuffle is taking place.
So this is a bit of a funny story, I got down to the gates at Number 10 and said, “The Prime Minister wants to see me,” and [the policeman] said, “That’s what a lot of people say.” And I said: “No, no, I’m the Member of Parliament for West Derbyshire,” and he looked on his list and I wasn’t there! So then I went in to see Mrs Thatcher, and Mrs Thatcher said to me at the time: “This is one of the nicer parts of the reshuffle, where I can invite people to join the Government for the first time.”
Before I’d gone in actually, David Waddington, who was then the Chief Whip, had said to me: “I wanted you in the Whips’ Office, but the Prime Minister had other ideas. And I won’t say what you’ve got, I’ll leave that to the Prime Minister.” The PM [Prime Minister] then said to me that she felt the Department of Transport should have members representing right across the country. Cecil [Parkinson] was Secretary of State, Michael Portillo the Minister of State, Robert Atkins, who would be an under secretary, was the North West and I was the Midlands. So she thought she had a good spread and asked, would I join the Government. She told me I was going to be Minister for Roads.
When I got to the Department for Transport, Cecil Parkinson said: “I may just change the responsibilities around, Patrick.” He went out for lunch with Michael Portillo and came back in the afternoon and said: “Yes, we are going to change the responsibilities. Robert, I want you to do roads, and, Patrick, I want you to do aviation and shipping.” To which I said: “There are two problems with that.” He said: “What’s that?” I said: “I’ve got the most land-locked constituency in the United Kingdom, and I’m afraid of flying.” Without a second’s breath, Cecil said: “Excellent, you’ll bring an open mind to this subject.”
There is some truth in that. Sometimes I think, what ministers have to remember all the way, and my view on this has not changed, is that you are not there as an expert in the department. You’ve got experts there – that’s the civil service. They’re there to advise and to tell and to help assist you. Your actual decisions are very much looking at the options and taking a political decision on them. Although it was very funny comment, there was some truth to it.
…you are not there as an expert in the department.
I worked for four Secretaries of State as a junior minister: Cecil Parkinson, Gillian Shephard, Malcolm Rifkind and Michael Heseltine. There’s no doubt in my mind, they were all different in the ways in which they ran departments. Both Rifkind and Heseltine were outstanding people to work for.
There’s a fairly funny story…this is four years on, I’d moved to the Department of Trade and Industry, and we’d done a green paper on the Post Office. One morning, the BBC came and interviewed me, and right at the end of the interview, when I thought the interview was over, I said: “Well, we looked at everything. We looked at breaking it up but we rejected all that, that was never a runner, and we published the green paper which is our proposed way forward.” I think about two weeks later, much to my horror, it must have been a quiet news weekend, I heard on the Today programme: “The Government look at breaking up the whole of the Post Office. We’ll be talking to the President of the Board of Trade at 8 o’clock.” I tried to get hold of Heseltine and couldn’t get him, so I was living in fear as 8 o’clock comes and they have it on. He said: “I know where this came from, you’ve spoken to my junior minister, and he said, we’d looked at it, we’d ruled it out and this is what we’re doing.” It was a great interview. I said to him on the Monday morning: “Michael, I’m so sorry about that.” He said: “Sorry? You got me on the 8 o’clock spot on the Today programme, what are you apologising for?”
So, both Heseltine and Rifkind were pleasures to work for. Partly because they both knew their own agendas and let junior ministers get on with their jobs. They were really great people to work for.
DT: In terms of managing the team of ministers, how did the four different Secretaries of State run things? Did you have a weekly meeting?
PM: Now you’re asking me to recall quite a way back.
Before I became a minister, I was PPS [Parliamentary Private Secretary] to Lord Young, and Lord Young used to have a lunch with his ministerial team every Thursday. Just a very simple lunch, but it was a three-line whip – you attended it. Even Alan Clark, who was then the Minister of Trade, attended, I would say, about 90% of them. As Minister for Trade, you’re travelling a lot, but it was quite important to attend. Because he was in the House of Lords, Lord Young used this as a way of getting a feel for what was going on. He got Commons ministers and he got Lords ministers there as well. Cecil Parkinson used two morning meetings a week with all ministers together.
DT: Was that with civil servants as well?
PM: I don’t think it was with civil servants, and in those days, the permanent secretaries didn’t really spend much time with under secretaries. Alan Bailey, who was then the Permanent Secretary, said hello to me on the first day and that was all I ever saw of him. But I did have a very good Deputy Secretary, called Russell Sunderland.
Malcolm Rifkind was one of these people that was immediately on top of his brief. He was the Queen’s Counsel. He read the brief, he understood the brief and didn’t need to be told twice about what was there.
So they were all different in their own ways, but I hope I learnt a bit from them all.
DT: You then had a period in opposition. Did you have the opportunity whilst in opposition to learn about different aspects of government and prepare for the eventuality that you’d be back in as a minister?
PM: In opposition, I was Deputy Chief Whip for almost eight years and I was Chief Whip for seven years from 2010 for the Government. In a way, the Whips’ Office is very much in charge of the ‘stage management.’ When the Leader wants something done, it will be “We’ll get the Whips’ Office to sort it out.” For all people say about it, the Whips’ Office is there to do the mechanics of the place: make sure your committee is manned up, make sure you’ve got speakers, all that kind of thing, and deal with the individual member’s problems, of which there are many and varied. So that kept me occupied.
DT: So back in 1989, when the Chief Whip said he’d wanted you to work in the Whips’ Office, they’d obviously marked you out as somebody who would be good at being a Whip.
PM: Well, when John Major sacked me, he said: “Patrick, you should have always gone to the Whips’ Office first, and I want to bring you back into the Whips’ Office.”
DT: So you took that as a sacking?
PM: Well, it was, because I did go out of the Government for 12 months from 1994 to 1995. I had a sort of 12-months sabbatical on the backbenches. Then I was brought back as a whip after that leadership election that John Major called in 1995. I basically then stayed in the Whips’ Office right the way through.
DT: What do you think from your background helped prepare you for office? What do you think you had to learn on the job
PM: I think for the last eight years, I was the only Cabinet Minister never to have gone to university. You can either say, you can’t do the job because you haven’t got that sort of experience, or you think about what the job’s about and take instruction. So, when I became Chief Whip, a) you learn on the job and b) every day is different anyway, and you run the Whips’ Office.
The Chief Whip, don’t forget, is in charge of a department that has more ministers than any other department. And they are in every different department. When you’ve got whips in every department, you get to know what’s going on. There is nowhere that you’ve got that sort of comradeship more than in the Whips’ Office. Because every day you meet, every day you’ll talk about things. If there are things going on in departments, the Chief Whip will know about it, and he’ll know what the parliamentary party is feeling about it too. He’s got to tell the Prime Minister or the Leader that sort of information. So it’s quite an important and enjoyable job, in running that team. There is more of a comradeship in the Whips’ Office, I think, than in any other department, because when you have a bit of a crisis about a vote, you’re all working to try to sort out that same problem.
There is nowhere that you’ve got that sort of comradeship more than in the Whips’ Office.
DT: So you enjoyed the management aspect of that?
PM: Yes. I was there for a long time, a total time of 17 years in the Whips’ Office, from 1995 to 2012. I don’t think there are many people around who can beat that.
DT: Coming back into Government in 2010, you kept the same job in a way…
PM: I kept the same job as Chief Whip, but it was a coalition, so that was new territory. Every morning and every afternoon, you knew you’d be at that 8am and 4pm meeting. The Prime Minister and senior people from Number 10, and usually George Osborne, would be there. William Hague would turn up when he was able to, Oliver Letwin was always there. You’d be discussing what was going on that day, what was happening Commons wise, general things. We worked quite closely. That team had worked from opposition and we carried that through into Government, up until I ceased being Chief Whip.
DT: How did co-ordination with the Liberal Democrats work?
PM: Well, there were two aspects of that, because there was Alistair Carmichael, he was the Liberal Chief Whip and then Deputy Chief Whip in the Government along with John Randall. They were kind of like two deputies. Alistair would look after his own people, but every day we would meet at 2:15pm. The Liberals would come into our Whips’ meeting and then we’d talk about the day’s business. They would have their own private meeting, where they’d be talking about their colleagues, we’d talk about our colleagues privately, and then at 2:15pm, we’d come together. Between the two of us, Alistair and I would say whether we had any particular problems, or if there were any issues facing us. We worked very closely together. Quite often what would happen, if there were a problem on the Liberal’s side and there wasn’t one on our side, and if there was a problem on our side, there wasn’t usually one on the Liberal side.
Actually, from 2010 to 2015, the Government managed fairly comfortably on most votes, especially in 2010 to 2012 when the Coalition was bedding down. There were a few bumps in the road, but you would have expected that.
DT: Can you talk us through your first day back in the Department for Transport in 2012?
PM: It was a bit of a shock. It hadn’t really been in the papers that I was going to end up as Transport Secretary. I’m told by Number 10 that Phil West, who will be my Principal Private Secretary, will make contact with me and he did, but there was an awkwardness of the old Secretary of State not moving out and me having seen the Prime Minister.
They come across and they spot me, they’ve got a picture of me. I’m driven across to the Department of Transport and then Philip Rutnam, who is the Permanent Secretary, is at the door waiting to greet me. I’m taken up to the fifth floor, and I’m given a cup of tea and this lady said: “Secretary of State, you won’t remember me, but I was here when you were last here!” So she was a welcome face, and there were a few other people who were there when I was first around. In fact, there was one, who said, “You won’t remember, but I was your Private Secretary for two hours, back in 1989,” when I was told initially I was going to be the Roads Minister. There were a few people like that but not many. Then I started to be taken through the briefing as the new Secretary for State for Transport.
Particularly if you’ve come from not running a department on to all of a sudden being politically in charge of a department, there are all the questions of how do I get spads [special advisers], who are the spads, and so on. I quite often said, there were only three people I employed at the Department for Transport and they were my special advisers. The rest were employed by the system. As it happened though, I managed to recruit some incredibly good spads.
Julian Glover became my policy special adviser. He had been writing the Prime Minister’s speeches; he had a great interest in transport and knew his stuff and I got this odd text message from him. I knew Julian anyway. He was brilliant, because he’s worked in Number 10, at knowing the system and knowing what lines to pull. So recruiting a good spad, which I did within a few weeks, was very important.
I suppose, most interestingly, we had discussed the reshuffle on the first weekend in September, and the first thing to happen on the Monday – I’m still Chief Whip, I’ve got a good idea what’s coming on the Tuesday morning – Rosie Winterton, who is then the Opposition Chief Whip, comes in to see me to talk to me about the opposition day, which is on Wednesday. She says: “We’re going to have two parts of the day, Patrick. The first one we’re going to do is train fares and rail.” I remember saying, “Rosie, I don’t think that’s a good idea at all, I wouldn’t do that,” and left it alone. Obviously they didn’t change anything. So that was the first thing I had to decide on the Tuesday, my first day in the department, knowing that we’d got a debate the next afternoon. Most of the ministers had changed in the Department for Transport, so I decided that I would do the fares debate.
I remember sitting around with the civil service and saying: “We’ve got this debate to do.” I’d been a Member of Parliament by this stage for 26 years, so I understand the Commons, and having been Chief Whip, I’d seen people handle the Commons. I remember, we were going through it and I said: “Look, the way we do fares is absolutely ridiculous.” One of the civil servants said: “Well, Secretary of State, if that’s what you think, you are the Secretary of State.” I was thinking to myself, this is the difference between being Secretary of State and a junior minister. If you’re a junior minister, they would have said, “But the Government’s policy is this,” but they didn’t try to say that to me. There was this recognition that, actually, as Secretary of State, you decide what the Government’s policy is. On that first afternoon, that was quite an eye opener to me.
…as Secretary of State, you decide what the Government’s policy is.
We agreed some words which I was happy to use, and they weren’t saying: “This is going to get us into lot of trouble.” So I did that first debate, and then I had to go before the Transport Select Committee as well. Why I agreed to do this within a week of being there…you submit yourself to quite a lot.
Throughout all that, one of the big questions was the Virgin West Coast Mainline and what we did there. I was defending it, because that was what the department had given me all the background to say and I’m only Secretary of State for four or five days by the time I am doing this. Then of course, that unravels and that becomes an issue within weeks. So there were the first two weeks that we were back and then getting ready for a party conference speech, which was the first conference speech I’d made as Secretary of State.
DT: You were dropped on your head basically?
PM: I’m not sure about dropped on the head. It was a job and you got on with it.
DT: There were lots of things you needed immediately to deal with and you’d been in the Department for Transport before but everything had changed. Did you have a sense of what priorities you wanted to focus on when you came in? Or did they develop over time?
PM: Well, priorities change. Both George Osborne and David Cameron, and to a degree Nick Clegg as well, were very much in favour of infrastructure spending and we were spending quite a lot of money. Although there were tight reins on the department of course, they were open to infrastructure projects. They wanted to build HS2, David Cameron was fully signed up to that.
In fact, there was a reception he gave towards the end of his premiership [in April 2016] for people in the transport industry, partly to thank them for the way they’d coped with the winter crisis. I was introducing the Prime Minister and I said: “The only problem with being the Secretary for State for Transport in this government is that there are always two people in orange jackets before you. However, on this occasion, it’s a great pleasure to welcome the Prime Minister to address you tonight.”
I mean, David Cameron addressed a rail conference in Leeds. I can’t think of a time when a prime minister had ever gone to a railway conference before. That’s when it got all the publicity for someone running into him. That was a commitment that he very much took. When he appointed me, he said: “I see this as a very, very important department and you’ll have our support in driving things forward.”
There were big infrastructure projects, there was a big road building programme, there was a big rail investment programme and there was HS2. HS2, at that stage, was incredibly controversial. It wasn’t so controversial on the Labour side, but it was certainly controversial on the Tory side, and one of my jobs was to make the case as to why that was the right project to go forward. So that’s all that we inherited in September 2012. Then, on the backdrop of that, was the failure of the West Coast Rail franchise, which was a fairly heady involvement in my first month in the department.
Although there were tight reins on the department of course, [Cameron and Osborne] were open to infrastructure projects.
DT: How did it become clear that there was a problem with West Coast Rail in the first place? What was your reaction when it became clear?
PM: The Legal Counsel, who is quite a famous Legal Officer, Christopher Muttukumaru, warned me along with the Permanent Secretary. They both came in one day and said: “Look, we are finding a few problems with this, but we’re not sure whether it is serious yet.” I was given a copy of a report from Pricewaterhouse[Coopers]. I read it and then Philip [Rutnam, then Permanent Secretary at the Department for Transport] said to me: “We’ll have some legal advice, tomorrow or the day after.” The PWC report was a bit ‘on the one hand this, on the other hand that’.
I then had to warn the Prime Minister that this was possibly coming. He was, safe to say, unhappy because he had asked for reassurance. There had been, over the whole summer, questions as to whether this was going to be alright or not and he’d been reassured by the Cabinet Secretary that it was okay. There had been quite a few changes at the top, the Permanent Secretary, Philip, had only arrived in the April, so he’d been all over it. When you see these documents, they are the size of that shelf, full of documents, two-fold deep. They are very, very big detailed documents. And the view was it was very unsafe, that we hadn’t done the procurement right and that we’d have to pull the contract. A lot of preparation went into that.
Parliament wasn’t sitting then, that was a three-week conference break. The problem was, when do we announce it? We were due in court and it was Ed Miliband’s party conference speech. We thought, we can’t have it on this day or that, or else we’ll be in trouble for that. So it was actually midnight that night after he made his speech that I was in the office ringing people like Tim O’Toole and Richard Branson, telling them we would be making this announcement at 7 o’clock the next morning.
DT: In terms of your view of the civil service, this was a pretty important mistake wasn’t it?
PM: It was a big mistake, and that was obviously in the select committee reports. I remember one of the questions in the select committee was “Is your department fit for purpose?” They were quite robustly rubbishing the whole department and I was saying: “Hold on, this not the whole department. Yes, mistakes have been made and we’ve got these wrong and we’re going to put those right.”
We commissioned two reports. One done by Sam Laidlaw, who was the lead non-executive on the board, and the other was done by Richard Brown, who was the European Chairman of Eurostar and a big railways person. The one done by Laidlaw was much more into the mechanics, what the department had done and where that had gone wrong. The one by Richard Brown was about the future of franchising and would the future of franchising hold out.
We got through that, and I then made a statement when I came back to Parliament. I felt that I could handle myself in Parliament and I was able to deal with what was without any doubt a very sticky wicket for the department. So the department felt they’d got somebody who could go along and tell the Prime Minister this had gone wrong and walk out with his head still on his shoulders. But that’s for others to say rather than me. Although Branson is quite nice about me in his book.
DT: So your feeling was that the civil service responded well to this?
PM: To the crisis, yes. We got something wrong, there were mistakes made. I don’t want to go into too much detail about that, because that was dealt with by the civil service. The West Coast has become a bit of a famous story in the civil service and what happened? A few people were moved, lost their jobs and we picked up the pieces and we moved on. But that was one area that had gone wrong.
The West Coast has become a bit of a famous story in the civil service and what happened?
DT: Your experience of the rest of the civil service, the rest of the department was more positive generally?
PM: Oh, yes. There were sometimes one or two people who would try to pull the wool over your eyes, but, usually with your spads and yourself, you didn’t miss too many. I hope we didn’t miss too many, but again, that’s up for others to say. Overall, I think all the people I worked with were incredibly good and responded to issues that I wanted to take up.
DT: Taking your point that the overall picture was very positive, when you felt they were pulling the wool over your eyes, why was that? Was it that they had a different view or was it that they didn’t want you to focus on something because they thought it would be too much trouble?
PM: Sometimes they would be trying to take you in a policy direction you knew would not be acceptable. Although you might not have been opposed to the policy yourself, but it was not the sort of area that you’d get support for higher up the Government.
We were in a coalition. I used to have meetings every Wednesday morning with what we would call the extended group of ministers and senior civil servants, where we’d go through the issues that the department were dealing with. I would also have separate meetings with Norman Baker, who was replaced by Susan Kramer, as a Minister of State and Norman was Under Secretary for State. We would also make sure that we kept the Deputy Prime Minister fully informed, particularly about HS2 in relation to the areas that he took a particular interest in, mainly in Sheffield.
DT: How did it work in terms of running the ministerial team, with having another party in the mix?
PM: It was alright. Vince Cable says that I was one of the more coalition-friendly Secretaries of State, as far as he recalls. We were a coalition so, that’s what we had to do, and I didn’t have any great problems with that. There was no ideological difference as far as I was concerned. There’s always more you can do with transport, but overall we protected the roads budget, we protected a lot of the disability access money in the Network Rail programme. If anything, we were over ambitious. But that was partly because Network Rail told us we could do these things and then came back later on and said that actually the charges are not quite as we’d thought, they’re more expensive. That’s where some of the issues of electrification have run into problems.
DT: You were overseeing some massive projects, some of which had been in place before you became Secretary of State.
PM: Some, yes. But one of the things that was fairly nice, I was there for nearly four years, which in itself is one of the longest tenures as a Secretary of State, so there were some projects which I’d actually started and saw finished. I often remember Cecil Parkinson saying: “The only trouble with this job is you start a project off, then you’re gone and it’s finished when you’re away from it.” Now, I didn’t see the start and finish of HS2, but I did see the start and almost completion onto the statute book of the HS2 Bill, which was amazing. We had to make some big changes there. We brought on David Higgins, who [previously] ran the Olympic Delivery Network. He engaged better with local authorities and people actually thought HS2 was happening when he came. A lot of those changes were very positive. Just a few weeks ago when we had the bill from the West Midlands up to Crewe, no one was talking about ‘if’ this project happens anymore, it was all about ‘when’ and ‘what’, and I do think that was a fundamental change that came about.
I was there for nearly four years, which in itself is one of the longest tenures as a Secretary of State
Tess Kidney Bishop (TKB): On HS2, how did you get people from across government on side, before it came to Cabinet?
PM: Cabinet actually wasn’t a problem; they were very signed up to it and the group had agreed to large parts of it. The route, I think, had been signed off at the previous Cabinet before that, where Justine [Greening] had taken us through what the route was going to be.
We got to the stage where the local authorities were pressing us to do it. There was one stage where 10 of the big local authority leaders, all of them Labour, came and delivered a letter to the Prime Minister, saying why this should happen. That was quite instrumental in saying to the Labour Party they’d got the support as well. Jack Straw who was in the House when we had the debate, got up and said this was very important as far as the North of England was concerned, and had to go through. So, although there were people who were saying that the Labour Party were going to change their minds – Ed Balls was not particularly in favour of it in the end – the Labour Party did support the bill. When we had the vote, it was something like 440 to 40. 10 to one in favour of the original second reading of the bill.
TKB: So the ground had been laid by the time you got in there?
PM: We were laying the ground while we were there. The spads were politically operating to get it through.
TKB: In terms of the public opposition, there was still a lot of controversy. How did you manage that?
PM: There were many things we did try to do. Partly, it was accepting that if all of a sudden you’re going to have this massive infrastructure project going through your farm or your land, you’re not going to be very happy with it, and you can’t change people’s mind about that. Funnily enough, I did go and do quite a lot of visits to individuals whose land was affected. I quite understood where they were coming from, and I didn’t try to argue with them that they were wrong in taking the view they took. I was saying: “I believe this is actually in the long-term interests of the United Kingdom.” I’m fed up of telling the story about how the first railway proposed between London and Birmingham was defeated in the House of Commons, because the canals were perfectly adequate. But I didn’t dismiss that this was going through their land, it was a problem for you. I was never trying to say that their concerns were something that we didn’t care about. But I actually believed it was the right thing in the country’s interest, in the long term.
The West Coast Main Line is the busiest railway line in Europe and the trouble is, it’s got no more capacity. There was one winter when every railway line in the country had delays upon it apart from one and that was HS1. Why? Because it was built to modern engineering standards. And that’s what HS2 will be. It will be built to modern engineering standards.
But, yes, it was controversial and it is a very big project. But as a percentage of government spending, over that period, spending on HS2 was minimal. If you look at what it is as a percentage of GDP, over the time it is being built.
DT: How did you decide which projects you wanted to support and see go forward and which you didn’t? You inherited some big ones, but where you had discretion.
PM: One thing you get laid down with as a Secretary of State is acronyms all over the place. You learn a new language. There was something called the HLOS. HLOS is high level output specification in the rail programme. I kept saying: “Why is this called HLOS? Why can’t we call it the Rail Investment Programme?” As soon as I said this, one civil servant said: “But, Secretary of State, that would be RIP.” So I said: “Alright, we’ll call it the RIS – the Rail Investment Strategy.” We have got the Roads Investment Strategy, which is called the RIS1 and the RIS2. One of the small things I managed to do with the Chief Executive of the Highways Agency was, we had these managed motorways, and I said: “Nobody knows what a managed motorway is. Why don’t we call them smart motorways?” Now they are called smart motorways. It’s part of getting the language right, trying to equate it. The acronyms were legion in the Department for Transport.
DT: Getting the name right is clearly important in terms of the story about what it is you’re doing, but in terms of deciding – cost benefit analysis, politics?
PM: Cost benefit analysis is all down to the Green Book. That’s all Treasury rules and they are marvellous things. The Green Book says that you have to manage every programme over a 30-year project. You’re not allowed to take into account the fact that the railway will last for 100 years. If it’s going to take you 20 years to build, you actually only have 10 years where you can start running it. Sometimes the nonsenses of some of those rules…you just have to tell the Treasury to butt up.
The Treasury weren’t very happy with HS2. George Osborne tells the story that one of the first options that he was given as Chancellor of the Exchequer when he arrived in 2010 was to cancel Crossrail. It would have still been possible to cancel Crossrail and he refused. He said: “No, I am not cancelling big infrastructure projects.” But, they gave him the option in the first week of saying no to Crossrail. Now, it’s going to open later this year and it will make a massive difference to London, I have no doubt about that. I think he says in his first Budget that, although he’s got to cut spending, he will try to protect capital infrastructure investment and he did. That’s how we managed to start one of the biggest programmes of modernisation of the railways that we’d seen for a very long time.
Sometimes the nonsenses of some of those rules…you just have to tell the Treasury to butt up.
DT: Did the civil service present you with a list of things you could cancel when you arrived?
PM: No, because I wasn’t into doing that. I came in as a Secretary of State after two years [of the Coalition Government]. It wasn’t as if I was a brand new Secretary of State from day one, cancelling projects. Those projects were in the Governments plans.
I got George, fairly quickly, to sign up to what we should do for roads investments and what we were doing for rail investments. That’s how the Road Investment Strategy One got done and we’re presently working on the Road Investment Strategy Two. It is very similar to what was happening on the railways. Roads was turn tap on, turn tap off. Now that [the investment strategy] is part of the overall government policy, which is one of the changes we made while I was there. I’d like to take some of the credit for it. I’m sure George will say it was his view as Chancellor of the Exchequer, which is fair enough. But, we did move to a Road Investment Strategy, making the highways slightly separate in the way in which it was organised. That was done in the Infrastructure Bill, making it much more like a company. Yes, I was the Secretary for State, but I was working to certain programmes and projects.
DT: I wanted to ask you about working with arm’s-length bodies and companies owned by the Government. You mentioned the crucial moment in HS2 when David Higgins arrived, creating Highways England as a company, and that it was important to set long-term plans. But for Network Rail and electrification, having an arm’s-length body doesn’t seem to have helped.
PM: What happened with Network Rail was that the way in which Network Rail was accounted for suddenly changed. The ONS [Office for National Statistics] reclassified it in September 2014. Up until that stage, it didn’t really feel itself answerable to the department. Although the Secretary of State was its owner, they felt that they were separate to us. So there were a few problems. Then a change was made in the Chairmanship of Network Rail, as a result of reclassification and some of the things that were going on. I announced that Peter Hendy would become the new Chairman of Network Rail. We introduced a new structure under which Network Rail became fully on the government books as opposed to being separate from the Government’s books. That was something that Gordon Brown had managed to do. Gordon Brown and Tony Blair, between them, had manipulated to keep it off the government books, so it didn’t count on the accountancy rules. It had to get re-classified to count on the books. So those issues changed and having a special director put on by the Secretary of State was quite important.
DT: Are you saying it worked better after 2014?
PM: There was a change in relationship and they found that both the department and the Treasury were much more saying: “We want to see a lot more of what you’re doing.” That whole arrangement changed as a result of that reclassification, as well as a new chairman.
DT: You referred earlier to the electrification problems and the changes in the costs of electrification. There were lots of pauses in that.
PM: No, it was always on. We’re still doing a huge amount of electrification, but there were some areas where you could argue that it wasn’t so definite. You’ve got the Secretary of State and you’ve got Network Rail, and then you’ve got the regulatory body for Network Rail, which was running as well. They’d all signed off that these plans could be done, and there was a big row with the PAC [Public Accounts Committee] about what the regulator had allowed and Network Rail signed up to. Both were questioning how they’d come to the views that they could be done for something like, if you take the Western electrification, £900 million to £1.4 billion. But it’s turned out to be much more expensive than that, double.
DT: Do you think that was the right structure – to have that regulator signing off?
PM: No. At that stage, that was not working correctly and those costs were not done correctly. I think lessons have been learnt and you would find now that they are a lot clearer in their direction and what they will take on.
DT: What about integration between HS2 and Network Rail? In a way, you want a unified railway network, but also you want a company that’s going to drive the creation of HS2 and a company that runs the network.
PM: I’m sure there’s a lot more work to be done in the department with the integration of HS2 and the West Coast Main Line. While I was there, that was in the early stages. There was all the planning work, which was going on just for the engineering of the railway, before you start talking about how you then work out what happens at Euston, the expansion that will take place at Euston and all the availability thereafter. I would say railways did dominate quite a lot of the time of the Secretary of State.
One of the things we did within a few days was decide that Howard Davies would come in and do the Airport Commission Review. I’d like to take the credit that I did it but actually it was all worked on before I got there. That basically put airports almost on the back burner for the first two years, up until basically the General Election where we could say: “Well, we’re waiting for the Davies Report.”
The other big thing that again was an area I got complete support from the Prime Minister, was the letter of direction I had to issue to the Permanent Secretary to say that we would replace the pacer trains on the Northern contract. The Northern franchise was coming up and the department said there was no proven financial case to replace the pacer. They are coaches on wheels and they’re 40 years old. The franchise came up and I gave a direction that the pacer would go, which was again backed up completely by the Prime Minister. You couldn’t issue a direction like that which was going to cost a lot of money on the contract without the approval of the Prime Minister and the Deputy Prime Minister.
DT: On airports, do you wish that you’d moved more quickly with Heathrow? The Government did have a majority at that point.
PM: Davies had been sent away to do two years’ work and the report didn’t come to us until just after the General Election.
DT: But after the election, you had a majority and, in retrospect, it looks like that was the moment?
PM: In fairness, certain aspects have been taken forward with it and they are doing a bit more work. One of the things that we found with HS2, we had 14 different judicial reviews, and we won them all apart from one very small bit about compensation and we said we’d go and we’d do that. Making sure you’ve got as tight a legal case as possible for something was driven into my mind by the department time and time again, particularly when they were saying things about the Airports Commission or HS2, to be wary of not saying anything that would land us in the courts. That was very much in my mind and I think we successfully navigated it.
Making sure you’ve got as tight a legal case as possible for something was driven into my mind by the department time and time again
TKB: Transport is closely connected to work other departments are doing, particularly on housing but also others. How did you co-ordinate with other departments and other Secretaries of State?
PM: One of the things I was very pleased to get out of George [Osborne] in one of his early Budgets when I was first there was about £170 million of what we called the seed funding money, which was for minor pinch points. We went out and said: “There’s this money available and you can bid for it, but you’ve got to show how it improves employment opportunities or housing and you’ve got to get some private capital involved in it as well.” This £170 million turned, by the time we’d finished, into investment in infrastructure projects of over half a billion pounds, because of private sector involvement as well. I remember talking to one of the big construction companies and saying, “It’s a minor pinch point but I don’t suppose it really makes any difference to you,” thinking they wouldn’t really be worried about £170 million, when we’re talking of billions. The Chief Executive said: “No, you’re quite wrong. Those are good little fillers. They help us in between big jobs where we might be moving onto another big job, but we can then use our resources and money for those smaller jobs.” So the pinch point funds were very successful. That was to open new roads into land and the like.
Part of what inspired me a bit with that, was Heseltine’s City Challenge money. Funnily enough, right in Derby, there is a big site called the Pride Park site and it was always landlocked. It got City Challenge money from Heseltine and now, if you go onto Pride Park, it’s not only where Derby County Football Club are, but a lot of other businesses have gone onto Pride Park and it must be responsible for at least 2,000 jobs within Derby. For schemes like that, which local authorities can bid into, they had to be shovel ready, ready to go. So we did do that once or twice and that was very successful as well.
TKB: And were you working with the Department for Communities and Local Government (DCLG) or others?
PM: Yes, that one was specific to the Department for Transport and one that we’d heralded. But there was also one in DCLG and other departments. The City Funding budget, that was available for specific projects, whereas the Regional Growth Funds, Heseltine and Greg Clark were very involved in dishing out. It replaced the RDA [Regional Development Agency] money. Heseltine and Ian Wrigglesworth [Liberal Democrat Member of the House of Lords] were the two grandees, so there was a Liberal voice and a Tory voice at that stage guiding that.
DT: There were the Local Economic Partnerships. They distributed a lot of money.
I remember one big meeting in Manchester, where I met Richard Leese. He’s been Leader there [of Manchester City Council] for about 20 years and he said: “You’re the 13th Secretary of State for Transport.” I remember saying, “No doubt, you’ll be looking forward to your 14th,” and he said, “Not until 2015.” I dropped him a little card after 2015: “Sorry to disappoint!”
DT: You worked for four different Prime Ministers, two at a very senior level. Can you compare how they ran their governments?
PM: I can really only do the two that I’ve worked for at senior level.
By the time I was appointed, it was 12 months before Mrs Thatcher finished as Prime Minister, but she’d obviously been Prime Minister for a long time.
John Major – that was a much more difficult time because we became a minority government and the Tory Party was tearing itself apart more so than it is today over Europe and the Maastricht Treaty.
David was incredibly confident as a Prime Minister and prime ministerial almost on day one; ready to rise to the challenge. I always remember saying to George, and David on occasion, there will come a time where they’ll be friction between the Prime Minister and the Chancellor. But that never actually came. I think part of the reason why it never came was because of the Coalition. Instead of the Prime Minister and the Chancellor, George was always ready to support David, and likewise David for George, against Nick and Danny [Alexander]. I think the quad worked incredibly well in ironing out some of the issues. One of the things I find rather ironic at the moment is that, on occasion, people say: “You’re giving the DUP a billion pounds.” God knows how much we allowed the Liberals to have in those five years. They had their projects and that was alright, because that was a coalition.
David was incredibly confident as a Prime Minister and prime ministerial almost on day one
I think that the present Prime Minister has an incredibly tough job dealing with something that no Prime Minister has had to deal with before, working out our exit from the European Union. I was a Remainer and on that famous Saturday morning, David Cameron has said this now publicly, I said in the Cabinet meeting: “I’d always wanted to live in utopia, the trouble is I’d wake up and find that Europe was still there.”
The trouble is, because no one’s ever done it before, we’re up against 27 other countries, and we’re also up against the [European] Commission and the Parliament. There’s a lot for them to lose, because we are the second largest contributor to the European Union funds. I just wonder if someone was receiving funds from the European Union, if they’d receive as many problems as we are in exiting the European Union? So she’s dealing with that and so far, she’s doing quite well.
DT: You were in the Cabinet from 2010 to 2018 so a long stretch. What did you see of how the Cabinet dynamics worked?
PM: Well, under David, there were the two stages of Cabinet. The first stage is where he was running a coalition with proper consideration in Cabinet discussion to what Nick Clegg does. Nick chaired a number of Cabinet committees for him and Nick would always be brought in when he wanted to speak. But David would soon close arguments down. He’d let those who wanted to speak, but he’d also make it fairly clear when he wanted to move on. So they’d have a couple of minutes, then: “Thank you very much.”
She may be changing, but Theresa was much more listening to everybody’s view. Cabinet would occasionally over run in time because she would let everybody speak, sometimes at length on what they wanted to say. That wasn’t always good for them, but they would. She was much more “I want to hear views.”
Cabinet would occasionally over run in time because she [Theresa May] would let everybody speak
DT: David Cameron had a reputation for letting his Secretaries of State get on with things.
PM: Yes, that is certainly true in certain areas. Although they would want to know everything that was going on and they would sometimes say, “Hey, we don’t like this speech,” or whatever, but usually that was all sorted out before it came up to me. Once he trusted them, he did let them get on with it.
DT: What are you proudest of from your time in office?
PM: The big projects we started at the Department for Transport, which were the Road Investment Strategy and HS2, without any doubt. It was almost four fascinating years. There were occasions where you thought everything was going wrong, and you just wanted to climb under your desk and try to lock the doors. But, overall, I found the time there incredibly rewarding and great fun.
DT: What advice would you give to an incoming Secretary of State?
PM: Make sure you get some good spads, that’s very important, but be clear in your own mind which direction you want to go in. Don’t get veered off track. Providing you’ve got the support of the Prime Minister, you can do that.
DT: What would be your advice on working with the civil service?
PM: Respect them. Make sure that you’ve got a very good relationship with your Permanent Secretary. But respect the independence and sincerity of the civil servants, and of the civil service.
DT: You mentioned earlier you only appointed three people in the department and inherited the rest. Do you wish you’d had the chance to appoint more?
PM: No. I had the same Principal Private Secretary throughout the whole period which was very good because he got to know how I worked and I got to know how he worked. He was very much in charge of the Private Office and made sure they didn’t fail. I was spoken to about assistant private secretaries that came in, but they were from a pool. To me, they all worked very well.