Burnham seeks to curb Treasury's grip on growth policy
UK Prime Minister Andy Burnham has detailed plans to shift growth policy from the Treasury to a new No 10 department based in Manchester, aiming to overcome the Treasury's cautious approach.
Andy Burnham is the latest in a long line of British prime ministers to try to rein in the power of the Treasury. This week he gave fresh details of his plan to move responsibility for growth policy away from the Treasury and into a new Downing Street department based in Manchester, known as No 10 North.
Burnham has drawn a comparison with Harold Wilson's Department for Economic Affairs, a short-lived 1960s experiment aimed at bringing long-term thinking to economic policymaking. Critics on the left have long accused the Treasury of short-termism and institutional caution.
Speaking to the Times, Burnham said the Treasury's dual role of driving growth while controlling public finances often clouds the growth mission, and that No 10 leadership on growth would give maximum power to clear blockages within Whitehall. The new unit is overseen by his cabinet ally Louise Haigh.
A devolution-led approach to growth
One of the few detailed policy documents the new government has produced so far concerns wide-ranging devolution plans, giving additional powers to metro mayors. Ruth Curtice, director of the Resolution Foundation and a former Treasury official, believes the new Manchester-based unit's greatest value could lie in coordinating policy areas such as housing, education and planning.
Deutsche Bank's chief UK economist, Sanjay Raja, notes that Burnham's choice for chancellor, John Healey, previously helped create regional development agencies during the Blair-Brown years, which were later scrapped by the Conservative-Liberal Democrat coalition.
Doubts over the new unit's effectiveness
Former Conservative minister David Gauke questions whether it makes sense to separate growth from the Treasury, since it will retain control over tax and spending and therefore remain the most powerful department. He also doubts whether the new unit can meaningfully influence government direction, given its limited access to the prime minister and other ministers.
A Treasury source stressed that the new department will focus on local growth and devolution rather than taking over the Treasury's economic strategy role. The Treasury has already loaned staff to the new unit, which is led by former journalist Sam Lister.
Observers say the real test will be how inevitable clashes between the two bodies are resolved, particularly as the government approaches a critical budget involving major decisions on tax, spending and the future of the water industry.
