The UK's New Prime Minister Wants to Move Economic Power Out of London. Here's Why That's Hard.
UK Prime Minister Andy Burnham wants to take control of the country's economic growth plan away from the Treasury, the government department that has managed Britain's money for centuries. Instead, he wants to create a new team based in Manchester and run by his cabinet ally Louise Haigh. The plan, first shared publicly in July and detailed further this week, would move growth policy out of Whitehall's most powerful ministry and place it under the direct authority of Downing Street, the Prime Minister's office (The Guardian, 2026-08-19).
Burnham told the Times that having No 10 lead on the growth mission gives "maximum power to unlock blockages in the Whitehall system" (The Guardian, 2026-08-19). He has described the new Manchester-based office, called No 10 North, as "more significant than people realise" and called for a "wholesale change in the architecture and culture of the British state" to unite the country and drive growth (Greater Manchester Combined Authority, 2025-04-02.
A Lesson from the 1960s
Burnham is drawing on history for his argument. He compared his plan to Harold Wilson's Department for Economic Affairs, a government body set up in the 1960s to create a national plan for the economy (The Guardian, 2026-08-19; The National Archives). That department was shut down after the Treasury fought back against it. Its failure is a reminder that the Treasury, which controls government spending, does not like sharing power over the economy.
This tension is not new. Boris Johnson all but forced his chancellor, Sajid Javid, to resign in February 2020 by trying to install his own loyalists inside the Treasury (The Guardian, 2020-02-13). Margaret Thatcher favoured her economic adviser Alan Walters over her chancellor Nigel Lawson, which led to Lawson's angry resignation (The Guardian, 2026-08-19). Burnham's approach is different: rather than fighting the Treasury from inside, he wants to move the growth mission somewhere else entirely.
Giving More Power to Local Leaders
A key part of the plan involves metro mayors, the elected leaders who run major city regions. Burnham wants to give them more powers so they can coordinate growth policies that are currently spread across different government departments (The Guardian, 2026-08-19). In a speech to the Convention of the North, the Levelling Up Secretary described the plan as "a deliberately long-term economic plan" and said the government is "reforming the shape and nature of government itself – re-distributing power" (gov.uk, 2023-01-25).
Some economists support the structural argument. Ruth Curtice, director of the Resolution Foundation and a former Treasury official, noted that no single department controls all the tools needed for growth policy (The Guardian, 2026-08-19). Michael Jacobs, who advised former Prime Minister Gordon Brown and is now an emeritus professor at the University of Sheffield, proposed a new growth team made up of officials from all relevant departments, which closely matches what Burnham appears to be doing (The Guardian, 2026-08-19).
The Chancellor's Role
Burnham's choice of chancellor adds another dimension. John Healey was appointed Chancellor of the Exchequer, the government's top finance minister, on 20 July 2026 (gov.uk). Sanjay Raja, chief UK economist at Deutsche Bank, noted that Healey helped create regional development agencies during the Blair-Brown years. These were bodies set up to bring a regional dimension to growth and industrial policy, before being scrapped by the 2010 Conservative government (The Guardian, 2026-08-19). Healey's gov.uk profile page now reads "No10 North open for business" (gov.uk), a signal of alignment between the Treasury and the new No 10 department, or at least the appearance of one.
The Treasury itself is still hiring for growth-related roles. It advertised a Deputy Director position for Housing, Planning and Cities focused on economic growth and spending, with shortlisting set for the week of 31 August 2026 (Civil Service Jobs). This suggests the Treasury has not been stripped of its responsibilities. Instead, the two power centres may be settling into an uneasy coexistence rather than a clean handover.
Burnham's Wider Plans
Burnham's broader economic agenda is taking shape alongside these structural changes. He pledged to release a long-term plan for the next decade "within months" and repeated his commitment to build more public housing (Reuters, 2026-07-20. He intends to keep the previous government's pro-growth approach to financial services regulation (Reuters, 2026-07-24, and announced on 21 July 2026 that VAT, a sales tax added to goods and services, would be removed from electricity bills starting October 2026 (Reuters, 2026-07-21. The chancellor delivered her annual Mansion House speech on 14 July 2026, setting out the government's economic strategy and financial services policy delivery (HM Treasury, 2026-07-15.
The broader context here is that Burnham is trying to do something the British government has resisted for decades: create a genuine second centre of economic power. Wilson's Department for Economic Affairs failed. The regional development agencies were abolished. Every recent prime minister who has tried to bend the Treasury to No 10's will has either backed down or paid a political price. Burnham's bet is that geography changes the equation. By physically placing the growth mission in Manchester, under a cabinet ally, and by routing it through empowered local mayors rather than through Whitehall's existing departments, he is trying to create something on the ground that the Treasury cannot simply absorb or shut down. Whether Healey's chancellorship becomes a partner or a rival to No 10 North will likely determine whether this experiment outlasts the Wilson precedent.
