Angela Rayner has insisted that the Prime Minister's plans to hand responsibilities for economic growth to the new No 10 North are not a demotion for Chancellor John Healey and the Treasury.
Andy Burnham said in an interview with The Times that the new Manchester-based satellite office of Downing Street will take over responsibility for growth from the Treasury as part of his drive to push power out of Whitehall. The Treasury will focus on controlling the public finances instead, he said.
Prime Minister's support
Mr Healey fully supports the move, according to the Prime Minister, who described it as part of a “huge transfer of power”. The UK is not “set up for growth”, Mr Burnham said in the interview, which was published as inflation surged to its highest rate since March as a result of energy prices being pushed up by the Iran war.
The Office for National Statistics (ONS) said Consumer Prices Index (CPI) inflation rose to 2.9% in July, up from a 15-month low of 2.6% in June.
Rayner's response
Speaking to broadcasters on Wednesday morning, Housing Secretary Ms Rayner insisted the Prime Minister's plans for No 10 North were “not at all” a demotion for Mr Healey.
She told Sky News: “The Chancellor is working really hard with the Prime Minister, with myself and other Cabinet colleagues.
“You’ll have seen the statement that the Cabinet made, I think now two weeks ago, where we were really clear on our intent to put devolution and community empowerment at the heart of this Government.”
She added: “What we’re all saying, including the Chancellor, is that we’re going to work with partners to ensure that they feel empowered in this process, so they can drive their local economies.”
Burnham's rationale
In his interview with The Times, Mr Burnham said the Treasury's dual duties of growing the economy and controlling public finances hampered its ability to do either.
“There’s a job to be done around control of public finances. It’s just the dual job of growth and control of public finances (that) sometimes clouds the growth mission,” he said.
“And particularly having No 10 leading on that growth mission means you’ve got maximum power to unlock the blockages where they exist in the wider Whitehall system.”
He also suggested the UK is not “set up for growth”, and hinted at moving to more public control of services like buses, trains and water.
“It comes back to this point about control, and the ability to get growth going — because you’ve got to have the control where you need it to unlock issues, to allow business to get quicker connections,” Mr Burnham said.
“And we’re not set up for growth, in the way you have to have a grip over those things to be set up for growth. So people are misreading this if they see this as highly ideological.
“I would say it’s highly pragmatic, because if you don’t have the ability to shape those fundamental enabling services, you don’t control the destiny of the place you’re leading. You don’t have a handle on the levers of growth.”
Next steps
Mr Healey will give a speech on the Government's economic agenda next month, the Prime Minister also said. Mr Burnham will meanwhile set out a “10-year plan” for economic and constitutional reform after the October 28 Budget.
The Manchester branch of Downing Street in Heron House is already up and running and officials have said it will cost taxpayers no extra money. The Prime Minister is expected to work at the outpost once a week as part of his move to push power out of Westminster.
Asked if he was prepared to be disliked, the Prime Minister criticised politicians who he said made a “fetish” out of being “tough” and “masochistic”.
“Isn’t the job to be popular by making people’s lives better?” he said. “Isn’t that what you should be doing? I’m very pleased with the start that we’ve made. We just need this to be a better period than we’ve had for a while.”
