One after the other, Britain\u2019s recent prime ministers have pledged to revive the nation\u2019s economy. One after the other, the promised growth eluded them.<\/p>\n
Andy Burnham, set to formally become the newest prime minister on Monday, has arrived with his own version of this pledge: \u201cGood growth in every British postcode.\u201d<\/p>\n
His plan? Give away power to local officials so they can make their own economic choices. Mr. Burnham has promised to bring about \u201cthe biggest change in our lifetimes to the way the country is run.\u201d<\/p>\n
Mr. Burnham has not revealed the details of his economic agenda. But his priorities are emerging in his speeches and recommendations from advisers. The New York Times spoke with five economists and policy strategists who are playing a role in formulating Mr. Burnham\u2019s economic vision, several of whom spoke on the condition of anonymity to talk openly about policies that were still not final.<\/p>\n
Alongside the so-called devolution of power, Mr. Burnham has said he will bring more public utilities and services under public control, while quickly tackling the high cost of living.<\/p>\n
But Mr. Burnham will face the same economic challenges that befell his predecessors: a heavy public debt burden, stubbornly high inflation and low productivity growth. Those are compounded by the unavoidable legacies of the country\u2019s decision a decade ago to leave the European Union, which has dragged on the economy<\/a>, and years of too little public investment. Nervous consumers are saving a lot, rather than spending.<\/p>\n Mr. Burnham faces formidable economic problems, but at their heart is stalled growth.<\/p>\n Britain\u2019s economy has been sluggish since the 2008 financial crisis. Gross domestic product per person is just 7 percent higher than it was in early 2008, compared with more than 20 percent in the decade before the crisis. <\/p>\n \u201cGrowth is the big challenge the U.K. faces,\u201d said David Aikman, the director of the National Institute for Economic and Social Research, an independent think tank. The country\u2019s more enduring problems like how to fund the clean energy transition and support an aging population \u201cwould look a lot easier if we had faster growth,\u201d he added.<\/p>\n Many of the big economic troubles, like high debt and huge demands on public spending, aren\u2019t unique to Britain. But Mr. Burnham is bound by constraints of his \u2014 and his party\u2019s \u2014 own making. Wary of spooking international buyers of British government debt and raising borrowing costs further, he has pledged to stick to strict rules on debt and spending made by Rachel Reeves,<\/a> whom he is expected to replace as chancellor of the Exchequer in coming days. Mr. Burnham will also inherit a party that promises not to raise any of the three biggest taxes in the country, including income tax.<\/p>\n Mr. Burnham comes to the prime ministership after nearly a decade as the mayor of Greater Manchester in the north of England<\/a>. The job gave him power over transport, housing, policing and skills development through adult education and training. Mr. Burnham highlighted the virtues of local over central government control as a political signature and has promised to further devolve powers from Westminster nationwide.<\/p>\n Britain is \u201cextraordinarily centralized,\u201d said Diane Coyle, a professor of public policy at the University of Cambridge who has influenced economic policymaking in Manchester for much of the past two decades.<\/p>\n Power, especially over finances, is hoarded in London, a level of centralization that is notable by international standards. Local governments have less ability to raise the funds they need than peer countries, according to data from the Organization for Economic Cooperation and Development, or O.E.C.D.<\/p>\n Centralization has led to two big, deeply entrenched problems \u2014 low growth and lagging prosperity in most of the country, and economic overheating in London and the southeast characterized by unaffordable housing. London\u2019s productivity is 30 percent higher than Britain\u2019s average, and it has been that way for the past couple of decades.<\/p>\n Here, Manchester is instructive. The city, which was an industrial powerhouse in the 19th century, suffered through the second half of the last century amid rapid deindustrialization. But it is staging a revival. The city has become a growth model<\/a> with impressive amounts of inward investment and productivity gains. Mr. Burnham\u2019s hope is that Manchester\u2019s resurgence, the seeds of which were laid before he became mayor, can be replicated across the country.<\/p>\n The critical advantages of devolution, Ms. Coyle said, is officials get better information about concerns like what skills local companies need in workers, and can better sync education and training policies to meet those demands.<\/p>\n