Andy Burnham might be the bookmakers’ favourite to replace Keir Starmer as Labour leader, despite his lack of a Westminster seat, but he certainly isn’t the bond market’s favourite.
In fact, gilt traders see the Greater Manchester mayor as the “biggest threat” of all the potential candidates, said the Financial Times. He troubled investors last year when he suggested the country should not be “in hock” to the bond market. Six out of 10 fund managers picked Burnham as the candidate that would “trigger the most negative market reaction”.
Burnham has said his comments on the bond market were misinterpreted, but the political project he espouses and the vision he offers for the country’s future – Manchesterism – remains highly divisive. Critics see it as “mostly vibes and boosterism” that “relies on a bottom-up localism” difficult to scale at a national level, said PoliticsHome. Others see it as our potential economic and political saviour.
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Manchesterism is a “horrifically overused phrase” about how my city “does things differently”, said Stephen Topping in the Manchester Evening News. But it’s true. Manchesterism is “‘place-based’ rather than party political”. It involves “public services working closer together, and in partnership with both the private sector and community groups, to ensure the benefits of a stronger economy can be felt by more people”.
The Greater Manchester region has become the UK’s fastest growing economy over the past decade, “at more than double the rate of the national average”. Devolution has been critical: the “trailblazer” deal struck in 2023 has allowed Greater Manchester to “take public control of key services” such as the bus network, which has improved living standards and boosted the local economy. Those who have worked closely with Burnham believe Manchesterism “could work in other parts of the UK”, though it would pose “a radical departure from the UK’s largely centralised economy”.
Burnham’s programme has begun “delivering affordability and economic dynamism” by “regaining public control” of essential services, said Mathew Lawrence, director of progressive think tank Common Wealth, in The New Statesman.
Energy, water, housing, transport and care are “domains of inelastic demand” and “existential need”. So market governance of the supply side “produces rent extraction” and underinvestment. The public “pays twice: through higher bills” and taxes to fund support. But public control of essentials eliminates the privatisation premium. “Rebuilding public provision is not the alternative to fiscal prudence. It is fiscal prudence.”
Manchesterism might be the “buzzword of the day”, but it’s simply people projecting their “pipe dreams” on to Burnham’s “blank canvas of soft-left localism”, said Daniel Johnson in The Telegraph.
“The irony is that 19th-century Manchesterism was more or less the opposite of what the Labour Party now thinks it means.” Manchester was “both the laboratory and the showcase of the Industrial Revolution”, the “citadel of free trade”. It had nothing to do with Burnham’s “municipal socialism”. His proposed solution to Britain’s economic woes is “a muddled melange of municipal meddling, including tax hikes and more borrowing”. What Britain needs is the 19th-century version, which Burnham doesn’t understand.
The vision of Manchesterism Burnham outlined in January is, in practice, an industrial strategy – and there is “nothing new about those”, said Christopher Snowdon in The Critic. Economists have long criticised them for “misallocating resources, crowding out private investment, picking losers, and forcing taxpayers to bail out industries that are only kept on life support for political reasons”. How, exactly, can Manchesterism “stop us being in hock to the bond markets” when Manchester City Council is “one of the most indebted in the country”.
What next?
Burnham is planning to reassure the bond market that his possible election to Labour leader would “not trigger a financial meltdown”, said The Telegraph. Sources say he is planning to endorse a pamphlet outlining a framework for Manchesterism, setting out how it could be rolled out across the UK and “the wider economic theory behind his ideas”.
But the uncertain national landscape, in which voters are moving both further left and further right, could make the success of Manchesterism “a challenge for anybody”, Sarah Longlands, chief executive of the Manchester-based Centre for Local Economic Strategies, told Manchester Evening News.
Manchesterism is still in its early stages, yet for all the benefits devolution has brought, Greater Manchester is still “a tale of two cities”, with a great income and opportunities divide exacerbated by the cost of living crisis. “Growth in Greater Manchester has to be for everybody – otherwise, what’s the point?” Longlands said.
