Burnham is a closet neo-liberal with perfect economic timing
Burnham is a closet neo-liberal with perfect economic timing
Ambrose Evans-PritchardFri, June 26, 2026 at 6:00 AM UTC
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Andy Burnham won't 'nationalise things for the sake of it', according to one former Downing Street adviser - Tolga Akmen/EPA/Shutterstock
Don't tell the Parliamentary Labour Party, but Andy Burnham is not as Left wing as he pretends.
His "business-friendly socialism" is a populist tilt to appease residual Corbynistas, the Left's grievance industry, and London enclaves of shrill wokery.
One thing he most assuredly has is the gift of economic timing, or at least good luck. But whether he is a genuine strategist or adds up to little more than a sweet-talking, wave-surfing, chaser of shifting political fashions is a legitimate question.
Britain touched bottom some time ago and is slowly adjusting to two decades of economic shocks. We are still at peak media catastrophism, but that is a lagging indicator.
Sir Keir Starmer can reasonably feel robbed. The rebound last year was blighted by Donald Trump's tariff war; and blighted this year by the Iran war and the ensuing jump in global borrowing costs. Green shoots wilted in the UK housing market.
Instead it is Burnham who may snatch the dividend of a powerful economic renaissance that is gradually gathering force and which could deliver the highest growth rates for a generation.
Sir Keir Starmer can reasonably feel robbed, given the economy's rebound was blighted by Donald Trump's tariff war and then by the Iran war - Brook Mitchell/Getty Images
The next secular cycle could plausibly make Britain the surprise star of the developed world by the late 2020s, so long as Burnham establishes market credibility with root-and-branch reform of the welfare system – not half-baked, Starmer-style tinkering to meet the fiscal rule.
He might do just that, according to his Mancunian economic mentor Lord Jim O'Neill. "I think Andy smells correctly it is the right thing to do," he said.
The party is sufficiently chastened by its poll collapse to obey orders next time. "Andy is the saviour, and so he's got a lot of people who want to have their lives extended as MPs, who will basically back him on whatever he wants to do," he told LBC Tonight with Andrew Marr.
Big caveat: this is a task for an iron man of unusual ruthlessness, and one might ask whether Burnham isn't more of a thin-skinned snowflake craving adoration.
"You have to make it absolutely clear that you are putting your office at stake, that you are prepared to call new elections or to resign if your parliamentary group is not behind you," said Göran Persson, the Social Democrat premier who turned around Sweden when his country was in far worse fiscal shape than the UK today.
"Any sign that you might waver will doom the programme. If there is the slightest dissension between your ministers, if you cannot keep your team together, you will find yourself on a very slippery slope," he said.
Got that, Andy?
'I think Andy smells correctly' he must establish market credibility with root-and-branch reform of the welfare system, says Lord O'Neill - Belinda Jiao
The supercharger for economic growth is artificial intelligence. The UK has the world's third-largest AI industry, without the handicap of the EU's suicidal AI Act. It scores well on diffusion.
Its high gearing toward services, life sciences and technology makes it a good fit for quantum gains in AI productivity, already visible in a 1.6pc rise in the past year on the new real-time information (RTI) measure.
The UK is now on the accelerating upward leg of the AI "J-Curve", tracking America with slight lag. Optimists think it could lift UK growth rates to 2-3pc, drastically improving fiscal dynamics and the political mood.
Burnham's Britain is sitting on the coiled springs of a multi-year credit boom. Households have deleveraged massively, paying down £600bn of mortgage debt. Companies have retrenched. Total private debt has dropped from 185pc to 133pc of GDP.
The scale overwhelms the modest rise in public debt. Today, the UK is one of the least indebted countries in the developed world.
The Bank for International Settlements says the combined private and public debt-to-GDP ratios are: Japan (354), France (324), Canada (315), Netherlands (302), China (300), US (251), Italy (232), UK (221) and Germany (196).
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All it will take to unleash a fresh cycle of credit expansion is lower inflation and a revival of animal spirits.
Both are on the way because the UK energy crisis of the past four years is essentially over – for reasons that should console both sides of the culture war.
We are moving from a global gas shortage to a structural glut. Excess supply will soon be flooding the market. European gas futures for 2028 are trading at €26 (£22) per megawatt hour, around the long-term average in real terms.
The UK is over the hump in the switch to more efficient electrotech.
Battery storage is now so cheap that it makes wind and solar unbeatable. Few noticed that Elon Musk's Tesla teamed up last week with NatPower to launch a £3bn-£4bn investment in battery projects in the UK and Italy.
Fewer yet noticed a week earlier that the Japanese are to invest £9bn in infrastructure linked to the UK's roll-out of offshore wind, now so vast that the UK will be a net exporter of electricity within five years.
The benefits will accrue progressively. If the Tories and Reform think energy costs will be a millstone around Burnham's neck three years hence, they are in for a rude awakening.
Will Burnham blow it by lurching Left? I strongly doubt it. What he calls Manchesterism is muscular use of the state to sharpen markets, break cartels and drive economic growth. It has nothing in common with ideological anti-capitalism.
"Andy is not going to nationalise things for the sake of it," said Prof Michael Jacobs, a former Downing Street adviser to Gordon Brown and now one of Burnham's economic whisperers.
"What he will do is go after monopolies that have no real competition and are making profits they don't deserve. The energy distribution networks are ripe for that," he said.
Burnham will give the National Wealth Fund borrowing powers along the lines of Germany's KfW, its €540bn investment bank, opening the way for a blitz of dirigiste investment, off-books and outside the fiscal rule. Will the bond vigilantes swallow it? Yes, so long as they have claims on the underlying assets.
Arya Chanda argues on the conservative platform Centre Write that Burnham's Manchesterism has echoes of The Good Society, the seminal defence of managed markets published by Walter Lippmann in 1937.
Lippmann was a "conservative liberal" horrified by the collapse of reasoned civility during the interwar era, so like our own era, if you swap radio propaganda for today's nihilistic social media.
Laissez-faire capitalism had failed in the Great Depression. Lippmann sought to head off the alluring false solutions of the Fascist Right and the Communist Left with regulated market liberalism and a respect for social stability.
Chanda says the more he has researched Burnham's time as mayor – including his New York-style back-to-basics police campaign against anti-social behaviour – the more he has concluded that the whole Left-wing pitch is a feint.
"Manchesterism has successfully dressed neoliberalism in the rhetoric of socialist solidarity and Mancunian pride. If Burnham does to the country what he has done in Manchester – perhaps with a Chancellor Streeting alongside him – 'Singapore-on-Thames' stands the best chance it has ever had of becoming a reality," he wrote.
Up to a point, Lord Copper. I doubt that Burnham deserves much of the credit for turning Greater Manchester into a flourishing hub of the knowledge economy, with an average growth rate of 3.1pc a year since 2015.
But at least he did not stand in the way. If he does not stand in the way of the coming national recovery, that alone will be something to celebrate. Perhaps, mirabile dictu, he might even do some good.
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Source: “AOL Money”
