Sir Mel Stride MP is Shadow Chancellor of the Exchequer.
The first few weeks of a new Prime Minister’s tenure can end up defining them for years to come – for better or for worse.
New leaders naturally want to quickly grip the news agenda, spread their message, and bed in a narrative with voters that can survive through good times and bad.
It’s not been entirely surprising then, that Andy Burnham has launched a policy blizzard, making announcements every day since he walked into Number Ten.
VAT off electricity bills. Bus fares capped at £2. Business rates relief for pubs. An end to rough sleeping.
All these things look good at first glance. But what’s the detail behind them?
The energy bill cut, we are told, will be paid for with money originally intended for the Government’s now-abandoned Digital ID scheme. But that scheme was never funded – Labour never said where the cash would come from. The independent OBR made that very clear in their Economic and Fiscal Outlook from last November, a point highlighted this week by the recently departed Chief Secretary to the Treasury Darren Jones. Like me, Darren knows that you cannot fund something with savings from a budget which is itself unfunded.
And of course, bills have gone up by £294 under Labour – so £45 off really doesn’t cut it anyway. Burnham would have been far better off adopting the Conservatives’ fully costed Cheap Power Plan that will save families £200 a year.
And what about Burnham’s pledge to end rough sleeping? Well, it is an important ambition, but we have been given no detail as to where the £340 million cost will come from. It should also be noted that since 2021, during Burnham’s time as Mayor of Greater Manchester, rough sleeping actually increased.
Burnham’s bus fare cap, it seems, will be ‘funded’ through an intricate attempt to reclaim cash allocated for overseas development grants – but that money will still end up overseas, and we will be reliant on other countries giving it back in order to pay for the fare cap.
And the latest announcement, a 20 per cent cut to business rates for pubs, will apparently be funded via tax hikes on other businesses – but we don’t know what businesses and what they will be expected to pay. There is just no detail. And, of course, a relief, worth around £100 million, will pale in comparison to the £9 billion business rates hike Labour have inflicted. The Conservatives, in contrast, have a fully costed plan to scrap business rates entirely for hundreds of thousands of high street businesses.
We also mustn’t forget the various other commitments Burnham made in the run up to taking office, including an aspiration to build more council houses that will cost billions, a similarly expensive social care plan (estimated at £18 billion a year), the nationalisation of Thames Water (the sky is the limit on that one), and a major increase in spending on foreign aid. And of course the absolute imperative of properly funding our armed forces.
All in all, Burnham has already run up a potential bill in excess of £50 billion and that could rise to £96 billion if you include the policies he’s floated like the nationalisation of Thames Water.
So where is this money coming from? To try and find out I have written to the new Chancellor, John Healey, calling on him to come clean with the British public about how Labour plan to pay for everything they’ve pledged.
After all, Burnham was clear in his speech outside Number Ten that he’d tell us how his policies would be funded.
But I have also pressed John Healey on something else. To avoid the mistakes of Starmer and Reeves and to say no to further tax rises or yet another increase in borrowing. In other words to meet the country’s challenges by urgently leaning into the control of public spending, especially getting the welfare bill down.
Keir Starmer and Rachel Reeves came to power without a plan for Government, so they ended up doing what their left-wing backbenchers wanted, and hiked taxes to pay for more welfare.
Now Burnham is in danger of becoming another Labour Prime Minister who pulls the tax and borrowing levers at the first opportunity.
Our country cannot afford more tax rises. It cannot afford yet more borrowing. The only sustainable way to boost spending in one area is to cut spending in another.
That’s why Kemi has offered to work with Andy Burnham to get the welfare bill under control. His backbenchers don’t want to do it, but we know it’s in the national interest and that any kind of economic recovery for our country depends upon it.
We’ve already set out how we could cut the welfare bill by £26 billion – a key part of our savings plan which now amounts to £50 billion. In addition, we want Labour to reinstate the two-child benefit cap and use the money saved to fund our defence.
If Burnham won’t say what cuts he plans to make, we will have to assume that he will be taxing more and borrowing more instead.
If the new Prime Minister wants to succeed, he must show he can learn the lessons of the failures of Starmer and Reeves. For the sake of our country we have to hope so, but I have my doubts.
Sir Mel Stride MP is Shadow Chancellor of the Exchequer.
The first few weeks of a new Prime Minister’s tenure can end up defining them for years to come – for better or for worse.
New leaders naturally want to quickly grip the news agenda, spread their message, and bed in a narrative with voters that can survive through good times and bad.
It’s not been entirely surprising then, that Andy Burnham has launched a policy blizzard, making announcements every day since he walked into Number Ten.
VAT off electricity bills. Bus fares capped at £2. Business rates relief for pubs. An end to rough sleeping.
All these things look good at first glance. But what’s the detail behind them?
The energy bill cut, we are told, will be paid for with money originally intended for the Government’s now-abandoned Digital ID scheme. But that scheme was never funded – Labour never said where the cash would come from. The independent OBR made that very clear in their Economic and Fiscal Outlook from last November, a point highlighted this week by the recently departed Chief Secretary to the Treasury Darren Jones. Like me, Darren knows that you cannot fund something with savings from a budget which is itself unfunded.
And of course, bills have gone up by £294 under Labour – so £45 off really doesn’t cut it anyway. Burnham would have been far better off adopting the Conservatives’ fully costed Cheap Power Plan that will save families £200 a year.
And what about Burnham’s pledge to end rough sleeping? Well, it is an important ambition, but we have been given no detail as to where the £340 million cost will come from. It should also be noted that since 2021, during Burnham’s time as Mayor of Greater Manchester, rough sleeping actually increased.
Burnham’s bus fare cap, it seems, will be ‘funded’ through an intricate attempt to reclaim cash allocated for overseas development grants – but that money will still end up overseas, and we will be reliant on other countries giving it back in order to pay for the fare cap.
And the latest announcement, a 20 per cent cut to business rates for pubs, will apparently be funded via tax hikes on other businesses – but we don’t know what businesses and what they will be expected to pay. There is just no detail. And, of course, a relief, worth around £100 million, will pale in comparison to the £9 billion business rates hike Labour have inflicted. The Conservatives, in contrast, have a fully costed plan to scrap business rates entirely for hundreds of thousands of high street businesses.
We also mustn’t forget the various other commitments Burnham made in the run up to taking office, including an aspiration to build more council houses that will cost billions, a similarly expensive social care plan (estimated at £18 billion a year), the nationalisation of Thames Water (the sky is the limit on that one), and a major increase in spending on foreign aid. And of course the absolute imperative of properly funding our armed forces.
All in all, Burnham has already run up a potential bill in excess of £50 billion and that could rise to £96 billion if you include the policies he’s floated like the nationalisation of Thames Water.
So where is this money coming from? To try and find out I have written to the new Chancellor, John Healey, calling on him to come clean with the British public about how Labour plan to pay for everything they’ve pledged.
After all, Burnham was clear in his speech outside Number Ten that he’d tell us how his policies would be funded.
But I have also pressed John Healey on something else. To avoid the mistakes of Starmer and Reeves and to say no to further tax rises or yet another increase in borrowing. In other words to meet the country’s challenges by urgently leaning into the control of public spending, especially getting the welfare bill down.
Keir Starmer and Rachel Reeves came to power without a plan for Government, so they ended up doing what their left-wing backbenchers wanted, and hiked taxes to pay for more welfare.
Now Burnham is in danger of becoming another Labour Prime Minister who pulls the tax and borrowing levers at the first opportunity.
Our country cannot afford more tax rises. It cannot afford yet more borrowing. The only sustainable way to boost spending in one area is to cut spending in another.
That’s why Kemi has offered to work with Andy Burnham to get the welfare bill under control. His backbenchers don’t want to do it, but we know it’s in the national interest and that any kind of economic recovery for our country depends upon it.
We’ve already set out how we could cut the welfare bill by £26 billion – a key part of our savings plan which now amounts to £50 billion. In addition, we want Labour to reinstate the two-child benefit cap and use the money saved to fund our defence.
If Burnham won’t say what cuts he plans to make, we will have to assume that he will be taxing more and borrowing more instead.
If the new Prime Minister wants to succeed, he must show he can learn the lessons of the failures of Starmer and Reeves. For the sake of our country we have to hope so, but I have my doubts.