Andy Burnham's speech at the People's History Museum in Manchester this morning has been trailed as a pledge to deliver "good growth in every postcode", or the biggest transfer of power out of Whitehall in recent history, in the words of his allies.
The ambition is genuine.
The devolution argument is overdue.
But there is a prior question that this morning's speech, however well-intentioned, has not yet answered. It is not how growth is distributed. It is whether growth, as conventionally understood, is the right starting point at all.
The trickle-down assumption
"Good growth in every postcode" is, at its core, a spatial version of a very old economic argument. The claim is that if the economy grows, the benefits will spread, and if we ensure that growth happens in more places, those benefits will spread more evenly. The failure of the past forty years, on this reading, is not that growth was the wrong objective; it is that growth was too concentrated, too London-centric, too captured by a narrow class of asset-owners and professional elites.
That is a reasonable diagnosis as far as it goes. But it does not go far enough. The fundamental problem with this concept of trickle-down economics is not that the trickle fails to reach the right postcodes. It is that the trickle does not work at all.
Growth, in a financialised economy, does not automatically translate into better housing, better health, better schools, or better lives for the people who most need them. It translates, instead, in the first instance, into higher asset prices, higher returns to capital, and higher rents, all of which actively worsen the position of those who depend on wages, on public services, and on the security that a functioning welfare state is supposed to provide.
The communities that Burnham is speaking for, whether they be the former industrial towns, the coastal areas left behind, or the cities whose cores have been hollowed by decades of disinvestment, do not suffer primarily because growth has passed them by. They suffer because their needs have gone unmet.
The distinction matters. If you begin from need, you invest directly in the things that make lives livable:
- social housing,
- reliable public transport,
- well-funded schools,
- accessible healthcare, and
- genuine social security.
If you begin from growth, you wait for the market to deliver those things as a byproduct of expansion, and the evidence of the past four decades is that the wait is indefinite.
What meeting need actually means
Burnham is expected to propose greater mayoral control over social housing, welfare and post-16 education, and those are welcome moves. But the framing matters as much as the policy.
If devolved control over housing means local leaders are empowered to commission social housing directly and build homes that people on ordinary incomes can afford to live in, that would be transformative. But if, as is more likely, it means local leaders are handed responsibility for a housing crisis they lack the financial resources to resolve, it is, at best, the redistribution of blame.
The same logic applies across the board. Burnham is committing to keep economic policy within the government's self-imposed fiscal rules, which require day-to-day spending to be covered by tax revenues by the end of the parliament. Those rules were designed, as Rachel Reeves conceived them, to reassure bond markets rather than to serve the communities that have been waiting decades for investment. Accepting them as a binding constraint means accepting in advance that the national government will not fill the gaps the market has left open. Local leaders will be empowered to make decisions, but not necessarily to fund them. That makes the claim of devolution meaningless.
Power without resource is not empowerment. It is the appearance of empowerment, with the frustration and eventual disillusion that follows when the promises cannot be kept. This is where we are already.
Starting from a different place
What Burnham has the opportunity to do, and has not yet done, is to reframe the entire conversation. The question is not how to generate growth and distribute it more fairly across the country. The question is how to meet the needs of the people who live in this country, and to build an economy that makes meeting those needs its primary purpose.
That is not anti-growth. An economy that properly houses people, educates them well, keeps them healthy, and gives them dignified work generates growth as a consequence. But it generates it differently: through public investment, through the multiplier effects of money spent in communities rather than extracted from them, and through the productive capacity that is released when people are not spending their energy managing poverty and insecurity.
Burnham could make that argument. The trailing for his speech this morning suggests that he has not yet fully committed to making it. "Good growth in every postcode" is a better slogan than most. But the communities that most need a change of direction will not be well served by growth that trickles down to them. They need a government that begins by asking what they need, and then finds the means to provide it.
That is a different kind of politics. It is also, in the end, the only kind that works.
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Burnham is doing the usual UK political garbage, economic growth will cure all.
Regrettably the UK will be offered tinkering, kicking the can down the road solutions. Nothing to solve real UK problems. More Blair foundations pearls of Tony wisdom.
I am sceptical that a Burnham government will have any real positive impact. It seems to me that the whole background to, and tactics resulting in, his “coronation” resemble those of a failing professional football club where the manager is chopped and changed but the underlying issues that is causing that failure, remain unchanged. Starmer had his board’s “vote of confidence” only to be ousted a few months later on the back of some disastrous recent results and the loss of his director of football (McSweeney) and the appointment of an old has-been for ambassador. In comes the new manager, promising to change the team radically, but, he will not be given the tools and resources to do so whilst the same neoliberal board remains in place so the club will continue on its downward spiral. As for trickle-down economics: it has never worked. At best it has resulted in a form of syphoning upwards of wealth through capitalist capillary action. To think that there are some who decry you for promoting MMT when they continue to cling on to the fantasy of trickle-down economics amazes me. I would not blame you if you feel at time like Galileo locked in a room with a host of flatearthers!
PS I speak from bitter experience re football having all my life supporting my home town team!!!
Thank you
And I suffer with Ipswich Town. They were great when I was a teenager.
I’m all for devolution, but whilst it’s easy to see how it works in large urban conurbations, it’s less easy to see how it works in large diverse rural areas where services are not easy to access and needs can be very different. Also as a Green, I also fundamentally disagree with the fixation on growth as the solution to all our problems, fairer distribution of wealth and resources seem much more important to me. In the South West we have no regional mayor, and I think attempts to institute this have not been easy as the Cornish do not want to be amalgamated with Devon.
Angela Rayner’s plans for large unitary authorities are a challenge. If we have one unitary authority for Devon you’re dealing with an area with very poor infrastructure and several hours travelling from one end to the other. And if you amalgamate several rural councils with Exeter I fear our rural services will decline in favour of a greater Exeter. Labour is very focused on urban need and very poor at seeing rural deprivation needs, as very few rural areas have Labour MPs.
I agree , Hazel. And as a Devonian “born n’ bred, strong Inthe arm, thick in the head” I can assure you that Cornwall’s lack of enthusiasm for joining Devon is heartily returned by Devonians. I can’t understand our lack of unity down here, as we have been done over by Westminster for the whole of my lifetime. We get poor provision her capita than the average county and it took Torbay 40 odd years to get a road in, and even the scrimping on the bridge at Penn Inn means that there are still enormous queues in rush hours. Devonians and the Cornish largely vote Liberal, and hence the uni- party see fit to ignore us and underfund us. Our roads, schools, public transport are all run down and underfunded, yet we have no imagination to fight back. People want change, yet Richard seems to be the only one offering a solution to the neglect, underfunding, lack of care, and pandering to the wealthy. Politics of care seems a workable idea, yet locals are so disheartened. Only this morning as I was on my way to the osteopath, an old feller was saying we are only one election away from civil unrest. Yet, we won’t join with Cornwall? Words fail me.
So, instead of a liar and cipher (Starmer) we have a fantasist/smiley face and a nice line in spiel/blather/bullshit. No-money Burnt-ham. Know-nothing Burnt-ham.
LINO the ultimate in slo-mo car crashes. I wonder if the people that elected Burnt-ham understood that he will deliver nothing?
“They need a government that begins by asking what they need, and then finds the means to provide it.”
If my understanding is correct, Burnham believes the way to finance this is by attracting private sector investnent into the regions, local Mayors being best able to facilitate this, and supposedly ensure it is channeled to meet “real” needs. A sort of regional Public Private Partnership model for local government. We all know how this ends don’t we!
We do
We do and it wasn’t good. However I was heartened to hear Burnham mention that government procurement contracts would have to have measures against public good. (Words to that affect.) Perhaps they already do in theory but lip service is paid to them. I may be naively hopeful but I’ve read that Andy Burnham has met with Mariana Mazzucato, who believes that PFI and other contracts, have failed in this country because they are essentially public sector hand outs, without any return for the government and its citizens. Contracts should stipulate what the private sector must achieve against government stated missions, housing, energy, education, health etc. Perhaps Burnham has been influenced by Mazzucato. Apart from the very brief gloss over and rather alarming statement re fiscal rules and absolutely zilch mention of the environment, I thought it a pretty inspiring speech. I’m waiting for the Westminster Oligarchy to rip him to shreds.
I thought it was vaccuous word salad from a man revealing how little he knows. Sorry. There is a video coming.
Only a tax imposing, currency creating central state can move resources from one area to another.
Devolved administrations are currency users and will therefore be much limited in what they can do.
In the past devolution has often just been a device for moving responsibility from the central state to local governments without providing the required resources.
Social care is a good example. The overarching story since 1979 is one of a system that has moved from mixed public provision toward a heavily privatised, means-tested, locally-funded model — one that was never adequately funded for the responsibilities it was given, and where promised national reforms have been deferred for over three decades.
In my belief system, trickledown “economic growth” as currently defined by our neoliberal priests and priestesses (Starmer, Reeves, Burnham, Badenoch), no matter how devolved it is, has become a form of idolatry – and even worse, an idolatry that requires constant human sacrifices (us).
Exactly. If regional mayors are to achieve anything they need to have resources they can control. That is impossible with fiscal rules designed round the expectations of bond traders rather than the needs of the country.
Because as Simon Wren-Lewis put it in one of his recent blogs: “taking macroeconomic advice from bond market traders is like taking advice on how to deal with pandemics from undertakers”,
🙂
Your post is obvious – but not to Burnham apparently. And isn’t inequality a central issue?
For instance, at the start of my career, young teachers could soon afford to buy some sort of house {and we were awarded grants to cover tuition fees}. Local authorities built ‘council houses – and flats’.
Then Mrs Thatcher insisted that tenants could buy these properties at reduced prices but the kicker was that the money was not spent on new dwellings. ‘Council housing’ just stopped. Private building prospered; estate agents flourished, road building expanded and private cars dominated travel. So many houses have garages and gardens that communities are spread out. Outside big cities, most bus services are feeble. There is little sign that the Strait of Hormuz will ever be as busy as it was before the war. Motor fuel may soon be scarce – possibly rationed. While less CO2 would be better for global overheating, transport issues could become tortuously difficult.
I can’t help but think of what you said the other week. What is not being said… okay so number 10 is just that a number on a house in an area of privilege. It could be anywhere in the uk. But why now is he moving base to the north, how much is that going to cost, the logistics, the security, the private taxis, the environment cost, what is he tying to outdo and your right this stinks of Blair, same bullcrap different t-shirt. Surely the country can’t handle a devolvement as its identity is so lost as evidenced why no one believes in it to protect it by joining the military. Surely that would splinter all that’s left, we need unity not this rubbish and at the moment I see very little in this in my postcode.
I fear that Andy Burnham is smart enough to know that he and the Treasury will devolve blame and not cash or power.
Does that make him and his team cynical – you bet it does.
Sadly, the frustration it will engender, will be used by some very sinister people.
Richard why don’t you write to Andy Burnham and send him this article?
Better you did, honestly.
Falling prey to a moment of cynicism is Burnham lining up some juicy procurement contracts for Manchester associates?
I am very wary of this devolution idea which I see as yet more division so there can never easily be a revolution with everyone gathering their pitchforks together when we need one. Because each region will have its own spin departments and people will be focused on their own local problems and nasty characters while the animals at the top continue their blanket authoritative dominance.
I have seen it with the break up of the NHS…