Communities Secretary Steve Reed has defended Andy Burnham's forthcoming devolution reforms, arguing they will benefit London by reducing migration from other regions to the capital, which drives up house prices. Mr Reed, MP for Streatham and Croydon North, backed channelling billions more into regional infrastructure and giving more powers to mayors, including over some taxes.
Reforms Aim to Curb Regional Inequality
The plan, expected to be unveiled by Prime Minister-in-waiting Andy Burnham on Monday, has drawn a warning from London Mayor Sadiq Khan not to cut investment in the capital. There are concerns that Mr Burnham, the former Greater Manchester Mayor, may adopt an “anti-London” agenda. However, Mr Reed stressed that boosting the North, the Midlands, and other regions would benefit the capital.
Speaking on Sky News’ Sunday Morning with Trevor Phillips, Mr Reed said: “What Andy is saying is that this is one of the biggest economies on the planet, and yet we have some of the poorest regions in Europe in this country, and that is because of the grotesque regional economic inequality we have in this country. If we can invest in the infrastructure and support to allow our regions to grow, it actually helps the South East of England.”
Impact on London Housing and Jobs
Mr Reed, former leader of Lambeth Council, elaborated: “It doesn't help London if London is the only place where people see opportunities for jobs and economic growth, because people from all over the country come to London. It pushes up our housing costs and pushes up housing demand. It benefits the South East if the rest of the country does well.”
He also downplayed the likelihood of an early general election if Mr Burnham becomes Prime Minister in mid-July, following Sir Keir Starmer’s resignation amid a Labour revolt. Mr Burnham is reportedly considering splitting the Treasury, creating a new economic ministry focused on growth in Darlington, while keeping a finance ministry in Whitehall. He has previously backed replacing council tax and stamp duty with a new property tax that could hit Londoners with a £7.5 billion higher bill.
Chancellor Appointment and Market Confidence
Mr Burnham faces a difficult decision over who to appoint as Chancellor, with Rachel Reeves widely expected to leave the post. Net Zero Secretary Ed Miliband, politically close to Mr Burnham, is a contender. However, there are concerns within Labour that Mr Miliband is too hardline on net zero measures, despite heatwaves already affecting Britain, and may struggle to retain market confidence.
Labour Deputy Leader Lucy Powell, a close ally of Mr Burnham, backed Mr Miliband for the Treasury. Asked whether he would be good at running the Treasury, she told the BBC’s Sunday With Laura Kuenssberg: “Yes I do actually, but actually I think this is a slightly distracting conversation, because I think we’ve all got a really important job to do.”
