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In a bold move that seeks to redefine the economic landscape of the United Kingdom, Prime Minister Andy Burnham has unveiled plans for a new department, dubbed No 10 North, which aims to wrest control of growth policy from the Treasury. This initiative is underscored by historical precedents and a desire to rejuvenate long-term economic thinking at a time when inflation and rising living costs are placing unprecedented pressure on households across the nation.
A Historical Context for Change
Drawing parallels with past Labour administrations, Burnham’s ambitions echo the short-lived Department for Economic Affairs established under Harold Wilson. This historical reference reflects a renewed focus on cohesive economic strategy, which Burnham argues has been stymied by the Treasury’s entrenched position over public finances. “The dual job of growth and control of the public finances sometimes clouds the growth mission,” Burnham remarked in a recent interview, suggesting that a dedicated office in Manchester could help to dismantle bureaucratic obstacles and stimulate innovation.
The Prime Minister’s aspirations are not without precedent; previous leaders have attempted to recalibrate the balance of power between No 10 and the Treasury. Boris Johnson’s controversial reshuffling of Cabinet roles and Margaret Thatcher’s preference for her own economic advisors illustrate the perennial tug-of-war for influence over fiscal policy. However, Burnham’s approach aims to go further by establishing a robust framework for regional growth through enhanced devolution.
Devolution as a Catalyst for Growth
Central to Burnham’s strategy is the empowerment of metro mayors and local authorities to take charge of growth initiatives that have historically been fragmented across Whitehall. This vision is supported by Ruth Curtis, director of the Resolution Foundation, who asserts that the coordination of various policy domains—such as housing and education—could yield significant benefits. “No one department has all the levers,” she notes, highlighting the necessity for a more collaborative approach to economic policy.
The proposed No 10 North unit is expected to play a pivotal role in this regard. With a focus on local growth and devolution, it aims to draw expertise from various departments, creating a “new growth unit” that could facilitate a more integrated economic policy. This collaborative ethos is further reinforced by the appointment of John Healey as Chancellor, who previously helped establish regional development agencies aimed at enhancing local economic capabilities.
The Challenges Ahead
Despite the optimistic outlook, skepticism remains regarding the efficacy of this new structure. David Gauke, a former Conservative Treasury chief secretary, underscores the enduring power of the Treasury, cautioning that its control over fiscal policy is unlikely to diminish. “The Treasury is always going to be the most important department,” he asserts, questioning whether No 10 North can effect genuine change given its limited resources and potential isolation from other government entities.
Moreover, the operational effectiveness of No 10 North will hinge on its ability to navigate the inevitable policy clashes with the Treasury. Jonathan Portes, a former senior economist, raises concerns about potential conflicts: “What happens when No 10 wants to do something, and Treasury says no?” This dynamic could stymie the very growth Burnham aims to stimulate, as historical precedents suggest that Treasury caution often overrides ambitious policy proposals.
The Path Forward
As Burnham prepares for critical decisions on taxation and spending, the upcoming budget will be pivotal in determining the feasibility of his vision. The government faces pressing choices around the future of privatised industries, particularly in the context of water services, alongside a backdrop of fiscal constraints.
Burnham’s commitment to a more radical economic approach, which includes proposals for significant renationalisation and tax reform, may run counter to the institutional caution identified by his allies. However, there remains a palpable desire within his Cabinet to shift the narrative from immediate fiscal concerns to a broader discussion on sustainable economic growth.
Why it Matters
The establishment of No 10 North represents a significant moment for British economic policy, with the potential to reshape the relationship between local governance and national economic strategy. By advocating for a more decentralized approach, Burnham aims to challenge the entrenched authority of the Treasury and promote innovative solutions to regional economic disparities. The success of this initiative could redefine the UK’s economic landscape, offering a model for more inclusive and sustainable growth in a time of pressing financial challenge. As the political and economic stakes rise, the outcome of Burnham’s vision will be closely scrutinised—not just by the government but by citizens grappling with the realities of a cost-of-living crisis.
