Jim O’Neill, former Goldman Sachs chairman, is pushing for a large expansion in government borrowing to pay for infrastructure projects
Miatta Fahnbulleh is a protege of Ed Miliband and led the capitalism-sceptic New Economics Foundation as chief executive for six years
When Andy Burnham enters No10 in weeks the pressure to implement new policy will be massive. The advisers who hold his ear will try to act fast, thinking that they have learnt the lesson from Starmer’s processology. Labour MPs have made their desire for ‘big change’ known for months but have failed to articulate it beyond a vague call to be more left-wing. Anonymous backbencher quotes like ‘I didn’t come into government to cut welfare’ populated Starmer’s two-year stint.
The views held by Burnham’s economic policy advisers do not bode well for growth. Chief among them is Miatta Fahnbulleh, the energy-turned-housing minister who quit to call for Starmer to resign. She is a protege of Ed Miliband and led the capitalism-sceptic New Economics Foundation as chief executive for six years after a period working at left-wing think tank the Institute for Public Policy Research.
Miatta personally called for a wealth tax under the last Conservative government, as well as a ‘tougher windfall tax on energy giants.’ Under her stewardship, the NEF published reports calling for both capital gains tax and dividend tax to be hiked to income tax levels – this is the darling policy of the so-called ‘soft left’ of the Labour Party. The NEF simultaneously argued for an expansion of the benefits system, which included a “minimum income guarantee” paid to everyone apart from the rich.
“Miatta Fahnbulleh is a protege of Ed Miliband and led the capitalism-sceptic New Economics Foundation as chief executive for six years after a period working at left-wing think tank IPPR.”
On energy policy she pushed for the nationalisation of banks and creation of new “green” banks with taxpayer funds, as well as a legal block on private banks lending to anyone with a “large amount of greenhouse gas emissions” and “penalisation of banks that provide too many carbon-intensive loans.”
Fahnbulleh’s record in government was to oppose new housing in her constituency of Peckham. She prefers to spend £10 billion of taxpayer funds every year building council houses. To achieve this she would implement ‘community right to buy – rights of first refusal to social landlords and community-led housing organisations when properties become available for sale… a Public Land and Housing Corporation should be established to strategically deploy… private land acquired at existing use value, to prepare the pipeline of land for social housing.’ This is equivalent to seizing private land at below-market value.
Resigned MP Josh Simons, who is also briefed to have been working on policy for Burnham since early in the by-election campaign, led on Digital ID in government after nursing the policy back to life from the Labour Together pressure group. He was also once a trustee of the New Economics Foundation led by Fahnbulleh.
Additionally brought on to advise Burnham are IPPR longtimers Carys Roberts and Zoe Billingham. Roberts ran IPPR before heading into the Downing Street Policy Unit. She left last year in a shake-up. Unsurprisingly, she supports the extra taxation of savers through Capital Gains Tax and dividend tax rises. Roberts also co-wrote a report which advocated for a radical proposal to combine employee NICs and income tax, apply them to all incomes on an annual basis, and apply a gradually rising marginal tax rate as income rises.
A supporter of wealth tax proposals in the Corbyn era, Roberts has pursued an ‘Alternative Minimum Corporation Tax’ based on global profit-to-sales ratios for companies operating in the UK as well as a zany ‘Citizens’ Wealth Fund’ to pay every young person a £10,000 universal minimum inheritance at age 25. This would no doubt be extremely expensive.
Zoe Billingham is the head of IPPR’s northern branch, and has named US leftist congresswoman Alexandria Ocasio-Cortez as her ‘millennial political inspiration.’ She has pushed to make ‘reducing regional inequality a legal requirement on government’ and mandate that at least 1% of all local authority budgets is allocated with ‘participatory budgeting’ – citizens’ assemblies. She also supports classic NIMBY-eco positions like introducing a planning rule that no new home can be more than 300 metres from ‘accessible green space.’
Other inspirations close to Burnham have been focussed on their own pet projects. Neal Lawson, the long term director of Compass, is a proponent of radical policy views like proportional representation and a ‘progressive alliance’ with the Liberal Democrats, Green Party, and other parties.
Jim O’Neill, former Goldman Sachs chairman, is pushing for a large expansion in government borrowing to pay for infrastructure projects. He was brought in to calm the bond markets in a briefing to financial papers on the eve of the Makerfield by-election. This idea has so far been unable to improve growth or productivity substantively. Economist Andy Haldane – brought in for the same reason – has also long-criticised the same Reeves fiscal rules that Burnham says he now supports. It is unlikely they will block the leftist proposals from above if they are ensconced in Downing Street. Outsiders with little political experience are often sidelined after one or two major decision crunches in government, especially if they were only brought in to calm bond traders.
The truth is that as Burnham is faced with the government’s eye-popping fiscal situation he will turn to his nearest and dearest – those leftist policy advisers who feel their radical proposals were ignored by the Starmer ministry – to plug the gap. Expect across-the-board tax rises packaged up with the ex-mayor’s ‘Manchester’ vibes. A cut to government spending? Perish the thought…
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