This is who will pay for Burnham’s ‘growth in every postcode’

“Good growth in every postcode” – that’s the central pledge of Andy Burnham, who currently occupies the slightly peculiar and constitutionally unique position of Next Prime Minister Presumptive.He’s made it to Parliament, clearing the crucial hurdle despite Sir Keir Starmer’s best efforts, but not yet into Downing Street. However, we all know that is just a matter of time, so his speeches carry the weight if not quite the immediate effect of a fully-fledged prime minister. So this promise is effectively the mission statement of a new, if as-yet unborn, government. It’s a laudable goal, which speaks to the frustrations of many who feel that their areas have been neglected, abandoned and overlooked for many years. Burnham’s proposed mechanism – greater localism – is similarly appealing. Perhaps surprisingly given their different party allegiances, on this topic he sounds a lot more like David Cameron than any of his Labour predecessors.  His argument is that the British state is over-centralised and as a result unresponsive, under-appreciative of the potential of many of its regions and insufficiently creative in its policy solutions. This is certainly true, and transferring power down, closer not just to town halls or community representatives but to actual citizens is a sensible way to improve each of those failings. Given that this is the central theme of Burnham’s imminent premiership – and the crucial bridge by which he hopes to transition from being Mr Manchester to a PM for the whole country – it merits close scrutiny, particularly where it raises questions rather than answers them. The first is to ask about the crucial qualifier. He isn’t just pledging growth, but “good growth”. What does “good” look like? To many it may simply mean “lots of growth” – or, to be more nuanced, strong growth on a per capita basis rather than just crude GDP. It would be consistent with his record for it to mean growth which he believes is distributed and felt down the income scale. But there are many reasons to be wary of trusting politicians with loose adjectives – “good” growth could just as easily be interpreted by Ed Miliband to rule out growth that involves manufacturing jobs that use a lot of electricity, as it could to rule such growth in by celebrating the economic and social value of skilled work. The potential is there for genuinely exciting changes in tax and regulation – on business, on housebuilding, on infrastructure, on transport – which could see a thousand flowers bloom in the British economy, giving room for new ideas and new enterprises to flourish and change lives for the better. Or for the imposition of political dogma which could easily distort and warp the decisions of businesses and households for the worse. Perhaps we might even see both happen in different places. The second question is: can “good growth” truly be delivered everywhere all at the same time? Any of us would push a button to make such a thing happen if we could, but there are some reasons to be cautious. I can’t think of a single economic revolution in which that’s been the case – from the wool boom which built so many rural churches, to the Industrial Revolution which handed dominance to the cities, to the Big Bang of the 1980s which reversed London’s decades-long decline.  Even the digital revolution, which has allowed financial services to disperse across the country, evidently has not been a rising tide which lifted all boats at the same time, or we wouldn’t be having this discussion. This is the inherent tension in the formation of the Burnhamite pitch for government: devolving power also means devolving responsibility, which also means devolving cost and risk. Promising that every place will make more of its own decisions is positive – and by increasing the scope for policy innovation, experimentation and competition it will increase the potential for many areas to succeed. But it isn’t possible to promise that success will come to all of them. If Westminster gives up power, and passes it downwards it must also devolve the right for experiments to fail. Most agonisingly for a prime minister who has been a successful city leader, and who has promised “growth in every postcode”, that is likely to also produce pressure to intervene if local innovations don’t work.  Burnham cannot give up power and simultaneously dictate how it is used (and in fairness he doesn’t seem to wish to), but he will now be judged against his promise not only to change the system but to guarantee its outcomes. This leads us directly to the final and crucial question: who will pay for it all? It’s a positive sign that Burnham says he is considering matching the transfer of policy powers with the transfer of fiscal powers. Rights without responsibility is a recipe for recklessness, and too much British devolution over the last 30 years has involved handing down subsidies rather than true power.  I hope we will see some local leaders take the opportunity to drive private sector growth – and attract new investors – by cutting taxes to make their areas more appealing. Places that draw in new workers, energise housebuilders, appeal to be the home of new data centres, and reward businesses for moving to town would do well, and over time those that choose not to should have every incentive to follow suit. The risk is that this requires time, strategy and restraint. If every postcode expects not just “good growth” but a Burnham of their own, with flagship policies, new grants and shiny new infrastructure projects from Day One, then the incentive will be for mayors to splash the cash to make their name. That would only mean one thing: even higher taxes.