‘German Basic Law: a guide to the law cited by Andy Burnham as a new model for Britain’

“No 10 North … will be given a mission to strive for equivalent living conditions in all parts of Britain – borrowing from the German Basic Law.”

What on earth does that mean?

What is it?

The Basic Law is Germany’s constitution, and, at the risk of sounding like a lawyer (oh, wait…), Burnham is mixing two things. 

Article 72 is where “equivalent living conditions” is actually mentioned. This lets the federal parliament legislate in certain policy areas normally left to the sixteen German Länder (roughly equivalent to counties but with powers similar to those of Scotland or Northern Ireland to make their own laws), but only where a national law is genuinely needed to establish equivalent living conditions. However, that is a rule about who makes laws, not about who gets the money. As councils don’t have the same degree of power (yet), it doesn’t really make sense in the UK context.

The money is set out in Articles 106 and 107: the “financial equalisation mechanism”. This requires the sixteen Länders very different financial strength to be reasonably evened out, and lets the federal government top up the weakest.

There is also a third strand Burnham may have in mind: Article 91a, which lets the federal parliament and the Länder jointly plan and part-fund the improvement of weaker regional economies, which is closer to his “coordinating a long-term economic strategy” than pure redistribution is.

What is it intended to do?

The Basic law is intended to hold together a federation of very unequal places. Written in 1949 and stress-tested by reunification, the promise is that wherever you live, your Länder can afford roughly comparable schools, policing and transport. Roughly comparable though is not identical: Germany’s constitutional court insists the aim is to reduce differences, not eliminate them, and equalisation payments cannot let a poorer Länder leapfrog a richer one: the North can’t get rich off the South.

How does it work?

The tax take per head of each Länder is compared with the national average. Those above the line give up part of their tax share; those below get topped up, covering 63 per cent of the gap, with city-states like Berlin counted as if they had 35 per cent more residents. In 2025 roughly €20bn (£17bn) moved this way: Bavaria alone paid over half (€11.7bn), and Berlin took the most (the irony). Federal grants then lift those still left behind.

Because this is constitutional law, two things follow:

First, individual Länders can sue. Bavaria is in the Constitutional Court right now, for the third time, arguing it pays too much. Whilst the court has repeatedly ordered the formula redrawn it has never let anyone stop paying. 

Second, a Länder in a true budget emergency can claim a federal bailout (Oh hello Birmingham City Council) but only as a last resort, once it has exhausted its own cuts and savings. Bremen and the Saarland qualified in the 1990s; Berlin, famously “poor but sexy”, was told in 2006 that it might be sexy, but it certainly wasn’t broke enough.

Could it work here?

Could it actually work here? Well, without stating the obvious: 

English councils aren’t German Länder. Wigan and Wycombe don’t pass primary legislation, and our closest equivalents, the devolved parliaments like Scotland, are protected only by a convention the Supreme Court has said the courts can’t police. A UK version would really be a legal duty on ministers to fund places towards equivalence, not a constitutional right binding Parliament.

We also already redistribute. Business rates are tariffed away from rich local councils (totalling 96% in Westminster City Council) and topped up elsewhere; and grants follow a needs formula; this year’s “fair funding” settlement already aims at full equalisation of needs and resources. 

But (big but): all of it sits at ministers’ discretion under the Local Government Finance Act. Putting “equivalent living conditions” into statute would arguably make the transfers transparent, durable and challengeable in court. Exactly what Andy Burnham predicted in his book “Head North”.

Be careful what you wish for: Without treading on my own income, does Labour want every well-lawyered shire county suing every funding settlement that moves money north? Germany’s answer, with seventy years of litigation and Bavaria back again, is still (probably) yes, and the system survives anyway. 

Final Disclaimers 

1. Any legal formula for England Councils invites a question of how Scotland, Wales and Northern Ireland, are funded, which is currently through the Barnett Formula which has no legal basis at all. 
2. Without a codified constitution, nothing stops a future parliament repealing the lot with a one-line Act (ominous teal shadows appear).

Ultimately, whether Burnham’s Basic Law will work depends on whether “Manchesterism” is intended to be a governing doctrine of the “Radical North” or vibes with a German accent.

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