Yesterday saw the appointment of the country’s seventh Prime Minister in ten years. Andy Burnham possesses a large parliamentary majority and, for the time being, the support of most of his party, but he still faces many of the same challenges that the other six grappled with. The world is dangerous and uncertain place for middle sized powers with relatively open economies, the public finances are shot, and Britian’s growth rate is anaemic – and has been for the last two decades. None of these challenges is unique to Britain but the country does seem to be poorly sited to face them all.
It is the economic situation which Burnham acknowledges he has to turn around in order to achieve his wider goals of devolution and creating a more equal society. He would argue that devolution, in particular, can be part of the solution (he would also argue that a more evenly shared prosperity would engender greater economic confidence and therefor consumer demand). His apparent success in Manchester, which under his leadership consistently beat most of the rest of the country in the economic growth stakes, was grounded in a business friendly attitude. That was particularly true of property development (as anyone who cares to do a before and after comparison of the city’s skyline can attest) where his administration bet on building the city’s professional services industry with its lust for prime office space. But it was also true, at least to some extent, of manufacturing too with the successful Made Smarter scheme driven and piloted in the North West. Crucially that got off the ground because the Greater Manchester Combined Authority (and the Growth Company that it harboured) gave the project space (and a bit of resource) to grow at a time when central government was distancing itself from something that stemmed (indirectly) from the Theresa May era industrial strategy.
In terms of the personnel he has picked to help him, the appointment of John Healy as Chancellor was a surprise to almost everyone, but in hindsight the move looks more obvious. Ed Miliband might have looked too red (perhaps unfairly, his radicalism is confined to environmental issues, he was a pretty orthodox advisor and Minister at the Treasury under Blair and Brown) and rumour that he was going to appoint Shabana Mahmood to the role provoked outrage among his soft left backers. Healy is a good compromise, a very experienced Minister, including at the Treasury, identified with neither the left nor the right. More pertinently his recent resignation, over the Treasury’s refusal to fund the Defence Investment Plan properly, can be applauded by every wing of the party. To the right, it’s a sign of his commitment to strong defence, to the left, of his willingness to face down Treasury orthodoxy (if the rumour that Rachel Reeves was offered the Defence portfolio in exchange is true, then it proves the Burnham has a very dry sense of humour…). But before anyone gets too carried away with the prospect of radical change in public spending and spooks the markets, the appointment of Emma Reynolds as Chief Secretary to the Treasury, overseeing pubic spending (and effectively number two in that Department), should be noted. Reynolds, who was an MEP before becoming an MP in 2010, lost her seat in 2019 before being re-elected in 2024. She spent a large chunk the intervening years as a senior director at the City of London’s lobbying arm, City UK.
The other big economic Department, formerly known as DBT, has seen perhaps the biggest shake up of all. In one sense it is back to the future, with Jonny Reynolds returning to the job he held until a year ago. However, he returns to a beefed up portfolio, with the majority of the, now abolished, Department of Science, Innovation and Technology going into the new Department of Business, Innovation, Science and Trade, which I think we are going to have to get used to calling BIST. On balance this is probably good news. Reynolds was popular and the driving force behind the Industrial Strategy, which has trod water since his departure. His successor Peter Kyle was not opposed to it but seems to have lacked the political clout to secure funding for much more than sticking plater measures such as the British Industrial Competitiveness Scheme (which will help some manufacturers with their fuel bills). With its author back at the helm and a more receptive team at the Treasury, we can hope for progress towards making the Strategy, which highlights advanced manufacturing, more central to the Government’s economic goals. Quite a lot may depend on the junior ministerial appointments which are being made as this article is being written; so far only the new Minister for AI, Kanishka Narayan (who will attend Cabinet) has been appointed.
The change in government is an attempt to press the reset button in office, something incredibly hard to do as, in their different ways, Gordon Brown, Theresa May, Liz Truss and Rishi Sunak all found out. Only Boris Johnson and, more than thirty five years ago, John Major, have pulled the trick off in recent(ish) times. Burnham has a mountain to climb to pull his party back to where it was and faces electoral threats to his left and right (although he might prove lucky there in that some of the shine seems to be coming off Nigel Farage and Reform) as well as that dangerous and uncertain world. Getting growth back into the economy will make it easier and manufacturing businesses will hope for a strategy that prioritises their needs and the contribution they can make to that.