Key facts
- Shabana Mahmood is reportedly set to be named Chancellor of the Exchequer by incoming Prime Minister Andy Burnham.
- Britain's public finances face an estimated annual deficit of £330 billion due to weak growth and an aging population.
- Burnham plans to replicate his town regeneration model, tested in Stockport, across the UK.
- Burnham has committed to fiscal rules and not increasing taxes on working people.
Andy Burnham, set to become Britain's next prime minister, plans to address the country's economic challenges by focusing on urban renewal and attracting private investment, drawing on his experience as mayor of Greater Manchester. His approach emphasizes regenerating towns like Middleton and Stockport, using public funds to stimulate housing, transport, and commercial development.
Burnham's vision aims to reverse the decline of post-industrial towns, which have suffered from a lack of investment and feel left behind by mainstream political parties. The regeneration of Stockport, a £2 billion program, has already attracted significant private investment and is cited as a successful model for revitalizing town centers. The Middleton project, though in its early stages, also seeks to create new homes, commercial opportunities, and green spaces.
However, Burnham faces considerable fiscal constraints. He has committed to existing fiscal rules and a pledge not to increase taxes on working people, limiting his ability to fund new initiatives. His strategy relies on leveraging public capital to attract private investment rather than waiting for market-driven solutions. This approach is designed to overcome market judgments of unviability, as seen in the Stockport transport interchange development.
Greater Manchester's economic growth of 17.4% between 2017 and 2023 is presented as evidence of Burnham's successful model. However, replicating this growth nationally may prove challenging due to the unique advantages of the region, including concentrated investment and strong research universities. Burnham will also need to work quickly to demonstrate progress, learning from the perceived slow start of his predecessor, Keir Starmer.
Economists and business groups have offered cautious responses. While the Confederation of British Industry welcomed the focus on investment outside London, it warned against increasing the cost of doing business. JPMorgan economist Allan Monks suggested that devolution could lead to transitional costs and potential loss in economies of scale, possibly raising overall spending.