Gordon Brown Placed a Timebomb Under Britain – It’s Set to Blow Up in Andy Burnham’s Face
Andy Burnham arrived at Downing Street promising a new beginning for Britain.
He called his victory a “circuit breaker” moment and promised that his government would deliver major changes to the country’s economic and political direction.
But there is one problem that no Prime Minister can escape, however ambitious his programme may be.
The past.
And one of the most difficult parts of Britain’s economic past was shaped during the long Labour era associated with Gordon Brown.
Brown is no longer Prime Minister. He left office in 2010 and has been out of frontline Westminster politics for years. Yet some of the decisions made during his time at the Treasury continue to influence Britain’s public finances today.
That is why the phrase “timebomb” has become politically useful.
The argument is not that Gordon Brown personally created every problem now facing Britain. It would be far too simplistic to blame one former Chancellor for the country’s current fiscal pressures.
The argument is that successive governments built commitments into the British state that became increasingly expensive as the population aged, economic growth weakened and the number of working-age taxpayers failed to keep pace with the number of people requiring public services.
And now Burnham has inherited the bill.
The most obvious example is the state pension.
The triple lock has become one of the most politically sensitive commitments in British politics. Under the policy, pensions rise each year by whichever is highest of inflation, average earnings growth or 2.5 per cent.
It was introduced in 2011, after Brown had left office, so blaming Brown directly for the triple lock would be inaccurate.
But the wider demographic and spending pressures behind today’s pension debate stretch back much further.
Britain is ageing.
People are living longer.
The number of pensioners is increasing.
And the proportion of the population paying taxes to support public spending is under growing pressure.
That creates an uncomfortable mathematical reality.
A government can promise generous benefits.
It can promise better healthcare.
It can promise expanded social care.
It can promise more housing.
It can promise higher defence spending.
It can promise cheaper transport.
But eventually someone has to pay.
Burnham is discovering that reality remarkably quickly.
His government has already made a series of ambitious spending commitments, from council housebuilding and social care reform to defence and measures designed to ease household costs. Economists have warned that the total package could require substantial tax increases if the government is determined to stay within its fiscal rules. One recent estimate suggested the required tax rise could reach £25 billion.
That is the political timebomb.
The danger is not that Britain suddenly runs out of money tomorrow.
The danger is that governments gradually make promises that are politically popular today but increasingly difficult to finance tomorrow.
Eventually, the arithmetic catches up.
And when it does, the Prime Minister in office at the time gets the blame.
That Prime Minister is Andy Burnham.
This is particularly awkward because Burnham’s political pitch depends heavily on increasing the role of the state.
He wants government to do more.
He wants councils to build more homes.
He wants social care to become more comprehensive.
He wants Britain to spend more on defence.
He wants to support households struggling with the cost of living.
All of these objectives can be defended individually.
The problem is that they do not exist individually.
They compete for the same limited pool of public money.
That is why the debate about the pension triple lock is becoming so important.
Recent analysis has argued that the policy is becoming increasingly difficult to sustain, with its additional cost potentially reaching tens of billions of pounds over the coming decades.
For Burnham, this creates an almost impossible political calculation.
If he protects the triple lock, younger taxpayers may eventually have to shoulder an increasingly heavy burden.
If he reforms it, millions of pensioners may feel betrayed.
If he raises taxes, working households and businesses may complain.
If he cuts spending elsewhere, public services may suffer.
And if he borrows more, financial markets may eventually demand a higher price.
There is no painless answer.
This is precisely why long-term fiscal problems are so dangerous.
They allow politicians to postpone difficult decisions.
A government can say that the problem belongs to the next Parliament.
The next government says it belongs to the government after that.
Eventually, however, there is no next government to pass the problem to.
The bill arrives.
For Burnham, the bill is arriving now.
His political challenge is made even more difficult by his promise to change the economic model of the country.
Burnham has spoken about a ten-year plan designed to transform Britain.
That is an ambitious timeframe.
But ten-year plans require ten-year finances.
If the government does not know how it will fund its commitments five years from now, promising transformation over a decade becomes extremely difficult.
This is where Gordon Brown’s legacy becomes politically relevant.
Brown was one of Britain’s longest-serving Chancellors, holding the Treasury portfolio from 1997 until he became Prime Minister in 2007. He was also Prime Minister from 2007 to 2010.
His governments expanded public spending significantly and pursued a philosophy in which government played a major role in providing public services and supporting households.
Supporters argue that this helped modernise Britain and reduce poverty.
Critics argue that the state became too large and that politicians became too comfortable making long-term spending promises without adequately considering the demographic changes that would eventually make those promises more expensive.
The truth is more complicated.
Brown inherited structural problems.
He also presided over years of strong economic growth before the financial crisis.
And the global financial crash transformed the fiscal position of Britain in ways that were impossible to predict perfectly beforehand.
So the idea that Brown deliberately planted a financial bomb is too crude.
But the broader warning remains relevant.
Governments create institutions.
They create expectations.
They establish entitlements.
And once voters become accustomed to receiving those benefits, removing them becomes politically almost impossible.
That is the trap Burnham now faces.
Take social care.
Britain’s ageing population means demand for care is likely to increase significantly. Yet social care is already expensive and politically difficult.
Burnham has indicated that he wants a more collective approach to funding care.
That could be a major reform.
But reforming social care requires money.
One recent analysis estimated that a more comprehensive National Care Service could cost around £18 billion a year, while simply strengthening the existing system could require several billion pounds annually.
Now add pensions.
Add the NHS.
Add defence.
Add housing.
Add local government.
Add measures to reduce household bills.
The numbers become enormous.
This is the fundamental problem with modern British politics.
Every political party promises to fix something.
Very few voters are enthusiastic about hearing which existing benefit will have to be reduced to pay for it.
That is why the British tax burden has continued to rise.
And that creates another problem for Burnham.
Higher taxes do not necessarily produce unlimited revenue.
Eventually, taxpayers change their behaviour.
Businesses reduce investment.
Workers demand higher wages.
Entrepreneurs move activities elsewhere.
Households cut spending.
The government therefore has to find a balance.
Tax too little and it cannot finance public services.
Tax too much and it can weaken the economy that generates the tax revenue.
That balance will be one of Burnham’s biggest tests.
His political opponents will undoubtedly argue that he inherited a difficult situation but is making it worse by promising too much.
His supporters will respond that decades of underinvestment created the problems and that only a more interventionist government can solve them.
Both sides have a point.
Britain’s infrastructure needs investment.
The housing shortage is real.
Social care needs reform.
The armed forces face genuine pressures.
And many households are struggling.
But the government cannot simply assume that every desirable policy is affordable.
That is the lesson of the timebomb metaphor.
The explosion is not caused by one decision.
It is caused by accumulation.
One promise.
Then another.
One entitlement.
Then another.
One tax break.
Then another.
One borrowing programme.
Then another.
Eventually, the system becomes so expensive that even modest economic shocks can create a crisis.
Burnham must therefore make a decision that many politicians have avoided.
He must decide what his government can genuinely afford.
That may mean making unpopular choices.
He may have to reform the pension system.
He may have to introduce new taxes.
He may have to delay some spending promises.
He may have to ask older generations to contribute more.
He may have to ask wealthier households to pay substantially more.
And he may have to explain to younger voters why the state cannot provide everything they have been promised.
None of those choices will be politically pleasant.
But governing is not about making every promise popular.
It is about making choices.
That is the uncomfortable lesson waiting for Burnham.
Gordon Brown may no longer be sitting in Downing Street.
But the consequences of decisions made during his era, combined with decisions made by governments that followed, form part of the economic landscape Burnham has inherited.
The Prime Minister therefore has two options.
He can pretend the timebomb does not exist.
Or he can defuse it.
Defusing it will require something British politicians have historically struggled to provide: long-term honesty.
The government must explain what it can afford.
It must explain what it cannot afford.
It must distinguish between investment that creates future growth and spending that simply creates future liabilities.
And it must stop pretending that every difficult problem can be solved by another government programme.
Burnham has promised a decade of transformation.
That could become the defining achievement of his premiership.
But it could also become the source of his greatest political crisis.
Because if he expands the state without fixing the underlying fiscal mathematics, he will not have dismantled Britain’s economic timebomb.
He will simply have added another layer to it.
The clock is already ticking.
And this time, there is no easy way for Westminster to pass the problem to someone else.
Andy Burnham is the Prime Minister.
The decisions are his.
And if Britain’s long-delayed fiscal reckoning finally arrives, it will be Burnham — not Gordon Brown — standing in front of the cameras explaining the bill.
That is the real danger.
The past may have planted the problem.
But the future will judge the man who decided what to do about it.