Andy Burnham has officially assumed the office of UK Prime Minister. What are the main challenges he faces upon taking office? Can he perform better than Rishi Sunak?

The UK’s current problems require large-scale reforms to overcome—but successive prime ministers, including Rishi Sunak, have lacked the resolve to undertake such sweeping changes. Burnham, by contrast, rose to power on a platform of reform, positioning himself as a reformer versus a mere ‘patcher-up’. Yet reform is inherently difficult and fraught with risk. 1. What is Burnham’s governing philosophy? We begin with Burnham’s governing philosophy because many of the challenges he faces stem directly from it. Burnham’s election as Prime Minister owes its strongest endorsement to his tenure as Mayor of Greater Manchester since 2016—during which he achieved notable success in economic development and governance innovation. Greater Manchester is a metropolitan county in northwest England, comprising ten metropolitan boroughs—including Manchester and Stockport—covering 1,276 km² and home to approximately 2.911 million people (2022). Economically: Between 2015 and 2023, Greater Manchester’s GDP growth rate was roughly double the UK national average. Governance model: Burnham championed decentralisation to improve governmental efficiency; public ownership of essential services (water, electricity, transport) to lower living costs and enhance accessibility; and a major expansion of social housing to alleviate Britain’s extremely high rent-to-income ratio (36.1% nationwide in 2025; 52% in London). Thanks to robust economic growth and improved quality of life, Greater Manchester attracted several global financial giants during this period—becoming the UK’s second-largest destination for foreign direct investment after London—and thereby fueling a virtuous economic cycle. Early in his campaign, Burnham pledged to scale up this ‘Manchester Model’ nationwide, specifically through: — Nationalising utilities—including water, energy, and railways—and imposing price controls; — Launching the largest council-house building programme since the post-war era to reduce rents across the country; — Driving reindustrialisation across multiple regions to revive towns devastated by deindustrialisation and narrow regional disparities; — Devolving powers over education and housing to local authorities, achieving what he calls the ‘largest rebalancing of power in British history’ to streamline administration and boost governmental efficiency. 2. Challenges facing Burnham These challenges fall into two categories. The first comprises issues confronting all UK governments, including: — High public-sector debt (net debt stands at 99.5% of GDP, compounded by fiscal shortfalls left by the previous Conservative government); — Increased trade costs following Brexit (e.g., new compliance burdens on EU imports/exports; gradual relocation of financial services from the UK to the EU; labour shortages in low-wage sectors due to the end of free movement from EU countries); — Persistent inflation (3.5% in 2025 per OECD data—the highest among G7 nations).

The UK’s incoming Prime Minister, Andy Burnham, says he will use ‘state-owned economy’ to achieve ‘common prosperity’. What is your view on this?

This is also why Burnham’s greatest adversary is not merely the bond market. His true adversary is a social structure capable of converting any newly mobilised resources back into rent. What the UK needs is not more compensation—but a fundamental reorganisation of development. The UK still possesses foundational assets for renewed development: its world-class universities and research institutions, mature financial markets, robust rule-of-law framework, aerospace and pharmaceutical industries, defence capabilities, and cultural influence. Yet these assets must be reorganised. First, social surplus must be redirected into productive investment. Land and real estate can no longer serve as the safest, most stable vehicle for wealth accumulation. The financial system must supply long-term capital to local enterprises, energy infrastructure, housing, and broader infrastructure projects. Corporations cannot continue relying on publicly funded education and infrastructure while diverting profits primarily toward dividends, share buybacks, and asset trading. Pension systems likewise require clearer boundaries. The state can—and should—protect the real purchasing power of pensions and guarantee adequate support for impoverished retirees; but individuals with substantial private pensions and assets need not receive blanket, undifferentiated protection. This is not about holding ordinary pensioners responsible for Britain’s decline. Rather, it demands that scarce fiscal resources be allocated according to genuine need—not according to which group wields the greatest capacity to punish the government for its allocation decisions. Second, the state must shift from being a compensator to becoming an organiser of production. Government cannot indefinitely limit itself to subsidising wages, rents, transport fares, or corporate losses. It must instead build energy, housing, transport, vocational education, commercialised research, and regional supply-chain systems—systems designed to reduce future compensation needs. Third, the UK must reintegrate materially into Europe. It need not immediately rejoin the EU—but it must lower trade barriers, restore scientific collaboration and talent mobility, and deepen cooperation in energy grids, defence, and high-end manufacturing. Germany, through its vocational training system, local finance networks, and industrial coordination, has sustained links between manufacturing and mid-skill employment for far longer. Germany today confronts its own challenges—energy transition, automotive industry restructuring, ageing demographics, and underinvestment—and is certainly no ready-made template for replication. Yet it does demonstrate that advanced economies need not follow Britain’s path of financialisation alone. (OECD) What the UK truly requires is the simultaneous fulfilment of three conditions: European-scale markets, strong state organisational capacity, and institutional frameworks that compel social surplus back into production. A European market alone—without domestic reform—risks leaving the UK as little more than a financial and service node within Europe. State investment alone—without restructuring vested interests—means public funds will simply be reabsorbed by existing structures. Collectivist slogans alone—devoid of market scale and execution capability—will yield only mounting debt. The painless scalpel is the cruelest of all. Burnham excels at storytelling. He frames bus management as a power struggle between the North and London; devolution as ordinary citizens reclaiming political agency; and reindustrialisation as Britain regaining control over its destiny. This is authentic political skill. Yet upon entering Downing Street, he confronts not just a nation craving a better story—but one whose structural contradictions have deepened over decades. At a time when Britain still possessed a functioning industrial base and greater fiscal space, it outsourced hard choices to the market. When the market model ceased delivering growth, welfare payments, property speculation, and debt accumulation stepped in to compensate for the consequences. As compensation persisted, it crystallised new vested interests—and new political taboos.

UK PM Burnham to Launch State-Owned GB Grid to Cut Energy Costs

15 hours ago

British Prime Minister Andy Burnham plans to establish the Great British Grid to reduce energy costs and accelerate connections. The initiative targets aligning UK energy prices with Europe within 10 years and supporting reindustrialisation.

reuters

2026-09-28

UK PM Burnham to Launch State-Owned GB Grid to Cut Energy Costs

UK PM Burnham to Launch State-Owned GB Grid to Cut Energy Costs

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