Paul Maynard: We must differentiate between what Andy Burnham says, and what those around him are saying.
Political analysts seem still engaged in a political autopsy of Sir Keir Starmer’s government. Kier who?
Trade and lobby groups have moved on to picking at the entrails of Andy Burnham in the hope of divining what his likely premiership will mean for them. Never has he been as powerful and influential as he is right now, nor will he ever be again – but there is precious little to go on.
We have a stream of photo opportunities in Sainsbury's uniforms, or playing a guitar. I feel at times like I am watching an episode of the One Show!
We are just starting to see kites being flown ahead of the Budget – despite explicit commitments not to do just that. One great service pension lobbyists can do for the nation is stress over and over again that in pensions, such kite-flying leads individuals to make poor and sometimes irreversible decisions on their personal finances for fear of what may appear in that Budget.
Trying to fill ‘Manchesterism' out a bit with regards to pensions is a little more opaque, and probably won't be revealed in a Budget, but rather the ten-year plan which will follow it. The only definite is that he has confirmed he won't confront the fiscal consequences of the ‘triple lock' as some of his advisers urged. That is but one ‘hard choice' which has fallen on drought-damaged stony ground.
That is why we must differentiate between what Andy Burnham says, and what those around him are saying.
There is currently a bull market in ‘people close to Andy' or claiming to be so. There will be so many working in an already-cramped Downing Street they will need to concrete over the garden for an extension.
The views of people such as Jim O'Neill and Andy Haldane may not align though with the soft-left of the Parliamentary Labour Party and Burnham's political gatekeepers when further hard choices have to be made.
The thoughts of the soft-left think tanks like Compass, IPPR North or the New Economics Foundation are more the golden thread running through this government – read what they say on pensions for the ‘story' that will run through Burnham's mind, if not the exact policy detail.
Will Torsten Bell have more or less of a free hand? I have found myself doing the same brief under two prime minister, with Downing Street taking a much more intrusive approach under the second.
Consider what the prime minister believes the £3.2trn accrued in UK pension funds are actually for. Are those funds the repository of a lifetime's accumulation by hard-working citizens so that they can have a more comfortable retirement, less reliant upon the state, and sacrosanct from state interference? Or does he see those funds as a resource to be used for the state to reindustrialise a nation and reverse a generation of neo-liberal economics?
The truth will be somewhere in between, but I suspect it will build on the current government's inclination to not just encourage but oblige funds to invest more of that £3.2trn in what it sees as the national interest.
We know from Andy Burnham's comments on defence spending that any increases there would be used for investment in reindustrialisation, ‘building resilience in all our places' as he put it.
That same rhetoric and impulse would easily be applied to pension funds. If I could gently hint pension funds might want to look at infrastructure, might he not do the same for what is his political priority?
His advisor Andy Haldane has already suggested that the annual £90bn or so of tax relief should be invested in a more ‘purposeful' way, and be conditional on those funds investing in the UK. But there will be equal pressure from within the Labour Party to reduce that tax relief and redistribute it.
Would Haldane's suggestion apply to newly accrued funds, or those already invested and in existence? Would it go beyond merely investing in UK stocks and shares? This was the voluntarist approach of the previous Conservative government, and the slightly more pressured preference of the Starmer government.
Yet it is a frequent criticism that FTSE firms do not always invest in the UK so mandation might do more to drive growth overseas? My own guess is that they might initially deploy this approach with Local Government Pension Scheme funds now they are being consolidated and government has more levers over them.
Burnham has experience of this from directing £300m from the Greater Manchester Pension Scheme into his £1bn Good Growth Fund which had a pipeline of projects enhancing physical infrastructure. That would certainly pass the Makerfield Test!
Such an approach would be consistent with the sort of ‘theory of state' Burnham has espoused – the rebuilding at state behest of productive capacity by reindustrialising areas outside of London and the South East.
Yet all of this is a very long-term programme, which might require a degree of legislation undeliverable ahead of an election due by 2029 at the latest.
Its appearance in a ten-year plan will signal the hope/expectation of a second term which today's volatile polling makes heard to guarantee.
Rather, Burnham will be faced with immediate binary decisions and trade-offs in both pensions and wider policy that may either knock his wider agenda off course politically as will ‘events' more generally.
If he reacts to every contentious decision which leads to a emotive narrative – veterans having to repay pensions overpaid to them, for example – pensions policy will be a tougher area to predict.
Paul Maynard is a former pensions minister and was MP for Blackpool North and Cleveleys from 2010 to 2024
