UK economic devolution and fiscal policy under Andy Burnham (with Francine Lacqua)

Asks about Andy Burnham's biggest challenge in getting things done as PM.

Francine Lacqua

Jim O'Neill

Burnham's devolution plan is almost constitutional economic devolution. Manchester has grown at 3x the rate of London for 15 years. Replicating that in 3-4 other big urban places would boost the national growth trend significantly.

This is about economic devolution, not just political devolution like Scotland/Wales which lack real powers in big cities.

Asks how funding for infrastructure in the regions would work.

Francine Lacqua

Jim O'Neill

Proposes an infrastructure version of the OBR — a transparent body that tells the population and financial markets about infrastructure projects with strong positive multipliers. This would reduce debt levels and raise the OBR's long-term growth projection. Bond markets would be extremely happy with that.

The merged body from the old Infrastructure Commission and the Infrastructure Projects Authority should be in the Treasury, not separate.

Asks about splitting Treasury into a separate growth department.

Francine Lacqua

Jim O'Neill

Opposes splitting the Treasury. If you get a leader and chancellor aligned on priorities, the Treasury delivers. Breaking it up is pointless.

When he went in to deliver on the Northern Powerhouse devolution department that didn't exist before, it became one of the most favorite places for aspiring civil servants.

Asks who the right person for chancellor would be.

Francine Lacqua

Jim O'Neill

That's the wrong question. Burnham needs to be clear on his priorities, then find the right people to deliver. The obsession with who will be chancellor is madness.

The UK gilt market has outperformed virtually every other market in the five weeks since the by-election, relating to the credibility of the center.

Asks about wealth taxes or equalizing capital gains tax with income tax.

Francine Lacqua

Jim O'Neill

Strongly opposes equalization of capital gains tax with income tax, especially for venture capital. Venture capital is exceptionally risky — people can lose all their money. Treating it the same as income tax is not wise.

Burnham made clear comments about tackling welfare reform, which if understood by markets, would reduce the need for tax increases.

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