Burnham drops Treasury split plan as UK growth agenda shifts to Number 10

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Burnham drops Treasury split plan

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Burnham has dropped plans to split the Treasury after advisers warned the move would create upheaval during a period requiring swift economic action.
Burnham is expected to become prime minister on July 20, with his cabinet selection process beginning July 17, and Ed Miliband considered a leading contender for chancellor.
Despite shelving the Treasury split, Burnham will transfer certain economic powers to Number 10 and establish a 'Number 10 North' to oversee regional devolution.

Treasury rethink before cabinet formation

As reported by the Financial Times, people briefed on Burnham's thinking say the proposal to split the Treasury is no longer a leading option after advisers concluded it risked causing upheaval at a time when fast economic action is needed.

The idea had been discussed by Burnham's aides and was backed by Andy Haldane, a senior economic adviser to the prospective prime minister, who has argued for separating the department into a finance ministry focused on stability and another ministry focused on growth. People close to the talks say that view has now lost ground, with one saying the plan had been "nipped in the bud" and another arguing it would not make sense halfway through a parliament.

A spokesperson for Burnham declines to comment. Burnham is expected to become prime minister on July 20 and is due to begin naming his cabinet at the end of the Labour leadership process, anticipated on July 17, with Ed Miliband seen as a leading contender for chancellor, although Burnham's team says no job offers have been made.

Regional growth strategy stays in focus

Although the Treasury split is being ruled out, Burnham has already proposed moving some economic levers into Number 10 and creating a "Number 10 North" to oversee the devolution of power and funding to regional mayors.

Haldane described a Treasury breakup in the Financial Times last year as a simple institutional fix for Britain's growth problem, arguing the department is too dominated by its fiscal role and not balanced enough toward growth. But other influential voices around Burnham, including Lord Jim O'Neill and Lord Nick Macpherson, have argued against such a reorganisation.

Opponents of the move say broader reform of central government matters more than dismantling the Treasury. Former Conservative chancellors Jeremy Hunt and George Osborne both criticise the idea, while Institute for Government researchers Thomas Pope and Hannah Keenan write last month that breaking up the Treasury without wider reform would be a distraction and that Burnham should strengthen No. 10 rather than weaken the Treasury.

Our earlier report examined how Labour, after Andy Burnham’s by-election win, is weighing the political and diplomatic trade-offs that could shape his leadership if he reaches Downing Street. We noted that the debate centres on how a future prime minister handles relations with the U.S. — especially in dealing with President Donald Trump — without appearing weak at home, given strong public scepticism in the UK.

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