In his first speech as Labour leader Andy Burnham has stated “I am ready”. We recently asked what an Burham premiership may mean for British manufacturers and it was telling that he gave particular mention to the UK’s industrial heartland during today’s address, from the mills of the Pennines to the docks of the Clyde and the steel works of Sheffield and Port Talbot.
The general feeling is that Burnham first speech as Labour leader was promise heavy but detail light, with more meat on the bones expected when he moves into Number 10 next week. What was clear is that the speech was bold, as he talked about the biggest change moment in 40 years of British politics.
Crucially, Andy Burnham will inherit three urgent energy tests as UK gas prices have surged 30%, as conflict has once again escalated in the Middle East. Near-term gas is at 135.99p/therm and as the ceasefire that drove the Q2 price decline has collapsed, a second global energy chokepoint is now being threatened. And the UK has already demonstrated that when domestic generation falls short, it pays whatever it takes to keep the lights on.
Andy Burnham has indicated his support for bringing down energy bills and his team is understood to be exploring the removal of green levies from electricity bills, potentially funded through capital gains tax reform. He is also understood to be sympathetic to calls from industry and backbench Labour MPs to do more to support domestic production, having “something of an open mind” to North Sea licencing.
And, in the third of the three energy tests for Burnham, the 25% discount on energy costs for energy-intensive manufacturers is currently scheduled to take effect in April 2027. For sectors such as steel, ceramics, glass and chemicals, energy can represent 20-30% of total operating costs. With near-term gas up 30% in July alone, that exposure is not a future risk. It is a current one and Burnham’s first days in office will signal whether bringing the April 2027 date forward is a priority.
Burnham’s appointment as Labour leader marks a defining moment for UK businesses. and companies are watching closely to understand what a new era of tax and economic policy could mean for growth and investment.
Burnham’s elevation to Prime Minister will happen on Monday, when Keir Starmer is due to go and see the King and resign. Burnham will then follow him to Buckingham Palace, where the King will officially ask him to form a government. Burnham will then be prime minister.
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