Burnham to flesh out economic plan as chancellor pick looms

ANDY Burnham is under pressure to outline an economic plan for the UK following his sudden and spectacular rise toward the pinnacle of British politics.

The former mayor of Greater Manchester is widely expected to emerge victorious from a contest next month for the leadership of both the governing Labour Party and the country after Prime Minister Keir Starmer said he was stepping down, just hours before Burnham was sworn in as a Member of Parliament.

Starmer’s office said on Tuesday that leadership candidates would be given access to key civil servants before nominations for the leadership race close.

Burnham will give a set-piece speech on the economy next week, a person familiar with the matter said.

He is yet to announce who would be his Chancellor of the Exchequer and has widely varying options, as gilt traders pay close attention to the likely direction of the next administration.

Burnham is backed by a swath of left-leaning MPs and has previously proposed higher government spending, leading to concerns that an administration led by him could ramp up borrowing.

He has repeatedly tried to talk down comments made last year in which he complained that Britain was “in hock” to the bond markets, and next week’s speech — reported late on Monday by The Times newspaper and confirmed by Bloomberg — is the latest attempt to attach fiscal credibility to his leadership.

“Andy Burnham will need to develop and have clear intellectual convictions of his own, which he believes in, which will enable him to ride through the occasional difficult patches,” former Bank of England Governor Mervyn King said on Tuesday in a Bloomberg Radio interview.

“We don’t know what those convictions are. They’re rather vague at this stage. How much would you spend on defence? What will you do about the triple lock for for old age people? Are you going to start to change social care now rather than wait until the end of the parliament?”

SEE ALSO

Andy Burnham’s victory may change Labour’s politics, but not Britain’s business direction

Can anyone fix Britain? Regular change of PM a symptom of UK’s malaise

UK PM Starmer resigns; new leader to be in place by September

Sidelines to centre stage: Who is Andy Burnham - frontrunner to be UK’s next prime minister?

UK’s Streeting backs Andy Burnham to replace Starmer as PM

A decade of chaos: Britain prepares for seventh prime minister

More

Burnham is likely to be afforded some help in preparing for government after Starmer’s spokesman, Tom Wells, said Tuesday that the premier wants “a smooth transition” including through so-called access talks, allowing prospective candidates to exchange information and establish relationships with the civil service ahead of a change over of power. Starmer “has been clear that he will seek to make this as easy as possible,” Wells told reporters.

Under any Burnham-led administration, Rachel Reeves is expected to be replaced as chancellor even though her steadfast insistence on abiding by self-imposed fiscal rules has gone down well with the markets since Labour came to power in 2024.

Gilts fell last summer when speculation over her future mounted after Starmer failed to explicitly back her during a debate in the House of Commons.

One of her former Treasury ministers, Darren Jones, is now being urged to stand in a contest to replace Starmer according to a person familiar with the situation.

Jones would be extremely unlikely to defeat Burnham, the former mayor of Manchester who has the support of scores of MPs — but those on the right of the Labour Party hope a contest would force Burnham to adopt fiscally prudent policies.

Burnham has yet to decide on a chancellor and has contrasting options, including Wes Streeting, typically viewed as sitting on the right of the party, and Ed Miliband, the more left-leaning former leader who as Energy Secretary has fought to defend the UK’s net zero policies. 

The Manchester politician has a team of high-profile economic advisers including former BOE chief economist Andy Haldane, former Goldman Sachs chief economist Jim O’Neill and Richard Hughes, who used to head up the Office for Budget Responsibility fiscal watchdog. BLOOMBERG