The Burnham shoe-in
Andy Burnham is obviously a smart political operator, having engineered his prime ministership without even being challenged. But will he succeed where Starmer failed?
Inevitably, unless it is for pure pursuit of power, people seek high office “to make a difference”. Either way, it involves increased government spending. For Burnham, it’s been such a rush that initially he favoured one thing, such as refusing to be constrained by bond markets, before retracting his opinion when someone pointed out to him the dangers. Instead, he now says that he will be bound by current treasury fiscal rules.
In an attempt to bolster his economic credibility, he has appointed three eminent economists as advisers: Andy Haldane, Richard Hughes, and Lord O’Neill. Haldane is sound, Hughes is anodyne, and O’Neill is an ex-Goldman Sachs macroeconomist with Keynesian leanings. Their advice is likely to be inconsistent, and if I was Haldane, I would distance myself from this circus act.
The chart below sums up Burnham’s problem. He will have great difficulty funding an O’Neill stimulus.
According to an article in today’s Daily Telegraph by Adam Smith (yes, that is his name and as a Tory MP he was a former Chief Secretary to the Treasury) O’Neill is pushing the line that “Britain needs to be much bolder to invest”. Put another way, O’Neill is displaying his Keynesian statist credentials. And as a fellow Mancunian with an impeccable macroeconomic pedigree, there can be no doubt that this is the line Burnham is inclined to take.
