Andy Burnham was hit with a brutal reality check today after laying out his Left-wing vision of a council housing bonanza and state ownership.
Official figures showed that disposable incomes of households tumbled 0.8 per cent in the first quarter of the year, accounting for inflation. The RHDI per head metric – targeted by Keir Starmer – has now dropped in four of the last five quarters.
Meanwhile, economic growth for 2025 was downgraded from an already tepid 1.4 per cent to 1.3 per cent.
The grim numbers, likely to have been worsened by the Middle East chaos, will fuel questions about how the PM-in-waiting will fund his vaunted new approach.
Yesterday Mr Burnham put the South on notice for more tax pain, a week before he is set to take over in Downing Street.
Delivering his first big speech in Manchester, he said the country had not been working for ‘ordinary people’ since before Thatcher.
Official figures showed that household incomes tumbled 0.8 per cent in the first quarter of the year, accounting for inflation
Yesterday Andy Burnham put the South on notice for more tax pain, a week before he is set to take over in Downing Street
He argued that ‘trickle down’ economics must be ditched and replaced with a Left-wing concept of ‘good growth’. That included more state ownership and the ‘biggest council house-building programme since the post-war period’.
Echoing the Corbynite slogan ‘for the many’, Mr Burnham said he wanted to put ‘hope in every heart’ by ‘rebalancing’ power and money away from Westminster. He suggested his Government would copy German post-reunification legislation dictating that all states must have ‘equivalent living standards’.
The ‘nerve centre’ for his so-called ‘Manchesterism’ will be a ‘No10 North’ based in the city – which critics say will be impractical and hugely expensive.
But the overwhelming Labour leadership favourite barely gave any hard details of his plans, and did not even take questions from the media.
That sparked a furious response with condemnation that Mr Burnham thinks he can have ‘power without accountability’.
There are fears the blueprint, being worked on by potential Chancellor Ed Miliband, will mean a string of new tax hikes focused on better-off families in the South.
Mr Burnham has previously backed a property tax that will punish those with more valuable homes, as well as an increase in capital gains tax and a new ‘death tax’ to fund social care.
He has stridently supported a revaluation of council tax that could result in huge increases in bills in London and the South East.
The ONS downgraded economic growth for 2025 from an already weak 1.4 per cent to 1.3 per cent
The latest ONS data showed that GDP grew by 0.6 per cent in the first quarter, the same as previously estimated.
However, there are suspicions that some activity might have been ‘front loaded’ due to fears about the impact of the Iran war.
Director of Economic Statistics Liz McKeown said today: ‘Our latest set of figures show no revision to economic growth in the first quarter of this year.
‘However, growth for 2025 was revised down a little.
‘Services were the main driver of growth in the latest quarter, with strength in computer programming, wholesale and advertising only partially offset by falls in rental companies and recruitment agencies.
‘Production and construction also both grew overall, although construction only partly reversed its recent weakness.
‘The household saving ratio continued to ease at the start of 2026 but remains above its pre-pandemic levels.’
RHDI per head is a measure of what is left after taxes and benefits and the effects of inflation.
Sir Keir declared after entering No10 that he was setting a goal of the metric growing over the Parliament.
That was regarded as unambitious, as the only time that has not happened in the last 50 years was between 2019 and 2024, a period which was blighted by Covid and the Ukraine war.
