Andy Burnham officially became the United Kingdom’s seventh prime minister in a decade on Monday, promising to use his government as a “circuit breaker” for the country’s political and economic challenges while launching what he described as the biggest changes to Britain’s system of governance in 40 years.
In his first speech outside Downing Street, Burnham outlined an agenda centred on decentralisation, regional growth and cost-of-living relief, arguing that excessive centralisation of power in Westminster had left many parts of Britain economically behind.
The new prime minister has pledged to establish a “No. 10 North” office in Manchester that will oversee the government’s decentralisation programme and help local authorities gain greater control over transport, housing, utilities and industrial policy.
Decentralisation takes centre stage
Burnham used his maiden address to argue that Britain had taken the wrong economic direction during the 1980s, with political power becoming increasingly centralised and economic control shifting away from communities.
“In the 1980s Britain took some wrong turns.
Political power was centralised, economic power privatised, large parts of the country industrialised and they still haven’t recovered.
Many feel as though they’re still in decline, and they don’t have the ability to turn things around.
And that’s why we will change politics, to make it more collaborative, more about problem solving than point scoring.
And we will take power out of here and carry it into every postcode in the land so that they can do more and in doing more, build a new economy where we put life’s essentials back under stronger public control to make them affordable to you again,” he said.
The proposed No. 10 North office is expected to coordinate regional economic policy while supporting local authorities in implementing reforms across essential public services and infrastructure.
Burnham has consistently argued that growth cannot be directed solely from Whitehall and that local governments are better placed to understand regional economic priorities.
Cost-of-living measures to follow
While Burnham promised to unveil a broader economic blueprint later this year, he said immediate support for households struggling with living costs would be announced within days.
“Later this year I will bring forward a new plan for Britain, a 10-year plan laying out a path from where we are now to where I believe we all want Britain to be, wherever we’re coming from, whatever party we support.
But I can do something to give people some breathing space now, some help with the cost of living.
And I will set out some of those measures starting tomorrow, including how we pay for them.”
The prime minister also reaffirmed commitments to invest in employment, education, housing and preventative public services while insisting that these priorities would remain compatible with Labour’s fiscal rules.
“We will help more young people into work by changing the education system and giving them more support, more mental health support, and we will build more council homes.
That is the fair and sustainable way to bring the welfare bill down to meet our fiscal rules and to honour our commitments on defence to our international partners.
We will help people to live well, building a more preventative state, investing in people’s success rather than paying for failure.”
Markets react cautiously as investors wait for cabinet details
Financial markets responded calmly to Burnham’s first address, with investors appearing reassured by his repeated commitment to fiscal discipline.
The yield on the benchmark 10-year UK government bond rose modestly by around three basis points to 4.98%, while the FTSE 100 index traded roughly 0.5% lower.
Market participants remain focused on the composition of Burnham’s Cabinet and the government’s fiscal plans.
Russ Mould, investment director at AJ Bell, said investors were watching closely for appointments to key economic positions.
“Investors are keenly awaiting details of who will form Andy Burnham’s cabinet once he becomes UK prime minister today,” Mould said.
“Shabana Mahmood is the favourite to become chancellor and so far, bond markets seem to prefer her as the likely candidate rather than Ed Miliband. Gilt yields eased back last week on speculation that Mahmood would get the job, which is the biggest clue that markets are accepting the governmental change in a calm manner,” he said.
“That’s good for now, but it’s what comes next that really matters. Bond investors are looking for any clues on public spending intentions, how they will be funded, and any policies that deviate from the path pursued under the Starmer-Reeves regime. Burnham’s big speech later today might offer a glimpse at what he wants to achieve but is unlikely to give the full picture.”
Business and unions welcome early priorities
Trade unions and business organisations broadly welcomed Burnham’s emphasis on economic growth and living standards while calling for swift policy action.
Paul Nowak, general secretary of the Trades Union Congress, said the new government should immediately tackle pressures facing working households.
“Andy Burnham is right to signal an end to the broken economic status quo and prioritise the cost of living.
This government should be straight out of the blocks delivering for working people in every corner of the country – with a laser focus on living standards.
For too long, ordinary families have been under the cosh while the tax avoiders and the super-rich have been raking it in.
That’s why we need to see urgent action to bring down energy bills, taxing banks’ enormous profits to pay for it and delivering Labour’s workers’ rights agenda in full.
And we need investment with good quality work at its heart to grow our economy and put more money in the pockets of working people.
This government shouldn’t be afraid to take on vested interests – whether it’s bad bosses, the super wealthy or crypto billionaires.”
The British Chambers of Commerce also welcomed Burnham’s promise of stability and a long-term economic strategy but urged the government to address business costs alongside household pressures.
Director general Shevaun Haviland said growth would depend on easing the burden facing companies.
“The challenge ahead is delivering on those pledges – and delivering growth.
The cost of living and the cost of doing business are two sides of the same coin, so it’s vital that Prime Minister also gives firms ‘breathing space’ from cost pressures.
Our surveys show energy and taxation are squeezing businesses, hitting confidence and investment. Easing the cost of doing business will deliver the growth we all want to see.
In his speech today he spoke about boosting British industry through public procurement, something which we have long called for. We widely welcome his pledge to support young people and skills.
Getting growth in ‘every postcode’ of the UK is only possible if business is placed at the heart of the economic strategy. Any structural changes to the economy must deliver growth – and that happens when firms invest and expand.”
Analysts also noted that Burnham’s economic framework remains largely aligned with Labour’s previous fiscal approach despite its stronger emphasis on regional development.
The Council on Foreign Relations said Burnham had “committed to the government’s existing borrowing limits, pledged fiscal discipline, and promised to reduce the welfare bill,” adding that many of his industrial and procurement priorities represented continuity with the previous administration while presenting them through a stronger political narrative focused on regional renewal and economic sovereignty.
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