I am set to graduate from university tomorrow.
As I look back on my three years in higher education, I am enthralled by a certain level of fondness. Whilst many may point to the late nights spent writing essays in the library, or the overwhelming stress of exams which pushed my hairline back further than I would like to admit, the social side of things was fantastic.
Going to the local boozer after a lecture with our professor became a common event. As did braving a Thursday morning 09:00 class with a violent hangover, owing to the fact that we were at the club into the early hours of the morning. It was hectic, but that is the joy of being a student with no real responsibilities.
Indeed, there was something about these watering holes and music venues which brought together a sense of community. That banded my classmates and I together. Pubs are, after all, a fundamental part of what makes Britain, Britain.
And so when I woke up this morning, I found myself feeling unusually optimistic. As I opened up my phone to see the press release come through from Number 10, I saw that Burnham intends to cut business rates for pubs, clubs and live music venues by 20 per cent.
I was, for the best part of about 10 seconds, overjoyed. But my smile quickly faded as I scrolled further down the email.
You see, one of the common themes of Burnham’s announcements thus far is that they are not costed in any real sense. The public purse is already stretched thin. For years now, the government has parroted the narrative that there exists some fiscal black hole, swallowing up the public’s money like Adam Richman on an episode of Man versus Food. Or that the defensive needs of our country cannot be met because we must shell out ever more cash to keep people out of work and trapped in the arms of the welfare state.
Time and again, the government reiterates that there simply isn’t enough money, and any attempt to find more money through borrowing would be a clear violation of the fiscal rules. An absolute no-go zone, which supposedly ensnares Healey in an economic straitjacket.
And so with such stringent fiscal rules and restrictions, one would hope that Burnham would use this morning’s announcement to reassure the markets that he can actually pay for his policies.
But no. Our Andy didn’t deliver.
Whilst he alleges that the scheme is “fully funded” through a review of “reliefs for businesses that do not make a positive contribution to local communities” there are no actual numbers present. In fact, the note goes on to say that “further detail will be set out in due course” – a hardly reassuring comment for the markets.
The package of support is worth roughly £100 million per year, yet the government have provided little explanation as to where the bulk of the money is coming from. How much would scrapping the relief on some businesses actually yield? Indeed, the very fact that the cash will be found from a “review” rather than being offered immediately is a somewhat shaky defence.
It is a matter made worse given the fact that Burnham’s other flagship policies appear to have fallen victim to such charges too.
Take, for instance, his announcement yesterday to cap bus fares at £2. Again, he insisted that the scheme is “fully funded.” But when one actually looks at the numbers, his argument falls to pieces. He admitted that the scheme costs £500 million, and only £400 million had been found through “replacing grants for international climate projects with loans.”
Or, in other words, the policy is £100 million short on funding.
It must be confessed, the fact that the policy is even partly funded is a good first step (the fact that I have even written such a message is telling), but one that simply does not go far enough. It leaves the door to more borrowing wide open. Sure, roughly 80 per cent of the policy is costed, but what of the other 20 per cent? How will that be paid for?
And opposition figures have jumped on this issue quickly, remaining steadfast in their criticisms of the plan. Shadow Chancellor Mel Stride, for instance, argued that Burnham wants to “go back to the 1970s” and overload on “huge spending and state intervention” alongside “higher taxes” and “higher borrowing.” Perhaps he sees himself as a modernised version of James Callaghan – though even Callaghan recognised that you cannot “spend your way out of a recession…”
Putting historical parallels to one side, let us take a gander at the government’s announcement that VAT would be axed on electricity bills. Yet another worthwhile move if the money can actually be found.
But despite Burnham’s claims that the policy would be paid for through the scrapping of the Digital ID scheme, once-Labour heavyweight Darren Jones was quick to shoot the idea down – stating that the “government will have to set out how it will pay for its new policies at the budget” claiming that the scheme itself was never actually funded – by no means a stable start to a premiership.
And yet with such shakiness, Burnham intends to keep at it. He intends to go even further – claiming that this is “just the start.”
The start of what, one must ask? The start of record high borrowing rates? The start of greater state intervention? From what we have seen of Burnham thus far, his agenda appears to be little more than spend now, pay later. A Mancunian take on Klarna which leaves future generations footing the bill.
That is no way to govern a country. It might have worked when he was Mayor of Greater Manchester, banging on the table for ever more cash from the Treasury. But now he is sitting at the grown-up table. Now, he has to make the difficult decisions that his backbenchers may not like, but that the country needs.
So far, he seems incapable of such a task. He is, by all accounts, a people pleaser. A man who promises the world to all whilst delivering to none. I wager that this may well be his downfall. If he is able to fund these commitments with some type of real spending cut, then I will hold my hands up and admit that I was wrong.
But, as much as it pains me to say, I don’t think he will. My guess is that he will continue down the road marked ‘fiscal ambiguity’ and keep making empty promises. But the fact about such a road is that it only goes so far. Eventually it will come to an end. One can only promise so many unfunded commitments before the markets get spooked and his regime comes crumbling down around him.
No amount of soundbites nor slogans will prevent that, and that may be a lesson that Burnham will learn the hard way.