The writer is our foreign correspondent based in the UK.
Andy Burnham took office of UK prime minister against the third-strongest economic backdrop of any predecessor in the past 50 years, according to analysis. A study by the consultancy Public First and business coalition Prosperity Alliance, found only Tony Blair and Theresa May came to power with the economy in a better state.
It measured Burnham’s first-year forecasts against his 13 predecessors’ first years, on GDP growth, inflation, unemployment, borrowing and real wage growth. Economist at Public First, Scott Corfe, said this backdrop would “give a Burnham government more room for manoeuvre than many of its predecessors.”
Inflation – the rate at which prices increase – is currently 2.8 per cent, far below the 11 per cent peak seen in 2022, but still above the Bank of England’s target of 2 per cent.
However, the central forecast used in the analysis predicted that, in Burnham’s first year, inflation is set to meet that target.
That matches the rate recorded under Blair and ranks Burnham second out of 12 prime ministers. Only Boris Johnson, whose first year coincided with lockdowns cutting inflation to 1 per cent, enjoyed a lower rate. Harold Wilson and Margaret Thatcher inherited double-digit inflation in the 1970s and 80s.
Meanwhile unemployment – at 4.9 per cent – is set to fall by half a percentage point in Burnham’s first year. The rate has fallen for two consecutive quarters from a recent peak of 5.2 per cent at the end of last year.
But Burnham faces a separate challenge – a record 1.1 million young people aged 16 to 24 are not in education, employment or training, according to the Office for National Statistics (ONS), the first time that figure has passed a million since 2013.
Public sector net borrowing – the gap between what the government spends and what it raises in tax – is forecast to dip 0.7 percentage points of GDP during Burnham’s first year.
That ranks Burnham fifth out of 13 prime minister on this measure. And gross domestic product (GDP) growth – the rate at which the economy expands each year – is forecast to hit 1.6 per cent. Corfe said “the economy would be growing” but he cautioned that “this would be a story of stabilisation rather than boom”.
“Growth would remain lacklustre, real wage gains limited, and public confidence in the economy exceptionally weak,” he added.
Early, as it is, in his time in office, trade union officials put in an issue for the new PM to deal with. They call for the immediate repeal of the threshold for votes in a ballot for strike action.
General secretary of the NASUWT teachers’ union, Matt Wrack, said the 50 per cent threshold for a strike to be legal had always been used as a tool of union-bashing.
He said: “MPs are not elected on a 50 per cent turnout threshold. Councillors are not. The prime minister is not. If Westminster elections were held to the same standard imposed on workers, half the Cabinet would not be in office today and Labour would have far fewer MPs.
“The International Labour Organisation’s Freedom of Association Committee has been clear that requiring over half of all eligible workers to vote before a strike can be declared is ‘excessive’ and designed to hinder the right to strike, essentially in large workplaces.
“The consequences are felt most sharply in sectors like education, where the workforce is overwhelmingly female. The threshold suppresses the voice of women who are already fighting for fair pay, safe conditions and dignity at work.”
Wrack said that after 14 years of Conservative governments using the law to weaken trade unions, Labour had promised a New Deal for Working People and the repeal of the Trade Union Act 2016, including the 50 per cent turnout threshold, adding: “For many in the trade union movement, these pledges were one of the strongest arguments for a Labour vote; the opportunity to actually repeal undemocratic and antiworker laws.”
