Andy Burnham pledged a “new economic model” for the UK as he sought to reassure Britons that his ascension as their seventh prime minister in little over a decade would bring an end to the country’s political instability.
Burnham promised in his first remarks as prime minister on Monday to deliver immediate action to reduce the cost of living, including explaining how to pay for the measures. He described to move as the first step toward a “10-year plan” to restructure government, hand more power to local authorities and bring some essential public service “under stronger public control.”
“I know people at home are fed up with politics — I hear you, and I want to be honest with you: We have not been good enough,” Burnham said, flanked by supporters in front of No. 10 Downing St. “We will make this moment a circuit breaker for Britain, bringing forward the biggest changes in the last 40 years: a new political model and a new economic model.”
As if to underscore his efforts to appear more accessible, Burnham spoke without the usual lectern and used no notes in remarks lasting about five minutes. His updated biography page referred to him as “Andy,” rather than using his surname.
Burnham’s speech included lines meant to reassure investors and Britain’s allies abroad, vowing to “meet our fiscal rules” and honor the country’s commitments on defense. The former mayor of Greater Manchester, who had little foreign policy experience before seeking the prime minister’s job, told broadcasters separately that he would speak with Ukrainian President Volodymyr Zelenskyy later on Monday.
The ceremonial arrival at Downing Street represents a breathtaking rise for a man who had twice before sought and failed to win leadership of the Labour Party. After coming second to Jeremy Corbyn in 2015 he retreated from national politics altogether and went be mayor of Manchester — an outsider status that helped propel him back to Westminster.
On Monday, Burnham was driven by motorcade to Buckingham Palace, where he formally invited by King Charles III to form a government in a ritual known as “kissing hands,” although no kissing is done these days. He’s expected to announce his Cabinet later on Monday, with Home Secretary Shabana Mahmood widely reported to have been chosen as Chancellor of the Exchequer over Energy Secretary Ed Miliband.
What Bloomberg Economics Says...
“Burnham’s premiership will be constrained by the UK’s lack of fiscal space. Whoever becomes Chancellor of the Exchequer will likely stick to the fiscal rules. Reports that Home Secretary Shabana Mahmood will get the job instead of Energy Secretary Ed Miliband reinforce that view. Mahmood is seen as the more market-friendly option.”
—Dan Hanson, Matt Bunny, Antonio Barroso and Ana Andrade.
Earlier, outgoing Prime Minister Keir Starmer gave his final remarks from outside the black door of No. 10 before formally stepping down. Starmer had announced he was resigning in the face of consistently bad polling for his government which intensified over poor local election results in May. He gave his successor his full backing as he spoke from Downing Street for the final time as PM.
“We face a world now where our enemies will stop at nothing to divide us,” he added. “It is vital that we remember the greatness of the Britain all around us.”
Burnham will now turn to the crucial task of appointing senior members of his government. It is a moment of political jeopardy for any leader but perhaps even more acutely so for this PM who must now try to build a coalition of support in a fractured party filled with MPs fearful of being dumped from office by an electorate tempted by newly prominent fringe parties on the left and right.
Naming Mahmood as chancellor would be seen as a snub to Miliband, who was the early favorite for the role and instrumental in Burnham’s ascent to power. Close Burnham allies Louise Haigh, Anneliese Midgley and Deputy Labour leader Lucy Powell are all likely to be given significant roles.
The fates of Chancellor of the Exchequer Rachel Reeves, Deputy Prime Minister David Lammy, Foreign Secretary Yvette Cooper, former Health Secretary Wes Streeting and former Deputy Prime Minister Angela Rayner will all be closely watched as Burnham seeks to avoid having powerful rivals on Labour’s back benches. Starmer, who remains an MP, is not expected to want or be given a cabinet role.
Burnham successfully pulled off his power-grab with very little known about his plans for office and is under pressure to offer clarity as to his policy priorities and, in particular, his approach to taxation and public spending.
In his only major policy speech he majored on plans to ramp up devolution, including establishing an outpost of No. 10 in Manchester, overseeing the biggest house-building program since the postwar period and giving more control over taxation as well as services such as water, energy and transport to the regions.
Burnham has also hinted at plans for tax cuts for lower earners. In an interview with The Times he said efforts to characterize him as a “tax-raiser” were “simplistic.” He acknowledged people’s frustration over the decision freeze the cap on tax-free income at £12,570 ($17,000), suggesting he might allow the so-called personnel allowance to rise.
He has promised to will stick to Labour’s 2024 election manifesto promises not to raise income tax, national insurance and value added tax. It also commits him to the so-called triple lock guaranteeing annual rises in the state pension until after the next election. Burnham has also said he’ll stick to Reeves’ budgetary rules.
He will inherit a prime ministerial inbox bursting with tricky issues, including how to keep lowering immigration levels that helped spur the rise of Nigel Farage’s Reform UK party, containing the nation’s ever-increasing welfare bill, reinvigorating Britain’s stagnant productivity and overhauling social care to cater for an ageing population.
On the global front, he’ll have to contend with an unpredictable US president in Donald Trump, while seeking to maintain British leadership in defense of Ukraine. A key challenge will be ramping up core defense spending to get to a pledged level of 3.5% of national output by 2035.
“Both the Andy Burnham administration and the Keir Starmer administration have both diagnosed the problems, at least rhetorically,” Panmure Liberum Chief Economist Simon French, chief economist said on Bloomberg Television. “On the steps of Downing Street, Keir Starmer, just over two years ago, talking about treading more lightly on people’s lives — that talks to supply-side frictions. Then, Andy Burnham in his comments this morning talking about ‘breathing space’ — that channels the cost of living.”
“Have they got the political backbone, the patience for some of these long-dated reforms?” French asked.
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