By Mihir Sharma Andy Burnham’s speech at the Labour Party’s annual conference was memorable. Unlike his predecessor, the new British prime minister sounded heartfelt and hopeful. And he took a few big swings at hard policies as well. Reform is promised for elderly care and Britain’s bloated welfare regime, as is a “national conversation” on the relationship with the European Union and the UK’s outdated winner-takes-all electoral system.

He also offered up “a theory of growth,” sharing it with the same passion that ran through the rest of his pitch. But — unlike with the EU, social care and voting reform — he didn’t seem open to a conversation about this. The PM’s mind is made up on growth. And that’s a problem because his theory of how to reboot the economy is, at best, thin. At worst it’s a recipe for decline.

Burnham sees two essential steps to growth, and an Edenic endpoint once they’re taken. First, the state should control “the basics.”Second, power must be devolved to the regions to unleash their animal spirits. The result of doing both, according to him? “We optimize the conditions for businesses to grow.”There’s quite a bit missing there, and a couple of very dubious assumptions.

On state control, it’s not hard to see why Burnham thinks this might be a vote winner. A recent survey found that more than 80% of Britons want publicly run water companies, and 70% want the same for energy firms. My heart’s with them. No two words are more feared in my household than “Thames Water.”But it wouldn’t be the first time that I, or a large majority of people, have been mistaken about what we want. Publicly run companies aren’t necessarily more accountable to those who use them. They tend to be frustratingly unresponsive. More to the point, state control can’t be the basis of a theory of growth. There’s no reason to suppose publicly run companies would be better at allocating scarce resources, or slashing costs in the way Burnham hopes.

In fact, Britain’s public sector is becoming more unproductive. Research from E&Y found that a shortfall in public-sector productivity costs the UK about £80bn ($106 billion) a year, which might reach £170bn of lost output annually by 2030. So what you gain by cutting out profiteering you can just as easily lose through inefficiency.

Then there’s devolution. It might boost growth if you let regions set their own tax and policy regimes, and to compete for investment and people. But that isn’t what the government plans at all.

If anything, Britain’s growth problem is born of local authorities having too much power. They usually use it to block investment.

A handy example of that came this week from the prime minister himself. When asked about plans for a third runway at Heathrow, Burnham brushed past the possibility that it would enhance growth, and instead implied it was something that London’s mayor and members of Parliament should decide on. Britain needs a leader willing to say that, when a regional preference conflicts with a national need, he will choose whichever boosts gross domestic product for everyone. Burnham has flunked his first test on that.

Provincial politicians will always object to stuff like new airport runways, nuclear-power plants, electricity pylons or reservoirs. Local panjandrums are today the biggest obstructors of UK infrastructure spending. So how can they also be the connecting link in any coherent theory of growth?

It’s telling that Burnham reckons his ultimate goal of “optimizing the conditions for businesses to grow” can be achieved merely by embarking on his two steps of statism and localism (as well as by “supporting workers”). In other words, companies and entrepreneurs will start investing once the central state is wisely setting the overall direction of the economy and town-hall officials are empowered to do the same locally.

This is just not true. The private sector is wrestling with larger concerns: It’s constrained by depressing amounts of red tape; borrowing costs are too high; the planning system is a disaster; poor transport links limit where firms can expand and recruit. All of these are fixable, some of them even before the next election. They should be the essential building blocks of any workable theory of growth for the UK. Burnham needs to make sure he includes them, quickly.

The prime minister has made a reasonable diagnosis of what’s gone wrong for Britain. He has proved willing to pose difficult questions about the UK’s welfare state, its democracy and its place in Europe. He should be willing to ask them of his own — and his party’s — economic instincts as well. The optimism running through his speech was refreshing. But a more hopeful leader doesn’t mean we have more reason to hope.

To contact the author of this story: at msharma131@bloomberg.net