Andy Burnham has vowed to significantly shift fiscal powers from Westminster to local authorities if he succeeds Keir Starmer as the UK's Prime Minister.
He made the commitment in his first major speech since securing a seat in the House of Commons, which qualifies him for the Labour leadership contest starting on July 9th. He stated that Britain has been "stuck in a rut," citing a "gross imbalance" in resource allocation between central and local government that is "holding back growth."
Burnham remained tight-lipped about who he would appoint to advance his agenda, saying he would not announce his planned ministerial team before the leadership contest concludes.
"We cannot have another decade like the last. We need a new determination to raise living standards, we need to change our politics, and we must act now," said Burnham, a long-time advocate of devolution, speaking at the People's History Museum in Manchester. He has served as Mayor of Greater Manchester for nine years.
The UK has the most centralized public finances in the G7, with only 6% of taxes and 20% of spending devolved locally, well below the OECD averages of 30% and 38%.
To reform UK governance, Burnham pledged to relocate some prime ministerial functions from 10 Downing Street in London to Manchester, creating a new entity dubbed "10 Downing Street North."
He stated that "10 Downing Street North" would serve as a conduit for redistributing UK power, helping all regions advance their own growth agendas. Burnham also issued a warning to London's civil service, declaring that Whitehall's days of "resisting devolution" were "over."
He hinted at a more protectionist approach to revitalize the economies of Britain's former industrial heartlands. "We need sovereign manufacturing and production capability across the country in critical areas like steel, defence, energy, food and agriculture, not letting it drain away," he said.
He said he would "back every region" to set credible industrial ambitions and propose plans to achieve them, while promising a "laser-like focus" on growth.
He also pledged the "largest council housebuilding programme since the post-war period." This echoes a policy proposed last year, when bond market investors were concerned that a Burnham premiership would mean increased government borrowing. Labour is currently on track to miss its target of building 1.5 million new homes during the current parliamentary term.
However, Burnham also promised to "reduce the welfare bill in a fair and sustainable way," indicating he would task his Chancellor with trying to curb a spending pressure that Starmer had attempted but failed to control.
UK government bonds showed little reaction to the speech, with yields largely flat on the day after briefly dipping by 1 basis point, in line with moves in other comparable bonds.
"Overall, I thought Burnham gave a good speech, but I don't think the risk of market volatility is over. The question now is how and with whom he delivers this national renewal," said Mizuho strategist Evelyne Gomez-Liechti.
Burnham reiterated his commitment to the fiscal rules set by current Chancellor Rachel Reeves. A key ally of Burnham told Bloomberg last week that he would seek to use the "flexibility" within those rules to increase infrastructure spending.
Harry Quilter-Pinner, Executive Director of the left-leaning think tank IPPR, said Burnham's pledge to abide by rules limiting spending and borrowing was the right move.
But Quilter-Pinner added: "Fiscal discipline should not be equated with a lack of ambition. The real test will be delivery. This is a chance to reshape how Britain is governed and how its economy works, but turning today's ambition into lasting change will require bold action from day one."
Burnham described his economic approach as "Manchesterism," calling it a "vision of good growth and a rejection of the old trickle-down model."
He pledged to "ensure all parts of Britain have greater public control over essential services like water, housing, energy and transport," and proposed a 10-year plan to reduce the cost of these essentials. Burnham stated that power currently resides in an "under-accountable, outsourced state."
The speech came just a week after Starmer bowed to pressure and announced his resignation as leader of the governing Labour Party. Several of Burnham's comments appeared aimed at winning over Labour MPs disillusioned with Starmer's team, including some who viewed his approach as overly top-down.
Burnham said he wanted MPs to be "true representatives of their communities" and promised not to use the party whip to "instil fear or suppress debate."
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