In his first week in office, Andy Burnham has unveiled a series of policy initiatives aimed at addressing Britain’s economic challenges, but some analysts warn that these proposals reflect a simplistic approach to economic management often referred to as "DIY economics."
The concept, introduced by former Treasury adviser David Henderson in the 1980s, critiques economic strategies based more on intuition and political will than on rigorous analysis and historical evidence. This approach assumes governments can engineer prosperity by directly shaping the economy—picking favored industries, enforcing domestic procurement policies, and equating national economic success with visible, short-term outcomes.
One notable example is John Healey’s advocacy for a stronger “buy British” policy in government procurement. The intended logic is straightforward: prioritize domestic suppliers, support British factories, and thereby protect jobs and build industrial capacity. However, experts caution that insisting on British-made goods risks higher costs or lower quality compared to imported alternatives. This trade-off can force governments to scale back purchases, raise taxes, increase borrowing, or cut spending elsewhere. Studies from the United States and Europe have quantified the economic cost of such protectionist policies, showing that safeguarding jobs often comes at significant expense and may reduce the amount of public services delivered under fixed budgets.
Beyond costs, the approach may disrupt the internal economy by diverting resources—such as labor, raw materials, and capital—from a diverse range of businesses toward favored sectors. It can also provoke retaliatory trade measures from international partners. Contrary to popular perceptions, imports do not equate to money lost abroad; rather, payments to foreign suppliers eventually flow back through demand for domestic products, services, or investments.
Similar critiques apply to Burnham’s recent cost-of-living measures, including proposals to eliminate VAT on electricity and cap bus fares at £2. While these policies have immediate impact on affordability, analysts highlight that they do not address underlying scarcity caused by factors such as planning restrictions and regulatory barriers. Subsidies or tax reliefs may shift costs to other groups but cannot fundamentally increase supply or reduce prices over the long term.
Burnham’s emphasis on reindustrialisation and supporting hospitality also reflects this pattern. Economists caution against “structure snobbery”—the belief that policymakers know best which sectors should be prioritized. Instead, wealth is generally generated through entrepreneurs responding to market signals and consumer preferences rather than through government-directed industrial strategies.
Observers suggest that Burnham’s flurry of policy announcements in his first week may be aimed more at demonstrating activity than at enacting sustainable economic reforms. Whether these initiatives signal a substantive economic philosophy or a short-term communications tactic remains to be seen.