548. Burnham vs. Westminster and Trump’s Next Target

0:00Does Andy Burnham want to win power only to give power away? On Monday, the man who will soon be Britain's Prime Minister set out his political and economic vision with devolution central to both, including a number 10 North and a warning to Whitehall not to block him. There was a lot of passion, there were big promises across a range of policy areas, including quite a lot that Rory and I have been calling for, which Andy Burnham summed up with the phrase, Good growth in every postcode and hope in every heart. As visions go, I have to say I found it pretty compelling. Let's see if Rory does too.

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2:44Rory Stewart:Welcome to The Restless Politics with me, Rory Stewart. And me, Alistair Campbell. and we're going to talk about Andy Burnham's big speech on Monday and what it says about the pending Burnham premiership. And in the second half, we're going to be talking about a series of very interesting elections across Latin America. So, Rory, Andy Burnham. Andy Burnham, Mayor of Greater Manchester, is now almost certain to be our next Prime Minister. In fact, I would say certain to be our next Prime Minister, barring something really weird happening. Keir Starmer will step down, Andy Burnham will take over.

3:12Rory Stewart:What's the rough timetable on that, just to sort of bring people back to the basics? Well, he'll be in there before the end of July, sort of third week of July, he'll be prime minister. Because had there been a challenge, there would have been a leadership contest within the Labour Party, and then it would have properly dragged on to just before Labour Party conference in September. So yeah, he's going to be prime minister by the end of the month. And yesterday I had lunch with the Palestinian ambassador, Hossein Zimrot, who we interviewed, and he pointed out, I think, that he's been in Britain seven years and has so far known six prime ministers.

3:45Rory Stewart:We're going to try again. So, and I suppose that's probably the starting point, isn't it? every one of these people will have gone through something pretty similar, I guess. Theresa May, Boris Johnson, Liz Truss, Rishi Sunak, Keir Starmer. All of them came into a country where a lot of people were pretty cross. And all of them will have tried to get their advices together and said, what are we going to do to sort out Britain? And I think there are probably two things you're thinking about. One of them is how genuinely to make Britain better. and the second thing which is necessary, which is how do you win an election?

4:20Rory Stewart:And most of them probably arrived at a very, very similar understanding of what was wrong with Britain. Cost of living, housing too expensive, people frustrated and angry about immigration, and a real sense that public services were creaking and things weren't really working. So what do you do about it? Now, if you're Boris Johnson, the answer was levelling up. So pumping quite a lot of money into the north of England. And we can talk about that a little bit because actually some figures have come out. And actually, rather surprisingly, for those who were skeptical of it, a loss of money went in.

4:55Rory Stewart:And if you go to places like Hartlepool, a lot was done. You had Rishi Sunak and Liz Truss, who I guess were more on a pro-free market business growth, low-tax side. Right. You had Keir Starmer, who I think thought his job was to bring a bit of seriousness back into government. And now we have Andy Burnham. So give us a bit of a glimpse of your sense of what Andy Burnham's recipe and vision might be for sorting out the country. I think on Monday, his speech did give a pretty clear picture of what he means. I mean, a couple of things to say. First of all, he's shown a ruthlessness, which when he was a young MP and a young minister, I never thought he had.

5:35But he has shown a ruthlessness. He has basically decided that the Labour Party was on the wrong track, the country's on the wrong track. And if we carried on in the track that we were on, with Keir Starmer leading Labour into the next election, Farage was virtually home and dry. That is kind of what's been at the back of his mind. And I think at the front of mind of quite a lot of MPs, particularly after the local elections. So what did he have to do? He had to find a seat, which he did. He had to win it. And He won it so big that the parliamentary Labour Party moved almost like a herd from Keir Starmer to Andy Burnham.

6:09And therefore, he's achieved what I knew he was trying to do, which was to become Labour leader and prime minister without contest.

6:15Rory Stewart:The first point you make is a kind of brilliant, brave political move, a very, very unusual move. Somebody who wasn't even in parliament manoeuvring himself to be prime minister against the prime minister with a stonking majority who you normally would have thought was safe for five years. Yeah. So that's big, bold, dangerous, difficult, very unlike what Labour politicians have tended to do historically. Then comes in and realises he can't just do the vibes. It can't just be about, you know, wearing T-shirts, not shirts. It can't just be about saying Manchester's great all the time. There has to be something of a vision.

6:50And what was interesting to me about the speech was, first of all, I can't think ever of a newly elected backbencher speech which has ever had so much attention. It was covered, frankly, as though he was already the prime minister. And today we're recording on Tuesday. The tension's clear. You've got the current prime minister, the incumbent, Keir Starmer, setting out a defence investment plan. But the front page is mainly about Andy Burnham. and Burnham knew that with the interest so high, Monday was a real opportunity to set out a vision, one which related, and this is absolutely key in all communications, related both to his own story and to that of the country.

7:29So his own story, years as part of Westminster Whitehall politics, which he blames for a lot of our ills. Next chapter, showing in Manchester that there can be a different way of doing it, more collaborative, more focused on what he kept calling place not party, and now suggesting that's the way forward for the whole country. So it is a vision. It is an idea. It is a different way of thinking about politics and about government.

7:55Rory Stewart:Seems to me that there are two big things. One of them is devolution, which is shifting political power out of London and down. He feels, and I think we would agree, you and I would agree anyway, that Manchester seems a pretty impressive example of what can be achieved if you give a mayor significant power. And tribute, a lot of this goes back to George Osborne, who lent in hard into the idea of setting up Greater Manchester as having power. And this was a devolution agenda that David Cameron embraced 15 years ago. But the results seem to be pretty good. After 10 years of Andy Burnham, it looks as though, and it makes sense, if you're driving an industrial strategy or vocational training in a local area, you're much more likely to get the kind of training and the kind of industry that suits that area.

8:41Rory Stewart:So that's good. And it also brings you closer to people. So we've talked about how in France, you know, local mayors are there for you to prod in the chest when you go into the supermarket. And that's definitely something I felt a lot in Cumbria, that Cumbrian problems were very, very different from things that people thought about in London. And I would have liked much more pattern. The second thing is a claim about infrastructure and industrial strategy. So a lot of this seems to be about thinking about house building, thinking about how to take control of water utilities, more government control of energy.

9:16Rory Stewart:And this is a sort of second idea that the economic lever is government playing a bigger role, partly renationalization, partly government spending driving stuff forward. Am I right? Are those the two main bits? Yeah. I think, look, he went through a lot of policy areas, and some of them you've mentioned, And I think it was also interesting. He had a very different take on education, apprenticeships, utility ownership, as you say. I thought maybe the most notable to me was the promise of the biggest council housing programme since the war. And it was interesting to me that he called it council housing, not social housing.

9:52And even though you're right that the first wave of devolution, Scotland, Wales, Northern Ireland, was essentially under us. And then George Osborne, as you say, came in, Northern Powerhouse, which never really took off. But he did do the Manchester and other northern regional city mayors. But I think one of the interesting strong lower order themes in Andy Burnham's speech on Monday was a rejection of Thatcherism and a blaming of Thatcherism for a lot of our current problems. Now, the truth is, a lot of this, for it to work, is going to have to involve the rebuilding and restoration of local government, a shift in power, as you say, that's going to require also a shift in mindset and a shift in resources at a time when resources are pretty scarce.

10:38But just to illustrate your point, I know you've written about this in your Middleland book, is that he was very, very careful not to be anti-London. Two or three times was trying to make that clear, but he was saying we have to have a more balanced economy. Now, London has roughly 15 % of the national population, but it accounts for about a quarter of all growth and a third of our exports. You go to Germany, and it's interesting you mentioned Germany at one point. In Germany, Berlin generates 5 % of economic output in Germany. Skilled jobs, you see them all over the place. Frankfurt, Munich, Hamburg, the Ruhr area.

11:17Then when you look at taxation, and I think this is where the Treasury is going to really have to get with the program. otherwise this thing is not going to work. 6 % of British tax revenues are collected by local government. Here in France at the moment, you mentioned mayors, in France it's 14%, in Spain it's 24 % and in Germany it's 32%. Sorry, the figure for Britain against Germany again,

11:42Rory Stewart:that sounds very extreme. 6 % of tax revenues in Britain are collected by local government, 14 % in France, 24 % in Spain, 32 % in Germany. So 6 % to 32%, I mean it's unbelievable. I mean, 6 % means 94 % of the tax revenue in Britain is collected centrally, which means, I guess, what you're getting onto. And the reason this matters is that if you are a local mayor, you have to be accountable and responsible. And a lot of that is money. It's about not spending money that somebody else collects and occasionally lets you have as a favor, but spending money that you actually generate in your local economy, taxing local people, spending locally.

12:22Now, of course, the big, big difference with Germany is that Germany is a federal structure. You have the 16 lender, which are more than just, you know, local authorities. They have real power, including for things like policing, but also economic regeneration. Now, I'm very, very grateful to the conversation. You know I like the conversation for alerting me to a new book, which is called The Myth of Treasury Control. It's published by Oxford University Press. It's written by four academics. And you can tell that this book is for academics, Rory, because it is currently priced at£125.

12:58Rory Stewart:You can also tell from the title, because I wonder how many listeners really know what the myth of treasury control is. That sounds like. You're really arguing against... Well, the subtitle is even better. Public spending in an incoherent state. Anyway, it's very, very interesting. And they've based it on 150 interviews with senior civil servants, people who make policy, politicians, people who deliver public services, including one Andrew Burnham. So I think this book, actually, by advice to Oxford University Press, is bring the price down, promote the fact that you've got an interview with Andrew Burnham in there, and I think it could actually become quite interesting.

13:36Rory Stewart:Let me come in with a plug. So 13th September, people who are feeling like getting their diaries out, I will be in the Dominion Theatre, sitting down doing what you call pedultery with Lewis Goodall. Oh, for God's sake. For God's sake. So Rory and Lewis Goodall are going to be talking about Manchesterism through the lens of my book, Middleland. Talking a lot about, I think, what devolution could feel like in Britain, how local democracy could work in Britain, and how it could be a model for the rest of the world. I think it's really relevant to Andy Burnham and Manchesterism. And anybody who's interested, you get tickets, fane.co.uk forward slash Rory dash Stewart.

14:17Rory Stewart:but look forward to seeing people for discussion 13th September. So Rory, when you put it in the podcast WhatsApp group, does anybody have a phone number for Lewis Goodall? And I sent you a phone number for Lewis Goodall. It was so that you could commit this terrible act of pedultery to plug a bloody book. Absolutely. I also thought I was being kind to you because you don't actually want to come out on a Sunday evening and sit on a stage with me. So I thought I'd give you an evening off. Okay, that's very kind. That's very kind. Well, if I can go back to the 125 book, but what they've done, they've looked actually in real detail at three areas that we have talked about and that we're both very, very interested in.

14:56One is prisons, one is special educational needs, and one is homelessness. This book, what it tries to do is to work out how the systems, and in particular, the way the Treasury operates. And there's a lot of talk about silos, there's a lot of talk about short-termism. And essentially, when you get to Andy Burnham's interview in the book, that is what he's talking about. Now, he's basically saying, I want to break that apart. Now, a lot of focus will be, I think, eventually. He didn't really talk about this, but I'm assuming that eventually we're going to have to get to greater tax raising powers to local government.

15:29That is a total anathema to the Treasury. This then leads us to a question that's getting a lot of attention already. Who will Andy Burnham appoint as Chancellor? because this has to be Prime Minister and Chancellor absolutely in lockstep saying, this is our vision. This is what we want to do. I think this will be Ed Miliband and I think it probably should be Ed Miliband because I think if you're talking about the need to change the mindset in the Treasury, then I think you need somebody who shows that they've got the capacity to do that. Now, Ed Miliband knows the Treasury, having worked for Gordon Brown, having been alongside Gordon and Ed Bowles when they were winning quite a few big battles within the Treasury.

16:11He's also shown, I think, on the climate agenda, and by God, is this week a reminder of how we need to sort of really face up to the realities of climate change. He's shown that he can take difficult positions and fight for them. I don't know any more, and Andy Burnham was right to point out yesterday, any speculation you see about this appointment, that appointment, just wait until I make those appointments. But I think it will be Ed Miliband, And I don't know what you think, Rory, but I think Ed Miliband would be the right choice, even though I know it'll be controversial. In fact, maybe even partly because it will be controversial.

16:46Rory Stewart:It depends on what your growth strategy is. And I think I'm more comfortable with the idea that devolution down to Manchester or down to Cumbria is really good at accountability, good at getting people closer to voters, good at producing policies that are more relevant, good at supporting good local sectors. but if he really wants growth let's take let's take his biggest thing which is council house building he doesn't have the uh the money levers on that i think the fundamental problem that andy burnham faces is that he's just signed up to the same handcuffs which keir starmer and rachel reeve set themselves when they said they weren't going to increase income tax national insurance corporation tax or VAT.

17:35Rory Stewart:In other words, he's basically destroyed the revenue that he could get to invest in the kind of grand industrial schemes that he might want to do from housing through to energy because he can't borrow much more money because of the fiscal rules and he can't raise much more through taxation. And I think it's heartbreaking because this is the opportunity if you actually want to go for a more Swedish or French style capable state of increasing the income tax, and particularly the income tax, I'm afraid, on medium income earners. I guess his thinking will be that on something as central to the Labour Party manifesto, that if he were to go against that, he would probably have to have a general election.

18:18And as things stand, I'm not sure he wants that. But it was interesting to me how, yet again, he was determined to emphasize his sticking to Rachel Reeves' fiscal rules, which, of course, is partly about keeping the bond markets settled, which they appear to have been. The reaction yesterday was, I suspect, exactly what they were planning for.

18:39Rory Stewart:That means the only thing he can really do to get his council houses built is radical reform of the planning system, radical deregulation. And that's why it's worth looking at these. Sam Friedman's written a really interesting piece, which we can put in the newsletter, in which he points out that Singapore, which is seen as a great kind of free market economy, has 80 % public housing. So all sounds great until you look at the details. You know Singapore very well. And of course, the way in which it's done in Singapore is the Singaporean government owns an enormous amount of land, has a very strong compulsory system of funding from taking it from average taxpayers, and it has incredible powers to drive through the building of this public housing against public opposition.

19:31Rory Stewart:So if he really wants to do this, what we're not hearing about is how's he going to make it easier to build? So what's he going to do about the Greenbelt? What's he going to do about environmental regulation. And how is he going to deal with all the stuff that you talk about every year when you go up to Leeds and you sit down with house builders, which is skills, building supplies, materials, construction costs, and all the stuff. And again, you know, the reason I'm raising this is the biggest house building, council house building project since the 50s, weirdly, is the kind of stuff that we were talking about even 15 years ago in government.

20:07Rory Stewart:We were obsessed with the fact that Macmillan had built an enormous amount of council houses. And as I keep saying, a lot of the most talented Tory ministers were made into housing ministers in an attempt to drive through, and they failed. And Labour also is going to fail massively on these incredibly ambitious targets, which were set by Keir Starmer at the beginning of his thing. So that all comes back to my question around Ed Miliband. Look, I think he's a great treasury fighter. I think he'll be able to drive change through. I think he'll probably be able to change taxation structures, give more power to local government.

20:39Rory Stewart:I think what he's not likely to do is really deliver on the deregulation, making it easier for business, dropping energy prices, freeing up planning regulations, which is what I think we need for growth. Of course, Andy Burnham having made this sense of place before party and I guess localism such a big thing, such a big part of this vision, that will be taken by people who then want to sit in opposition to big building programs in their own area as a sort of, you know, an anti-localist point. So this is going to require a lot of change. In this book, The Myth of Treasury Control, I'd completely forgotten this, but back in the dying days of the new Labour government, after Tony had gone and Gordon came in and Andy Burnham was then Chief Secretary to the Treasury, So he knows the treasury, knows how the treasury works, and he knows it from that side of the table, as it were.

21:32But there was a program, I'd completely forgotten about this, but it was called Total Place. And this was in 2009, and it was backed by the Treasury at the time. And I'm wondering whether Andy Burnham was pushing this. And essentially, the point behind this was that you map all your public spending in an area, and you then build the services around what they call place-based outcomes. And of course, what happened? 2010, David Cameron came in, austerity post the crash, and this just got, you know, basically kicked aside. So it'd be interesting to see whether that approach comes in.

22:05Rory Stewart:There's an amazing report, which has been put together by Damian T. Chatterjee, who's the director of Public First. And what he's been looking at is all these attempts to put money into less affluent areas. So 19 billion pounds of national funds, 19 billion pounds national funds have been allocated by Tory and Labour governments. This is what me talking about, what happened from Boris Johnson levelling up onwards. This is lots of different names, shared prosperity fund, levelling up fund, towns fund, pride in place fund. And they've followed what's happened. And a lot of this money has been spent.

22:42Rory Stewart:So Hartlepool, for example, got£25 million town fund, which focused on the economy. So not just cosmetic improvements. Hartlepool's received£974 per head since 2016, compared to£1 to£3 per head for councils in London. So huge difference. And there's been a massive transformation, not just if you go up to Hartlepool and how it looks, but also setting up vocational training colleges, getting behind businesses. However, the punchline that they've discovered is that these areas which have received the most money, Hartlepool, Great Yarmouth, Ashfield, Boston, have all got reform MPs, or in the case of Great Yarmouth, a restore MP.

23:27Rory Stewart:And putting a lot of money into those areas, huge amounts, like 19 billion pounds, hasn't changed remotely people's willingness to vote for these far-right populist parties. In fact, weirdly, it's the opposite. There is a correlation they found. The more money these areas get, the more likely they are to vote for restore or reform. If you equal across poverty, diversity, and all other indicators, all other things being equal, the more money you get in leveling up funds, the more likely you are to vote for reform or restore. Oh, that's very interesting. I mean, I guess that what Andy Burnham, I think, is trying to say is that if we just carry on with this politics of people at the centre in Westminster and Whitehall decide what you in Hartlepool and Great Yarmouth need and we give you a few bob here and there and we say why don't you build this with it and build that with it what he's trying to do and I think there's number 10 north we should talk about there's number 10 north and what that means and he says it's going to be the nerve centre of a rewired Britain and he was very careful to say even though he wants it to be based in Manchester because he's got to be based somewhere that it's also and i've got these i've got a friend in scotland stephen monroe who every time you and i talk about the north literally every time he will send me a message saying the north is fort william the north is you know so andy bird every time he talks about number 10 north he's got to watch the scottish reaction to that but i think what he's saying is that this isn't just about giving money this is about empowering local communities and it was interesting the way he He talked about what he's done in Manchester.

25:00He kept going on about collaboration, working with the parties, working with the trade unions, working with faith groups, working with businesses, etc. Now, how will that approach survive the reality of parliamentary politics and parliamentary combat? And if you saw the reactions, both in parts of the press and also from the Tories and from reform yesterday to Andy Burnham's speech, it's going to be very, very hard. I hope he does it, by the way, but it's going to be very, very hard to stick to this, you know, not point scoring, not doing party politics all the time, not just sort of saying you've got everything wrong and to hold to this sense of a more collaborative approach.