The future, in Burnhamland, is a place of vaulting ambitions. There will be stronger reconnections with Europe, and even the tantalising prospect of rejoining the EU on terms which we might at best note as hazy. The electoral system might get an overhaul too – at some unspecified point after a commission has fleshed out the details.
And Burnham intends his distinctive calling card – devolution – to be the elixir to boost sagging national growth, but leans on examples like German federalism which are themselves undergoing severe strains.
As ambitions go, “owning the future” is not an unwise one. It forces opponents to respond to your plans and gives the hopeful a north star. But Burnham is now in the hot seat vacated by Sir Keir Starmer, a leader who foundered not only on his own record – his tenure struggled under competing priorities for the nation’s finances. And that tension is now haunting his successor, as Budget day looms on 28 October.
The result is a bare-knuckle fight as the big departmental ministers make their final bid for resources. As well as trooping through the Treasury doors to meet Chancellor John Healey to advocate for spending priorities, senior ministers are discovering that Burnham himself is sitting – at least metaphorically – alongside the Chancellor waving a large neon sign that says “No”.
So, the Health Secretary Yvette Cooper finds herself in an unwelcome reprise of her predecessor Wes Streeting’s position: balancing the need to buy off threats of strike action by nurses on the eve of the winter NHS crunch with directing resources to keeping waiting-time cuts – a major pledge of the Government when it came to power – on track.
As reports, money for above-inflation pay rises has been rebuffed. Cooper has been hamstrung by Streeting’s (and Starmer’s) decision to sign off a deal to end resident (formerly junior) doctors’ industrial action after a long tussle over the terms. The maths of this were that that the final deal, while expensive, was better than the strain and financial drain of continuing strikes. But it has led to a sense from nurses and other clinical staff that they have been short-changed while doctors walked away with a decent result.
To head off that clash at the pass, a letter co-signed by Burnham and Healey notes that there is no more resource available to fund the pay rises due to extreme pressure on the public finances. And the most interesting aspect of all this is that a “hard no” communication comes jointly from PM and Chancellor, which means ministers cannot engage in last-ditch shuttle diplomacy to call in favours. That is already creating an edgy mood in Cabinet – in the knowledge that if another department is given any small relief, someone else is going to pay for it.
A sharp rise in 10-year borrowing costs to a 19-year high has ended a period when the loose field of “Burnhamomics” suggested that loosening borrowing strictures could ease pressures. The Government can credibly blame the Iran crisis and its knock-on effects, and a spike in gilt yields in France, as factors in its troubles. But besides the externalities of the on-off Strait of Hormuz blockage, the Ukraine war and pretty much everything related to Donald Trump, global lenders believe that many countries – including the UK – oversee public spending bills which are out of control, and are punishing this by how much they charge for debt.
Even Bank of England Governor Andrew Bailey, who has tended to reticence in engaging with governments, is now publicly urging the Chancellor to reassure financial markets.
Even so, resources have to be allocated. Healey, a Chancellor who resigned as defence secretary over a long-delayed military spending plan, is also looking at delays to one of the UK’s main international agreements – to deliver 3 per cent of GDP for Nato defence spending by 2030. This now appears to be written in disappearing ink – or at least the kind that can be blamed on Starmer’s era.
In fairness, Healey, who did see this bombshell moment coming when he resigned from defence, will make a call on sequencing that his predecessor, Rachel Reeves, fudged. The Defence Investment Plan will therefore be funded in preference to trying to hit a target which is justified by the rising threat level – but not without tax rises or cuts on a scale Burnham does not want to countenance.
That was the “spreadsheet nightmare” that never added up, as one official at the time puts it, which caused Starmer to lose his grip and his authority. Now, his successors have inherited the same numbers.
Sceptics might point out that while Healey stands tall as one of the most respected figures in Cabinet for his unflappability and focus, his critics in the military sphere and MoD itself believe he indulged in slow decision making on major capability gaps. The UK now needs to set out a more strategic and rapid set of responses to the triple threats of Russia, China and Iran, as well as the kind of debates about what to do with malfunctioning Ajax tanks.
His successor, Wes Streeting, has shared warnings from intelligence services that we are under-resourced for the AI era which our enemies are embracing at speed – and that urgent challenge even more testing than ornery doctors wielding pay demands.
All of this, plus the prospect of how to pay for welfare reforms at scale, means this Budget is going to set out the hard road to tax rises and economies Labour has skirted. The future in Burnham’s vision is another country, alive with possibilities. Running the present is a more daunting matter altogether – and the annoying thing about the present is that you wake up to it every day taking the blame for it.