The economic inheritance Andy Burnham will receive from Keir Starmer and Rachel Reeves is not, in any meaningful way, a crisis. That is worth saying, because the comparison is not with some imagined social-democratic Eden. It is with the Britain Labour inherited after austerity, Brexit, the inflation shock and the Truss episode – a country in which economic policy had too often alternated between drift, denial and irresponsibility. Restoring seriousness to fiscal and macroeconomic management is an achievement, and not one economists should dismiss.
But it is also a limited achievement. Labour was not elected simply to demonstrate that it could avoid blowing up the gilt market, or so that ministers could once again speak in complete sentences about public finances. The question is whether Starmer and Reeves changed the trajectory of an economy that has, for more than a decade and a half, been characterised by weak productivity growth, falling relative living standards, deteriorating public services, excessive centralisation and a damaging loss of openness. On that test, the answer is less comfortable.
