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22 October 2020updated 05 Aug 2021 5:52am

As Sunak U-turns, Burnham calls for a “reset between national and local government”

The chancellor’s change of heart on Covid-19 funding highlights the divide between Westminster and regional leaders.

By Jonny Ball

Last night, as news broke that the Chancellor Rishi Sunak would today announce a new range of financial support for areas entering tier two restrictions, the reaction from northern leaders was one of disbelief.  

Greater Manchester had effectively been living under tier two for three months, but financial aid was seemingly only up for grabs once London had those same restrictions imposed on Saturday.

Sean Fielding, the leader of Oldham council (one of the 11 local councils that make up Mayor Andy Burnham’s Greater Manchester Combined Authority), told The Guardian the new support showed that council leaders were “not just being chippy northerners” when they complained the government prioritises London. “Our businesses have struggled under the equivalent of tier two restrictions, or more, for three months and received nothing,” he said.

Today, Sunak effectively U-turned. He unveiled plans that will award businesses in the north of England, which have incurred huge losses due to coronavirus restrictions, grants of up to £2,100 a month that can be backdated to August. The new measures will also expand the job support scheme. The Chancellor slashed the required contribution from employers from a third to 5 per cent of the wages of employees who are not working. 

[see also: Why Rishi Sunak’s most painful U-turn is the fault of George Osborne]

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As Sunak was preparing to make his announcement, Burnham and other metro mayors appeared before the BEIS select committee to discuss the lack of support for business in their areas. 

The overlap of these two events is an elegant signifier of the dysfunctional relationship between central government and local leaders. Minutes before Sunak unveiled the new measures to the Commons – before it became clear the financial support would apply to tier two areas retroactively – Burnham had told the committee he was “open mouthed” when he read the news that a new support package would be unveiled today. He said it was “billed as being for London and Birmingham”.  

Speaking alongside Liverpool City Region’s mayor Steve Rotheram, whose region was the first to enter the harshest tier three restrictions, Burnham said he was “struggling with this announcement today”.

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[see also: Andy Burnham: “The problem now is, to a large degree, the Chancellor”]

Earlier this week, ten days of acrimonious negotiations between Whitehall and Greater Manchester collapsed after neither side could agree on the level of support for locked down businesses and workers. Reflecting on this, Burnham today told the committee that a lockdown couldn’t be implemented or imposed on Greater Manchester “on terms dictated from 200 miles away”.

The mayor publicly decried the government’s unwillingness to support Greater Manchester residents through a winter that Boris Johnson admitted would see the locked down north make sacrifices “over and above anyone else”. Reports have suggested that reluctance to spend the extra cash provoked divisions between the Prime Minister and the Chancellor, who is increasingly anxious about the country’s ballooning deficit.

In the BEIS committee hearings, Burnham told the chair that in his final pitch to the Prime Minister on Tuesday he had explained “that we had been in three months of restrictions, so therefore we were in a different position to the Liverpool City Region, and different from Lancashire… And that factor did not weigh at all in the final analysis. They basically said, ‘No, you’re going to get the same as the population-based figure for Lancashire and Liverpool’.”

Sunak’s U-turn unexpectedly gave Manchester’s businesses a boost, but Burnham expressed dismay at the way the episode had been handled.  

“Why on earth was this not put on the table on Tuesday to reach an agreement with us?” he later asked on Twitter.  

The disjointed, ad hoc approach to formulating public policy and the attitude shown by No 10 towards local authority leaders has led to renewed calls for a devolution of powers, regional autonomy and a new constitutional settlement for the UK.  

As one of the most centralised countries in the OECD, the government’s response to coronavirus has been hampered by a reluctance to cede power away from Westminster. For months, local leaders have asked that they be given the resources and responsibility to implement an effective track and trace programme, but some fear it is too late.

“You’ve got a powerful centre, and it’s not treating places equally,” Burnham told BEIS committee members today. “That is a terrible place to find ourselves in the middle of the pandemic. I would just say to the government: there has to be a bit of a clearing of the air and a coming back together – a reset, really, between national and local government.”