Andy Burnham used his first policy speech in Manchester last week to set out his vision for fixing Britain’s “broken” political system.
The 56-year-old former mayor emphasised his plans for devolution, including assigning a new No.10 unit based in Manchester the task of giving English regions more control over areas such as housing and transport.
For many living in the north of England, a Burnham premiership would be a breath of fresh air. He is a self-professed champion of the North and has confirmed that he will spend some of his working week in Manchester as Prime Minister.
But for all his rhetoric about a No.10 in the North, there is concern that Westminster and Whitehall will bend Burnham’s priorities to the UK’s traditional focus: London.
The Thames Water debacle is going to be its first acid test.
Nationalising Thames Water has been floated by Burnham, but it carries enormous financial cost. The water company requires at least £20 billion in investment over the next five years in critical infrastructure upgrades. This would be additional to the multibillion-pound cost of compensating Thames Water’s creditors.
The total numbers alone should be enough to discourage Mr Burnham from pursuing nationalisation, and there is hardly room in the budget for unnecessary expenditure.
The decision would also have drawbacks for Manchester and the North. If the government were to nationalise Thames Water, every pound spent would be a pound less for the government to invest in the North on public services, including healthcare, housing and energy.
This would derail the likely Prime Minister’s “10-year mission” to raise living standards, while undermining one of the central promises of his rapid rise to power: that Britain’s future growth must be driven by all of England, Scotland, Wales and Northern Ireland, not just London. Nationalising Thames Water would risk making that commitment look hollow the moment he enters office.
The issues that nationalisation presents do not stop there.
Even placing Thames Water under a Special Administration Regime (SAR), a temporary insolvency process which has been floated by Minister for the Environment Emma Reynolds, would result in at least £4 billion of taxpayer money from all across Britain being spent on a project in London and the home counties, a cost likely to rise even higher.
The rest of the country, Manchester included, would be stumping up cash to bail out the South. It would certainly be a shot across the bow for the voters of Makerfield, who Burnham promised would be a “touchstone” not a “stepping stone” for his premiership.
Britain’s top job is now more unstable than ever. If Burnham wishes to avoid the short tenures of his predecessors, he will need to balance driving economic growth, appealing to his voter and political base, all the while fighting off an ever more popular Reform.
Manchester’s former Mayor recently claimed in an interview with LBC that he is “not undisciplined when it comes to the public finances.” Burnham must stick to his word and prove it.
Disciplined finances might mean not spending billions in taxpayer money on nationalising Thames Water. It would mean instead delivering Northern Powerhouse Rail on time and dedicating funding to the government’s new hospital programme, finally securing the investment the north has long been promised but never received.
Thames Water will be the first great test of Burnham’s northern agenda, and it’s vital for his premiership that he makes the right choice. Burnham will face calls from some quarters to reject calls to nationalise Thames Water and invest the funds instead in the communities around the country long neglected by Westminster.
