Andy Burnham is expected to become prime minister in less than two weeks, promising to significantly change Labour's agenda and deliver improvements for all parts of the UK. However, he will inherit a bulging in-tray of challenges and issues left over from Keir Starmer, ranging from geopolitics to the cost of living.
Welfare Reform
Burnham will be in power when the final recommendations of the Timms review into disability benefits land. The interim report proposes radical changes to personal independence payments (PIP) and a more humane assessment process. PIP spending has surged since 2020 and is forecast to double by 2030. The new PM will face a rightwing opposition demanding cuts, particularly for those with fluctuating mental health conditions such as anxiety. Ministers have indicated their aim is not to make more savings but to stop the bill growing further. Overhauling the system without harming dependents or causing ructions with Labour MPs will be a tricky balancing act.
Defence Investment
Allies of Burnham say he accepts the defence investment plan, which commits £298bn to buying weapons over four years, as “settled,” even though it requires finding an additional £4.7bn at the next budget. Longer-term questions remain over how he could increase defence spending to 3.5% of GDP by 2035, as his predecessor promised. One option considered by Starmer’s officials but rejected was to issue “defence bonds”—new debt for defence spending only.
Taxation
Burnham has promised to stick to Labour’s 2024 manifesto pledges not to raise income tax, national insurance, or VAT. However, he recently told LBC there was “some room within that manifesto for movement on tax,” prompting speculation about which taxes he may raise to fund expensive policies. He has talked about changing business rates, aiming to make large companies with out-of-town warehouses like Amazon pay more, while small high-street businesses pay less. Allies discuss a possible significant rise in capital gains tax.
Immigration
Burnham plans to proceed with most of Shabana Mahmood's proposed overhaul of the immigration system, including changes to indefinite leave to remain (ILR) from five to 10 years and scrapping permanent refugee status, making people eligible for removal if their home countries are deemed safe. Mahmood, tipped to remain home secretary, may soften the ILR changes, as many Labour MPs are uncomfortable with them applying retrospectively. Other controversies include the use of houses of multiple occupancy and military sites for asylum seekers, and continuing small boat arrivals.
Jury Trials
Burnham has publicly doubted plans to limit jury trials. Suspended Labour MP Karl Turner has told colleagues that Burnham privately committed to scrapping them. However, ditching the plans could provoke backlash from some female Labour MPs who support the changes to speed up criminal cases, especially those involving violence against women. Two ministers who resigned from Starmer’s government—Jess Phillips and Alex Davies-Jones—have been advocating for the changes to avoid a growing court backlog.
White House Relations
Donald Trump has disrupted even the best-laid plans for Starmer, and there is nothing Trump cannot derail. As Manchester mayor, Burnham barely featured on Trump’s radar, unlike London's Sadiq Khan, and has few embarrassing anti-Trump comments in his past. However, their first encounter—possibly at the G20 summit in Miami in November—will be high-stakes. Burnham plans to keep Jonathan Powell as national security adviser, providing continuity.
Middle East
Burnham’s first geopolitical move was an apology for Labour’s handling of the Gaza conflict, which alienated many party supporters. He has promised to be tougher on Israel, including potential sanctions. But the Iran conflict and its economic fallout, especially after the fragile ceasefire's disintegration, will likely be his first big international challenge. The UK public has yet to feel the energy crisis from a potential blockade of the Strait of Hormuz. Burnham will decide how much to contribute to any peacekeeping or cleanup operation without committing British firepower.
Europe
Starmer prioritised closer ties with Europe, but Labour's manifesto red lines on the customs union and single market tied negotiators' hands. Burnham would have faced a crucial UK-EU summit to sign a new food and drinks deal two days after entering No 10, but the meeting was postponed due to turmoil. Burnham has previously said he believes the UK should return to the EU but distanced himself from that aim during the Makerfield byelection. With a focus on domestic issues, he may not prioritise Europe as much as Starmer.
Devolution
Burnham's big change is significant devolution of powers to local mayors and authorities—from tax to education and transport. This “rewired Britain” was at the heart of his first policy speech since becoming Makerfield MP, termed “Manchesterism.” Labour’s English Devolution and Community Empowerment Act 2026 gives more powers to mayors, but Burnham suggests going further in Wales and Scotland. Opponents within Labour are uncomfortable handing powers to Reform UK mayors and those in London and the south, who already feel uneasy about emphasising regional divides.
Thames Water and Public Control of Utilities
Alongside devolution, Burnham’s biggest domestic policy intervention may be on utility ownership. He has promised to put the “essentials of life” under public control, though what that means is unclear. The first test is Thames Water, whose creditors are trying to engineer a buyout. Environment Secretary Emma Reynolds wrote to Ofwat opposing the proposed deal. If no agreement is reached, the company may enter special administration. Burnham’s government must then decide whether to spend public funds buying it out, legislate to nationalise it, or allow it back into the private sector with stricter regulation.
Artificial Intelligence
Some senior government members believe AI will be the defining political challenge of the next two years. Burnham has said little about it, though reports suggest he is sceptical of some pro-tech positions taken by Starmer’s government. One immediate decision is on copyright rules for AI companies using creative content for training. Starmer’s government proposed a blanket exception with an opt-in option for creators, but that position is under protest from artists like Elton John and Paul McCartney. Burnham must also decide how much to invest in building Britain’s AI capacity amid concerns of over-reliance on US technology.
North Sea Oil and Gas
Labour promised not to issue new licences for North Sea oil and gas exploration, causing angst among fossil fuel companies and unions. Burnham is unlikely to break that promise, especially if he makes Ed Miliband chancellor. However, his government could approve the new Jackdaw and Rosebank fields, which do not require new licences. A decision on Jackdaw is expected as soon as next month.
