There is no golden economic or fiscal legacy for Andy Burnham.

The prospective incumbent of No 10 will need all the emotional intelligence he can muster to convince voters and the markets that he has the right stuff.

It doesn’t help that the fiscal inheritance from Rachel Reeves, whose days as Chancellor look numbered, is rotten.

Despite £75billion of tax increases since July 2024, when Labour was elected, public finances are on a knife edge. 

Burnham has never fully retreated from his provocative view that Britain is ‘in hock to the bond markets’. The latest budget data shows the difficulty he will face as he seeks to implement business-friendly socialism.

Borrowing data is notoriously erratic. It is the difference between two very big numbers: How much the Government spends and how much it raises in taxes and charges. 

Tax collections, local authority spending and interest payments can be lumpy distorting trends.

Nevertheless, in the first two months of 2026-27 the budgetary shortfall was 24 per cent higher than last year at £46.3billion.

Among the factors responsible was a sharply higher interest rate bill, largely the result of nearly 25 per cent of gilts that are index-linked to inflation. The trend in the data is not encouraging, with the tax take up 4.1 per cent, while government spending on pensions and welfare – obvious targets for radical change – is up 7.2 per cent.

In a message to Labour colleagues on Thursday, Reeves urged them not to ‘deviate’ from her fiscal rules. Bond markets are watching like hawks.

Burnham is drawing on the experience of a robust group of economic experts. It includes the last chairman of the Office for Budget Responsibility (OBR), Richard Hughes, and former Bank of England chief economist Andy Haldane.

Hughes was at the OBR when Reeves first unveiled her fiscal rules, creating more space for capital spending. He will be conscious of the fissures. 

The OBR report on Reeves’ first Budget noted the risk of ‘fiscal illusions’, such as the 2017 sale of the student loan book, when the Government sought to reduce government debt, but achieved a sale price less than in its accounts. The phrase ‘business-friendly’ could be a good omen. 

A lacuna of the Starmer-Reeves axis has been its relationship with commerce and the City. 

The combination of higher employer National Insurance contributions, new employment laws, a surging minimum wage, business rate distortions and energy costs all discombobulated the corporate sector.

If Haldane, president of the British Chambers of Commerce, could set in motion an understanding and civilised relationship with enterprise, that would be a start.

There is much from the Burnham camp to give pause. Talk of more wealth taxes, on top of those already imposed, could speed up entrepreneurial exits.

Engineering community-government ownership of water may appear a no-brainer. But the experience of Great British Railways so far is salutary.

Nevertheless, if Burnham could transfer his upbeat Manchester narrative to the rest of the nation, burying endless gloom, it would be a fresh start.