Burnham Weighs Bigger Budget as Experts Lobby on Economic Policy

Miatta Fahnbulleh Photographer: Leon Neal/Getty Images Europe Photo by Leon Neal /Photographer: Leon Neal/Getty Im

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(Bloomberg) — Andy Burnham, the UK’s presumptive next prime minister, is considering unveiling a bolstered budget later this year as allies and experts seek to persuade him to pursue a land tax, public control of utilities and a more ambitious devolution strategy.

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Burnham is on course to take over from Keir Starmer on July 20, with little known of the policies he plans to enact. That has led would-be advisers and ministers to jockey for jobs in his government and policy ideas as he itches to deliver rapid change while planning for his first months leading Britain. 

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One idea Treasury officials are exploring, after preliminary talks with Burnham’s team, is to merge the annual budget — usually held in October or November — and the spending review set for departments, the Financial Times reported Sunday. They are typically held separately, though in her first budget in 2024 Chancellor Rachel Reeves also chose to set departmental budgets the year ahead in a bid to particularly boost education and health funding. 

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Fast-tracking departmental spending decisions could allow Burnham to set his priorities going into a general election due in 2029 and set out a clearer path to channeling 3.5% of economic output to defense spending — something he’s promised to increase. But it would also pile pressure on his would-be Chancellor to produce an expanded document in mere months, when spending pressures in the years ahead remain uncertain,

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The Treasury and Burnham’s spokesperson didn’t respond to requests for comment. 

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Reeves, who is expected to depart the role when Burnham enters Number 10, defended her two-year tenure in a BBC interview over the weekend by arguing the former Greater Manchester mayor will inherit a stronger economy than she did. Still, she urged him to ensure he has a “worked-through plan” and is clear about what he wants to achieve when he takes over.

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“Governing is hard in Britain, and lots of challenges and shocks will come his way,” Reeves said. “He needs to stay laser-focused on things that have always motivated him.”

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Burnham’s close ally Louise Haigh, who’s expected to be given a senior role in his cabinet, assured voters this week that Burnham has a detailed plan that he’s been working on for a long time. 

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So far, Burnham has said he wants to hand considerably more power to local authorities and launch a Number 10 in the north of England, with his most thought-out policies so far surrounding devolution. But he’s wavered and then committed to maintaining the Reeves fiscal rules and rowed back on plans being considered to split the Treasury. 

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He’s also suggested he wants to extend public ownership of utilities and has said there is “some room” for movement on tax while vowing to stick to his Labour Party’s manifesto promises not to raise income, national insurance or value-added tax. He suggested to LBC last week that increased business rates on warehouses could be used to fund tax cuts for small hospitality businesses.