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By Dr Valentin Boboc, Senior Economist - Institute of Economic Affairs
‘This is Manchesterism,’ Andy Burnham declared yesterday at the People’s History Museum in Manchester, in his first set-piece speech since returning to the Commons as the member for Makerfield. With Burnham the only declared candidate to succeed Keir Starmer as Prime Minister, we can now take a step back from debating (or even trying to reclaim) the meaning of the slogan and instead contend with the proposals of ‘real existing Manchesterism’ as the Prime Minister-in-waiting develops them.
If we had to list the most commonly used words in the speech, then Manchesterism is all about extensive devolution, a focus on ‘good growth,’ taking powers away from Westminster and easing the cost of living.
There was much to welcome in the prospective Prime Minister’s remarks. However, as Burnham reached for as broad a vision as he could, his speech revealed a few contradictions at the centre of his Manchesterism.
For one thing, Burnham rightly said that growth cannot come from top-down imposition. He wants more devolution; but he also dislikes unequal outcomes. Devolution creates benefits precisely because it produces differences. If we hand power and budgets to local authorities, let them alter the regulatory landscape and let them reap the rewards of growth, then some places will inevitably do better than others. The areas that decide well capture the gains, the areas that decide badly bear the costs, and everyone learns from the contrast. Burnham instead promises ‘good growth in every British postcode’, a promise that the difference such competition produces will not be allowed to show.
A centre that guarantees the same result everywhere, whatever localities do, is a centre still holding the strings. As Burnham himself noted, Britain is already, by the standard measure, the most centralised large advanced economy in the world, with mayors whose own tax-raising powers are limited and who mostly spend grants handed down by the Treasury. Devolution routed through a second prime ministerial command post is delegation, not devolution. A race in which everyone must finish first is not a race at all.
Another contradiction is a stated wish for a smaller Whitehall alongside an enthusiasm for nationalisation. Burnham worries, correctly, about a civil service that has grown too large and pulls in too many directions. Nevertheless, he has also confirmed that nationalising energy and water would be part of his programme for government, on top of the Great British Railways and GB Energy projects already under way. The staff of a nationalised utility are not, strictly, civil servants, but every industry taken onto the public books needs a sponsoring department, a board, a financing line from the Treasury and an official somewhere to answer for it when the taps run dry. The machinery of the state will inevitably grow to accommodate these new roles. It is impossible to reduce the size of the state if we keep inventing new functions for it to discharge.
The final contradiction is a welcome passion for growth wedded to a passion for regulation. Rachel Reeves has her ‘active and strategic state’, the Common Wealth think tank has its ‘productive state’ and now Burnham has ‘growth in every postcode.’
The protectionism Burnham layers on top is concerning. He promises to use the procurement system to ‘buy British’, to extract social value as apprenticeships and placements and to safeguard sovereign capability in steel, defence, energy, food and farming.
Government procurement is already the most protected corner of the economy. The World Trade Organisation explicitly exempts it from the core non-discrimination rules of both the GATT and the GATS, which makes it the one large arena where states may lawfully favour their own, and Britain already piles multiple additional requirements through the Procurement Act 2023.
The public sector spent £434bn through procurement in 2024/25, about a third of all public spending, and every domestic-content and social-value condition bolted on adds cost and delay. Defence, which Burnham singled out, is hit particularly hard by the current procurement rules. The last time the National Audit Office assessed the Ministry of Defence’s equipment plan, it found a £16.9 billion hole, the worst affordability gap on record. Content rules and wage conditions will only make defence procurement more expensive. Extensive protectionism will also exacerbate the cost of living and ultimately hurt British consumers in the name of protecting key industries.
There was plenty in this speech to welcome, but much else that cut directly against it. A government that owns the water, the trains and the power stations is not running a smaller state. A region with new powers but still told from the centre what success looks like has not gained much power after all. Focusing on growth is welcome, but no economy can grow if inputs become more expensive due to protectionism and bureaucratic barriers to growth are left intact.
What we’re reading
A bitter pill for the Bank of England to swallow. According to Huw Pill, the Bank of England’s chief economist, Brexit has made inflation worse in Britain. Addressing a conference in Uzbekistan, he suggested policymakers were finding it far more difficult to tackle a ‘self-sustaining momentum in pricing’, blaming the erection of new trade barriers and the end of free movement. Julian Jessop argued back in 2023 against Brexit being a driver of British inflation and indeed could help reduce it.
Ministers delivering? Perish the thought. But reports suggest that autonomous robots could be coming to Britain after ministers – or those who hope to be there once Ooor Andy takes over – singalled they would support a change in the law to allow their use. Readers who have been to Los Angeles will recognise the small grocery or takeaway droids; with a change to the 1835 Highways Act, they might join e-scooters on the nation’s pavements, safety campaigners and departmental myopia permitting.
Andy Burnham’s devolution proposals have largely focused on how to expand the public sector and build as many council homes as possible. But why not revisit this piece of IEA research from back in 2015 about how the private sector could be sliced up and large economic gains made from a radical devolution package. Tom Packer and Matthew Sinclair make an eloquent case for how fiscal decentralisation could ensure a more rational, experimentative and democratic alternative to SW1 sclerosis.
But if readers are worried that all of this simply sounds like regional policy by another name, why not look back at Pimlico Journal’s excellent 2024 piece ‘The Curse of Being First’. Their argument is that Britain’s economic geography has been skewered first by being the first country to industrialise, and then by decades of ineffective and ill-intentioned regional policy. Rather than try to revive it, parts of the North should be allowed to wither, rather than ‘the indefinite warehousing of British people’.
With Keir Starmer’s Defence Investment Plan finally expected today, it’s worth revisiting our Director’s recent piece on how sufficient suspending – and the growth required to finance it – should be at the heart of Britain’s defence posture. With social security spending soaring, defence spending contracting in real terms and GDPA flatlining, it is no surprise if short-termist politicians are presiding over a Britain becoming military incapable. We need an end to ‘gossip, triviality and folderol’.
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