Hello and welcome to the Looking for Growth podcast with me Rebecca Ray and James Newport, co-founder of LFG. We are joined today by Joe Hill uh who's policy director at restate and Julia Williams uh who's co-founder of the Center for British Progress. Um Joe, would you mind giving us a bit of an intro uh to yourself and and what you do? >> Sure. Uh REST's a cross party think tank. We're based in Westminster. Um and we work on public service reform. Before here I uh I worked for an AI company for a bit and I was a civil servant for seven years. >> In what department, Joe? >> Uh in the home office and in then the treasury with you James. >> Treasury. Oh. Yeah. Had to drop that in there. >> And Julia. Um so center for British Progress is the new think tank. I'm one of the co-founders. It was launched this April and we are focused on economic growth and science and tech progress. ultimately we care about human progress and we think that growth and material um abundance is how you get that. Um before that I actually came from the private sector so I worked in tech and also then in like a philanthropy slashfamily office. >> Can I just very quickly ask you came from you came from a private sector in tech and then you you've now created a UK think tank. What what led you to doing that? That's quite a different shift. >> It was in some ways a complete accident. Um, a very happy accident. But I I was going to go to to law school in America and I wanted a um project to run over a summer um because I wasn't really loving my um last job. So I started with David, my co-founder, a campaign based on science and tech policy. Uh so basically crowdsourcing ideas from scientists and technologists and the model was a program that was set up by the federation of American scientists in the US. We saw this worked really well for them and I thought this could be a really fun thing to do for a couple of months before I went off to law school. Um and here I am now having started a think tank. Um and very yeah very very happy to be here and not in tons and tons of debt. um and actually feeling like I'm making a difference instead of uh reviewing Boeing American constitutional law. >> Well, it's it's uh I think American constitutional law is maybe being tested right now. So, it's uh yeah, I uh very exciting to come over. It's just interesting shift. I know a lot of people who have gone from think tanks or government into tech. Bill, Joe, right? You went from straight from the treasury into the um uh the AI company. Uh but yeah, the other way around is less common, at least for myself. So, it's interesting to hear. But yeah, thanks so much for joining us both today. Uh we're going to talk through few topics which should be quite nice and spicy. Um decline of a UK, does it exist? Do you think it exists? Uh if it does exist, what role do think tanks such as yourselves have to play in that? You causing it, ending it, you got take both routes. Uh and then moving from there into okay, what's what's the future look like? What's the opportunities? uh what kind of things should we be thinking about in terms of AI in terms of public sector uh reform how hard should we go on the civil service reform agenda is that that's a that's a big thing big talking point uh and then also spend tax budget should just over a month's time what kind of things should we see in that where does the government need to go further if it does is everything just uh kind of hunky dory uh and if we have time we'll try and put you in the hot seat of trying to pretend like you're the PM and you have six months to is save the country. So what would you want to see? So I'll dive straight into the first of the kind of deep questions which is Julia, do you believe the UK is in decline? >> I guess it doesn't matter so much what I believe, it matters what people in the UK believe and British people definitely do feel like they are in decline. There was some interesting polling looking um across every single sector of public life. How do people feel things are are going? are they improving or are they getting worse? And across pretty much everything from crime uh to the NHS to uh the economy, it's all people have a sense that in all these areas things are getting worse and that maps on pretty clearly with um to the economic situation. Um so we haven't grown since um 2008 really. Um our productivity growth is pretty much flatlining. This is all very well trodden territory for looking for growth people. Um but I don't think people understand how dramatic this has been um when it comes to the living standards of ordinary households. If uh we were tomorrow 25% poorer, everyone would be complaining quite a lot. But no one really thinks about the opportunity cost of what would it be like to be 25% richer. Um, so if if Britain's in decline, um, I also think like we've been here before. 20 uh 1970s pretty tough. Uh, three-day work week. Um, everything bins all around London, the streets literally stank. Um, unemployment really high. And yet then we were able to pick ourselves back up. Um, I don't think it is a permanent decline. And I still am very optimistic, but it would be disingenuous to to to not recognize how difficult of a situation we are in right now. >> Excellent. Joe, same question. Do you feel the same? >> Yeah, absolutely. But I think we can turn it around, right? I think that like uh there are lots of different ways you can kind of feel we're in decline. You know, over the course of your life, you can look around. I started working about a decade ago. in that time is very clear like the pressure on you know your paychecks way higher than it used to be. um you really feel the change in cost, the availability of public services, things like that have just have just materially got better in ways that people can see them Julia's right like people aren't stupid. Um you can tell them that GDP per capita is like 0.1% higher and they'll think so what everything else has gone wrong. Um uh but there are other ways like I you know internationally I I'm probably not the only one here who knows people who are British and who you know grew up here and and um have lived their lives here but uh have decided actually this is too much. They want to go live somewhere else and they have better opportunities and you know what talented people are very mobile. I think that's really challenging. The west broadly is is experiencing lots of similar problems to us but there are bits bits which are bit doing better and bits which are doing worse. I think like uh so I'm gonna become a father for the first time in March which I think is great is very like clarifying on lots of these things and you know I I don't know about you guys I certainly feel um that our generation is uh is staring down the b barrel of like worse off quality of life probably than a lot of our parents generation had certainly um worse off in terms of opportunity and aspiration you know the trajectory that lots of people um were able to have over their lives of the previous generation. It doesn't seem like it was there for most people in our generation. And I think when you're expecting to have children uh or you have kids yourself, that's that's very clarifying, right? You think that um this uh this isn't kind of a game. This is this is deadly serious. >> Yeah, it's it's like almost an obvious question, right? It's a bit of a leading question because you know LFG obviously that's kind of key message we set up around the idea but UK is in decline we need to reverse that but one it's good I think to like check that sense check that with people yourselves and often people who work in think tanks right there's often an element where you guys uh try and be not necessarily you but you as a as an ecosystem uh try to cut through potentially the kind of vibe of a country and actually look at the the raw more evidence and argue from that position and one of the push backs we get for instance online is like oh actually you know crime is going down you know violent crime down etc yes phone thefts are up and bite thefts but you know this is everyone talking about how bad the UK is in decline is is not being true we are we are you know we're getting a little bit of growth I think we got like 0.1% that's technically not you know flat it's is a little bit uh so it's good to like sense check from you guys of like actually and I think what you said at the start which is doesn't necessarily matter what I think but what the sense of the mood in the country is is that generally everyone feels like or you know a significant majority of people feel uh that's what we are and I guess where would where would you guys point the blame for that like who's dropped the ball how many people have dropped the ball uh you know obviously you've had large we've had big events COVID um you know the turb evidence of Brexit and sorting that out. But yeah, is it is it all politicians? Has the has the whole kind of public service sector kind of got a little bit to to reflect on? >> Sure. Yeah. I uh God so many people, right? I think uh >> we we don't not everyone but we we don't have all day. Uh you >> don't want to list all the names. No, I think you know that one day the truth will out and people will be counted but uh you know so many people and and you know it's sure it's so easy to uh point the finger at our our politicians and our political class but you know what um a lot of people talk about the kind of challenges we have getting talent into politics and actually for for better or worse the people we have are the ones who stood up to be to be counted and and and the other people I point the blame as all the people who just stood by and didn't did did nothing. I think um I think people like us do deserve a lot of blame genuinely. Not me personally or Julia. Uh but I do think I I had this kind of clarifying experience. We were both at um Labour Party conference a couple of weeks ago at the time of recording. Uh and I was at uh this sort of private discussion about AI and uh how AI is going to change. And we maybe we'll get on to that a bit later. But I just had this moment looking around the table of thinking, a lot of these people were here talking about this same topic 10 years ago. And if you asked them all what they thought would happen, they would say AI would never get to where it's is today. It would never be able to do things it is today. They paint a very different picture of the past. And and now today, they always thought it would do what it would do today. You know, they've completely changed their tune. Um and the policymaking class does have a lot to answer for. You know, the sort of professional commentator thinker, we're very unaccountable for a lot of the things we suggest people do and the kind of very vibes based ways that the sector, you know, decides what it thinks. It's incredibly mimetic. It's just as group thinky as Westminster and and Whiteall are. Uh I I think I think we deserve a bit of blame, too. And I kind of I found myself really frustrated at this conversation saying, "Hang on, you guys all thought a bunch of different things 10 years ago and some of your talking points are still the same." Like, you know, if you were wrong about the big stuff, what else are you wrong about? >> So, how do you think the the ecosystem as a whole should reform or could reform to to to change? >> I mean, I think uh >> I I didn't want to what that change is. It's great that uh new organizations and more people are getting into it and you know Julia Julia's team are doing a great job and maybe they'll talk a bit more about that. Um it's a small world right? Think tanking in Westminster is very different to think tank in DC. Uh, you know, Duncan Robinson at the Economist wrote something in a recent column about the Resolution Foundation saying, you know, some think tanks in Britain are very wellunded, but most think tanks are like uh three recent university grads in a trench coat or something like that. He's not wrong, right? I mean, we're nine people and um not all recent graduates, but uh like it's a really small world and um a like a bigger world, more diversity in that world, more points of view and more debate and discussion is key because at the moment uh it's not that competitive like not a lot of people are trying like we we lack ideas, right? >> Yeah, I agree. Um I kind of turn the moment I I think about a lot is not um the 1970s when parliament I think started dying. Parliament actually used to make decisions. Um MPs you know their jobs are to represent not just their constituents but to represent their parties to think about governing to hold government to account. Um and then that's not what's happening today. Sorry, what did it why the 70s? What was the turning point point then? >> That's when case load um for MPs increases a ton and that's partially because uh the welfare system becomes more complex. I mean it was creeping but the 1970s is really you really see that explosion. Yeah. >> And then their their their um actual structure internally to deal with that with that those increasing demands doesn't shift. Local government also gets slightly hollowed out. So um you don't end up having social working um social workers doing that work locally. Um so MPs are now focused pretty much on being a customer service desk uh for their local communities and they don't have the policy expertise either individually or in their teams to deal with the complexity of legislation. Legislation is legally complex. It's we're dealing with policy issues that um people study for years and years to understand. Um so you start seeing um parliament being hollowed out in terms of capabilities because th those MP's offices are not focused on governing and then all of a sudden the bills that are going through parliament are pretty much just signing the check to departments to do whatever they want um through straty um instruments and frameworks. Um this means that people that being an MP is actually not that exciting, right? Pay is not amazing. It's good, but um it's also really hard to be an MP. You're getting tons of abuse. you're working crazy hours. Um, so the pay is not commensurate with the the workload. Um, at the same time, you're completely disempowered. All you can do is hope for a ministerial ro role because if you're a backbencher MP, you're a glorified social worker. Um, so maybe not people going into to to politics quality goes down slightly. This is also the party's fault. You know, you should be choosing people not just based off of loyalty and political views, but you know, I think they should know what inflation means or what a bond market is. Um maybe we shouldn't have leaders of political parties that believe you can use hypnotherapy to enlarge people's breasts. Um so that's also the party's um pro problem for not actually looking at these people as highskilled workers and doing the proper motocratic system to get them in. But it's because the job is also kind of crap. So if you have crap MPs, then your commit uh your select committees are a bit crap as well. Um you those select committees also don't have the policy uh advice and expertise u outside of the civil service to to to to really um do the work that they're supposed to be doing. And then you think okay but if I'm become a minister the really good MPs that become ministers and make posit make actual decisions uh they'll have they'll have more power and you know maybe you believe it's like a normal distribution in terms of talent and the best of the MPs are the ones who will end up making the decisions and actually that's a good thing maybe sure but then they become ministers again they have tiny teams um we have the smallest number of um political adviserss in in all of the the G7 countries like smaller than Canada and Australia. Um so you go in, you have maybe let's say like six, seven people um um sorry you have like a diary manager, you've got two people working with you as private secretaries and then couple of policy adviserss and most of them are like political le liaison or um comms people not actually um subject matter experts. obviously the political element um of decision-m is going to be completely hollowed out and you'll have to end up relying on the civil service. So I mean I I think a lot of the problems that you see today comes from a lack of political accountability because the politicians don't know what they're really doing and it's not their fault. I'm not saying it's their indiv it's not like one individual's fault. It's because they don't have the capacity and the cap um to to to know what they're what they're doing. I'm I I'm not too sure on the history of think tanks, but I I can't remember much about kind of when I've looked at political history seeing much about think tanks before the 1970s. Do you think there's been a rise then in in think tanks because of of that lack of expertise with the MPs? >> Yeah, I think so. So, I think um think tanks have a very different role to play um in the UK compared to the US. So in the UK, um I think they're kind of external advisors for for um governments when they want to like get a second opinion on what civil servants are are doing and give more capacity from the outside to that political like very very thin political layer. Whereas in the US, you get a little bit of that. But what you get more of is whole teams of um of think tankers going into government to fill that thick political advisor layer and then as soon as that their party goes out of power they leave and they spend four years, eight years um doing the policy thinking such that when they go back in that's d that's directly what informs that political thick layer. So, this is a huge generalization, but where in the US it's like maybe part of that uh cycle in and out, in the UK, there aren't enough seats to take in all the think tankers. And in any case, um you kind of need the people on the outside that you can tap on the shoulder and ask advice to, but that's not going to work as well because people on the outside like we we do our best, but we don't know what's going on day in day out in the government. Even if a lot of us I mean I didn't I don't have government experience Joe Joe did but I'm sure that things things change quite quickly and you don't have that context. Yeah, this is um I find the like US distinction of the UK one really like interesting of how think tanks are integrated in and you do really have like a far better system what feels a far better system of uh engagement between those units and actual government and how it operates and the thin political layer in our system is like absolutely ridiculous and this is it frustrates me right because a bunch of the stuff you're talking about there is fixable by the government like you can just hire more political advisers you you could just do that if you weren't just worried about like some Daily Mail article coming out at you and telling you Oh, you're hiring those bads. Literally, the person on the street doesn't care how many political advisers you you have. What they care about is are you delivering and making things better for them. And if you do that with a thousand more special advisers, great. That's what people want to care about. But it seems really difficult for politicians to like push that forward. Uh and maybe I'm an outlier in thinking that but I would be absolutely happy if you know if that was the case uh that they hired more more political advisers because what you're talking about I didn't actually know of a case load issue of like the change in the >> MP that would be a more difficult change. It would mean um getting MPs to do less case load work and I think politically that could be more difficult to sell. >> You could up their teams though, right? You could and you could also pay their teams better but you know separately you >> all this cost money though and who's paying for that? >> Yeah. Yeah. We should come on to that. That's a very good point. Yeah. Uh but it feels like structurally if you want better decision if you're going to up workload you need good competent people in there and you probably need to hire and pay more. But you're taking taking on like so that's the ecosystem we have right now. How come you Julia decided that that was the one you wanted to to lean into? You wanted to start the center for British progress. Where's the gap that you saw? Um, every entrepreneurial pursuit starts with incredible naivity. Why? Why is no one doing this? There's a reason why. Um, no, I mean, I think ultimately I I really care about this country. I want to live here. I want to raise my children here. I also care a lot about impact and having an impactful career. And um, I think you can't shut your eyes off to politics. It's it's incredibly frustrating. It's a very depressing sector to be in because um the incentives aren't super clear, right? So, when you're in business, you kind of know what you're optimizing for and everyone else knows what they're optimizing for and you to some extent you kind of know what the answer is. You might not get there, but at least you know what you're going towards. Whereas in politics, it's slightly more um opaque. And that's an incredibly frustrating ecosystem to be in because you're failing all the time and you have all these irrational actors and you're like gosh like why why are you why are you doing what you do? Um but it is the best way to actually have a large scale impact on the country and through second order effects on the world. Um, so if you're trying to optimize for having an impactful career, um, and one that feels really fulfilling where you actually feel like you're you're giving back, um, yeah, I mean, I I I I think it is probably the best sector to work in. And I I I urge people to get more involved. Um because I don't think that there is enough um yeah really talented people from very different backgrounds working in politics and in policy. >> And and Joe, you you were from the other side, right? you're in Treasury uh and you saw you engaged with think tanks and like what what made you want to uh want to go into that? >> So I didn't I mean I it is I don't need to give you the life story but I I I kind of got here a complicated route. Um I uh I left the civil service just sort of a little bit um frustrated and fed up and and maybe a little bit kind of done with working in policy and Westminster. Um you know there were push and pull factors but the kind of apolitical keep your opinions to yourself very hierarchical civil service that I loved in lots of ways just got a bit a bit tricky for me. Um, and I I couldn't quite color inside the lines anymore. Uh, at the same time, I I'd kind of in some of the jobs I done in government started to get very excited about AI. Um, this is all pre- chat GPT. So, people thought I was kind of um fanciful and insane and were like, oh, what's all that about then? Is that like chat bots? You know, is that going to amount to anything? And I I um I thought that might be fun uh and and an interesting thing to do. And like I you know, that was that was right. Absolutely. And um there's a model where I'm still working at an AI company, a sort of alternative future. Um I ended up coming back to Westminster because I thought I got a very cool offer and like it'd be quite tricky to pass it up and couldn't talk about why more, but but also because um country was in a rubbish place. like between the time I left the treasury and and joining a think tank, we had uh the kind of disastrous mini budget and interest rate rises and uh you know illegal migration continued to get off the charts. Public service quality continued to decline. it was kind of obvious we were in for um significant political change and I thought, you know, I'm still just about young enough that I can afford to take a bit of a a pay cut and go and do something fun for a little bit. And and I think like just to echo it, you know, this isn't a careers podcast, I don't think, but uh like like think tanks are really fun. um like putting aside the impact and political and kind of saving the world motivations which you can satisfy in lots of other jobs. Um uh it it's it's a great like it is a great thing to do and it's not for everyone. I recently wrote a a like blog post about why you shouldn't work at a think tank uh because uh we are selfishly hiring at the moment and I thought I'd be able to kind of get it to go a bit viral by telling people the bad reasons to work there. But like you know um I work for a really small organization, smallest one I've ever worked in. Uh we don't have loads and loads of meetings. I get to write a lot. I get to read a lot. I got to talk to interesting people like do podcasts like this. And I get to say what I think. And you know I was in the civil service for seven years. You you don't say what you think. And you know the price of being able to just write and send off a tweet about whatever random opinion kind of comes into my head or write a blog or write a paper about it. That's that's a that's a price worth paying sometimes. the the kind of traditional format as I understand it corre correct me if I'm wrong of of think tanks is kind of policy report writing um talking to talking to MPs talking to people in government talking to civil service about that uh do you do you think there's anything that like is changing in the think tank world about the way that you do that because LFG although we're not we're not a think tank we have a more kind of gorilla style I haven't checked that with Lawrence actually maybe I shouldn't say gorilla style um but uh way of kind of promoting policies that we're a fan of or highlighting things that we are are not happy with. Like I was wondering if that kind of you you are looking at think tanks and is there any changes going on there? >> Yeah. So I think one thing that we do that's slightly different is we work on a commissioning model mostly. What does that mean? And it means that we talk to people in government or in different political parties and we try to figure out what do you actually want like what is the policy demand? Um and then we try to fulfill that. Lots of people think about think tanks as like actually quite literally a a tank where you can sit and think or you know like you >> ruined my romantic vision. >> You live in this like vacuum and you have brilliant ideas and you write this brilliant report and all of a sudden the state is fixed. Um, and I'm not going to lie, sometimes we do have passion projects, and some of them actually have been quite impactful. Um, for example, one of my passion projects was this exceptional talent office idea where it was all about getting some of the best talent, my most talented people into into the UK and actually um having like a uh something something like a um um a head hunting unit for the country. And I kind of thought this was not going to to happen at all. it was like one of my pet projects. Um, and then that's something that's actually well, we'll see if it's implemented well, but at least government said that they want to do the more of this kind of work. Um, so sometimes you you have a good idea or like I don't know if it's good, but you have an idea and it's taken up, but most of the time you need to have those demand signals to figure out what people in government actually want. We've also tried to experiment a little bit more with tools. Um so we're hosting this planning tool um called Scout. Um we've done sort of R&D um grant giving toolkits. Um so more interactive things that civil servants can use from the inside to help them in their policym um and we've got a couple other projects that we're um working on as well. But at the end of the day, um I think it kind of will depend on where in the ecosystem you sit as a think tank. Um there are many many different things you can do to pressure government to have different kinds of policies. Um, and I think actually what LFG does is incredibly impactful and whether or not like even if you're not a think tank, you can have so much influence when it comes to um the kinds of policies that government um picks up. And I think we should all be thinking a little bit more creatively about um the methods. >> I Yeah, I I I I agree. I think like like yeah times change we change with them that you know that there's all sorts of things that the think tanks do now they didn't do 10 years ago and we all do things very differently um uh I I think like you know the sector broadly is experimenting with like much more like short form ways of communicating things much more like blog and article style work uh probably as kind of attention spans decline we need to kind of decline what you know reduce what we do to fit those slightly um but I do want to plug for like I think ain't broke, don't fix it sometimes. And um uh why do I think that? I think we're in the ideas business and actually ideas really matter. Like good, new, original, well thought through, challenging ideas really matter and they're in like way shorter supply than people think. Um it's sort of sometimes like fashionable in Westminster and everywhere else to say, you know, we've got enough ideas. what really matters is kind of execution or something something along those lines. That's a kind of and you know sometimes people even borrow from startup world where they say you know all all startup ideas are kind of equally good all that matters it's 90% execution or something like that and um like uh >> well I guess you need you need um like policy ideas to be able to do the execution. >> Absolutely. Yes. You've taken the words right out of my mouth. I think it's I think it's like no no I think it's I think it's like uh that's that's maybe true like maybe we say it's 98% execution 10% ideas but way fewer than 10% of people are working on the ideas like the ideas are really underpriced um like genuinely good ideas are so hard to come by and particularly new ideas you know that the thing I'd throw back at some of those people um from uh tech culture in particular particularly from kind of venture capital um Peter Teal talks about >> just be careful Joe Yeah, this is we've got a lot to take is like uh the idea that um like heresy is really important, right? That saying often quite controversial things is really important for progress and for making uh for finding between the kind of consensus and the radical different idea, finding some kind of new balance of what the right thing to do is. And I would say um even the think tank sector is incredibly kind of group think driven, is incredibly cautious about saying what it really thinks about things. And um a lot of it is really in the kind of content business rather than the ideas business like just trottting out like groups of words which say the same thing. Uh I call these things like policy memes a lot and I've written about it before like there are these things which you say in Westminster and everyone kind of you know they're sitting around the podcast or they're sitting around the table in parliament they nod a lot and you know James you say we need to be more preventative in health policy and we all nod and the real importance of you saying that. It's not that it advances the debate because most people think that it's that uh uh we all know now that James is a sort of he's one of us. he knows how to do the memes and you know you say uh prevention early intervention I say targeting is going to be key and you nod and you know that I'm one of you guys and I think a lot of the ideas in Westminster kind of come from this world right of just um ill thought through illconceived kind of they're mimemetic in some way right people are saying them just for the sake of saying them so um that's the bit of the think tank culture I think we need to keep and we need to resist the slide into a kind of like sometimes client journalism. I think it depends like I think different think tanks have different models. There are kind of more insider focused ones and certainly the party political ones right will always be a bit more kind of in their in group and working with the political parties that they support. Um that's >> the communications element as well and you're trying to get the party and it's not just >> totally and for for and for those of us that are more cross party like I think we have more of an opportunity to kind of speak our mind equally. I like I I don't think that necessarily means the quality is higher in many of them. >> You you've kind of set me up for two uh two follow on questions. One to go into our next stuff. We want to talk about public services for future and I really want to get into that. But also you've touched on a really key topic which I felt very much when I was at uh the labor conference and events around that which was this issue of like you know you're talking about ideas and the importance of ideas uh and the place you'd hope a lot of those ideas were being discussed were party conference. The vast majority of my party conference experience was about do you think the PM will still be in a job in a year? Do you think Rachel Reeves will survive after the budget? Do you think X Y and Zed? Oh, you know, Andy Burnham, look at his failed coup attempt. Like this is what people like talking about and liked and that. And then we had discussions which were meant to be policy focused were ones where people were using exactly the kind of terminology used. Oh, we need to make sure this scheme does X and oh yes, we need to make sure it does this. Yes. And everyone nods. And then I throw a spicy comment in and everyone gets a little bit irate because they're like, James isn't playing by the rules here. >> And they say afterwards, James, you're a bit punchy. You got to be Um, but it's like this should be a delivery point and instead it just feels like everyone's coming around for a nice little uh gossip. But please like you are think that you're the guys that run events there, right? You're the guys that are there to lobby and to push the ideas. Is your experience better than mine? >> I mean I I don't think party conference is about policy formation. It's this like um instance where you know you all go around the table and you hold hands and you think we are a group and we're here to solve a problem. No wor like let's not think about what the problem is. It's a problem. Um it's all about like I guess creating in-group and outgroup dynamics. Um and like maybe that's fine to some degree. Um like to be able to identify your people. um and to do this like strange ritualistic uh dance. It's you do have useful side conversations at conference. I don't think the roundts and conference are where you're going to get policy made, but I kind of think that's okay. Like that's not what it's trying to do. Um, I I still find it incredibly useful to catch up with people individually and to meet new people and then you'll do the serious policy thinking afterwards, but you know, when you're when you're in the Tik Tok reception watching Emily Thornbury uh do her fantastic DJing, I'm not thinking, oh, you know, I'll go up to her after this and talk to her about welfare reform. >> Same for you, Joe. >> Yeah, I know you were busy period. >> I can't I can't advance much on that. I think you're right. I think that like um in another in another question you might be asking us about talent in politics right and we'd be saying well the parties need to be much sharper about working out who their leaders should be and how they select those people in the sense gossip right plays an important part in that like I I do really believe that who leads these organizations matters um I believe how they select the future people in that matters do I think that like you know a drunken in conversation that spectator reception is going to change that like probably not. Uh but um it feels fine to me that political parties spend a lot of time on that. I think you can get there's fall on both sides like you can get a bit of um uh a good policym discussion going at party conferences with the people who are interested in that and I encourage you all to come along to our events next year but uh but for sure it's a political it's a party political environment right it's going to have a different tone to Westminster. >> Very fair. Okay. I won't I won't probe further on that because there's lots we could discuss and uh some of it will just be my own angst and anger at traveling so far for for that. But anyway, uh let's go into building public service of the future. You guys obviously have a business of these ideas pushing what public service should be. Uh Becca, do you want to take us away on the kind of first strand of that? >> Yeah. So, how radical do you think civil service reform needs to be? started started off quite open but >> sure yeah I think I draw like I draw some distinctions here between and maybe these are academic people like civil service reform wider public service reform and then like the the shape and size of the state right and we might we might think different about all of those things. um uh civil service reform kind of used to be this very nerdy techy concept not many people were interested in and is now only like a slightly less nerdy and techy concept that some of us are interested in. Um but it's my day job and I spend a huge amount of time on it. Uh and I think it's an area we need to be really really radical. Um because you can look at the history of failed attempts of civil service reform in Great Britain and read reports by think tanks, civil servants, ministers, independent commissioners um which say exactly the same things as uh we still say today and they stretch back decades and centuries, right? And um there is clearly a kind of profound state capacity issue uh and in a very overentralized country like Britain is where our governance is so focused on like a small number of people in SW1A. Um it really matters how good those people are and where they come from and what they do. Uh and with big problems there which we basically haven't um solved. you know, the civil service today is is a a relic of decades of trying to reform it and failing. And I and I think that means you should have a you should take wherever your your sort of starting point is for what the right answer is and then try and be I don't know like 20% more radical than that because uh ambition always gets watered down. Changes always get watered down and you need to you need to take a really a really kind of punchy approach to doing it. Have you got any interesting like favorite or I guess least favorite attempts of civil civil service reform? >> It's hard to say because like have any of these ever really been a success or failure? It's just it's very hard to judge. I think I think not. I've got loads of favorite and not favorite ideas, but in practice like these organizations look like basically like they did decades ago. Um and that's a real failure, right? the world's moved on, things have changed. Not everything needs to change, but but good god, these ones do. So, like you can pick any of your favorite reports. Um, but in some sense, until recently eminent think tanks based in Westminster started writing about it. Of course, those are the best ones. Uh, no one's really managed to crack them up. >> And what about like the wider public service? I know you touched on three kind of tenants, but wider public service. So I know you've talked before Julia about like examples of regulations which fail to allow new industries to start. So like how do you see and we'll go into AI in a little bit but just like existing systems of the public service whether it's from regulations and bodies that have been set up. How do you see that these things need to reform? Do you think they need like substantial change or is it just like more of an evolution? >> Yeah. So I I I I I like to think that in the problem often isn't the individual. Sometimes it is the individual, right? Sometimes some people are like really should be are the problem. They are the blocker, but often it's the incentives within the system and the system itself. Um, and I think this is I was talking to someone the other day about state capacity and civil service reform. I'm not going to use any names, but he was telling me about one particular service servant who was incredibly um entrepreneurial in one job. Um was able to kind of reform the entire department, change um tons of of of uh the people within the department, cut lots and then moved into another position where the incentives were slightly different. Huge blocker, not getting anything done. uh stasis, entropy, same exact person, no personality change, but the incentives were different. And I think you can >> Do you know what those incentives were? >> Oh, I mean like promotion promotion would be based off of this, performance reviews be based off of this, and then um incentives slightly changed. Um, and I'm sure Joe has very particular ideas on um, like the HR side of things when it comes to to to how civil servants are um, are promoted and incentivized internally. But um, I think you can then take a step back and have that same analysis when it comes to institutions. Um, so for every from like um, every everyone from a regulator to a department will have its own set of incentives. The regulator's incentive for example is to make things as safe as possible. That's their job. Um but currently we don't have any built-in incentive structure for how fast can you get um a clinical trial review through uh for example or um how many nuclear uh power plants are being built. Um and like that's not built into the incentive structure of those of those bodies. And similarly in you know for example the department um Desnes their entire job is um and like on uh climate and energy no trade-offs at all. They don't have to think about trade-offs. It's not their job to think about trade-offs. So when they see people saying we're actually going to increase demand incredibly high by adding all these AI um data centers like obviously they're going to say actually no because uh we have a different set of of of um aims. So yeah, I mean I I I do think that um when it comes to uh both how individuals uh work within thei the civil servants, how regulators work within a system and then how departments work together. I like to think a little bit more about how the incentives are set up and less about who's in there. I mean that's why I think that um >> but do you not think that if you change the incentives in a lot of cases that would be to civil servants quite radical reform if that makes sense? >> Yeah, maybe. But I I mean I I'm not anti-ra radical reform, but I think radical reform needs to be adding capacity. I think the failure of um Doge for example or the failure of the slash and burn model where you're not building cap um the right kind of capacity to to then fill it is you don't fix the problem, you create new problems and you create holes and you realize that it's not it wasn't because of the people that were in it. It was because of the the structure of the system. >> Yeah. No, I I I very much agree with that. like I often uh it's like a blunt blunt approaches of X we're just going to cut X number of civil servants and I think like that is uh is is failing to miss a point of like you actually need to discuss like what you want from a civil service what you want it to achieve and how are you going to incentivize it to deliver that and then work out well how many people do we need and what can we do and how can we streamline uh because you know I've worked with fantastic civil servants I mean Joe uh was one of them uh at the time of treasury but there's a you know bunch for services who I think are great, some who I think yeah probably should be moved on, but like you know they they are the victim of your own structure you're set into. Um and sometimes there were teams who are hyper effective uh not necessarily for the right reasons but they're very very effective because they were driven to deliver um something in that area and like this comes back to your point as well. Your Design was great, right? because it picks up on your your big kind of piece of was it this year or last year was on >> everythingism. Yeah. Sure. >> Yeah. Um and like that is a real structural problem, right? Like that's you should if you have a department which is actually at war of itself. >> Yeah. Like I think it's like I there's so much in there to unpack and um I think the you're you guys completely right about the incentives and and the kind of um ideal you know we should design these things top down with a sense of what we want them to do and how to make it work. Um I think where that has fallen foul in the past is it's exactly the sort of thing that the senior civil service loves as an exam question say oh very good very good minister very wise let's go away you know it's time to do our single departmental plan anyway so we'll we'll just go away and we'll six month HQ review and we'll really just sort of bottom this stuff out for you and there's a lot of PowerPoint and actually nothing much changes and you have to really think about the kind of the fundamental incentive incentives that are going on here. We have a civil service today which is significantly bigger than the one I joined in 2015. You know over 100,000 people bigger. Many of those jobs are kind of frontline public service jobs and you know the way we define the civil service which also includes prison officers and border force officers and um HMRC tax inspectors is a bit weird but uh loads and loads of those people are also doing exactly the same jobs that you and I did as kind of policy advisers in central government departments. I think the quality of both public services but also like policy advice minister's ability to deal with issues has has gone worse in that time in most areas some exceptions and particularly in the AI and tech space where we've built a lot of capacity which just just wasn't there 10 years ago and it's great that it is uh and and so sometimes you need to take I think in the civil service reform some quite top down and quite blunt approaches because the machine is kind of like AI it has emergent properties to it and I think it you can there are some uh people who in the civil service who I think are are quite kind of um savvy about these things and are really playing their own game but most of the time it is kind of we set up these machines no one's really in charge of how they work and they just have these emergent properties which we can't really explain they kind of generate bad outcomes and very riskaverse behavior um and worse uh worse delivery of the public's priorities um without anyone ever really planning them to and so Some of those like big uh big levers we need to pull do include creating a system we can just get rid of people if they're not performing. Um it's a huge issue in the civil service. We have run a couple of big surveys now of civil servants themselves um which show that like about 7% of civil servants agree with the statement the civil service manages poor performance well. Um and it's you know everyone else is either don't know or in the majority of cases disagrees. Um it's a huge problem. There are some departments um the department for transport and the treasury where we worked which um over like a 4-year period uh uh removed 0.4% of their staff for poor performance. It's just it's miles order of orders of magnitude out of kilter with what high performing organizations do. You can't tell me for a second that the thousands of people that do those jobs are really high performing and capable. Um and you have all these kind of weird incentives to either just pass people around the system or or as we are now as the government are now. Um rather than actually performance managing people just offer the whole civil service these very widespread uh uh voluntary exit schemes which are kind of if you want to leave we will pay you a month of salary per year of service up until like up until like 12 months um to leave no questions asked. And in theory some questions are asked but in practice no. Now, this is like the worst way to manage your workforce because the people who are most likely to leave are your best people who think they can get a job elsewhere and they think, "Oh, I'd quite like my job search subsidized by the taxpayer." And the people who are most likely to stay are the ones who know that they're not very good. They didn't do much work and if they go anywhere else, they're going to have a tough time, but the civil service will let them coast along. And I think this is for the public a really toxic issue. Actually, the public aren't daft. They see these stories about civil servants who've got three or four jobs at the same time working somewhere in Reading and they think, "God, this isn't how is that possible?" But it's also awful for civil servants, right? Like why would you show up to do a really good job if you're not going to see really any change in your career trajectory and prospects compared to someone who is just clocking in, not even doing the bare minimum HR have had them on a performance improvement plan for a year and a half, two years, like why would you bother? >> That's your team as well, right? That's who you're meant to be working with. >> Yeah. they're the ones who end up carrying the cost. So I think I think some of this stuff uh you know in an ideal world you redesign these systems bottom up but top down you just pull some kind of quite big levers to get the incentives right and the behavioral change that we all want to see. >> Sorry please. >> Yeah no I I mean I I I completely agree. I think that's where um actually we his historically the the British civil service was um when it when it was was started one of some of the one of the best in the world because it was meritocratic among a sea of government structures that were based on patronage and um on nepotism and then there was this uh report the um north co Yeah was north exactly and then um that that the more meritocratic system came out and I I mean I kind just don't believe that the current civil service is very much meritocratic like it's better than many >> but if you're not actually firing people who are poor performers if you're um to be frank if your salary raises are not just based on performance and on based on other factors >> I think the core principle at the heart of it which applies to all other kind of public service reform and I think we've forgotten in this country is that is that public services are for the public not for the services right um public sector jobs are not an extension of the welfare state. They're not a kind of way of um redistributing wealth or giving people comfortable employment. They are to deliver the things the public wants. And I'm I'm all for higher pay in loads of areas of public services, better terms and conditions, better treatment. That the way that um the buildings we ask some public servants to work in, the quality of like respect they get is terrible. The civil service, you know, you still can't get tea and coffee near where you work in most government departments. you got to go out and buy it. It's it's a complete joke, right? All for the cost of a few pennies. Um uh but that is all a means to an end of really high functioning public services. It it doesn't have another end to it. I I think we forget that sometimes and it's it's a broad principle we should be applying. >> Yeah. I um uh I'd come back on your point of like merit based appointments. I just don't think that's what we have anymore at all. Um, I think that we're riding high on that being what we what we were known for. >> There's an interesting bit of history on this, for what it's worth, which I'm going to write about quite soon, which I think is um goes to your question of like, do you need to burn it to the ground or not? Like, how radical do we need to be? which is our um we call civil servants I think this has gone out a bit out of fashion now but in this country we used to call civil servants mandarins because um the uh system of kind of standardized examinations and meritocratic recruitment that we put in place in the 1800s uh was based on the kind of longunning set of sort of civil service exams in imperial China which is one of the like longest running institutions in all of history right that's been going for thou well well over a thousand years and kind of has a modern incarnation under the Communist Party. But actually, if you dig into the history of this, it's it's so fascinating because it was never just one set of exams. And every every so often you see this pattern keep happening happening in Chinese history of a new dynasty comes in and they go and you get a new emperor and they say, um, uh, these exams, they've got, you know, they've become kind of corrupt. They don't, they're not really meritocratic anymore. They're a bit useless and we're not getting the quality of people through, you know, it's meant to be. um regardless of your background but more and more children of high prominent high you know prominent civil servants are getting to the top so we need to completely scrap the system and have a new one and this cycle kind of repeats and repeats over time and I think it speaks to what Julia was talking about earlier about like institutional entropy like you can't ever really I think design these systems perfect once and expect it to stay like that forever things always degrade a bit over time and one of the things that's important about campaigns like LFG is you guys pushing the the kind of renewal and revitalizing ization and I think it's such a core message on other bits of public sector reform too like when we invented the NHS in the ' 40s uh but they said this is a revolutionary moment right that was at the heart of the kind of beverage rapport um uh and the makings of the modern welfare state and now we're like oh no that's sacred you could never touch that or change that the version they built then in that revolution can't ever be undone that's true of all our public service institutions at one point these things were you, but we act like they're kind of now forever. >> Yeah. And that's uh I know we're we're coming up to time, but I really want to focus. So, we I'll drop the awkward if you were PM uh or PM advisor segment. Uh and if people want to hear what your views are, I'm sure you'll, you know, they should follow you on X or LinkedIn and visit your website because they'll get the details there. And instead, let's spend the last few moments on the topic of AI. Yeah. >> Because that hooks quite nicely into this point of like NHS was built as the example you use after the war this kind of massive public service. Well, the state obviously expanded in that time time when uh kind of we just came out this huge kind of world end world changing um context. Uh and now we've got AI. I'm not saying it's the same kind of context, but we do have this transformational piece of technology and you know depending on who you believe and your views on different timelines and things you know we've got the AI labs actively firing for um kind of artificial general intelligence levels. We've got heavy investments by the government both in terms of infrastructure through the new kind of announcements on US uh data centers and and AI infrastructure being provided etc. Uh but also a lot of stuff being kind of touted as it's going to solve a bunch of our productivity problems because we're just like you know everyone will have an access to we're not chat GPT because we can't you know or any other external LM we have to build it ourselves or something strange but you know basically they'll have access to chat bots they'll have access to AI and that will uh automate away our problems do you guys I mean there's two two parts to this one do you think we are preparing for underwhelming results like do you think there's a risk the fact that, you know, AI is going to not not achieve this and we're going to be left hanging. Uh, and on the flip side, let's say we do get the transformational one. All the stuff you just talked about here doesn't fill me with massive confidence that we're going to have government structures to deal with the ramifications of that. You can take it on either either direction you want. >> Yeah. So, I don't think we're prepared for any version of what AI is going to bring. Whether you're thinking it's going to be a godlike creature or like lead to even 1% productivity growth and the kinds of changes in in the economy that would lead to that. Um, and I also don't think that we're taking it seriously enough. um if we were taking it seriously enough, we would be working really hard to get um it built in the UK. Um but see, you know, it's it's literally illegal to train an AI model um and a large language model in the UK because of our copyright laws. Um so even Google Deep Mind, people say we have we have it's an American lab, but at least they've got offices in the UK. They do not train in the UK because it would be illegal for them to train in the UK. Um, we've got sky-high energy costs. Um, and we're not we're not really thinking about how AI is going to increase our demand for energy and trying to adapt to that. Um, it's in planning. I don't even want to start in planning. They try tried to build a home much less a data center. Um, and then I don't think there's enough intellectual work being done on the social ramifications of AI. Uh, so I think that there will be labor labor shocks. Um, and if we don't figure out a way where people buy into the kinds of positive impacts AI will have on their lives once they see this labor shock, they're going to be up in arms and on the streets saying we shouldn't be adopting AI. Now, that would be the wrong response. Um, historically, how fast you adopt a general purpose technology is incredibly predictive of your living standards 20 years on. So there's this really interesting economic paper that I always cite that says how fast you adopt um a technology can explain up to 25% of the in of the living standard and GDP divergences between countries uh 20 years onwards. Um so uh diffusion is incredibly important, adoption is incredibly important, but if we don't actually deal with um the the sort of inevitable backlash that's going to to come due to the labor market effects and also at the same time understand the um the the essay question, how do we get firms and individuals to adopt AI faster, which is is is actually an academic question that's not being answered. We don't understand technology diffusion. Um even even the academic literature is unclear on this, then we're going to be far behind. Um and I I can talk to you through some of the ideas that we we've been developing, the things that I've been thinking about, but ultimately it it can't just be down to to to think tanks like ours to be answering these questions. Um, and if there isn't an appetite in government, um, and outside of government to be taking these qu these questions, um, and our answers seriously, then we're not going to be, I think, um, adapting well to to what could be one of the the biggest shocks um, that we see in our lifetimes. >> I just, yeah, I completely agree. I think we're sleepwalking on it. Um, I think there is maybe a little bit less complacency today about the scale of the impact AI will have than there was before chat GPT was released in a public beta. like there's a little tiny bit less because people um can use it and people have some sense of the implications particularly uh deep fakes and social media um ones uh and you know like people of my parents generation are able to use it and engage with it on their phones and so like people are loosely aware but the institutions are just not prepared at all for for what this could involve. Um, and I think like it's so hard you're kind of making these these finely balanced judgments about the future and what it'll involve. But, uh, you know, 10 years ago, 15 years ago, betting on this was a very contrarian belief very few people had. Most people said, "Oh, you think AI is going to be big? This stuff is can't do anything. It's terrible." They thought, you know, it can't beat those, um, uh, recapture, are you a robot thing, so it's never going to amount to much. Um, and a small number of people did really bet on it and bet their careers on it, and they were dead right. Um, they're still right. And those are the people who think it's going to have a huge transformative impact. The rest of the people, I was talking about this earlier, right? Like I think, um, I remember A-level philosophy on some of this stuff, and there's this god of the gaps theory. I don't want to spend too much time talking about this, but like the god of the gaps theory of religion, it's like um you know, as we learned more about the world, we uh redefined and redefined the space for God to be to be a smaller place. You know, we said, "Oh, well, why does the sun rise in the morning?" Oh, you know, religion has an explanation for that. And then when we learn that the earth orbits the sun, we place that. But we say, "Oh, well, who makes who makes the sun? Oh, God makes the sun." I think there's something about this with AI like there are all these people out there who say wow that's not really intelligent is it? you know, if it was really intelligent, it would be able to do X. And then as soon as AI can do that, it go they go, "Oh, no, no, no. That's not that's not actually real intelligence. That's not general intelligence. General intelligence be able to do something else." It it's blowing through all the benchmarks and it continues to the sake of the transformation is just going to be profound. It's going to be profound and uh governments, ours and others are hugely underprepared for this. It's the single kind of biggest blind spot I think in what our future could look like. So pretty quickly, if you could get the government to to reverse to to change the attitude, right? Where would you say it to focus? Like would it be we need to have our own internal our own domestic model because national security reasons bulldo through copyright law to do that? Would it be actually you need to get this diffused and you need to get everyone using it and trained up or Yeah. Where would you guys say we, you know, we we have to prioritize, right? You can't do everything. So where where would you guys say this this effort needs to be? >> I'm on team team diffusion, right? I I I think we may well have lost the lead now on frontier model development and the structural facts about our economy are going to make it very hard for us to be anything other than a sort of downstream adopter of US developed frontier technologies. I think people who worry about the US cutting off our access to some frontier models, God, if we're really in that place with the United States, we've got much bigger problems to worry about, right? And that's a real that's a very serious point. I think people underestimate how reliant, you know, we don't have we want AI sovereignty. This country's got sovereignty on barely anything about our economy. We're an exporting trading nation. Um, for me, it's diffusion. And I don't I don't know what it looks like. I think the ideas Julia is talking about are really sensible, but um be it in the private sector, in the public sector, we we've not worked out how to be a fast follower of technology adoption um in this economy, usually because we've been at the frontier of previous technological developments. Um we've still not really adopted many of the benefits ourselves, but that's the bit we need to figure out. >> Yeah, I mean I agree diffusion is important. Um I do think that the UK has an opportunity when it comes to um open source development. I also I just like yes we probably won't be building the next frontier AI lab but why would you make that impossible um if you can just make some things legal such that if there is a next technology paradigm which might happen right um and we might have an algor um uh algorithm breakthrough that means that it's not going to all be about scale. Um we might figure out that you know these these chips that are um designed for computer gaming actually you need like we can figure out a better design of chips that's actually made for um artificial intelligence uh that will be much better at than parallel processing power. um like yeah so be like yeah fine um pro maybe you think probability is relatively low but like you should probably hedge and still allow that probability to be uh to be like within the realm of of possibility. Um I do think we're very reliant on the US and we historically always have been reliant on the US. I think it is false to sort of yeah it would be unwise for us to rest on our laurels there. It's not they have shut things off in the past. So we sent half of um we sent incredible number of scientists to go build the nuclear bomb. Um in some ways it was a British US uh cooperation and yet uh after the bomb was built uh that our access was cut off and we had to start over from scratch and build our our own bomb. Um I yeah that isn't to say that I don't think we should be collaborating with the US or that I'm hawkish on the US. I'm not. But I do think it's important for us also to think about our own capabilities um and be a little bit more cleareyed about the the geopolitical reality that that that we live in. Um and I I think having a strong sovereign state should still be the aim. Um while remaining open I that that's historically we what we've always um done. Um and kind of the strength of of of Britain has come from its ability to be a trading nation. I completely agree with Joe. Um, so yeah, I I I I do I do think diffusion is important, but I wouldn't shoot ourselves in the foot when it comes to actually having our own capabilities. And I would think a little bit harder about leverage and the kind of leverage that we're able to command in this new economy because right now it's we pretty much have no leverage other than the talent. We have incredible talent. Um, but if you look at the rates of people leaving, >> Yeah. That's just not great either. >> Yeah. I know. Excellent. Well, thank you. I think that's like a great a great thing to finish on. And uh I will give you uh I I'll plug LFG a couple of LFG items. So, obviously we got make or break uh a big event which I hope you're both coming to. >> Obviously, all your all your other team members are coming to. Yeah. Yeah. Yeah. Those not watching video t they're nodding in agreement as should you listener. Uh, so you can you can meet them in the flesh and you can uh you can press them harder if you think me or Becca haven't interrogated enough. You can uh interrogate Joe or Julia in the room on the 23rd of October in the evening. Uh we're at the Indigo at the O2 uh LFG make or break. So make sure you get your tickets for those. Um but otherwise I will let you guys have a a kind of final statement. If you want to flag anything coming up from your end in terms of publications or things people should look out from from either of your organizations uh feel free to say now. >> Yeah. So we just published our growth survey. Um once a year we survey uh hundreds of economists and ask them what does the UK need to do to grow? Um and we we just published that and it's incredibly interesting. Um there's actually remarkable consensus. It's a good to-do list for government in my view. Um we also just published a paper on AI growth zones uh which gives a little bit of technical detail on a lot of the things that we talked about today. Um and we will be doing lots of more of um public events. Um we're going to try to maybe build a little bit more of a community around CBP. So, um would love to see some of um the LFG crew in in those events, too. >> Uh I I'm going to plug a specific bit of recent research which um uh some of my colleagues did on the use of robotics in surgery in the NHS. It's such like an underrated topic, but I've been amazed by what they found. Um uh which is that like uh the use of robotics, this is these are human operated robotics. Let's forget AI for a second. Um, it it has these huge like safety and recovery benefits because robotic instruments are much more precise and don't need to like it can articulate in ways that a human hand can't. And so it means that um like on average people's recovery times from surgery are much quicker than they would be otherwise because you need to make like much smaller incisions and like jiggle bits of people's body around less. I thought that was amazing and this is like such an underrated thing. We need need robots in every surgery department in this country. So, um you should go and take a look at that on www.re-state.co.uk/publications. Uh but, uh uh we've got loads of upcoming work uh and and you know, if you are a massive civil service reform nerd, as I'm sure many of your listeners are, um then we have something coming out very soon on public procurement reform, which is about as techy as it gets, and it's gonna very very I don't want to spoil it for you, but you know, maybe we can come back and talk about it at a different time. >> Sounds great. Thanks guys for coming on. That's been wonderful. >> Yeah. Thank you so much.