Burnham Outlines Key Policy Directions Amidst Leadership Speculation
Andy Burnham, recently sworn in as the MP for Makerfield, has put forward a range of policy proposals that could shape his agenda if he were to become the next prime minister. These ideas were articulated during his successful by-election campaign, following Sir Keir Starmer's resignation.
Burnham has indicated an adherence to existing economic frameworks, committing to the fiscal rules established by Chancellor Rachel Reeves and maintaining Labour's pledge not to increase main rates of income tax, VAT, or National Insurance. Helen Miller, director at the Institute for Fiscal Studies, highlighted the limited fiscal flexibility available to any prime minister under current rules, suggesting that increased spending in one area would necessitate cuts elsewhere or new revenue streams.
Public Control Over Essential Services
A recurring theme in Burnham's proposals is a move towards greater public control of utilities. He has advocated for bringing water, energy, and transport services under stronger public oversight. Referencing the Greater Manchester bus network, which combines private operation with public control, he suggested this as a model. For entities like Thames Water, he has expressed support for full public ownership.
"We do need to bring down water bills, energy bills, rail fares, just as we brought down bus fares in Greater Manchester, to make life more affordable for people," Burnham stated following his by-election victory.
Estimates for nationalising the entire water industry have reached £100bn, though this figure is contested. A more gradual approach to public ownership for rail companies, as contracts expire, could significantly reduce costs, a strategy previously overseen by Louise Haigh, who managed Burnham's campaign.
Social Care Reform
Burnham has a long-standing interest in social care reform, dating back to his ministerial roles under Tony Blair and Gordon Brown. He has consistently proposed replacing inheritance tax with a "national care levy" to provide free care, with wealthier individuals contributing more. While he affirmed his stance during the by-election, the exact revenue potential and cost of such a reform remain unclear. The Health Foundation estimated in 2024 that a universal, NHS-style care model could require an additional £17bn by 2035/36, while a model similar to Scotland's, offering basic protection, might cost around £7bn for England.
Defence Spending Debates
A critical issue for any new leader is defence spending. The recent resignation of John Healey as defence secretary highlighted a disagreement over the government's investment plan, which he argued fell short of a necessary 3% of GDP target by 2030. Reports indicated the Ministry of Defence sought £28bn more funding but was offered only an additional £10bn.
Burnham has suggested a two-pronged approach: a 10-year defence and security strategy combined with reforms to public investment and procurement. He told The Times that reducing the welfare bill by integrating recipients into the workforce could free up funds for defence. "I am not squeamish about saying that the plan would be to reduce the welfare bill. Not at all," he remarked.
Housing and Tax Reforms
Burnham has called for the "biggest programme of council house building since the Second World War," proposing to redirect the existing £39bn affordable housing programme entirely towards social rent homes. He also aims to reform taxes on business, property, and land, including changes to the "highly regressive" council tax.
He has long supported a land value tax (LVT), an annual tax based on the land's value, excluding improvements. In 2022, he described LVT as a "very productive form of taxation" that could discourage land hoarding and potentially replace stamp duty. An Institute for Fiscal Studies report noted LVT's advantages, such as its fixed supply and inability to move abroad, making it an "efficient way to tax a wealthy group," though fairness concerns were acknowledged.
HS2 Northern Leg Revival
Burnham expressed a desire to reinstate the northern leg of HS2 between Birmingham and Manchester, a project estimated at £36bn when scrapped in 2023. He suggested recovering some costs by capturing the increase in land value around new stations, sharing the windfall with landowners to offset infrastructure expenses. The IFS has explored funding mechanisms for large infrastructure projects, such as levying additional business rates or ringfencing developer contributions, noting that such methods primarily reallocate existing revenue rather than generating entirely new funds.
Support for Business and Education
Advocating for a "new drive of re-industrialisation" across the UK, Burnham proposed cutting business rates for pubs and music venues by 20%, funded by higher taxes on out-of-town warehouses used by online retailers. He also aims to raise the threshold for business rates, exempting many small high street shops.
In education, Burnham emphasizes creating alternative pathways to training and employment beyond university, promoting an education system that offers "academic and technical in equal balance" and securing more work placements and apprenticeship guarantees for young people.
National Insurance and Waspi Women
Burnham has indicated a desire to reconsider the increase in employer National Insurance contributions, introduced in the 2024 Budget, which is forecast to generate £16.1bn by 2029/30. While he called the increase the "wrong decision," it is unclear if he would seek a full or partial reversal.
He has also publicly supported the 'Waspi women' (Women Against State Pension Inequality) who claim they were not adequately informed of state pension age changes. Although he previously stated he would "stick by the Waspi women because they deserve some recompense," his spokesperson later clarified that he "accepts the final decision" of the government not to grant compensation, following concerns over the potential £10.5bn cost of such a scheme.
Source: Energy bills, defence and social care: What are Burnham's potential policies?