Andy Burnham needs to address the causes of inequality, not simply treat symptoms of inequality

Prime Minister Andy Burnham arrived at Number 10 Downing Street this week, ushering in a new chapter for British politics.

As we wrote following the resignation of Keir Starmer last month, the UK’s new leader would inherit a straightforward choice: to continue to choose monopolists and corporate interests over the common good as many Prime Ministers before him, or break the status quo.

Three days in and announcements from the new government have come thick and fast: £2 bus fares, scrapping VAT on electricity bills, and pledging to end rough sleeping. All treat the symptoms, not the causes, of the country’s deep-seated structural inequalities.

This includes the monopolistic power gained by big — mostly foreign — firms with the ability to set prices and wages, choose the direction of technical change, and influencing politics to change the rules of the game in their interests.

The recently announced VAT cut on electricity is estimated to knock around £45 a year off the average bill, which is a real, if modest, help with the cost of living. Yet this fails to answer why energy costs have increased dramatically, nor does it address that a small number of companies compete with housing developments for grid capacity to power data centres. In our Licensed to Loot report earlier this summer, we traced this precise dynamic to specific London boroughs, where housebuilding has stalled due to excessive pressure on grids.

When it comes to Burnham’s pledge to end rough sleeping, which the Prime Minister described as his “first instruction” upon walking through the door at Number 10, it is also important to note that this goal, while admirable, does not account for why homelessness exists in the first place. In his efforts to end rough sleeping, the new Prime Minister must account for who has been allowed to control land, housing and capital that otherwise could have helped to prevent a rough sleeping crisis.

Earlier this week, the Balanced Economy Project convened a letter signed by 16 other civil society organisations that calls on the new Prime Minister to unhook the UK from Big Tech’s cables. To achieve his promise of “good growth in every postcode”, the Prime Minister must use existing powers to stop letting monopolies write the rules.

Our letter, signed by other organisations including ARTICLE 19, Global Justice Now and the Good Law Project, is careful to frame this not as an anti-tech issue but an anti-monopoly issue.

“A critical break with the UK’s current relationship with Big Tech and AI monopolies is core to a successful premiership. The abuse of structural and market power of a small number of Big Tech companies is a root cause of many of the problems the UK public face: huge potential losses in tax receipts because of firms avoiding paying their fair share in taxes, an economy that feels increasingly out of reach for most, the extraction of value hindering real growth and innovation, and meaningful climate action being undermined.”

These issues all point to the same concern of a new government which appears ready to treat the manifestations of a poorly run economy: homelessness, a cost-of-living crisis to name two. But Andy Burnham must also train his sights on the structural issues which give rise to these problems in the first place.

For a start, he should allow the Competition and Markets Authority true independence, free from political pressure to be “open for business” (read “big” business), to use the powers already granted by Parliament to limit private power over the state and the people. Secondly, it means ending Britain’s dependence on tech giants and their infrastructure, including action on data centres that are prying grid capacity away from vital sectors, and introducing smart public procurement practices so the government can reduce its dependency on Big Tech.

The PM should also be concerned about the grip the financial industry has over the economy and political decision-making.

The UK is now the largest net exporter of financial services in the world, but finance is today a cornerstone of the British economy, more so since Burnham’s predecessor made finance central to his plans for economic growth. The more competitive finance sector, Starmer believed, the greater the benefits across society.

Yet the harms generated by a finance-dominated society — as we have repeatedly laid out in our research including January’s Too Big To Cool report — persist because dominant financial actors have been encouraged to pursue profit above all else, while social and environmental obligations are seen as ancillary. This is why the promise of “sustainable finance”, for example, has proven so hollow.

Burnham of course did not build this economy, but he now needs to make the required decisions on how to reform it, and no longer can a handful of dominant private actors set the direction of travel for the UK while extracting value from our communities and returning that wealth to shareholders. As we told the Prime Minister in our letter:

“You have inherited an economy that has been quietly wired to serve a handful of dominant US-based technology firms. You also have the rare opportunity to tap into the public mood by curbing their excessive power over the economy and our lives.”

The Counterbalance is published every Thursday. Please send any thoughts and feedback to scott@balancedeconomy.org.