Andy Burnham, the Labour MP hoping to replace Keir Starmer as UK prime minister, said his plans for the UK are consistent with the Labour Party’s 2024 manifesto as he reiterated his commitment to a series of fiscal rules.
Making his first speech since his return to Westminster, Burnham said on Monday his plan for change “whilst not taking risks with the public finances, will seek to give Britain some breathing space.”
Starmer’s Labour Party promised in its manifesto before it won the election in July 2024 that it would not raise taxes on working people, including income tax, social security contributions or value-added tax.
Burnham said his plans would be “backed by the stability that comes from sound public finances … and the discipline of our current fiscal rules.”
There had been concern amongst investors last year about Burnham’s approach to the fiscal rules after he stated the UK had to get “beyond this thing of being in hock to the bond markets”.
UK government borrowing was £23.3 billion in May 2026 — £5.4 billion or 30.4% more than in May 2025, and £5.6 billion more than the £17.7 billion forecast by the UK’s Office for Budget Responsibility (OBR).
That’s according to latest figures from the UK’s Office for National Statistics (ONS), which said the UK’s public sector net debt excluding public sector banks (PSND-ex) has reached £2.984 trillion.
The UK public sector net debt was provisionally estimated at 95.1% of GDP at the end of May 2026 — this was 0.4 percentage points more than in May 2025 and remains at levels last seen in the early 1960s.
REACTION:
Alex Everett, Investment Director – Rates Management, Aberdeen Investments: “An assured and optimistic speech from Burnham, albeit light on detail. Most importantly for gilt investors, he underpinned his announcements with a renewed commitment to fiscal responsibility.
“This was supported by an ambition to reduce the UK’s welfare bill – a politically difficult topic which signal some willingness to take challenging decisions. While the speech was growth-focused, these offsets should provide the gilt market with near-term reassurance that a Burnham government would be mindful of fiscal constraints as well as political priorities.
“With such a focus on investment and improvement spending, the re-affirmation of prudence was welcome at this relatively early stage.”
Shevaun Haviland, Director General of the British Chambers of Commerce: “Firms need consistency, clarity and stability from policymakers, if business confidence is to be improved.
“Businesses will judge Andy Burnham’s plans on whether they deliver the boost to investment, productivity and trade desperately needed to unlock growth. As our recent report outlined, government must always ask whether policy passes a ‘growth delivery test’ to encourage firms to invest and grow.
“It’s crucial that the devolution agenda has local business at its heart and brings benefits to all parts of the UK.
“Our Chamber network completely understands how national ambition can be translated into placed based economic growth. We’ve long argued that more decisions affecting local economies, including transport, skills and infrastructure, should be taken closer to the communities they serve.
“Successful Chamber-led Local Skills Improvement Plans across England show the power of devolution to help address the challenges facing our economy. Creating greater parity between academic and technical qualifications is something business wholeheartedly supports.
“A pledge to improve the public procurement system is welcome, but it must quickly bring benefits to SME supply chains across the UK.
“Fiscal devolution must see money spent in the right way, to boost local growth. It must not mean further costs on business. BCC analysis shows government-imposed costs on SMEs have risen by more than 70% in just 10 years. New local business taxes and visitor levies would stifle economic growth.
“The difficult truth is, whoever leads the UK, the primary challenge remains the same -delivering growth. Business stands ready to work in partnership with any new Prime Minister to focus on that crucial task.”
Rain Newton-Smith, CBI Chief Executive: “Business will welcome Andy Burnham’s clear focus on growth and delivery. Taking the positive, dynamic and collaborative approach that has helped public and private sectors drive growth in Manchester and applying it at UK level would give industry a practical agenda it can get behind.
“Business will welcome the commitments to sound public finances, upholding fiscal rules and maintaining investor confidence. Backing innovation and scale-ups, boosting international trade and tackling youth unemployment by strengthening apprenticeships are practical steps that can help unlock growth.
“Business leaders will be encouraged by efforts to use the levers of devolution to spread prosperity across the country. While London must remain vital to UK growth and investment, helping other regions attract greater investment and make decisions that reflect local priorities is essential to taking the economy forward.
“While firms support many of the ambitions, they will need a clear delivery plan – particularly on business rates. Proposals for greater intervention in markets such as transport and utilities must avoid deterring investment. Public-private partnerships remain the most effective and affordable route to upgrading critical infrastructure, crowd-in vital private capital and deliver long-term growth.
“We can’t forget that a change of Prime Minister does not change the economic realities facing the country. Public spending alone cannot ease the cost-of-living crisis or transform the economy; business must do much of the heavy lifting. If firms are to be the engine of growth, the government must first tackle the cost of doing business, which has already reached a tipping point.”
Mirte Boot, principal research fellow and interim head at IPPR North: “Andy Burnham is right to call for bold, transformative change to our country’s economy. The writing on the wall is clear; the status quo isn’t working. People feel acutely that their places are not getting back what they’ve been putting in, and political trust is at rock bottom.
“For two decades, IPPR North has seen successive governments promise change, transport spending, and regional growth in the North. But to drive real change, we must turn the system on its head, and power must be handed down to people and places.
“Mayors must be given the powers and capital to build local infrastructure like transport and housing, and we must see a push against Whitehall orthodoxy, so local leaders are given control over revenue and borrowing.
“This cannot just be words anymore. We have to see delivery. Devolution is for the whole country: when our regions prosper, so does the UK. This is not about north versus south, it is action versus inaction.”