Andy Burnham’s pledge to move closer to the EU could leave the UK “crawling back to 70% of where we were 10 years ago,” former deputy cabinet secretary Helen MacNamara has said.
Mr Burnham, who is set to become the prime minister on 20 July, previously said that he seeks to ‘consolidate the progress made on the existing UK-EU negotiations’, and to ‘strengthen UK-EU co-operation on illegal migration and economic security’. The ex-mayor has also pledged ‘growth in every postcode’ and laid out plans to devolve government powers to local authorities.
On the latest episode of In The Room, Helen and ex-No 10 special advisor Cleo Watson explain that Burnham may be making his own life harder, among huge pre-existing economic challenges, if he sticks to his pro-devolution and pro-EU stance.
Listen to the full episode:
”You want to devolve all of the powers, but then you also want to be able to pull the levers and make the growth happen now,” Helen explains. “There’s tension and choice between those two things. They aren’t compatible.”
Cleo stressed the importance of positive growth that people can actually feel, rather than the kind of Labour lip-service which came to define Starmer’s premiership. “Trotting out some figures doesn’t mean anything to people. The question is: can you make the average Briton feel better off?
”The thing is, as a European bloc, we aren’t doing that badly. We’re just on a very sluggish continent. Amazingly to me, we’re doing better than Germany, which is the country that Andy Burnham holds up as the kind of perfect evolved federalist state. It’s a bit of a worry that his blueprint for growth is objectively failing.”
“In terms of exports, for a very, very long time our economy has been tailored towards exporting to the EU,” Helen says. “And that is much more complicated because of Brexit. There are very, very strong voices in the Labour Party saying we need to align as close as possible to the EU now, to, in the short term, build that economy back again. And that would probably make a difference to some of the numbers.
“But the problem with that choice is, we’ll be aligning ourselves with a bit of the world economy that is definitely not growing.”
GDP and employment across the EU are rising slowly, but being significantly outpaced by the United States – which is also the UK’s single biggest export partner. The US is also the greatest national investor in the world for the rapidly emerging industry of AI, investing $100 billion in 2024, 10 times as much as second-ranked China. The US is “seismically important in terms of digital,” Helen says.
“All these new bits of the economy aren’t facing back into the EU. There are some quite hard choices there. Do you, out of sentiment or short-term pragmatism, try to unwind some stuff, and then we can maybe crawl back to 70% of where we were 10 years ago on some services, some exports?
“Or do we say, ‘Actually, we need to double down, go further, align more with the parts of the world economy that are really growing and likely to carry on growing over the next 10 years’? That’s a hard and very brutal choice.”
Listen to the full episode of In The Room, ‘Will Burnham make you richer?’, on Apple Podcasts or Spotify, or watch on YouTube.
