Andy Burnham will take office as UK prime minister with a packed agenda, from a £4.7bn defence funding shortfall to navigating relations with Donald Trump. The incoming Labour leader has pledged to address the cost-of-living crisis while tackling unresolved challenges from his predecessor’s tenure.
Defence and economic pressures
One of Burnham’s first tasks will be addressing a £4.7bn gap in Britain’s defence investment plan. Former Prime Minister Sir Keir Starmer’s £15bn proposal only secured £10.3bn in funding, leaving the remainder to be confirmed in the 2026 Budget. Burnham, who has prioritised defence, must find savings in his autumn Budget to cover the shortfall.
On taxation, Burnham has signalled potential adjustments within Labour’s manifesto framework, ruling out increases to income tax, VAT, or national insurance but hinting at changes to business rates. Calls for a wealth tax from left-wing MPs and a proposed 45% capital gains tax rate add pressure to his fiscal strategy.
Foreign policy and US relations
Burnham’s first major international test will come in late September at the United Nations General Assembly, where he is expected to meet Donald Trump for the first time. The US president has already labelled Burnham “extremely liberal” and questioned his stance on North Sea oil exploration. The meeting will set the tone for UK-US relations under his leadership.
Domestic reforms and housing
Welfare reform remains a contentious issue, with Burnham inheriting the Timms and Milburn reviews. Any overhaul could face resistance from Labour backbenchers, who previously blocked £5bn in cuts under Starmer. Burnham may opt for reform over cuts to avoid dissent.
On housing, Burnham has vowed to launch the “biggest council house building programme since the post-war period,” aiming for 1.5 million new homes in England within five years. His plan includes using vacant public land and prioritising higher-density development in existing towns to protect green spaces.
Devolution and EU relations
Burnham, a long-time advocate for devolution, has proposed a “No 10 in the North” outpost in Manchester to decentralise power. He also seeks closer EU cooperation on defence, migration, and economic security, though he has ruled out rejoining the bloc.
On migration, Burnham has backed Shabana Mahmood’s reforms, including tighter rules on asylum appeals under Article 8 of the European Convention on Human Rights. The changes aim to reduce small boat crossings by directing migrants to “safe and legal routes.”
