Not so much a safe pick as a very deliberate one

John Healey's arrival at the Treasury caught many in Westminster on the hop. Most thought Burnham would give the job of Chancellor to Shabana Mahmood or Ed Miliband, so the Healey appointment came as a genuine surprise to those who don’t properly appreciate his economic background. This same lack of understanding has informed the snap judgments about Healey’s principal qualities as Burnham’s Chancellor: an experienced, safe pair of hands, but also someone who is not afraid someone to challenge Treasury orthodoxy (as demonstrated by his recent resignation as Defence Secretary) and who is unlikely to challenge Burnham’s position politically.

But there is an important side to John Healey’s CV which has been almost entirely overlooked, and which indicates why he was not so much a safe pick for Andy Burnham as a very deliberate one. That relates to his track record on regional economic development.

In a candid interview for the Harvard University sponsored project looking at the UK’s regional divides, Healey set out a philosophy of local economic development that he has held for the best part of thirty years. He himself points to a seminal paper which he and Ed Balls, who were both working for Chancellor Gordon Brown at the time, produced in 1998 which was, in effect, an intellectual underpinning for English regional policy. In those New Labour years, he went on to hold the regional economic development brief at the Treasury and to drive the Regional Development Agencies (RDAs) through their most ambitious phase. His justification for this was clearly stated at the time and subsequently – that Britain has been vastly over-centralised and is all the poorer for it.

Strip out the institutional detail of the RDAs and the principles of the day carry straight through to today. Healey's case for the RDAs was that they let places make the argument for investment on the basis of their economic, human and regeneration potential. He championed ‘single pots’ of real money, devolved with flexibility and genuine decision-making power and he argued strongly against the all too familiar ritual of local bodies bidding into pots of money still held in Whitehall. He believed in business-led delivery inside broad local coalitions. And he was instinctively wary of concentrating support on a handful of big cities – accepting there was an agglomeration case but concerned with ‘equality as well as the economics’.

If that reads like a summary of Andy Burnham's governing pitch, that is the point. ‘Good growth in every postcode’, a new ‘No 10 North’, the promise to end Whitehall's habit of fighting devolution – the new Prime Minister is describing, in 2026 language, some of the elements of the settlement that Healey spent the 2000s trying to build.

It is particularly interesting that when Healey talks about where they did not go far enough, he talks about the failure to fold training and employment support into regional economic strategy. That, he argued, was hugely costly. It is striking, then, that skills sit at the very centre of Burnham's pitch: technical education on a par with the academic route, work placements at scale, employment support devolved to the places that can actually reach people. Healey's biggest ‘what we got wrong’ is the ground on which Burnham is now majoring.

There are parts of the same interview which Healey might now find a little awkward, such as when he judges the impact of metro mayors to be closer to ‘sophisticated municipal PR’ than anything meaningful in terms of driving growth. That sits a tad uneasily alongside Burnham's account of a Greater Manchester transformation he largely drove himself. But the tension resolves in the Prime Minister's favour, because Healey's complaint was never that mayors have too much power – it was that they have far too little. His diagnosis is Burnham's grievance. The man now holding the Treasury's purse-strings is someone who has argued for years that devolution in England has been left functionally and fiscally hollow.

Which brings us to where he and Burnham might be most closely aligned. Asked what the RDAs lacked, Healey's answer was not so much about how much money local areas had, but about the tools at their disposal. He argued that the Treasury never developed financial instruments that worked at a regional level, such as development bonds, tax-increment financing and local flexibility on business rates, because it clung to a belief that investment markets are "national, not regional". That is unfinished business for both him and Andy Burnham and with fiscal devolution very firmly back on the table, Healey has an opportunity to do something about it.

For investors, places, and anyone with a stake in regional economic development, there is a clear signal here. Those at the top of government are in lockstep in their belief that more needs to be done to loosen the shackles of Treasury orthodoxy and put more power in the hands of local leaders – and mayors in particular. The ‘safe pair of hands’ framing undersells the moment. For a Prime Minister whose entire premiership rests on rebalancing power, appointing someone who has tried to walk this path before is a shrewd move. Whether he is able to make more progress this time is the question that will define both their tenures.

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Images: UK Government / Wikimedia Commons (Open Government Licence)