No Answer Andy Discovers the Treasury, and Unfortunately He Quite Likes It.
Welcome back, dear readers, to Week Two beneath the freshly repainted canvas of Clowning Street, where the new ringmaster is still enjoying that intoxicating new job smell, the Cabinet contortionists are already tying themselves into knots, and somebody in the Treasury appears to have handed Andy Burnham the keys to the tax cupboard without explaining that the money inside actually belongs to other people.
The Starmer posters have barely been peeled from the dressing room walls, yet Britain’s great Labour circus has already settled comfortably back into its old routine. There are grand announcements, eye watering sums of money, arguments about who should pay, rows within the Labour Party, immigration contradictions, businesses warning about taxes, and ministers discovering that governing is considerably more difficult than standing beside a lectern promising to make everything nicer. The ringmaster may be new, but the sawdust smells remarkably familiar.
Burnham arrived promising a different style of politics, and there is certainly plenty of style if you like learning about baps and buns. Sleeves rolled up, concerned expression carefully deployed, soothing words about fairness, communities and bringing people together. It is the political equivalent of a clown making a magnificent balloon giraffe, everyone admires it until somebody asks what it actually does. The persistent difficulty for the new Prime Minister is that behind many of his attractive sounding promises lurks the same dreary question, where is the money coming from?
Social care provided a perfect example. Burnham has floated a new funding settlement, with one option reportedly involving a dedicated levy on workers’ earnings. Social care unquestionably requires a sustainable solution, but millions of employees may reasonably want to know whether “solution” is once again Westminster dialect for “another deduction from your payslip”. Burnham has previously championed a national care service and suggested funding it through a dedicated contribution, although the details remain unresolved. The circus has therefore unveiled the exciting new attraction before anybody has quite worked out the ticket price.
Council tax produced an even bigger balloon animal. Treasury projections cited this week suggest the total council tax take in England could rise from £41.2 billion in 2024/25 to £58.8 billion by 2030/31, with the average Band D bill potentially reaching £2,836 by 2030 if those projections materialise. At the same time, Burnham is talking enthusiastically about fiscal devolution and giving local leaders greater financial powers. Devolution may be a perfectly legitimate policy debate, but whenever politicians start talking excitedly about “new fiscal freedoms”, taxpayers are entitled to check whether somebody has quietly put their wallet on the trapeze.
Then there is Burnham’s reported enthusiasm for reconsidering property taxation, including arguments around the geographical imbalance in the current council tax system. This is where the Labour contortionists really earn their money. The Government says it wants growth, but also more revenue. It wants investment, but needs more tax. It wants people to feel secure in their homes, but also wants to reconsider how those homes are taxed. By the time the contortionist has finished explaining it, both feet are behind his head and the audience has forgotten what the original question was.
Unfortunately, the people with actual capital have the irritating habit of being able to leave. New analysis highlighted this week estimates that Britain’s number of sterling millionaires has fallen to 442,000, down 7 per cent since 2024. The fact is under this Labour Government Britain is becoming less attractive to capital, entrepreneurs and high earners. A government can treat wealthy people as an inexhaustible cash machine, but cash machines become rather less useful when somebody puts them on a plane to Dubai.
BP provided a rather larger warning sign. The company has put its North Sea operation up for sale this week as part of a wider restructuring, with the tax environment among the issues hanging over the sector. Labour increased the Energy Profits Levy to 38 per cent and extended it to 2030, taking the headline combined tax rate on North Sea profits to 78 per cent. BP says its UK headquarters will remain, but its North Sea business employs around 1,100 people directly. Ministers can debate endlessly how much tax an industry ought to pay, but when one of Britain’s corporate giants starts packing away a major part of the act, it is at least worth asking whether the circus has set the admission price too high.
And if the economic tent looked shaky, the electricity story was enough to make everyone check where they had left the candles. New analysis of the grid event on 23 June reported that frequency fell to 49.656Hz during a period of tight supply and that Britain relied on increased electricity imports from France as the system came under pressure. Energy systems are complicated and grid operators routinely balance supply and demand, but the episode inevitably reopened the argument about resilience, domestic generation and Britain’s dependence on interconnectors. It is difficult to sell an energy revolution convincingly when critics can portray the national grid as a circus plate spinner shouting, “Nobody move!” while reaching desperately for an extension lead from France.
Immigration brought another week of extraordinary theatre. Reporting based on footage from northern France said French officers described limits on when they could intervene against migrant boats, including circumstances in which officers said they were instructed not to stop departures. Meanwhile Angela Rayner has urged Burnham to reconsider restrictions affecting overseas care workers, arguing for exemptions to protect the social care sector. And so the immigration contortionist returns, simultaneously promising control, acknowledging labour shortages and attempting to satisfy completely opposing wings of the political audience without dropping the hoop.
Welfare has already become another delightful family argument. Burnham’s Government is considering requiring some young claimants to undertake training or volunteering, but figures on Labour’s Left, including Kim Johnson and John McDonnell, are pushing back against anything they regard as punitive welfare reform. The Government’s final proposals are not expected until after Alan Milburn’s review reports in the autumn. Burnham has therefore managed, remarkably quickly, to inherit one of Starmer’s favourite circus acts, announcing reform before discovering that half the clowns refuse to get into the car.
What makes Week Two so entertaining is that the Burnham honeymoon is still supposed to be underway. This is normally the stage at which the bunting is fresh, the polling is flattering and the new Prime Minister is photographed looking purposeful beside trains, nurses and strategically positioned mugs of tea. Instead, the new ringmaster already has the Labour Left rattling the cage over welfare, questions over social care funding, arguments over taxation, a North Sea giant putting assets up for sale, immigration contradictions and a national grid scare providing ominous background music.
None of these issues has a simple answer, which is precisely why the answers matter. Britain has enormous structural problems in social care, energy, taxation, welfare, immigration and local government finance. They cannot be solved with warm words, a regional accent and another balloon animal labelled “fairness”. Eventually somebody has to explain what the policy costs, who pays for it, what happens if the assumptions are wrong and what the Government will do when its own MPs refuse to cooperate.
For now, No Answer Andy remains firmly in the centre ring, smiling broadly as the brass band plays and the Cabinet races around behind him carrying buckets marked TAX, WELFARE, ENERGY and IMMIGRATION. Perhaps the master plan really is tucked away somewhere backstage. Perhaps the numbers add up beautifully. Perhaps all the contradictory performers will eventually discover they are rehearsing the same show.
But after Week Two, the audience could be forgiven for wanting rather less choreography and rather more explanation.
The Big Top is open, the contortionists are limbering up, the balloon animals are fully inflated and the Labour clown car is once again rattling around Westminster.
The only thing still proving remarkably difficult to produce from the hat is a straight answer.
READ ALL ABOUT IT: Links to this week’s top Labour circus acts below:
