In the coming months, the UK Prime Minister will face a series of knotty issues, ranging from reshaping UK-EU relations and immigration policy to welfare reform and energy policy. The low-key Budget unveiled on Wednesday is likely only the beginning of a string of major challenges during Andy Burnham's premiership.
From North Sea oil drilling to immigration policy, from welfare reform to the future of UK-EU relations, a series of thorny policy questions will test whether the Prime Minister can shed his reputation for trying to please everyone and make hard decisions for the country.
The much-anticipated November 20 summit on UK-EU relations will give Burnham an opportunity to push Britain toward closer ties with the European Union in three specific areas. The two sides have entered the final stage of crucial negotiations, aiming for a three-part agreement: scrapping border checks on food and drink exports, reconnecting the UK with the EU carbon market, and allowing young people aged 18 to 30 from both sides to live, work, and study in each other's countries for up to three years. However, London and Brussels have yet to agree on a cap for the number of participants in the scheme. The EU is demanding at least 100,000 places, allocated according to the population size of the 27 member states.
Last weekend, Burnham called for an honest discussion about whether the UK should restore freedom of movement. The remark won praise from Labour MPs in big-city constituencies but sparked a backlash from MPs in pro-Brexit Red Wall seats. The government subsequently played it down, saying Burnham was not proposing a return to free movement and had not backed any specific option. It added that the Prime Minister would set out policy options around the November 20 summit.
A Ten-Year Plan
Burnham is expected to publish an overarching strategy document in December setting out his long-term and broad policy goals. The document is being called Labour's ten-year plan. The Prime Minister will then sign off on a series of specific policy papers setting out priorities in different areas such as European relations, health, defense, and infrastructure, with related policy rollouts continuing into 2027.
Advancing devolution is one important task. Mayors across England are waiting for the government to clarify how much control they will gain over business rates and income tax. By focusing on policy priorities for the next decade, Burnham hopes to put off some of the thornier issues until after the next general election, but the approach has annoyed some colleagues. Scrapping the long-standing pensions triple lock and plans to replace the current first-past-the-post voting system with proportional representation have both been shelved until the next parliamentary term.
In many areas, however, Burnham cannot delay decisions beyond the election. The next UK general election must be held by summer 2029 at the latest.
Spending Review
For Chancellor John Healey, next year's government spending review will pose a bigger challenge than this Budget. At that point, he will need to set departmental budget allocations for the UK from fiscal 2028-2029 to fiscal 2030-2031. The overall spending totals currently planned for those later years imply a significant slowdown in the growth of overall government spending. The Institute for Fiscal Studies (IFS) notes that if Healey wants to avoid real-terms cuts in some public services while maintaining health budget growth and meeting defense spending targets, he will need to raise 拢35 billion by fiscal 2030-2031 through tax increases or welfare cuts.
Defense and Social Welfare
Defense is arguably the biggest test facing Healey. He previously resigned as defense secretary in Sir Keir Starmer's government because he believed military spending was insufficient. Now, as the chancellor in charge of the nation's finances, Healey is under growing pressure to explain how Britain will raise defense spending to 3% of gross domestic product (GDP) by 2030. Currently, government ministers have only committed to another target: raising defense spending to 3.5% of GDP by 2035.
Burnham has pledged that national security cannot come at the expense of social security. But he also needs to explain how the government will control rapidly growing social welfare spending in the coming years. Next month, former cabinet minister Alan Milburn will publish a set of recommendations aimed at helping nearly 1 million young people in the UK who are neither in education, employment, nor training. One core measure is to establish an independent youth welfare system that reduces cash benefits while providing more employment support. How these plans are received will be an important test for Burnham. For months, the government has been trying to win support from Labour MPs for the reforms. Last year, Labour MPs rebelled over welfare reform, a key moment that dealt a fatal blow to Starmer's authority.
Energy and Climate
Burnham says he wants a pragmatic energy policy while sticking to Britain's legally binding strict climate targets. Energy Secretary Miatta Fahnbulleh last week approved the development of the new Jackdaw gas field off the coast of Scotland, but she still needs to make a harder decision on the much larger Rosebank oil field near Shetland. This either-or choice requires balancing climate goals against jobs and tax revenue, and whatever decision is made is bound to anger either climate-focused Labour voters and environmental activists, or the fossil fuel industry.
Within the UK central government, Burnham must also make a final ruling on how far to relax the zero-emission vehicle (ZEV) mandate. The policy requires automakers to gradually increase the share of electric vehicles in new car sales in the coming years. The business department wants the rules relaxed as much as possible, while the energy department prefers to keep existing requirements.
Public Utilities
Burnham has frequently spoken of wanting stronger public control over utilities and ending 40 years of neoliberalism, fueling widespread speculation about policy change. However, specific details of the related policies remain limited. At Labour's annual conference in Liverpool in September, Burnham said he would scrap a restriction in place since 1989 to allow the government to hold shares in private water and sewage companies. His first real test will be Thames Water. Burnham has said he wants the heavily indebted utility to be brought under public control. But he has not yet decided whether to temporarily nationalize it through a special administration regime.
Immigration Policy
When Burnham became Prime Minister in July this year, he promised to end factional strife within Labour, but he is now facing fierce divisions among government ministers over a series of controversial immigration policies. Home Secretary Shabana Mahmood has proposed a plan requiring care workers and other workers who do not need university degrees to wait 15 years instead of 5 to obtain permanent residence in the UK. These workers had originally come to Britain expecting to qualify for permanent residence after five years of residence. The proposals are intended to fend off political pressure from the anti-immigration Reform UK party led by Nigel Farage. However, the policies are unpopular with many Labour members, trade union leaders, MPs, and government ministers, including Housing Secretary Angela Rayner.
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