Robert Colville dissects Burnham

Robert Colvile has an excellent thread on X basd on a column he wrote in The Times which dissects the Andy Burnham project and particularly the ridiculous economics which underlie it.

Robert Colvile on X: "Andy Burnham's speech on Friday promised voters 'the return of the Labour they once knew' - to undo not just Thatcher, but Blair. But the economics underpinning that claim are, frankly, garbage. (1/?) https://t.co/RNnzASFe3l" / X

He writes:

"Andy Burnham's speech on Friday promised voters 'the return of the Labour they once knew' - to undo not just Thatcher, but Blair. But the economics underpinning that claim are, frankly, garbage.

Burnham argues that in the 1980s, communities across Britain were stripped of political and economic power. That because they 'surrendered control of the essentials', they were 'exposed to higher costs'. And that greater public control is the *only* way to bring those costs down."

(Burnham said:)

(Colville argues:)

"On the politics, he has a point. Britain is indeed massively over-centralised, and Thatcher played her part in that.

But the economic aspect of this - and the policy implications - is hugely alarming.

First, in Britain as elsewhere, prices controlled by the state have risen much more than those controlled by the market! Eg food and clothing are 'essentials' by any measure. Yet private sector competition drives huge benefits without 'public control' of Tesco or Next.

But even on the 'essentials' Burnham cites, he's wrong. 

This is a chart of energy affordability over the last 46 years (couldn't get the years to work, sorry). It shows costs falling sharply post-privatisation, only to rise hugely when the state sticks its oar in via Net Zero.

On housing, Burnham's story is that Right to Buy kicks off the price rises. But he's wrong! Not least because people still live in the houses. There's a boom and bust, but real house prices are at the same level in 1997 as in 1979. It's only under Blair that things go supernova.

You can say that the failure to build social housing contributes to the problems, and it does. But the fundamental driver (apart from cheap credit and growing wealth/population) is the failure to build full stop.

But it's water and transport that really pose a problem for Burnham's thesis. Because yes, prices there did rise after privatisation. But that's because we were making the investment that we'd failed to under public control, because they were competing with schools 'n' hospitals.

In other words, even if you disagree completely with my arguments above and think privatisation has been a disaster, there is *no plausible route* for 'public control' to cut prices significantly, because there it is investment that is driving the costs, not corporate greed.

On water, for example, we need to spend billions to upgrade our creaking Victorian infrastructure for more people and hotter weather, whoever owns the pipes. In fact, water companies have repeatedly bid to make this investment and been told no, because of the impact on bills!

Of course, as I say in the column, this isn't the only way in which Burnham's economics is a fantasy. He thinks deindustrialisation was a savage political act. In fact, academics have shown in detail how uncompetitive British industry had become by 1979. Euthanasia, not murder.

(In this table which Colvile cites next an entry of 100 means that the relevant sectors of British and German industry had the same productivity in that year. Note that when Mrs Thatcher was elected in 1979 )

(Colvile continues)

"And of course, his political approach is a fantasy as well. He thinks what matters is party unity. But the best leaders challenge their own parties. Even Starmer accepted that over-regulation of business/construction is far more of an issue than some remnant of neoliberalism!

And it's also striking just how backward-looking this whole thing is. What Burnham gave us was a country in which all the industries, and all the places, were those of yesterday. Where all the solutions were about returning to how things used to be.

Burnham has promised voters “the return of the Labour they once knew”. But the voters who knew that Labour also know why it failed. As for the rest of us? I suspect we’re about to learn."

(You can read the entire thread by clicking on the link at the top of this blog post.)