David Gauke is a former Justice Secretary and was an independent candidate in South-West Hertfordshire at the 2019 general election.
The task for Andy Burnham over the next 24 days is not a simple one. Winning a by-election in a relatively marginal seat as a candidate for an unpopular governing party is no easy task. At the same time, Burnham is running for the leadership of his party and is seeking to appeal to its membership whose instincts, on some issues, will differ from those of the residents of the Makerfield constituency.
There is a third audience that Burnham cannot afford to ignore. The bond market is listening very carefully to everything a probable Prime Minister says. Scare the markets and we will all have a problem, but even the Labour Party might recognise that this should count against a leadership candidate.
Burnham is not a natural fiscal conservative. Although he was once Chief Secretary to the Treasury, responsible for controlling public spending, he was never at home in the role. Although liked by officials for being personable, he did not have a reputation for being entirely on top of the numbers. He is also too much of a people-pleaser for the Treasury and has a long history of backing dubious spending commitments. For example, a worrying indication of his instincts is that he was a longstanding supporter of the entirely unmeritorious case of compensating the WASPI Women, something of which they are keen to remind him.
Until very recently, Burnham made the case for exempting defence spending from the fiscal rules, as Germany has done. But, given that money is fungible, any exemption of defence spending would simply allow higher levels of borrowing and debt. Germany can exempt defence spending because it borrows much less than we do, giving them the fiscal space to pursue a looser policy.
Not surprisingly, the markets reacted nervously when it was clear that Burnham had a path to 10 Downing Street. Gilt yields rose, and Burnham (“in hock” to the bond market) retreated – announcing he would stick to the current fiscal rules. It was a sensible move. Not even Liz Truss managed to achieve a bond market crisis in advance of making it to Downing Street, but it demonstrated that the easy answers that worked as an opposition politician no longer applied.
That is not to say that Burnham has abandoned every economically illiterate policy. Talk of reindustrialisation plays well with many, but it is nostalgic tosh. Manchester’s revival is not the consequence of the growth of the factories and mills of the past, but by embracing the knowledge economy and building homes for aspirational graduates in the city centre. Incidentally, it is yet another example that deprioritising affordable housing requirements is the way to get more homes built, although it is not clear that this is a lesson that Burnham has learnt.
Where he is on stronger ground with the markets is his honest appraisal of the economic harm done by Brexit and his long term desire to rejoin the EU. Except that was his position before he knew he was standing for the constituency of Makerfield which voted 65 per cent Leave in 2016, making it the 75th most Leave seat in the country. Now he does not want to talk about the EU.
On the face of it, this should be a huge opportunity for Reform. However much Burnham might back-pedal, he is on the record that he is a re-joiner. To be fair to him, even in his interview with The Guardian last autumn where he set out his views, he framed this as being a long term objective, but Reform need not worry about such a nuance.
What will be fascinating is to see how centrally Reform focuses on the Brexit issue in this campaign. Will it be all about a “Brexit betrayal” and something of single constituency second referendum? Makerfield, after all, should be favourable territory for such a Reform campaign. But there are risks in such an approach. Public opinion has moved against Brexit and polls suggest that even in seats like Makerfield views are broadly evenly divided.
Fighting on the topic might also sound obsessive in that membership of the EU is not at the forefront of the minds of the electorate. And what if Reform tries to fight on the EU relationship and loses? If a self-declared (albeit recently reticent) re-joiner can win in Makerfield, perhaps the issue no longer resonates for Leave voters in the way that it once did. It would be understandable, albeit a little cowardly, if Reform baulks at raising the stakes.
Burnham may well have enough charisma, nous, political capital and policy flexibility to win in Makerfield without ruining his chances of winning the Labour leadership or sparking a bond crisis. He might disappoint a few firebrands with his newly acquired fiscal caution, but most Labour members will not want a new leader to be met by a market crisis. And enough Makerfield Leavers will see Burnham as sufficiently anti-establishment that he will win their personal vote.
Voting for Brexit was, for some, as much about giving the know-it-all classes a bloody nose as it was about the merits of our EU membership. Burnham – like Nigel Farage and Boris Johnson – gives every impression that he is up for bloodying the noses of the know-it-all classes, albeit he has different targets in mind, focused more on the rich, “them down there in London,” and supporters of VAR. In his own way, he is a populist and it will probably be more than enough to win the by-election.
As the victor in Makerfield, Burnham’s advance will be irresistible. Keir Starmer will surely conclude that his time is up. The pressure on alternative candidates – and their potential Parliamentary nominees – to bring the uncertainty to an end will be immense. A challenge from the Labour right would result in such a heavy defeat that the centrist wing would be marginalised for a generation. In which case, it will not happen. In all probability, if Burnham wins in Makerfield, he will be Prime Minister within days of returning to Parliament.
The problem, therefore, is not reconciling the voters of Makerfield, Labour members and the bond market over the next 24 days. It is the months and years after that where the problem lies. Burnham can muddle through on fiscal policy for now, but at some point tough decisions on public spending are going to have to be made, and neither Burnham nor his party are reconciled to that. He can kick the issue of EU membership into the long grass, but it will not go away and it continues to divide the voters to whom Labour is trying to appeal. Big promises on reindustrialisation win votes but when those promises are not fulfilled (as Donald Trump is discovering), the voters remember and feel betrayed.
To turn the country round, we need a political party with the right policies to deliver sustainable economic growth, willing to persuade the country to confront the trade-offs, backed by a party membership and an electoral coalition that is aligned to that approach. The Makerfield by-election, and the various policy contortions of Burnham, shows that the Labour Party is a long way away from being that party.