number 10 - UnHerd

Andy Burnham’s missing economic strategy

Wolfgang Munchau — Sun, 19 Jul 2026 23:03:55 +0000

At the World Cup, a single misjudgment by the manager ended the England team’s hopes of reaching the final. In politics, Keir Starmer never recovered from sending Peter Mandelson onto the pitch. Luck, too, played a role in the downfall of both the Three Lions and the outgoing prime minister. But when football teams or politicians keep on failing, it cannot be explained by fortune alone.

When Bill Clinton got elected in 1992, a newspaper dispatched me to Washington, where I followed his first two years in office. He had a lucky break during the election campaign, but did not owe his victory and political success to that. This was the new era of post-communist financial globalization. Many of the smart people at the time were on the center-left of politics, and Clinton was their man. He was a reactionary on law and justice, but his welfare-to-work policies were inspiring. The center-left of Clinton’s generation saw welfare as an insurance policy, but also as a poverty trap. As a result, they pushed for people to get back into work. Clinton committed his own share of policy errors, like the deregulation of the financial industry. But he started off with an intelligent agenda.

Clinton was also a politician with a keen interest in macroeconomics. He was not an economist, but shortly after he got elected, he assembled a group of experts to help him draft his program for his time in the White House. His strategic goal was to reform welfare and the health system while at the same time eliminating the fiscal deficit.

Today, 34 years later, Andy Burnham will become Britain’s latest prime minister. What do we know about him? It is true that he did not have a lot of time to prepare his agenda. The time between a US presidential election to the inauguration is a little over two months — with a Christmas and New Year’s break in between. This is a little, but not much more, than the time between Burnham’s victory in the Makerfield by-election and his arrival at No. 10. Certainly, it does not take years to formulate an economic strategy.

Why the campaign against Farage will fail

By Wolfgang Münchau

It is the implementation that takes longer. Clinton did not have it all worked out, but he set goals and intermediate targets, and developed a clear idea of the political and real-world obstacles that would stand in the way. Burnham has expressed a lot of ideas about British society. He has policies — but I’d struggle to identify an overarching strategic objective beyond the usual platitudes of social justice.

Burnham inherits a problem that his predecessors failed to address. Productivity growth in the UK collapsed directly after the global financial crisis in 2008 and never recovered. Until then, the City of London was the gift that kept on giving. In Germany, it was the car industry. One European country after another lost its business model. What happened in all of these countries, including the UK, is that more and more people become dependent on welfare. It became normal. Germany renamed its welfare program a “citizen’s income”, as though it were a basic human right. But the shift from welfare as an insurance policy to a welfare as a personal choice has trapped European societies in a vicious circle. The greater their welfare dependency became, the more they fell behind in investment and innovation.

Burnham has not given us any plan to fix this problem, let alone one I could disagree with. There are socialist ways of raising productivity growth, and libertarian ways. But let’s not get hung up on ideology. The fall in productivity growth is not about who gets what. It’s about investment, and most investment comes from the private sector. Companies invest to become more productive and innovative.

What does Burnham think about private-sector investment? I haven’t the foggiest, and nor does anyone else. I don’t get a sense that this is a question that keeps him up at night.

Burnham faces an insurgent Britain

By Wolfgang Münchau

He has, however, thought a lot about public-sector investment. But the two are not the same. About 80% of all investment in the UK is from the private sector. So if Burnham pushes ahead with his public investment plans by raising taxes, what I’d expect to see is a fall in private investment that exceeds the rise in public investment. It’s basic math.

Granted, we’d all like to have better trains. But fixing the trains has nothing to do with productivity. The US is a country with a terrible railway network, and with high private-sector productivity. France has Europe’s best railway system, but the trains have not stopped the French economy from becoming increasingly dysfunctional. Everybody needs to get to work, but the comfort and speed of the journey is at most marginally related to our productivity.

The productivity problem can only be solved through strategic action — just like Clinton addressed structural fiscal deficits and welfare dependence. Emmanuel Macron, too, was a welfare reformer, but he had no fiscal strategy. This is what has rendered his presidency a failure. A recent estimate from the French High Commission for Strategy and Planning found that France’s debt could rise from a current level of 118% of economic output to between 186% and 245% by 2050.

The center-left used to be good at strategy. Clinton was. So were Tony Blair and Gordon Brown. To be clear, I am not endorsing anyone here. This is not about whether we agree or disagree with their policies. My point is that these people had some strategy. But since Burnham has not told us what his strategy is, we can safely assume that he does not have one. Macron had one, but as I say it failed the fiscal test. This is a bit like going to war and being shocked that the enemy fights back, which is what happened when the US and Israel attacked Iran.

As for Starmer, he clearly was not a reformer, but at least Rachel Reeves imposed fiscal rules that kept the show on the road. But, again, have no clear idea where Burnham really stands on those rules. He said he would follow them, but this is easier said than done unless you have a clear idea of what to do when the numbers no longer add up.

So rather than leaking the names of Cabinet ministers, maybe Burnham should have told us about how he intends to fix the productivity problem while keeping the country solvent. At this point, we don’t need details. We need direction.

“It borders on delusion to think that you can draw lessons from the governance of Manchester for the UK.”

Burnham has lots of policies, for example on devolution. I am not against this. It is possible that local governments spend money more wisely than central government. The other way around is also possible. Either way, there is no link between the degree of decentralization and innovation. Silicon Valley is not where it is because of Californian politics. It is there because of Stanford University, and because some of its most brilliant entrepreneurs, like Steve Jobs, grew up there.

Burnham knows local politics better than most politicians do: and maybe it is easier to fix some problems locally. But it borders on delusional to think that you can draw lessons from the governance of Manchester for the UK as a whole. Cities don’t have bond markets, nor currencies that can devalue. And the mayor of Manchester does not have to put up with Donald Trump. The idea of a Northern No. 10 is a nice publicity stunt; but it is about appearances, not substance. I therefore make one specific and confident prediction: Burnham will not solve the UK’s underlying economic issues.

That said, he may still succeed politically. Elections, after all, are zero-sum games. Someone has to win. Starmer got his whopping majority not because he had a brilliant plan, but because people preferred his lack of a plan to the Tories’ version of a lack of plan.

Electoral success and problem-solving are not the same thing, of course. Margaret Thatcher would probably have lost the 1983 elections had it not been for the Falklands War. Angela Merkel managed to win four elections in a row and yet failed to address her country’s economic problems.

But the importance of problem-solving (or lack thereof) does not mean that you should keep ignoring the economy. The persistent failure of the previous generation to address the problems of a permanent decline in productivity has made European countries harder to govern. And the longer people are trapped in the welfare system, the harder it will be to get them out again. If you fail to solve a problem for long enough, eventually it catches up with you.

The odds of a successful Burnham premiership are shortening precisely because previous prime ministers have prioritized short-term expediency over long-term strategic action — and because it looks like he will do exactly the same. But we are already living in the long-term. The fact that politicians like Cameron or Johnson succeeded politically without solving the country’s deep-seated problems does not mean that the current generation of politicians will enjoy the same luxury.

In politics, as in football, outsiders can win, and favorites can lose. But we should not fool ourselves about Burnham. He does not have a strategy to fix the British economy. Those who are hoping he will do it by chance will be disappointed.

view comments

Boris Johnson blames the herd

Sam Leith — Thu, 07 Jul 2022 23:00:56 +0000

In a good mood, Boris Johnson likes to ramble, but his resignation speech as Prime Minister was just a few minutes long. On the surface, it made a creditable attempt to project dignity and generosity and good grace. He admitted that “no-one is remotely indispensable” and called having been Prime Minister “a privilege” and “an education”. But you could discern three main things that, under its mostly mannerly style, it was determined to put across.

In the first place, it was an attempt to present as case-closed the notion that he should be given his wish to continue as Prime Minister until the autumn. In the second, it was an attempt to shape how history would view him, with a recitation of his achievements. And in the third, it was an attempt to cast him as the victim of malign or, at best, unimaginative pygmies. The three dovetailed nicely: point one because point two, therefore point three. The speech’s big theme was: they were wrong and I was right.

He turned to the first issue right away — and his tactic was not to focus on the point as if it were a question up for debate but, rather, to smuggle it into a subclause as if it were already a given. “I’ve today appointed a Cabinet to serve, as I will, until a new leader is in place.” The important bit in that sentence is the three words “as I will”. Why does he want to carry on? Not out of personal ambition, he assured us, but because of a selfless sense of duty: “The reason I have fought so hard in the last few days to continue to deliver that mandate in person was not just because I wanted to do so, but because I felt it was my job, my duty, my obligation to you to continue to do what we promised in 2019.” He bust out a nice little tricolon in making what rhetoricians call an “ethos appeal”.

The issue of his place in history was addressed with a now familiar litany of catchphrases and statistics — “getting Brexit done”; “delivering the fastest vaccine rollout in Europe”; “leading the West in standing up to Putin’s aggression in Ukraine”; “vast programme of investment in infrastructure… the biggest in a century”; “levelling up… unleashing the potential of every part of the United Kingdom” and so on. Nor was he slow to remind us of the electoral mandate that underpinned his arguments to be able to continue in post: “The biggest Conservative majority since 1987, the biggest share of the vote since 1979.”

That point informed a dominant figure of the speech: apostrophe, a showy changing of your ostensible addressee. He vaunted his statesmanship in an aside which showed how there were more important things than party politics — “let me say now to the people of Ukraine that I know that we in the UK will continue to back your fight for freedom for as long as it takes” — taking credit by implication for the UK’s support for Ukraine by reassuring them personally that it would survive his premiership. Otherwise, he more than once made a point of directing his address explicitly to “you, the British public”. The message was that he was speaking to the people over the heads of the parliamentary party. He was deft enough to admit that “there will be many people who are relieved” but kept in mind “quite a few who will also be disappointed”, and it was the latter he affected to console.

It wasn’t, he said, as if he hadn’t tried to make his MPs see sense: “I’ve tried to persuade my colleagues that it would be eccentric to change governments when we’re delivering so much and when we have such a vast mandate,” he said. “I regret not to have been successful in those arguments.” “Eccentric”, to give him his due, is a wonderfully effective note of condescension.

Lock up your cats

By Sam Leith

His list of thanks might have seemed gracious, even formulaic — but be it noted that he thanked everyone (family, civil service, “Conservative party members and supporters”, staff at Number 10 and Chequers) except his parliamentary colleagues. And he even dropped in a salty little jibe about the Downing Street policemen being “the one group, by the way, who never leak”. And there’s quite a bit of wriggle-room in the way he phrased his pledge of support to his successor: “To that new leader, I say, whoever he or she may be, I say, I will give you as much support as I can.” He didn’t quite say “as much support as I feel like” — but as oaths of fealty go it means much the same thing.

And so to the third thing. Running through these words, like the proverbial golden thread woven through a tapestry, was a distinct glittering line of what might be informally identified as butthurt. He admitted “how sad I am to be giving up the best job in the world”. But at no point would the departing Prime Minister concede that there was any good reason for him to resign. He trivialised the criticisms of his character and behaviour as if they were arbitrary gamesmanship on the cricket field — “quite a few months of pretty relentless sledging”. Great men can put up with sledging — all part of the game — but the characters who surrounded him in the parliamentary party just didn’t have the cojones. “Them’s the breaks”: stoical acceptance of his fate, or an attempt to recast reaping what you sow as the operation of dumb luck?

The payoff was a metaphor so bland and unoriginal, so cursory, as to project not the slightest sincerity: “Even if things sometimes seem dark now our future, together, is golden.” That’s going through the motions. Johnson the phrasemaker was present not in the payoff, but in the payload: the main pull-quote from today’s resignation statement that “the herd-instinct is powerful”, casting his detractors in the parliamentary party not so much as independent moral agents but stampeding quadrupeds. Here was a Big Dog, in his view of it, brought low by a flock of sheep.

view comments