Andy Burnham has been in office a few days, but has he given us an indication as to what his government will be like?
Back to pre-Thatcher days
Burnham has said that he wants to take the country back to the pre-Thatcher era. I know many who want to ridicule him will say that means strikes and the IMF in Downing Street baling the country out. I think I know what it means. Thatcher thought our future lay in finance and that many industries were outdated. We were not very good at making cars for example, so it was better to bring in foreigners to show us how to do it. One of these, Honda, closed its Swindon site in 2021. Thatcher also did not like trade unions and did not like the older unionised industries. There was a less partisan side to her thinking. Publicly owned industries had to borrow from the Treasury for investment which limited the amount they could borrow. She thought that if they could borrow as private companies then there would be far more investment. She also had an idea that they could be owned by individuals, many ordinary people having shares.
Unfortunately, it did not work. Individuals soon sold their money to large shareholders, many of whom unashamedly asset -stripped the companies, refusing to put in the necessary modernisation but awarding themselves large bonuses.
Public control
We are lucky in the North East, since we have a large reservoir up at Kielder, built before water was privatised, and it is far less likely we will suffer water shortages. I feel strongly that Kielder disproves the privatisation argument. I don’t think Andy wants to go back to nationalisation as practised after 1945. At that time industries such as railways and power supply had been damaged in the war and nationalisation was the only way to fix them. There was little private finance available. Now the situation is reversed. There is plenty of private money and governments are short of it because of the many burdens they must take on. What I think Andy wants is public control of essential utilities such as railways, water, gas, electricity and buses. This does not mean the government has to own everything, but it must control it. The successful public transport services in Manchester and London are not owned by the relevant transport authorities, but they do control them. If a company does not deliver a good service, it can be replaced, and routes and fares are regulated. After the recent appalling performance of some water companies, and the barefaced greed of their directors, I think most of the public would be happy with this.
Immediate issues
Andy has set out a direction of travel which I think many would be happy with. But there are more immediate issues. The cost of living. If he cannot improve this in the next six-month then his grander schemes will not be realised. We all know he cannot control wars in Ukraine or the Gulf of Hormuz, but one of the areas where government has influence is energy prices. This influences how many people firms can employ, the performance of our industries, and household bills. One way would be to suspend the Green Energy levies, whether temporarily or for ever, and find funding for green energy projects from other sources. The levies account for 13% of domestic consumers bills. Since his policy programme will include greater regulation of the energy companies, hopefully what they charge industry can be reduced too.
Building more council houses will effectively reduce prices in the private sector and help end the scourge of homelessness. Councils should be able to borrow against their assets from the private sector to do this. But he is not going to bring in effective funding for regional government or local authorities without reforming the present antiquated household rates system and replacing it with something fairer such as a land value tax. This will produce tremendous opposition form vested interests, particularly in the South, so if he is going to do it do it now, early in his term of office.
Direction of travel
I am happy with Andy’s direction of travel. He has shown both dexterity but also unnecessary vindictiveness in appointments to his government. John Healey for Chancellor was a clever move, settling the Miliband/Mahmood competition for the job. But I am not happy with some of his other appointments. The wholesale sacking of Starmer supporters such as Steve Reed and David Lammy does not augur well for an inclusive Labour Party and will store up resentment for the future. It can be argued that some Starmer loyalists such as Liz Kendal simply were not very good, but to sack Hilary Benn who has been a loyal and competent minister and shadow minister for many Labour Leaders just looks like nastiness.
Of course, the most magnanimous act would have been to appoint Keir Starmer as Foreign Secretarey, a role to which he would be admirably suited, but perhaps I am expecting too much of our politicians.
Overall, I see a government with a clear sense of direction but an initial failure to try to bring the Labour Party together which worries me for the future. For all his much lauded “people skills” Andy Burnham does not seem to be good at bringing his own party together. Still, he has time to learn.
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