East meets Westminster: ‘Boom and bust is here to stay but hopefully not on this scale’ - MP Matthew Hancock
In the latest in a series of interviews with our MPs, RICHARD PORRITT speaks to MATTHEW HANCOCK
AS the interview draws to a close, MP Matthew Hancock is asked if he will pose for pictures.
“Of course… oh wait,” he says, before grabbing the tablet computer from the table which has been recording the exchange and gazing intently into the reflective screen: “Better just make sure my hair is ok.”
But this is a not a man obsessed with his self-image or succumbing to the trappings of the glow of Westminster politics – he just wants everything to be absolutely right.
Since cruising to victory in the safe Tory seat of West Suffolk two years ago, he has slowly but surely been building a reputation as a serious contender for a big job.
He is liked and respected at Number 10 and Number 11 after a stint as George Osborne’s chief of staff.
But more importantly his expertise is timely – as an economist who has experience in business outside politics, he understands the difficulties faced by people struggling through the double-dip recession and has opinions on how to beat the bust.
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“Infrastructure investment is a big area that the Government has made some progress with – locally and nationally – but can do a lot more,” he told East meets Westminster at Portcullis House.
“Especially getting private investment into our roads and railways. We have campaigned hard to get the bottle-neck at Ely opened up, and for improvements on the railways.
“And then there are the issues surrounding the A14, which is a big challenge – there are two examples of things the Government ought to do.
“We need to be creative about how we get funding and how we get firms on board. Firstly, we need to make it easier to get through the non-financial hoops – getting all Government departments pushing in the same direction and then also financially guaranteeing returns on projects.
“This is something the Government can do without actually spending cash, but people who invest in the project know they will get something in return.”
Mr Hancock speaks with a passion not normally associated with economics. He knows the subject can be dry which is why when he came to write a book about it – Masters of Nothing with fellow MP Nadhim Zahawi – he was adamant about one thing: “I have read enough boring economics books in my time, I did not want to write one as well. We had a rule that we had to have at least one funny anecdote in each chapter which I think we managed to hit and brings it to life a bit.
“The central thesis is that economics is all about human behaviour not just about models and rationality. You would be hypocritical if you did not bring humanity into it.”
The 33-year-old turned to politics after becoming an economist. He realised the big economic decisions were made in Westminster.
But why economics in the first place?
“I became an economist because my family run a small internet company – when you type your postcode into the internet and it brings up your address, they wrote that software.
“And in the early 1990s the company almost collapsed – interest rates were 15% and life was very tough. That made me interested in not just how to run a business but how the whole economy works and how to prevent good businesses going bust.
“If we had not got that cheque in by the end of the week – and I still remember this vividly – not only were my family’s jobs on the line and our house on the line but also the 30-odd people we employed, their jobs were on the line.
“And that left a deep impression on me as a teenager. It makes me personally passionate about building a better economy that does not have these mad fluctuations. So I became an economist, but then I realised that the big economic decisions are made in politics.”
And those big economic decisions are being made now. So how is the coalition doing on the economy two years into its deficit-busting cuts programme?
Mr Hancock is a big supporter of the Government but he admits things have been – and will remain – tough.
“It was always clear that the plan was always going to be very difficult to enact,” he said. “The key issue is whether the deficit is being dealt with. We now know it is down by a quarter.
“Everyone knows it has been tough but there is concrete progress. Of course, everyone would rather the economy was growing as well and everybody knows the reasons for that as we watch what is happening to some of our closest neighbours.
“We have to do everything we can to get that moving – it is doing lots of things but it needs to do more.
“I hope we see growth as soon as possible. In the East of England, private-sector job creation is remarkably strong. There is too much unemployment but it is relatively low compared to the rest of the country – we are well-placed to take advantage of a European recovery, when it comes, but also the massive growth in the rest of the world.
“We are well-placed to take advantage of the growing middle classes of India and countries like that.”
Unlike some politicians who have gone before him, Mr Hancock does not believe you can beat boom and bust. But he does think Governments can do more to guard against it.
“Monty the dog got an offer for a credit card from RBS – the fact they were offering loans without actually checking if the recipient was even human was fairly distressing, and it had a �10,000 limit,” he said. “Now that may be funny but it is symptomatic of a much wider problem of not checking if people could pay their money back before lending it out.
“People sometimes say that the next financial crisis will happen when the last person involved in the previous one retires – I am 33 so I hope to be a bulwark against that occurrence. But I can’t promise it single-handedly.
“One of the best things about being an MP is that when you are in the national policy debate, as I am on the economy, you can relate to what is going on in your constituency.
“The difficulty of good companies not being able to get credit at a reasonable price is something I can bring to the national debate.
“At the moment the system has over-reacted because the banks over-lent and now they are trying to pull it back in. Eventually things will get heated again and people will forget some of the lessons.
“So what we need to do now while the memories are fresh is work to change the regulatory system and understand what it is that causes these booms. Booms are always going to happen – to say you have abolished it is to totally misunderstand how people live their lives and have forever.
“You can dampen these boom and bust cycles but not abolish them – after all, we did not have a bank run for 140 years before Northern Rock and that should be the sort of record we should be aiming for.
“These things will happen but hopefully never again on this scale.”
And what if Labour had won the last election? “If Alistair Darling was still the Chancellor now we would be at the IMF.
“Christine Lagarde [IMF chief] shudders at the thought and she would not have even been directly affected. People understand this is difficult – there is no money left. I am an optimist for the future of the economy.
“I do not have time for those people who think the end of the West is nigh. The rise of the rest of the world is a major opportunity over our lifetimes.
“It is a huge change and it has big challenges but the crucial part of that is that we have to get our economy up to speed.
“We have got to be fit and agile and have the right infrastructure and ensure that our children are fit to compete. Then in 10, 20, 30 years’ time we are able to compete in what will be a very different world.”
Mr Hancock is an engaging, grown-up politician who has quietly got on with being a constituency MP in his first two years in Westminster while slowly, but surely, building up a national profile. He is liked in West Suffolk, and around Westminster it is accepted that he speaks with purpose and poise and has a bright future.
But he is too canny a politician to be shouting about his strong prospect and impressive start to parliamentary life from the roof tops – and anyway he does not need to. Asked if he wanted a Cabinet job, he replied: “I am very happy doing what I am doing at the moment.” And few would doubt that. But there is also little doubt he has the potential to become a minister.
But for now, back to West Suffolk and the day-to-day trials of a shared Government: “The one thing the coalition has not wobbled on a bit is the need to reduce the debt. Of course, there is lively discussion but on the central strategy the Government is united.”