Analysis by Keith Rankin.
Role: Economic historian.
Keith Rankin – On Monday, July 20, Andy Burnham became prime minister of the United Kingdom, replacing Keir Starmer. He’ll be the second leading Commonwealth prime minister, in recent years, to have been elevated into the Prime Ministership from outside of parliament (with Mark Carney, prime minister of Canada being the first).
Keir Starmer
To many people from outside of the United Kingdom, who get their news from elite-media sources, it will be not clear why Keir Starmer became so toxic as the United Kingdom prime minister. There were two essential reasons.
The first was foreign policy. Starmer, already unpopular before his party won the 2024 election with a record-low popular vote (contrast the support that election for Jeremy Corban), ‘cooked his political goose’ early on with his unwavering support for Israel at a time when Israel was (and still is) committing live-streamed genocide. This source of unpopularity was amplified by the Starmer government’s declaration of pro-Palestinian protestors as ‘terrorists’; all at a time when the world was coming to realise that the unevidenced declaration of certain people as terrorists becomes a licence to murder or torture them.
Further, on the foreign policy front, United Kingdom elites in general – and Keir Starmer in particular – have pursued a belligerent anti-Russia foreign policy. It is not at all clear that ordinary British people are quite as animated about Vladimir Putin as Boris Johnson, Liz Truss, and Keir Starmer have been; I am sure Donald Trump animates more people than Putin.
Keir Starmer – along with Germany’s Friedrich Mertz and France’s Emmanuel Macron – is a principal foreign backer of Ukraine’s attacks deep into Russia (and attacks on oil facilities – including tankers – far more telling than anything Iran has done in the Persian Gulf), the world’s most heavily nuclear-armed nation. My sense is that ordinary British people are not so much concerned about Russia, and are much more concerned about ‘bread and butter’ economic issues; and dearly wish for a deprioritisation of foreign policy belligerence in favour of reduced domestic inequality and more domestic opportunity.
Thus, the second essential reason for Starmer’s downfall was domestic policy. Some of the concern about recent missteps in domestic policy has mis-translated into a very real ‘anti-immigrant’ narrative among England’s working class; Burnham will not try to placate that sentiment. The deeper concerns relate to the retrenchment of the British welfare state (with an increasingly punitive approach towards Britain’s huge and growing numbers of economic victims), and the retrenchment of the British fiscal state creating a series of leaderships characterised by a Pavlovian helplessness towards the injection of money into the economy.
On this last point, the United Kingdom suffered in 2010 by (as Ruth Richardson did in New Zealand in 1994) the passing of a law to render expansionary fiscal policy illegal; these now illegal policies, when adopted in the past, got the world out of the Great Depression of the 1930s and then built up the post-war prosperity.
(The New Zealand fiscal repression law was the 1994 Fiscal Responsibility Act, now incorporated into the Finance Act; and note The Fiscal Responsibility Act 1994: The astonishing success of a weak non-binding policy 2018 by Derek Gill. We may also note that Christopher Luxon follows the principles of fiscal repression as a matter of belief, and not because he is obliged to by the law.)
The British initiative, associated with George Osborne, established the Office for Budget Responsibility. This has led to a highly conservative form of technocratic governance informed by classical liberal principles (established 210 years ago by James Mill and David Ricardo) and disallowing governance informed by Keynesian principles (established 90 years ago by John Maynard Keynes). (For other references, see Can Andy Burnham rebuild Britain if the OBR says no? July 2026 by Richard J Murphy, The OBR and the unintended economic consequences of Mr Osborne 12 July 2024 by Nick O’Donovan, and The Role of the OBR 25 July 2024, New Economy Brief.)
Andy Burnham
Andy Burnham is popular because he’s seen as a plausible, indeed charismatic, political leader with sound albeit moderate social-democratic credentials. Yet almost all the television coverage I have seen about him focuses on domestic socio-economic and regional governance policy; none of that coverage has focussed on fiscal policy.
All this at a time when the world faces its most serious geo-military crisis, ever (or at least since the 1962 Cuba-USA-USSR crisis). And in which the United Kingdom is a central player; indeed the nuclear power whose decisions might – and sooner than many of us would prefer to think – swing the fate of the world between life and death.
(Note these two articles, both written by people who are not Russophiles, which contain warnings about what the Russian polity might do as its other politically-realistic options disappear: The Putin Escalation Risk 3 July 2026 by Ian Bremmer; and Letting Russia Burn 13 July 2026 by Nina L Khrushcheva, great-granddaughter of the leader of the Soviet Union in 1962 Nikita Sergeyevich Khrushchev; both articles on Project Syndicate.)
What will Burnham do if, for example, Russia strikes at a nuclear power station within a Nato country; or fires a nuclear warhead into Western Ukraine? Burnham has no track record on foreign policy, or geopolitics.
Finally, will Burnham succumb to the Office for Business Responsibility?
The Liberal Democrats succumbed in 2010 to 2015 (coalition partners in government), by going along with the damaging policies of fiscal consolidation; the policies (pursued also by Germany with its debt-brake) which delayed the European recovery by at least half a decade. The LibDems caught the wrath of the British electorate in 2015.
Brexit was an indirect result of the Office for Business Responsibility. With a referendum, the United Kingdom could not hide behind the incumbent-preservation bias of the First Past the Post electoral system (saving the Tories in 2015; this bias also preserved unpopular governments in New Zealand in 1978, 1981, 1987, and especially 1993). In the 2016 Brexit referendum, every vote counted; previously, people in the northeast of England had almost never had their votes make a jot of difference to the outcome of British elections.
Theresa May survived as prime minister for three years, benefitting from the best three years of the world economy since 2008, but being gaslit by Boris Johnson. Johnson could have been prime minister for a decade, but he undermined himself principally through issues more interesting to the media than fiscal policy. Liz Truss tried to defy the OBR (in an extreme right-wing way), and only lasted a few weeks. Rishi Sunak did his best given the political constraints he was up against, the most important having been that he was both a Conservative and a conservative.
It was Starmer who was most overtly tested by the OBR, and he failed that test spectacularly (but not as spectacularly as Christopher Luxon has failed the equivalent test in New Zealand, though Luxon may yet be saved by a number of fortuitous circumstances which are in no way attributable to him). Economic slowth in the United Kingdom has been significantly less problematic than in New Zealand.
We have no indication, yet, that Burnham has the political smarts to defeat the Treasury technocrats. But, as Richard Murphy explained, he is almost certainly Britain’s best bet at present.
Analysis of the 2024 United Kingdom election clearly suggests that Labour would have got far more than 34% of the vote had Burnham rather than Starmer been the party leader then.) Burnham does have a mandate to lead – and to change course – despite the unusual circumstances through which he has become Prime Minister.
Here’s hoping that Andy Burnham can overcome the belligerents in both the British Treasury and in Nato. Does he have the balls to be a non-belligerent on the world stage? Can he face down Mark Rutte?
About the writer:
Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.