Politicians tend to make decisions based on ideology, says the former minister – especially his old boss Michael Gove. Now he hopes to change things via his thinktank

David Laws has had three careers. In the first, lasting seven years after he left Cambridge University with a double first in economics, he worked in the City of London as an investment banker, getting very rich as bankers do. In the second, lasting 21 years, he was a Liberal Democrat politician, aspiring to high office as politicians do. The prize came in 2010 when the party went into coalition with the Tories and Laws became Treasury chief secretary, the chancellor’s number two, with a cabinet seat. Alas, after 17 days, the discovery that his parliamentary expenses claims involved “serious breaches of the rules” compelled his resignation. He returned to office two years later in the humbler role of schools minister under Michael Gove.

Now, aged 51, having lost his parliamentary seat in 2015, he has started a third career: as head of the Education Policy Institute (EPI), a thinktank launched last year that aspires to the august role that the Institute for Fiscal Studies plays in economic policy.

If you move from the worst academy chains to the best local authorities, there is a massive improvement in performance

Like the IFS, Laws’s institute will, he tells me, be “data-driven, influencing debate by the quality of its analysis and its quantitative skills”. The quality of education policymaking is poor, Laws argues, and the institute wants to make it better.

Was policymaking poor when he was schools minister? “Yes. A lot of decision-making is not based on evidence but on hunch. I had little coming to me from civil servants that presented the latest academic evidence. Too often, they just serve up practical advice about how the minister can do what he or she wants. But politicians are prone to make decisions based on ideology and personal experience.”

Would he be talking about his old boss, Michael Gove? “All politicians have that weakness, but Michael particularly so. Justine Greening seems a more pragmatic, nuts-and-bolts person who doesn’t start with a presumption about where she should end up.”

Laws names several areas where he believes the institute, barely a year after launch, has already made a difference. A report on grammar schools found that, contrary to the prime minister’s views, they had no significant impact on social mobility and, if they were expanded as Theresa May wished, children from poor homes would lose. “I’ve spoken to quite a few Tory MPs who read our research and were influenced in their views,” Laws says.

He also mentions a report just published which concludes that, while New Labour’s sponsored academies had excellent results, the Tories’ “converter academies” have failed to raise attainment except where they already had outstanding Ofsted ratings. He says: “If you move from the worst academy chains to the best local authorities, you will see a massive improvement in performance. Academisation for its own sake is highly risky.” This week the EPI will publish a report scrutinising progress made by the government in closing the attainment gap between poorer pupils and their peers.

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Laws has the air of a man in complete command of his brief. According to one former colleague, he has such an absorbent mind that he never kept paper or owned filing cabinets even when people still relied on such things. He speaks rapidly, firmly and straightforwardly. He loves detail and data, answering questions with points a, b and c, as though dictating a policy paper. He is the kind of man you can respect and even warm to but you’d hesitate to go on holiday with because he’d probably want to discuss school funding formulas at the poolside and, in any case, according to his Who’s Who entry, likes “visiting desert regions”.

He was born in Surrey and, since his mother was Catholic, went to mass every Sunday until his mid-teens and also to mostly fee-charging Catholic schools in Surrey. His mother was Tory, his father, a commercial banker, Labour, so Laws split the difference and decided he was a Liberal (as the party was then called) when he was 11 or 12. He knew he was gay from a similarly early age “but in those days you kept homosexuality a secret”. He didn’t come out publicly until it transpired that he was paying “rent”, charged on expenses, for rooms in a “second home” owned by his long-term partner, a former Lib Dem aide.

He chose economics at university. “I wanted to go into politics and so much of politics seemed to come back to economics”. He then went into banking “because it seemed a good way to get responsibility and financial stability quickly”, a rather prim rendering of the time-honoured advice to “make your fortune, young man, before you go into politics”.

Banking occupied “all my waking hours” so that he didn’t build political links or meet politicians and he hadn’t been politically active at university, seeing student politics as “about personalities rather than issues”. In 1994, he decided, sitting in the bath gazing over Hong Kong during a conference, that he would make a complete break and “go hell-for-leather for politics”. He resigned without a job to go to. He wrote to the Lib Dems asking for one. After prolonged background checks – “they thought I might be a Tory spy” – he became research assistant on £14,000 a year to Malcolm Bruce, then the party’s Treasury spokesman. He became MP for Yeovil in 2001 and was soon on the frontbench, eventually becoming the party’s children, schools and families spokesman in 2007.

He was regarded as on the party’s right and he co-edited the Orange Book, a manifesto for the Lib Dems’ drier wing. “I believe that classic liberalism can be a vehicle for delivering opportunities and people getting more out of the state, rather than being delivered monopolistic public services.” If you think that sounds like post-Thatcher Toryism, so did George Osborne. He tried to recruit Laws to the Tories in 2006, but was told the party was too illiberal on social issues.

Laws admits to being an admirer of Milton Friedman, the American economist who became an inspiration to Margaret Thatcher. But he says Friedman got one big thing wrong. “He assumed that a society which became much more meritocratic was one where there would be lots more equality of opportunity. We’ve now got meritocracy. People are chosen for their abilities and character rather than where they come from. But their chances of acquiring the necessary abilities and skills are hugely linked to their socio-economic status. So we’ve got meritocracy without equality of opportunity.”

I ask what he is most proud of from his period as schools minister. He immediately mentions the pupil premium, though he wasn’t in office when it was introduced: “I negotiated it into the coalition agreement and I insisted on it being in our 2010 manifesto.” From his own work, he picks out Progress 8, a quintessentially Laws policy, heavy with data, much of it beyond the grasp of ordinary mortals. “It incentivises schools to help every single pupil instead of prioritising just a few on the [GCSE] C/D borderline.”

His biggest regret? Again, an unhesitating reply: tuition fees, though they, too, were outside his personal remit. He was a longstanding supporter of fees and opposed the Lib Dems’ promise in 2010 to phase them out. He was also the last Lib Dem MP to sign the pledge, circulated by the National Union of Students, not to support increased fees and did so, he says, under duress. “We should have dropped the [anti-fees] policy before the election,” he says. “Having not done that, we should probably have vetoed the increase.”

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Are fees now doomed? No, but he wants the system reformed because “we need to figure out whether taxpayers and students get value for money”. How is that to be measured? “It should be a big clue that some students take very expensive courses and then earn less in the labour market than some who don’t go to university at all.” I suggest this is an arid economist’s view. He replies that if we care about social mobility, more money should go to early years education, less to universities.

Does he also regret the coalition’s free schools? Laws supported the idea of free schools before the Tories did but fought fierce battles with Gove over the programme’s scale. “It started as a small component of the capital budget but in the end we were spending more on it than on the maintenance and improvement of the entire school estate.” He calls for “evidence” on whether free schools are working or not; the EPI, after rigorous research, will soon provide it.

To an unusual extent for an ex-politician, Laws comes across as intellectually impressive, or at least very good at articulating abstract concepts. Will he move on to a fourth career in a few years? I suggest a university professorship may suit him. “I would be a terrible professor. Too interested in practicalities and doing stuff.” What about a future head of Ofsted? “That’s very flattering of you. But I thoroughly enjoy my role at EPI.” A politician’s answer perhaps.