Andy Burnham's Vision for Change
"True to the motto of this city, I am going to do things differently,"Andy Burnham declared, referencing the film 24 Hour Party People. His speech in Manchester indeed presented a distinct perspective on how to view and manage the UK.
The outgoing Greater Manchester mayor offered an analysis of the causes behind economic stagnation, drawing from his experiences both running the city and serving in Cabinet. Central to his critique was the notion of an unresponsive British state, one more skilled at internal disputes than enacting meaningful change and national rebuilding.
Ambitious but General Solutions
Burnham's proposed solutions were ambitious yet largely broad, emphasizing the transfer of power from central government to regions and cities, a practice common in other developed nations. He recounted his tenure as chief secretary to the Treasury two decades ago, when he sought to develop a northern counterpart to London's Crossrail but was told it would not meet the Treasury's cost-benefit criteria.
His address did not constitute a detailed economic plan including specific assessments of taxation, spending, investment, infrastructure, or strategies related to trade, artificial intelligence, and Europe. This may partly be due to the ongoing Labour leadership campaign, where Burnham appears to be reserving detailed policy decisions and trade-offs for a later stage.
Policy Directions and Fiscal Prudence
There was, however, a general policy direction covering business rates reform, housebuilding, technical education, and infrastructure development. The speech was marked by an optimistic and upbeat tone.
In two particular areas, Burnham signaled a commitment to fiscal prudence. He confirmed adherence to existing borrowing rules and expressed support for the Milburn Review, which examines young people's employment outcomes and could potentially lead to welfare savings.
These elements form part of what has been described as a broad five-part plan. Devolution and industrial policy constitute two other components, with the final part described by Burnham as providing quicker assistance on the cost of living.
Balancing Fiscal Rules and Ambitions
Questions remain regarding how these proposals align with the 2024 manifesto pledge not to raise major taxes and to maintain fiscal rules. Some initiatives will likely require additional spending. Devolving decision-making might also necessitate reallocating capital expenditure from the southeast to projects such as northern powerhouse rail.
In European contexts, such agendas often involve granting regions extra borrowing powers to invest in infrastructure. It remains unclear how this would be reconciled with existing borrowing constraints.
Outstanding Questions and Leadership Decisions
Many details are yet to be clarified in the coming weeks. Two notable questions include whether Burnham fully endorses potentially difficult welfare spending policies emerging from the Milburn report, and what the "Makerfield Test" implies for Brexit reset discussions concerning single market access.
The announcement of the chancellor appointment is also pending, with no decision made so far. Market reactions have been calm, much to the private satisfaction of some of Burnham's advisers.
Conclusion
A sense of direction, confidence, and optimism combined with promises of fiscal prudence can be influential. However, even the renowned Mancunian confidence has its limits.
