As Prime Minister Andy Burnham takes the reins at Downing Street, he's embarked on an audacious mission to reboot Britain's economy, a sprawling tapestry of challenges that have been simmering for years. With promises of "good growth in every postcode", Burnham is determined to shake off the stagnation that has plagued living standards and regional development since 1979.
A cornerstone of his plan is reindustrialisation – safeguarding Britain's sovereign manufacturing and production capabilities in sectors like steel, defence, energy, food, and farming. This move aims to revitalise areas that have suffered from deindustrialisation, injecting new life into local economies and creating jobs outside the London-South East bubble.
However, experts warn that an overreliance on past industrial models may not be enough to drive modern prosperity, given the UK's comparative advantages often lie in service sectors. Energy costs and global manufacturing competition also pose significant challenges.
Devolution is another key plank of Burnham's agenda, with promises of "the biggest rebalancing of power this country has ever seen". This includes setting up a No 10 hub in Manchester and potentially transferring powers like taxation to regional leaders. The OECD recently highlighted the economic benefits of devolution, but concerns exist about potential inefficiencies and the substantial financial investment required.
The cost of living crisis remains a pressing concern for the new Prime Minister, with a promised support package expected soon. Households and businesses have endured soaring costs driven by energy price shocks, leading to inflation above the Bank of England's 2% target for five years. The previous parliament saw household incomes fall for the first time in modern history, prompting warnings from organisations like the Joseph Rowntree Foundation about deepening poverty.