Why Burnham's radical devolution plan could reshape Britain

Andy Burnham looks like he's going to be the next Prime Minister.He's been talking about what he wants his economic agenda to be.And it's worth just kind of picking through some of the issues he's talking about.We don't know exactly what the policies are going to be.We certainly know, though, Britain has all sorts of issues it's facing.And one of the reasons a lot of people are looking towards Andy Burnham right now is because of his economic record in Manchester.

And actually, it's really striking here.If you look at economic growth, and this is showing you GVA, gross value added.So growth, there's the pandemic there, as you can see, in different regions of the UK, West Midlands, West Yorkshire, London, overall.And just look at Manchester, I bring on Manchester, the line from Manchester, and you can see, It's a striking story here.Manchester's had some of the strongest growth that we've seen anywhere in the UK over the last few years, and looks like that is set to continue.And so a lot of people are wondering, what are the lessons from Manchester?

How could we apply them across the rest of the UK?And here's where things get interesting.So what I'm going to show you here is just the bigger picture for this country.And this is kind of, it's a bubble chart.You'll see the bubbles in a moment.And the further the bubbles are this way, the better off each of those different regions are.

And I'm going to show you different cities across the UK and different countries around the world.So there's the UK.And what do you see here?You see that big bubble.Of course, that's London.Probably wondering what that bubble is there.

That's actually Reading there.And obviously, these are better off parts of the country.These are less well -off parts of the country.So they've got Sheffield along there.Plymouth is around there as well towards the bottom when it comes to cities.And there's Manchester.

It's kind of somewhere in the middle, but more like at the upper end of that cluster of second cities.And so just think about that for a moment.Now I'm going to compare other countries in Europe.We'll start with France.And here's what's kind of interesting.So here you have Paris.

It's kind of a little bit better off than London, give or take.But look, there's Marseille and there's Lyon.And so you havetwo major cities that are kind of close to that capital.You don't really have that to the same extent in the UK.It's the gap between London and then the rest, and the fact that the rest are quite far down here.

When I say the rest are quite far down here, so not that well off, Compare the UK with Poland.So this is the same thing for Poland.So major cities in Poland, there's Warsaw over there, kind of actually not that far off London in terms of how well off it's doing.But look at Poznań there.So Poznań, basically kind of similar to most UK cities, actually better off than many of those UK cities.cities.

And it's a similar story as well if you look at Germany.So there's Germany, big cluster around there.Look at Italy.So again, the cities tend to cluster kind of higher up.And then look at the U .S.

and it's just a completely different story in the U .S.Most of the cities over there, New York there, I mean look at San Francisco, so there's the tech story there, incredibly well off.San Francisco, beyond anything in the rest of the G7.But the big picture I kind of want to leave you with is, look at the UK, look at London, look at the gap between London and the rest, and even more significantly, Look at those second regions, those second cities in the UK and how far down in terms of GVA, how much income they're generating.They are compared with France, compared with Germany, compared even with Italy and certainly compared with the US where you have all these other cities, smaller cities, not capital cities certainly, which are better off than London

Another area where you see this isn't just in the economics, it's also in health outcomes.This is showing you life expectancy as a heat map of the UK.The lighter coloured areas have higher life expectancy.This is just male life expectancy at birth, which is one measure.If we just zoom in, so we'll zoom in here to Hampshire and you can see Hart.Hart in Hampshire has the highest life expectancy in the UK, 83 .7, pretty well off area.

But now if we kind of zoom up the country, so zoom up to Blackpool there, so Blackpool there, you can see it's dark, so the darker areas have lower life expectancy.You're talking about 73 .7 years of life expectancy for the average male born in Blackpool.And the striking thing about this is that most of the time, you expect life expectancy to go up and up.And actually, that is the story in the UK.Although, obviously, we had the pandemic, which is that dip at the end.Life expectancy has been kind of going up and up and up.

Look at somewhere like Blackpool.And actually, it's kind of going nowhere.That's really concerning in a country where you're expecting to see health outcomes improving over time.In fact, life expectancy in Blackpool has been basically unchanged since 2007.So divergences when it comes to the economy, divergences when it comes to health.And also a big divergence in terms of the state and just how much money it is sucking in, particularly towards London.

And this was something that Andy Burnham talked about an awful lot.This chart, I know it's just a lot of bars here, but this is so, so striking because the darker bars are showing you how much of the tax that's generated by the government comes into the central state.Okay, so into the equivalent of Whitehall in these different countries around the world.There's Germany, there's France, Canada, you know, areas that have big federal governments.And there's the OECD average.It's kind of a bit of a

So the OECD average is just over 50 % of all the taxes are generated by the central government versus all of those state local taxes.Where's the UK on this?We are a massive outlier.So more than 90 % of all the taxes that are collected in Britain are collected and go into Whitehall.And that is a massive, massive difference with other countries around the world, where you have local taxes, genuine local taxes, which are decided on and spent, for the most part, in many federal parts of the world.The UK is just really centralised when it comes to our tax system.

And actually that, if we just take that bar and kind of work out how has that shifted over time, you might have asked the question, has it shifted much over time?Is this a new issue that Andy Burnham is talking about right now?Well, to be honest with you, not really.Back in the early 90s, it was over where it is now.So it's about 92%, 93%.And during the period of New Labour devolution, it came down a bit.

So you're seeing local governments getting a little bit more power to tax over that period.But actually, since 2010, so since the period of the coalition and the Conservatives, the amount of tax going into Whitehall, the centralisation of the UK state, which is kind of another way of saying it, it's gone up and up.And again, the question for Andy Burnham is, are you going to bring that down meaningfully?A lot of people, when they get into office, when they get into Westminster, all of a sudden, they're like, oh, actually, we'd quite like to keep hold of those taxes.And for the most part, it's mostly just council tax that, in the UK, the local areas get to decide.So that is one of the issues that he's certainly nodded towards.

Perhaps the closest thing that we've got to a kind of definitive new policy or something he says he wants to do is when it comes to how Sorry, housing.And if you look at this, this is showing you total building, house building going back to the 1960s.So really long run chart here.And you can see the glory era in investment banking.when the UK was building, this is actually in England, so when we were building more than 300 ,000 homes a year.So that's, you know, people see that as the glory era.

And right now, we just haven't been building that many homes in recent years.The striking thing is when we kind of divide this up, so we show you where the house building is actually happening.So private house building is obviously the bulk of it.That's the blue areas there.You've got housing associations, which is the green areas.But look at the red.

That's basically, that's local authorities.So this is council houses being built here.And what do you see?If, again, you step back and look at this chart, you see that we used to build a lot of council houses back in the 60s and the 70s and the early 80s.But that just hasn't really happened in recent decades.And it's a tiny little fraction at the moment.

So Andy Burnham says that he wants to make those red little segments bigger.and to build more homes.But of course we've heard from this government, from the previous government, from the government before that, that they are determined to build more homes and what's actually happened well actually it hasn't actually come.So how council house building is that going to be the thing that Annie Burnham can actually shift?We'll have to wait and see.We know so little about what's actually on the agenda in terms of plans but we're starting to learn a little bit more about some of the issues that this potential new Prime Minister wants to deal with.