Eventually they will run out of money, like Labour governments always do.
You’re going to have to show your workings on that one I’m afraid.
After a honeymoonish period of low-stakes but popular policy announcements, the first really bad sign out of Burnham’s cabinet comes when the stakes get higher:
Fans of the show will remember that back in June, in the dying day’s of Starmer’s government, then Secretary of Defense John Healey dramatically resigned over Starmer’s failure to commit to raising the UK’s defense spending to 3% by 2030. It was a big moment and very much made even the slender hopes of a Starmer fightback untenable because it went to the heart of “a PM’s first duty is to protect the country”.
Healey’s letter (bolding mine). can be read here : he does not stutter.
This new era for defence required further investment through the Defence Investment Plan (DIP). The excellent and extensive cross-government work that completed in January-overseen by you, me and the Chancellor - confirmed the scale of the challenge and the rising demands on defence.
Since then, you have been unable, and the Treasury has been unwilling, to commit the resources that the nation needs to defend the country at this time of rising threats.
…
Since then, the demands on defence have increased still further, as have the UK commitments you have rightly made to allies. Conflict in the Middle East, with the UK now leading the multinational Strait of Hormuz military mission; High North security, with the UK now leading NATO’s Arctic Sentry mission; increased Russian activity towards the UK and NATO nations and increased attacks in Ukraine, with the Paris Agreement confirming a British deployment to Ukraine after a ceasefire.We have worked to secure a Defence Investment Plan that does two things. First, deal with the increasing operational demands on defence now and step up the SDR actions to meet the increasing threat. Second, set a clear path to meet the new NATO commitment you agreed to spend 3.5% of GDP in 2035 through the next Spending Review.
As we have regularly discussed, I am certain that a headmark date for 3% of GDP on defence in 2030 is what Britain must set.
However, your DIP financial settlement - which I was first given in full on Monday afternoon this week-falls well short of what is required for defence and the country at this dangerous time. The extra support is backloaded when the pressure of operations and imperative to speed up readiness to fight is in the first two years and it rises to just 2.68% of GDP in 2030, when we will reach 2.6% next year with the investment we are already making.
Without a DIP that meets the moment in this way, I am being forced to make decisions that would reduce the readiness of our Forces and increase the risk to personnel on operations, and could make the country less safe.
After explaining to you that I would not be able to accept a DIP settlement that does not give our Forces the resources they need, I am now left with no other option than to submit my resignation as your Defence Secretary.
Pretty punchy stuff. So when Burnham appointed Healey not as returnign Defence Secretary but as Chancellor of the Exchequer (Treasury) it was taken as a very clear signal that defence would be a funding priority, tha the the 3% by 2030 target would be hit and that whatever arguments the Treasury had thrown up under Starmer would be overruled by its new boss, whose views were very clear.
So this headline has indeed been something of a bombshell:
Healey to shelve his own defence spending target of 3% of GDP by 2030
Healey’s previous insistence that Britain should spend 3 per cent of its GDP on defence by 2030 — as a milestone to reaching a Nato target of 3.5 per cent by 2035 — is now up in the air.
Government insiders told the FT that Healey’s Budget would focus on filling a defence equipment funding gap of nearly £5bn left behind by former prime minister Keir Starmer, amounting to about £1.2bn a year.
But much bigger decisions on an uplift in defence spending will be delayed until a Treasury spending review next year. One government figure said: “The immediate priority is to fund the defence investment plan that was published by Keir Starmer and the chancellor will set out more details on that at the Budget.” “Beyond that, at the spending review we’ll set out a clear path to meet our 3.5 per cent Nato target in 2035 and set a target date for us to hit 3 per cent on that path. The spending review is the right place to set a target date,” they added.
Healey’s edifying and dignified comment on this apparent about-turn here:
In an interview with Sky News broadcast on Friday, Healey said that “fiscal discipline” was the “first priority” for any chancellor, adding that a Burnham government “simply can’t deal with the problems we face as a country by maxing out the country’s credit card”. When asked about the 3 per cent defence spending target, he said: “Fiscal discipline has been the bedrock of the government that I was part of for the first couple of years, as a Labour government since July 2024.”
There’s no way to make this look good really. Especially not for Healey.
One of the lessons is what we always knew. British politics is a simple game - a Cabinet of senior politicians argue for months about how to improve Britain, and in the end the Treasury blocks spending.
Teh other lesson is that Burnham is not the transformative PM hoped for and promised. When it comes to the big strategic moves, he is just as boxed in and hamstrung as Starmer was. The original sin of this Labour government is the pledge not to increase taxes, which leads to a) ludicrous salami slicing of costs and b) total inability to actually deal with the big issues.
A spending review next year (2027) will mean that even if a big decision is made, government finances and spending won’t change until 2028 at the very earliest, with an election due in 2029 at the latest. The chances of Labour going into that election able to credibly say that they’ve delivered the change people wanted are getting slimmer by the month.
An alternate take on Healey is that he honestly fights his own corner. Then as Defence he wants budget increases. Now as Treasury he wants budget discipline.
But ultimately this is the problem:
And it all flows from a public that wants lots of services and no taxes. And are used to politicians telling them they can magically square this circle, if only they’re put into power. And somehow people keep believing them and electing them.
As in the USA, a weak-minded disinterested electorate makes for a dumb, self-serving, or both government.
I think that works if he had stayed as Defence and fought his corner. By resigning, he made it a matter of conscience not just for himself but for the current Defence Secretary as well, who is now either left to fight his corner by resigning - the only honourable option open in the light of the missed 2030 3% target, apparently - or to implicitly say, “Nah, this is fine” by staying in role. And if it is fine, then the Treasury has room to squeeze harder.
A structural factor here is that the UK’s defence procurement is awful, much of the money we spend will be wasted, which is part of the Treasury’s argument. E.g. we have recently spent 15 years and £6.5bn on an armoured personnel carrier which is so abdly built/designed that soldiers testing it got out vomiting and uncontrollably shaking from the noise and vibration. It was signed off as ready for live deployment in November, and unsigned off in January. A useful reminder that particularly when it comes to defence, how much you have put in is a less useful measure of your capabilities than how much you have actually got out.
“If we give you this money you’ll waste it on your usual bullshit” is a Treasury argument that is diffculte to refute, and goes to show that Burnham has some major structural issues to deal with, not just a comms problem.
[In a speech Tuesday] He will use the statement to put public control of services at the heart of his priorities for the coming months, sources told the Guardian, saying he would make the case that it would unlock investment, jobs and growth… The prime minister will face an early test of his commitment to public control as he mulls legislation to make it easier to bring struggling utilities such as Thames Water under government ownership… Burnham will give a scathing analysis of how privatised services have done little for the public, saying that utilities and transport have not been run in the public interest and are neither reliable nor affordable… Burnham has promised a 10-year project to take public control of utilities which is expected to be a major focus of his next few months in power. Allies have said the prime minister is “completely committed” to putting utilities such as energy and water companies into public control, and is looking at every option.
Well, that is going to cost a great deal of money both to nationalize them and for large amounts of new infrastructure. So what happens to everything else?
Still waiting for something to back this one up.
There was that one Post-It note…
With the end of summer recess, it’s Burnham’s first day as PM in Parliament. He could make (and walk back from) various announcements over summer, but nothing much could happen until Parliament was back in session. Now it is and naturally the headlines are all about:
Keir Starmer resigning as MP, causing another by-election.
This is a bit of a surprise - Starmer had said fairly recently that he intended to serve his full term. On the other hand, “Starmer breaks a promise when it suits him” is not all that surprising after all.
The timing - and headline-grabbing - seems somewhat petty, but it’s not one day of bad news for Burnham because fighting a bye-election is going to be a distraction and a pain. Holborn and St Pancras is a very winnable seat - it wouldn’t have been an ex-PM’s if it wasn’t - but it’s inner London, populated by a demographic that has been drifting towards the Greens, and is going to have to be defended seriously, at some peril.
And it would be bad indeed for Burnham to lose - his appeal to the party wasn’t radically different policies, it was electability. He won in Makerfield, he’s had a visible if not massive bounce in the polls, but the questions is always “What have you done for me lately?”. A loss - a high profile loss in a once-solid Labour seat - will damage him badly
Because of this, there’s a decent chance that Burnham’s initial policies will skew slightly more leftwards than he perhaps originally planned, in an attempt to woo Green curious voters back into the fold.
At least Starmer isn’t resigning and running for that seat again immediately.
I doubt Burnham can do much at this point to save the seat if it’s already leaning Green - any short-term flashy policy announcements are likely to be meaningless and seen as such.
On the other hand, if a Green win - or even a serious Green threat - gets him to drag the party leftward I for one will consider this a good thing.
From the Guardian liveblog:
From the Economist’s Owen Winter
Holborn and St Pancras’s local election results in May (ish): Labour 38% Green 29% Conservative 10% Reform 9% Lib Dem 7%
The post-Burnham MRPs show Labour winning Holborn and St Pancras with ~41% of the vote versus the Greens on ~22%. By-election dynamics could of course scramble that
From Rob Ford, a politics professor
Starmer’s parting gift to his successor: a tricky first by-election defence in a Labour seat where the Greens will fancy their chances…
Labour’s vote dropped 17 points to 48% in this seat in 2024, with a combined 29% going to the Greens (10%) and the left independent Andrew Feinstein (19%). A high profile Green candidate (Polanski?) consolidating that vote would only need a 10 point swing from Lab to win
The 2026 Camden local elections also underline Green strength on the ground in this seat - they were first or close second in all but 3 of the 11 wards wholly or partly in the seat (and in two of the others they stood aside in favour of “Camden People’s Alliance”)
The seat has exceptionally high shares of non-white voters (66%), graduates (51%) and young ppl (47% aged 16-39) - all groups that have swung Lab to Green in recent years. This could be a humdinger of a by-election
Just as Burnham standing in Makerfield transformed that race, Polanski standing here would transform this one, and for similar reasons: the opportunity to elect a national leader changes the nature of the contest
The question of whether Green leader Zach Polanski will stand is interesting - the odds are still with Labour, but they can win with a big push, and what bigger push than the leader standing? It’s just that if you don’t at least run them close, a lot of your own political capital goes up in smoke. (And the Greens hate that.*)
*One must be true to one’s self.
I wouldn’t be surprised to see Count Binface back on the ballot again, as well.
I kind of hope not. He hit a high point as the joke candidate in a joke election - if this is a serious bye-election with a chance of change of parties, having him in the background won’t add much, and will take away from what he achieved against Farage.
Anyhow, I said it was a shame that Starmer was dragging attention from Burnham’s first day as PM in PArliament, so:
He made a speech about what he intends to do.
- Britain’s defence begins with Ukraine
- Substantial change needed and his will be a problem solving government
- Small boat crossings down, claims Labour did this
- Plans for devolution - Cornwall specifcially mentioned
- Wants “political reform” to regain trust in Parliament
Diagnosis of the UK here:
And let me lay it out clearly.
From the 1980s, this country took a series of wrong turns. Political power was centralised, economic power privatised, the country de-industrialised austerity followed, hollowing out councils and depriving them of the agency to act to reverse any of this.
And then Brexit compounded the damage, ushering in a decade of low growth and stalled regeneration.
Change begins with honesty. I’m not hearing much of it this afternoon. Unless we are blunt about what went wrong, we won’t turn things around.
Far from taking back control, the combination of these policies took control out of the hands of communities up and down Britain.
For 40 years, too many places have been drifting. Too many British high streets tell the story of this decline. People yearn to see them restored to what they once were.
A PM saying Brexit was wrong and damaging feels like quite a moment, wouldn’t have been seen as possible even quite recently.
Like governments always do
So what can Burnham do about it?
- Rejoin the EU? Well in a few years the pendulum will swing and Reform/Conservatives will gain control of government and reverse the process.
- Join the EFTA (the Norway solution)? Well this includes freedom of movement which much of the British population opposes.
- A big package of integrations? This is what Teresa May wanted–and which the EU rejected as cherry picking.
- A small number of limited deals? This will likely happen but have very little impact.
Oh, we’re a long way from actually doing anything. The first step is to admit you have a problem. It’s good that Burnham feels he can stand up in Parliament and say this. But for anything to happen that then has to become the default common sense position among the public so that teh question becomes “how do we fix this”, and we are a long, long way from that. But, you know, journeys of a 1000 miles…
It’s somewhat unclear what proportion of the UK would oppose it if it was offered. The leave vote did include a lot of people who were just generally unhappy with their life in general and saw it as an anti-establishment protest vote. A ‘Norway plus option’ was actually being bandied about by the leave campaign at the time of the vote.
The campaign was also worded in an incredibly misleading way where it was suggested that we’d somehow wind up in a situation where British citizens wouldn’t be impacted.The idea that the British would also be restricted in their EU travel genuinely didn’t seem to cross some people’s minds. I think some would change their vote purely on that. I even worked with a couple of ‘leave’ voters who were convinced it wouldn’t impact normal EU citizens either, just give the UK the option to kick out anyone causing an issue, which was actually already something the UK could do.
Even my elderly uncle who did vote leave used to work in France and was quite happy for EU workers to come over to the UK. He couldn’t explain why he voted leave other than a sort of ‘Oh, I’m just sick of everyone going on about the EU’.
Obviously a chunk of people did have an issue with free movement and won’t have changed their minds having discovered that it does impact them and theirs. I think it would be interesting to see an actual poll on how many people would support the option of a Norway-type deal if it was on the table, if it was either that or carrying on as we are now.