‘Andynomics’ is just managed decline with a smile

It was during the Great Depression that then US president Franklin D Roosevelt coined the phrase the ‘first 100 days’. In a national radio address three months into his presidency in 1933, he summarised all the New Deal measures already introduced. Since then, ‘the first 100 days’ has been considered a temporal benchmark to assess the impact of a new leader.

Although UK prime minister Andy Burnham still has 90 days to go, is there anything we can discern just from his first 10 days? This might seem premature. But the state of the nation is so dire, and the record of recent administrations so damaging, that a truly transformative government would need to show a genuinely fresh approach from day one.

For too long, the UK has had a series of technocratic, managerial administrations. A feature uniting them all has been a dishonesty about the tough choices required to escape the country’s plight, particularly the ravaged state of the public finances. This hasn’t been their only failing, or even their worst. While engineering a spiral of indebtedness and low growth, they have demonstrated a scepticism for democracy that borders on contempt. Shielded by the belief that ‘they know best’, governments increasingly treat the electorate as a problem to be ‘managed’, rather than the only source of their authority.

Despite his ebullience, the early signs that Burnham can confront this economic and political decay are bleak. His empathetic air certainly contrasts sharply with the woodenness of his predecessor. But a kinder style is no substitute for honesty. There are difficult choices ahead. They will hit Burnham sooner or later – as they have all of his recent predecessors.

Burnham’s willingness to be honest with the public will be his first and arguably his most critical test. He has promised to lead a ‘cost of living’ government, but shows no signs of understanding the real causes of the financial pressures people are facing. These pressures come not from rapidly rising prices, but from stalling incomes: wages are stagnant, and have been since the 2008 financial crash. The government’s forecasting body, the Office for Budget Responsibility, predicts that real disposable income per person will flatline, growing a mere half a percent a year for the rest of this decade. This is less than a quarter of the average rate of growth from the mid-1950s to 2007.

There can be no doubt that the UK is in a uniquely deep rut. The latest official figures report that labour productivity at the start of this year is actually below where it was four years earlier. In the whole period since 2008, productivity is up only six-and-a-half per cent. During the 20th century, that modest gain – made over nearly two decades – used to be achieved in three average years.

The truth is that there will be no national economic renewal – never mind Burnham’s promise of ‘good growth in every postcode’ – without significant reform. The priorities for any government must be ending the handouts that are protecting unproductive jobs, curbing the ballooning spending on welfare and health, and easing planning and regulation red tape to allow the construction of homes, infrastructure and 21st-century workplaces.

If his first 10 days are anything to go by, Burnham is out of his depth. In his first Downing Street speech, the new PM pledged to ‘put the care of people at the heart of everything I do’. But a caring manner is not what makes a government effective. It certainly won’t allow Burnham to bend the laws of economics by subsidising people’s living costs without a growing economy. Even his second-day announcement of cutting VAT on household electricity bills falls well short of his benevolent claim to ‘put more money in people’s pockets’. Burnham’s lordly almsgiving amounts to less than a pound a week for the average household, and it won’t offset the rise in energy costs already expected by this October.

We must also beware the empathetic ruler who says he knows what’s best for ‘ordinary people’. On day four, Burnham promised to save the pub by offering business-rates relief. This would be paid for by extra taxes on high street businesses that, in his view, ‘cause social harm’. The prime minister highlighted vape shops and gambling arcades as such ‘harmful’ businesses. In other words, he will decide what is good and bad for us.

Economic stagnation is one problem. The perilous state of the public finances is another. Britain’s debt level is fast approaching the equivalent of one year’s economic output. With a return to positive interest rates at the end of 2023, the cost of servicing existing debt is mounting. In fact, if debt servicing were a government department, it would be the second largest – exceeded only by health and social care. Now, one in every £12 the government spends is just to pay the interest on its accumulated debt.

Not only is debt not being paid down, but most of the new borrowing is also devoted just to paying the interest charges on past debt. Interest payments absorbed about six in every seven pounds of borrowing this year, exacerbating an unsustainable spiral.

Burnham says he intends to meet costly commitments on defence, social care and public housing. But he hasn’t explained how he can do this without stemming planned hikes in spending on welfare and health. Without economic growth or substantial budget cuts, Burnham’s spending promises could only be funded by extra borrowing or higher taxes. So far, then, new leader, same reliance on tax-and-borrow to pay for a society debilitated by handouts.

Whatever Burnham might, or might not, do about the public finances in the longer term raises the third critical test: his democratic mandate. He has promised ‘the most significant change moment in our politics for 40 years’, while simultaneously saying he would stick to Labour’s 2024 manifesto. He can’t do both. Initiating an extensive political and economic transformation of the country, as he has implied, is incompatible with the existing manifesto policies. Such a revolution must surely have the consent of the people.

If Burnham is to stay true to his day one pledge to ‘bring forward a new plan for Britain, a 10-year plan’, then he should already be preparing the country, and his party, for a General Election around it. For democracy to function, as well as for practical reasons, he should let it be known that he and his cabinet will campaign for this plan to secure support for it at the ballot box.

But this appears to be wishful thinking. In his first BBC interview as prime minister, Burnham explicitly ruled out an early General Election. The new, caring prime minister prides himself on being a ‘people’s person’ – but that clearly doesn’t even extend to listening to the current polls, which indicate that about half the adult population want an immediate election (compared to a third that don’t). At this stage, it seems that Burnham has no such plan for change, despite insisting he was ready to govern.

By the time his premiership reaches the famous 100-day benchmark, Burnham might yet confound current expectations. But he needs to move quickly. He can start with being honest with people about the tough choices ahead, weaning his government off its tax-and-borrowing dependency, and submitting his ideas to the judgement of the electorate.

If the first 10 days are anything to go by, Britain is in trouble. New leader, new manager – and the same social and economic quagmire.

Phil Mullan is the author of Beyond Confrontation: Globalists, Nationalists and Their Discontents.