Most capital cities in Europe are led from the Left. London, Paris, Amsterdam, Copenhagen and Rome all have left-wing mayors. Their tenures have seen the imposition of rent controls, restrictions on tourism markets, higher taxes and more subsidies for social housing.
There is, however, one city that stands apart from the rest. The Madrid Community – currently led by Isabel Díaz Ayuso – has seen consistent centre-right, free-market government for over 30 years now. Madrid’s example provides an optimistic vision for what future local and regional governments can achieve if they embrace entrepreneurial and pro-growth ideologies.
Spain’s 1978 constitution is more decentralised than the European average, and much more so compared to the UK. The 17 autonomous communities have wide latitude over their own affairs and can raise taxes and spend the proceeds freely.
The Partido Popular (PP), or People’s Party, first won a Madrid regional election in 1995. One of their headline pledges was to expand the Madrid Metro by 30 miles in their four year term. With this promise, the PP won a majority and got on with building. By the next election, they had opened up 35 miles of new lines, built for 90% cheaper per mile than London’s Jubilee Line Extension.
The PP then used their metro building success as the basis for future campaigns and pledges to build. After the 1999 election, they built 47 more miles, and after 2003, they built 45 more miles. Even today, there are 25 miles planned or under construction. At the earliest, it will take London 35 years to build the Bakerloo Line Extension from the initial proposals in 2006. And that project is only four miles. We urgently need to learn the lessons that Madrid has for building infrastructure so successfully.
The building does not just stop with new metro lines. Madrid also is embarking on one of the largest brownfield regeneration projects in Europe. The goal of the Madrid Nuevo Norte project is to transform old railway and industrial land into a new central business district complete with office buildings, homes and a renovated Chamartín station, which is the hub of the extensive Spanish high speed rail network. The project will also see an extension of the metro, commuter rail and new parks and public spaces.
Building homes and offices around a high speed rail station is a no brainer. Yet in West London, Sadiq Khan has legally protected single-storey warehouses that surround the location of the Old Oak Common HS2 station. This area ought to have a regeneration project that matches, or even exceeds Madrid Nuevo Norte, but the Mayor refuses to remove the Strategic Industrial Location designation.
The PP has also led radical overhauls of Madrid’s hospitals and schools, instilling choice at the centre of these public services. Madrileños are free to choose their doctors and hospitals for both primary and specialist care anywhere in the community. The regional government has also expanded the role of private hospitals, allowing patients to use their services with government funding. As any free-marketeer will know, competition drives better results. Madrid has the shortest waiting time of any Spanish region with the average wait of 49 days for surgery, less than half the Spanish average of 119 days, and significantly better than the English median of 92 days. Madrid also has the highest life expectancy in Europe.
The ability to choose extends to schools. Families can apply to send their children to any school in the region. And the regional government even funds some private schools, a far cry from the UK Government’s VAT on private school fees.
Finally, the regional government has prioritised low taxes and regulations. Madrid has the lowest taxes in Spain and the PP has heavily discounted inheritance tax to just 1% for close family members. The PP has also led the way in letting any product legally produced under the regulations and guidelines of another community be sold freely in Madrid. That scraps additional licences and authorisations that were previously needed.
As a result of all of these measures, Madrid is a prosperous place, which grew by 3.4% in 2024, a far cry from London’s 0.3% growth in 2023 and 1.1% in 2024. Madrid receives 67% of all of Spain’s foreign direct investment too, showing international investors have confidence in the region.
Madrid shows what an optimistic vision for centre-right governance of a city can be. Proudly pro-building, pro-freedom and low-tax. We desperately need that in the UK.
My thanks to Tim Dier, one of the CPS’s research fellows, who organised an exchange trip for think tankers to learn from Madrid’s free-market success.
