Jonathan Portes, professor of economics and public policy at King’s College London, argues that the economic inheritance Andy Burnham will receive from Keir Starmer and Rachel Reeves is not a crisis but a limited achievement. Labour was elected to transform the economy, not just stabilise it, and Burnham must learn from Starmer’s mistakes by pursuing bold reforms in devolution, tax, EU relations, and immigration.
Stabilisation Without Strategy
Portes writes that restoring seriousness to fiscal and macroeconomic management is an achievement, but Labour was not elected merely to avoid blowing up the gilt market. The central contradiction of the Starmer-Reeves approach was treating stability as a growth strategy and fiscal credibility as a fiscal strategy. Excessive caution prevents the investment and reform needed to improve productivity and fiscal sustainability.
Devolution: Power and Resources Needed
Burnham understands that growth happens in places, and the productivity gap between London and the rest of the country results from choices about transport, housing, skills, and institutions. However, the Treasury model of devolution—responsibility without power and resources—is blame-shifting. Portes argues that Burnham must make devolution fiscal and institutional, not just rhetorical.
Tax Reform Essential for Growth
Britain needs a tax system that raises revenue fairly while minimising economic damage. Current taxes on work are too high, property taxes are irrational, and wealth taxes are inconsistent. Council tax is indefensible, business rates tax productive activity, and reliefs on high incomes, capital gains, inheritance, and pensions are a mix of historical accident and political cowardice. Reform is part of a growth strategy.
Closer EU Ties Needed
Brexit has made the UK poorer and less open, creating trade frictions and reducing investment attractiveness. Incremental improvements are not enough; a much closer relationship with the single market in goods, services, research, energy, and mobility is an economic necessity. Portes cites universities as a sector harmed by incoherent policy on funding and international students.
Open Immigration System
Britain needs a relatively open, liberal, and flexible migration system to maximise comparative advantages in high-productivity tradable services and to fund public services. Arbitrary targets and ritual denunciations are not a substitute for a functioning system and lead to economic damage and political failure. Policy should address distributional impacts through housing, labour standards, and skills.
Burnham’s Task: Use Credibility, Not Abandon It
Starmer and Reeves’s legacy is stabilisation without a strategy. Burnham’s task is to use credibility, define fiscal responsibility properly, and explain that growth, fairness, and openness are inseparable. A closed country will be poorer, a country that underinvests will not grow, a state that refuses to reform tax will ration ambition, and a Labour government afraid to say these things will discover that caution has costs.
