Burnham must learn from Starmer’s mistakes: Labour was elected to transform the economy, not just stabilise it | Jonathan Portes
Economist Jonathan Portes acknowledges that Keir Starmer and Rachel Reeves successfully restored fiscal credibility and economic stability after a decade of crisis, but argues this represents an incomplete achievement. Labour was elected to transform Britain's economy, yet treated stability as an end in itself rather than a foundation for growth. The underlying pathologies remain: weak productivity gains, regional inequality, and stagnant living standards that have characterised the British economy for fifteen years.
Portes urges incoming Labour leader Andy Burnham to pursue a fundamentally different strategy centred on three pillars. First, genuine devolution that transfers real fiscal and institutional power to regions, not merely responsibility for delivering central government priorities. Second, comprehensive tax reform that reduces the burden on work whilst increasing it on property, wealth, and capital gains—restructuring a system that currently penalises productive activity. Third, strategic rather than defensive engagement with Europe, moving beyond damage control on Brexit to identifying concrete growth opportunities. These reforms, Portes contends, are not distractions from growth but essential components of a coherent growth strategy.
In short
- Starmer-Reeves restored economic stability but left structural weaknesses unaddressed; Burnham should pursue transformative growth policy rather than cautious management
- Real devolution requires fiscal power, not rhetorical devolution; tax system needs reform to shift burden from work onto property and wealth
- European engagement should move beyond reactive damage limitation to strategic growth opportunity
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The case for
Portes argues that whilst stabilisation was necessary, Labour has become overly cautious and treated stability as an end rather than a means. The economy still faces deep structural problems—weak productivity, regional inequality, stagnant living standards—that require bold transformative action on devolution, tax reform, and strategic European engagement to unlock genuine growth. These reforms are not distractions from economic strategy but essential components of it.
The case against
The counterargument is that Starmer's cautious approach was essential and appropriate given the economic chaos and fiscal credibility crisis inherited from the previous decade. Restoring confidence among investors, businesses, and markets is not merely a narrow technical objective but a prerequisite for everything else—without it, governments cannot borrow to invest, cannot implement ambitious programmes, and risk repeating past instability. Rushing into transformative reforms whilst fragile confidence is being rebuilt risks destabilising hard-won gains and undermining the very fiscal foundation needed for future ambitious action.
Explained simply
Keir Starmer's government and Chancellor Rachel Reeves are credited with stabilising Britain's economy after years of crisis and uncertainty. However, economist Jonathan Portes argues that restoring stability, whilst necessary, does not fulfil Labour's election mandate to truly transform the British economy.
Britain has faced persistent economic problems for fifteen years: weak productivity growth, regional inequality and stagnant living standards that have barely improved. Portes contends that treating economic stability as the end goal, rather than as a foundation for growth, has left these deeper issues unresolved.
With Andy Burnham set to become Labour leader, Portes is urging the party to pursue a fundamentally different economic strategy. The debate highlights the tension between stabilising the economy and pursuing the bolder reforms many argue are needed to address Britain's underlying economic weaknesses.
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