After six prime ministers in a decade, Andy Burnham looks increasingly likely to become the seventh. But whoever takes charge faces the same chronic economic problems that have fuelled political instability: a lack of job opportunities, stagnant living standards and strained public services.
Burnham has pledged to revive the economy while sticking to the current government’s fiscal rules — borrowing only to invest, not for day-to-day spending, and reducing debt as a proportion of the economy within a few years. The pledge reflects a wariness of upsetting bond markets, especially as interest payments on the national debt now account for one in every £10 the government spends.
“Andy Burnham likely to become seventh PM, facing same economic challenges with Darren Jones backing his fiscal understanding.”
Before the US-Israel war with Iran began, Chancellor Rachel Reeves estimated she could meet her financial rules with £24bn to spare. But much of that cushion may have been eroded by the conflict. Even the plans Burnham has hinted at — boosting investment, focusing on skills, and taking more state control of utilities to lower bills — could easily exceed the available wiggle room.
Growth remains the overriding priority. Between 1990 and 2007, the average person became better off by roughly 2.5% a year. Since then, living standards have improved at half that rate, leaving households thousands of pounds worse off than they might have been. A lack of public and private investment during austerity and after Brexit, compounded by Covid and higher energy prices, has damaged productivity. Food prices have jumped 40% in just a few years.
Darren Jones, the former Treasury minister, has thrown his weight behind Burnham’s economic approach. Jones, who ruled out his own leadership bid, said that Burnham understands the fiscal rules and has reassured him over his economic plans. The endorsement signals that Burnham may be able to retain credibility with financial markets even as he seeks to revive growth.
But the margin for error is slim. Burnham could tweak the rules to allow more borrowing for investment if bond markets are convinced it will pay off in higher growth. Alternatively, he could raise money through taxes or cuts elsewhere. His ambitions may be thwarted, and some promises may not survive contact with financial reality.