IT wasn’t meant to be like this. If the Tories had won an outright majority on 7 May, Philip Hammond would have gone to the Treasury as chief secretary and implemented the toughest spending cuts in a generation. As part of the coalition agreement, however, he had to step aside for a Liberal Democrat and make do with the top job at the Department for Transport.
When we meet on the construction site for the Canary Wharf Crossrail station, he appears to be having trouble adjusting. As soon as he leaves the safety zone, he whisks off his scruffy steel-capped boots, replacing them with a pair of highly-polished dress shoes; later he’ll complain about the flecks of mud on his sharp blue suit. Of all the places Hammond thought his ministerial career would take him, a mucky, windy building site can’t have been one of them.
Does he like the new job? “Well it’s very different,” he laughs. “I’m the gamekeeper who’s now turned poacher, put into bat to defend my budgets against the Treasury.”
Despite the eleventh-hour upset, Hammond has already become one of the coalition’s most high-profile cabinet ministers. His decision to scrap the third runway at Heathrow was the first big government announcement, not least because it was just about the only thing the Liberal Democrats and Tories completely agreed on. They also ruled out further runways at Gatwick and Stansted, effectively putting the break on any real expansion whatsoever.
That decision put him at odds with the majority of businesses in London, not to mention airlines and airport operators, but Hammond is unrepentant. He dismisses claims from British Airways boss Willie Walsh, who has threatened to expand in Madrid instead of London if his tie-up with Iberia is successful.
“It’s not up to me to tell Willie Walsh how to run his airline, but I think you’ll probably find – and common sense will sort of suggest – that Heathrow is the place that most British Airways passengers want to come to. Barajas, charming as it is, will not be the first-choice destination for most of them,” he says.
Hammond assures me the new government is not “anti-aviation”, however, and has set up a task-force to investigate how to improve airports without adding huge amounts of extra capacity.
“When the agenda was about a campaign for a third runway, there was little incentive for the protagonists – the airlines, the airport operators – to engage in a discussion about how you make it better without the third runway,” he explains.
“Now the third runway’s off the table, I think we’re going to find a willingness to engage in a real debate about how we can make the airports work better.”
A stickler for small details, Hammond thinks a raft of incremental changes will provide part of the answer. Airlines could boost passenger numbers by using larger planes, he explains, while runways could be managed more effectively.
Hammond is also planning to change the way airports are regulated, with greater incentives for operators that cut queue sizes and satisfy customers. “It’s important that we make Heathrow a world-class airport that is attractive to passengers, a place that people want to fly into, a place that airlines want to use,” he says.
Others seem less certain that this kind of tinkering will have any real effect. One member of his own task-force tells me that Heathrow will remain a national embarrassment unless the government takes radical action.
Its most eye-catching solution is a new high-speed railway that will connect London and the South East to the North. “It’s a big part of our plans,” he says. “We’re committed to a high-speed rail network in the UK, initially to Manchester and Leeds.”
“The key element is that there must be a connection to Heathrow, creating alternatives to flying for domestic journeys and probably for some intercontinental journeys as well, which could be diverted onto rail.”
As befits a government that is keen to burnish its environmental credentials, Hammond has also given London railway Crossrail his full blessing, saying the government has “no plans to reduce the scope of the project.”
That said, Hammond is determined to drive down the cost of the £16bn railway, £5bn of which is set to come from his departmental budget. He has a tendency to use technocratic language – peppering his sentences with phrases like “value engineering” and “risk management” – but this masks a ruthless determination to cut waste and get the best deal for the taxpayer.
It is surely this kind of approach that guided his business career, which spanned pharma, oil and gas, healthcare and housebuilding. Media reports say he is the richest member of the cabinet, with a fortune estimated at over £7m.
As Hammond talks about “sweating assets” and “squeezing the juice” of private sector contractors, his eyes take on a steely gaze, and it’s easy to see that he would have been perfect in the role of chief secretary. (At a speech to City lobby group London First later, one member of the audience will describe him as “tailor made” for the Treasury job).
If he harbours any resentment over having to make way for a Liberal Democrat, he doesn’t show it. And like most front-benchers, he is a full convert to the joys of coalition government.
“Clearly I was expecting – hoping – to wake up on 7 May and find we had a Conservative majority government elected. That isn’t the way it turned out. This is a democracy so we have to listen to what the people have told us.
“The conclusion we’ve reached, which I’m sure history will judge to have been the right conclusion, is that the correct course of action is to form a coalition between two parties that actually agree on many things, particularly the need to tackle the fiscal deficit.
“Not to have done so would have risked plunging the economy and the financial markets into a chaos from which they might never have recovered.”
Perhaps Hammond is so positive about the coalition because the work he did in opposition was so far advanced that his successor, Danny Alexander, has little choice but to continue along the same path. He seems to suggest as much himself.
“I hope that progressively over the course of the last few weeks, and then through the Budget and into the summer, the message that business will be getting is that everything we talked about in opposition is indeed being delivered,” he explains.
And if the noises coming out of Cameron’s inner circle are anything to go by, Hammond is more at the centre of things than his job title suggests. My hunch is he won’t stay at Transport for long. Watch this space.
CV | PHILIP HAMMOND
Education: State school in Essex
Philosophy, Politics and Economics at University of Oxford
Before Politics: Wide-ranging career in business at small and medium-sized companies in manufacturing, property and construction and oil and gas.
Political Career: 1997, MP for Runnymede and Weybridge; 1998-2001, Shadow Minister for Health; 2001-02 Shadow Trade Minister; 2002-2005, Shadow Minister for Local Government; 2005-2007, Shadow Chief Secretary to the Treasury, and Shadow Chief Secretary to the Treasury; 2010, Secretary of State for Transport