‘Circuit breaker’ economic policy

In his inaugural speech, standing in front of the ‘10 Downing Street’ in London, on July 20, United Kingdom’s new prime minister, Andy Burnham, pointed towards taking a different turn in terms of economy, and politics.

To many, including this writer, Mr. Burnham launched a statement of purpose to move away from the onslaught of neoliberal and austerity policies being practiced for the past four decades or so. As his own words point out, this amounted to breaking the circuit of these long-standing policies regarding the economy and politics

To quote from the Prime Minister’s speech in this regard—and following in the footsteps of New York Mayor Zohran K. Mamdani, who addressed the ‘cost of living’ crisis, the following is being indicated ‘We will make this moment a circuit breaker for Britain, bringing forward the biggest changes in the last forty years, a new political model and a new economic model. In the 1980s, Britain took some wrong turns.

Political power was centralised, economic power privatised, large parts of the country de-industrialised, and they still haven’t recovered. Many feel as though they’re still in decline, and they don’t have the ability to turn things around. And that’s why we will change politics to make it more collaborative, more about problem solving than point scoring. We will take power out of here and carry it into every postcode in the land so that they can do more.’

Here, in the spirit of the ever so high rising voice of democratic socialists, like Bernie Sanders and Zohran Mamdani, and related arguments in the same direction by the progressive movement with prominent political figures leading this, including the Spanish Prime Minister, Pedro Sánchez, all pointing towards the need to re-wire public policy with public opinion to have a much-needed meaningful relationship towards meeting challenges from existential threats to rising level of inequality, to improving the overall quality, and reach of political voice, PM Burnham, indicated for instance in the same speech: ‘And in doing more, build a new economy where we put life’s essentials back under stronger public control to make them affordable to you again. Re-industrialising Britain, using public procurement to back British industry.

Later this year, I will bring forward a new plan for Britain, a 10-year plan, laying out a path from where we are now to where I believe we all want Britain to be, wherever we’re coming from, whatever party we support. But I can do something to give people some breathing space now, some help with the cost of living. …We will help more young people into work by changing the education system and giving them more support, more mental health support. And we will build more council homes.’

It needs to be pointed out that the new PM’s comments on the economy and politics are a continuation of his “Manchesterism” philosophy. As Mr. Burnham—who at the time was Greater Manchester’s mayor—indicated in his January 22 Guardian article in this regard, ‘If the question at the centre of British politics is “who broke Britain?”, let’s be clear and unequivocal.

The four horsemen of Britain’s apocalypse are deindustrialisation, privatisation, austerity and Brexit. …We hope what has been happening in Manchester might offer inspiration. Over the past decade, we have become more and more functional as the country has become dysfunctional.

We have used devolution to build a new, more collaborative political culture that is the polar opposite of the Westminster and Whitehall world. On the back of it, we have begun to roll back some of the worst aspects of the 1980s. We have retaken public control of our buses and will soon reach a new tipping point where we are building more council and social homes than we are losing through right to buy. We are taking a long-term approach to rebuilding an economy devastated by the deindustrialisation of the Thatcher era.’

About the applicability of ‘Manchester model’ to the entire British economy, and politics, a June 24, Project Syndicate (PS) published article ‘Can the Manchester model save Britain’ pointed out the following: ‘Greater Manchester has become the UK’s fastest-growing region.

Investment has been flowing in, especially to sectors like professional services and technology. …The model that produced this success began coming into focus in 2009… And since 2009, the city’s leaders, including Burnham, have stuck with the same broad set of policies. This stability contrasts sharply with the policy churn seen at the national level. …Can the UK’s likely next prime minister replicate the Manchester model at the national level? Not entirely. …But the core lessons of the Manchester model do apply. Ensuring that people have the skills and infrastructure they need to find jobs, get to work, and build their businesses is vital to growth. And it can be achieved only if the authorities stick with their strategy for the long term.’

During the last four decades or so, Pakistan has gone through around two-dozen International Monetary Fund (IMF) programmes that overall follow neoliberal- and austerity-based policy foundations. Given this, alongside the meaningful presence of ‘Chicago boys’-styled policymakers influencing the public policy domain in similar directions, breaking this circuit of economics and politics is indeed overdue, and essential re-wiring of policy in this regard is carried out in Pakistan on the lines being indicated by the UK prime minister, among many others.

With significant lessons that are available to follow from China, and from similar ones being practiced in Scandinavian countries, it is high time that the country moves away from neoliberal, and austerity policies, and towards non-shock therapy policies. Moreover, therefore, it makes sense to learn from the ‘Manchesterism.’

Hence, not only does the public sector need to take on a broader, more purpose-driven, and mission-oriented role, proactively dealing with economic challenges and creating a symbiotic relationship with the private sector and markets, but it must also overall enhance productive and allocative efficiencies in the economy.

Here, while the importance of non-neoliberal formulation of economic institutions is important in the realm of governance and politics, it is essential to effectively employ local government system to achieve economic gains, including much-better utilizing state-owned enterprises (SOEs), and special economic zones (SEZs) through the local governments.

Copyright Business Recorder, 2026