The clock is ticking for Burnham’s plan

The new prime minister has talked the talk, but can he walk the walk?

• By Martin Ivens / Bloomberg Opinion

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Andy Burnham, the UK’s personable new prime minister, has been buoyed by his bounce in the opinion polls. However, the day of economic reckoning is fast approaching, with the budget just two months away.

Burnham displayed no Macbeth-like “infirmity of purpose” in seizing the crown from Keir Starmer in his ruthless coup, but he has wobbled on the economy. At the outset, he was forced to reassure the bond markets that he would stick to his predecessor’s fiscal rules — strictures he once dismissed as financial fetishism. With long-term borrowing costs hitting new highs over ballooning government deficits across the G7, it is just as well Burnham expressed contrition when he did.

Three wise men played their part in smoothing ruffled market feathers when it became known they were shaping Burnham’s financial thinking. Jim O’Neill is respected as the former chief economist at Goldman Sachs Group Inc and as an adviser to the last durable Tory chancellor, George Osborne. As deputy governor of the Bank of England, British Chambers of Commerce president Andy Haldane, was a lone voice in predicting an inflationary surge in 2022. Richard Hughes, as ex-chair of the Office for Budget Responsibility, promised to bring fiscal credibility.

O’Neill and Haldane share Burnham’s passion for reviving the fortunes of the rustbelt in their native North of England; O’Neill’s ideas motivated Osborne’s Northern Powerhouse initiative, while Haldane has long advocated boosting transport links and infrastructure spending to bridge Britain’s regional divides. So, natural allies, but also hardheaded realists.

However, none of the trio is taking an official position. O’Neill told the Financial Times on Friday that he has “decided to not take a formal role,” citing the constraints of having to put his financial assets into a blind trust.

“It’s not because of any policy disagreements,” he said, adding that he hopes to maintain an informal relationship with Burnham and his team.

Haldane not joining the government does seem to be policy based. In a blistering Financial Times article published last week, he condemned its former budgets as ”outright harmful” to the private sector. Haldane called for the government to announce “a moratorium on tax increases and regulatory burden on consumers and businesses for the remainder of this parliament. This would be the equivalent of a fiscal Hippocratic Oath to ‘do no harm’ to private-sector sentiment.”

Hughes, the third member of this trio, is ideally equipped to score the new government’s spending plans. In January he testified to the House of Lords that the Labour Party’s 2024 election manifesto looked “nothing like” its actual tax-and-spend trajectory once in government; but he too has failed to find a desk at No. 10.

Burnham commands the political stage after only one month in office, and has a limited time window to refine his pitch on prosperity. He is the first prime minister since Boris Johnson to cheer up uncommitted voters, his can-do optimism infinitely preferable to doomy Starmer. His “hopey-changey” message receives plaudits for echoing former US presidents Bill Clinton and Barack Obama at their most winning; Burnham’s mastery of social media has already made him better known than the pop star whose song has been at No. 1 for 20 weeks — he has 57 percent name recognition, Olivia Dean has only 55 percent.

Burnham beats the populist parties of the left and right at their own game. By saying he would get rough sleepers indoors by Christmas, to help cut the bills of pubs, clubs and musical venues at the expense of garish vape shops on the high street and in valuing “the hard hat as much as the graduation cap” in education, he reaches the parts other politicians do not and resonates with ordinary voters in ways neither Starmer nor his Tory predecessor Rishi Sunak could.

The Oct. 28 budget should force some sharper choices than the present loosey-goosey Burnham comments on how to put Britain back on the path to sustained growth. On Friday, the UK announced a surprise budget deficit of ￡1.8 billion (US$2.45 billion) — a dismal figure, because there is usually an income boost from scheduled payments of self-assessed income tax. The PM has stopped talking about alleviating cost of living pressures — over which he has little control, given the many international factors at play — and speaks empathetically instead about giving household budgets “breathing space” where he can, and talks about a major 10-year overhaul of utilities and energy dependency.

It does not demand an excess of cynicism to realize this change of emphasis kicks the can down the road and is intended to deflate expectations of how different life would feel for many in the short term. Having campaigned in earnestly stirring poetry, the Burnham government is getting ready to govern in prose.

Martin Ivens is the editor of the Times Literary Supplement. Previously, he was editor of the Sunday Times of London and its chief political commentator. This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.