Actions speak louder than words

Andy Burnham enters Downing Street with no shortage of ambition. Greater devolution, more public control of utilities and a new council house building programme are among the promises that helped carry him into office. Delivering on any one of those agendas would be challenging. Seeking to rewire the British state, against a backdrop of constrained public finances and with an in-tray full of domestic and international challenges, will require much more than ambition. If the new government is to make progress this decade, it will need to quickly flesh out the vision of what it wants to achieve and be ruthless in its prioritisation.

The new Prime Minister has promised a 10-year plan in coming months to lay out his vision. Clarity of vision will be critical because policy design should follow from policy purpose. Ministers and civil servants cannot hope to implement coherent policy without first knowing what they are trying to achieve.

Take devolution, which looks set to be the flagship domestic reform. Burnham has spoken enthusiastically about the biggest ever rebalancing of power away from Whitehall. But before any powers can be transferred, or any new decisions be made locally, a series of fundamental questions need answers.

Which responsibilities should be devolved? To which tiers of government? Should local authorities gain greater control over revenues from national taxes, or be allowed to raise more of their own revenue? How do you balance rewards for growing revenues with protection for areas whose revenues decline?  

The answers to questions like these should depend on what devolution is intended to achieve, and how much influence you think local leaders really have over their economies. A system designed primarily to raise economic growth, for example, is unlikely to look the same as one designed to tailor public services more closely to local preferences.  

The government will also need to decide which agendas to prioritise. Prioritisation will matter all the more because, while Chancellors come and go, the underlying fiscal constraints remain the same. Public debt, borrowing and debt-interest costs are all high. One in every £12 the government spends currently goes on debt interest.

Burnham has indicated that he intends to retain the existing fiscal rules. That is sensible. Loosening the rules in order to borrow significantly more would mean debt continuing to rise and would undermine the UK’s fiscal credibility. It would require investors to be compensated with even higher interest rates.

Adopting the fiscal rules does not, however, stop Andy Burnham from choosing to plot a distinctly different path from his predecessors. To do this, the new Prime Minister will need to be ready to put money where his priorities are.

Under current plans, total public spending will continue to grow over this parliament. Taxes are due to rise by even more, allowing borrowing to fall and debt to stabilise. Despite a growing state, spending on public services will remain tight. How much money to give the NHS will be a defining choice. If it continues to receive the relatively generous settlements to which it has become accustomed, many other departments will face cuts.

Andy Burnham has said that increasing national security is his first priority. He has also talked about providing support with the cost of living and ending rough sleeping. If any of those priorities means spending significantly more, the new government will have to decide which other parts of government to spend less on or which taxes to raise. The same is true if the new government decides to push ahead with a massive council house building programme – the subsidies required will not come cheap.  

These are not arguments against ambition. They are reminders that governments are ultimately defined not by the scale of their ambition but by the choices they make when not everything can be done at once. Actions speak louder than words.

Burnham has spoken of creating a new politics in which government levels with the public about difficult decisions. That sounds great to me. Before the last general election, IFS criticised what we called a conspiracy of silence around the difficult fiscal choices facing whichever party entered government. Honest discussion of trade-offs should be the starting point for good government.

The Prime Minister will not be able to avoid difficult choices. But he can explain them. Setting out a clear vision, establishing priorities and being open about what they cost would not guarantee success. It would, however, give other politicians and voters a clear basis on which the government's progress can be judged.