“Good growth in every postcode and hope in every heart.” The last words of Andy Burnham’s speech yesterday were quite something.
Even for someone who has been around the world of politics for as many years as I have, this was the most inspirational speech I have heard from a prospective Party leader in a very long time.
Like many other people, I want to see more detail of how Andy plans to deliver the vision he has articulated. But I am nevertheless one of those who has been left with a renewed sense of hope in my own heart today.
Yes, there are a lot of questions that remain to be answered. I understand why Andy Burnham said he would stick to the current fiscal rules that Labour has adopted in Government. Spooking the markets would not have been a wise move by him.
And fiscal rules are not just about market perception. It makes economic sense to distinguish between borrowing to fund current expenditure on public services and borrowing for investment that will bring economic returns down the line. It makes sense to preclude the former while embracing the latter.
But what about the overall level of national debt? Rachel Reeves’s rules also require UK debt to fall both over the next three years and thereafter. She is right that it is not sustainable to carry on endlessly servicing a national debt of £2 trillion or more. But if Britain is to invest in the economy on the scale envisaged by Andy Burnham, I cannot see how that can happen without some increase in debt in the short term. I say “short term” because, if good growth is indeed going to reach every post code and transform the productive capacity of the UK as fundamentally as Burnham set out in his Manchester speech, the proceeds should bring debt down over the medium term, not increase it. But the national debt is still likely to rise in the short term while the pump of good growth is being primed.
So yes, important questions remain. However, the core message of his speech – that a sense of common purpose and radical acceleration of devolution can bring sustainable change – is a powerful one.
It is not pie in the sky either. Andy Burnham quoted how this kind of approach has transformed Manchester’s fortunes over the past ten years or so.
The experiences of other countries also add weight to the argument. Strong regional government embedded in activist partnerships with business and other social partners was vital to Germany’s economic success in the decades after World War Two. Or look more recently across the Atlantic. Despite the image of the USA as a place where free market economics rule, active engagement by government at State level and below has often been a key part of successful economic development. The exponential growth of the life sciences industry in North Carolina from the early noughties is just one example.
It was also refreshing to hear Andy Burnham reference what is being achieved by Finland’s Housing First policy – where active central and local government investment in the housing stock not only helps drive economic growth. It is also being shown to saves money spent on alleviating the symptoms of homelessness. By tackling the causes it is making pivotal difference to the life chances of so many.
My own 27-years’ experience as an MP for a part of Birmingham hit for years by the economic trauma of industrial decline reinforces my belief that the kind of path outlined by Burnham can make a real difference. Locally-grounded partnerships can indeed become engines of change when they have real resources and national backing. The crises that hit the Longbridge car plant in 2000 and 2005 were a body blow to the community where I live and we feel the consequences to this day.
Could a more interventionist approach by government have helped prevent at least one of those crises before they hit? I believe so, and it was something for which I argued at the time. Even so, active intervention by government in response to the Longbridge crises both limited the impact of the crises on jobs across regional economy and enabled practical programmes of support to be rapidly put in place for workers directly affected. Some of what we did then later became models for government programmes which mitigated the impact of the 2008 financial crash on otherwise sustainable businesses elsewhere in the UK.
Encouraged and enabled by government, the driver of the Longbridge response was the creation of a strategic partnership between local government, business, the education sector and social partners like trade unions. It made a difference during the periods of crisis. How much more impact could the kind of partnerships forged during the Longbridge crises have had if they had been both empowered and resourced to catalyse a new economic strategy for the region once the immediate crises had passed? For a while, the fact that there was a government- sponsored Regional Development Agency still in existence at least kept those possibilities alive. Instead of that, though, the change of government that took place in 2010 both scrapped Regional Development Agencies and ushered in a decade of austerity that cut resources that could have been used to boost regeneration and industrial renewal.
The legacy of a decade or more of blinkered thinking by government coupled with technological revolutions now unfolding at a pace that is difficult to comprehend have created a landscape in which the challenges and opportunities for regional economies today are very different from those we faced during the Longbridge crises of the noughties.
But the lessons learned during those times are still relevant and it is refreshing to see them echoed in Andy Burnham’s vision of devolved economic power enabling local partnerships to deliver good growth that can reach every post code.
But a future grounded in local partnerships cannot simply be about creating new delivery mechanisms that are not constrained by the bureaucratic eccentricities of Whitehall or the short-termism that too frequently dominates the way the free market works here in the UK.
It is also about creating a sense of agency in local areas based on shared values and common purpose. People in places like my part of Birmingham feel left behind by a system which seems remote from the reality of their lives and where opportunity usually seems to feel like something that is for other people, not for them or their families.
Not only is the inequality that people experience real but it also creates an atmosphere of intergenerational disillusion which saps creativity and stunts ambition to build a better tomorrow. It is an atmosphere which far-right populists can so easily exploit, fomenting division within and between communities in a vicious spiral of hate. It is an atmosphere where blame for the present replaces hope for the future.
To build a successful economy you need confidence. Yes, that includes confidence amongst those with the capacity to invest material resources needed for growth. But it also has to include generating confidence amongst people that it is worth investing in their own human potential – in education, at work and in their relationships with their neighbours. That is why Andy Burnham is right to make “hope” as central to his mission as “good growth”.
The real tests, of course, will not be in the words but how they can be translated into action. That will be about a lot more than the resources that are put behind Burnham’s plans, crucial though those resources will be. He is right that turning ideas into action will require a shared sense of purpose that, in turn, will rely on politics being done very differently from now on, at both local and national levels. Doing that has to be about much more than constitutional reform, but replacing an electoral system that magnifies inter-party conflict with one that encourages cooperation within and beyond the world of politics has to be part of the picture.
Andy Burnham’s Manchester speech was not a rounded programme for government. It did not address Britain’s role in an increasingly perilous world or the pressing practical decisions that have to be made over issues like defence spending. So, yes – there are still a lot of questions yet to be answered about what a Burnham-led government will mean in practice, both on the issues he talked about and those he did not.
Nothing is guaranteed but Andy Burnham’s speech has still given me a spring in my step today.
