Burnham faces tight finances and foreign tests as he heads for No 10

Andy Burnham is set to enter Downing Street on Monday with little time to define his programme and a long list of immediate pressures. Al Jazeera reported that he will become the United Kingdom’s seventh prime minister in a decade after winning overwhelming backing as Labour leader on Friday, following Keir Starmer’s resignation last month.

Sunder Katwala, director of the British Future think tank, told Al Jazeera that Burnham’s rise had moved faster than expected, only weeks after he won a by-election. Katwala said the former Greater Manchester mayor had not yet had enough time to settle on all his answers for government.

Little fiscal room

Economists and analysts cited by Al Jazeera said Burnham will take office with the economy barely expanding over the past two decades and Labour trailing Reform UK in opinion polls for much of the past 18 months. Anand Menon, director of UK in a Changing Europe, told Al Jazeera that Burnham has limited space to spend.

Menon said any new commitments are more likely to require tax rises than extra borrowing, though targeted spending tied to a defined purpose could be easier for markets to accept. Al Jazeera cited UK Parliament data showing debt interest cost about 110 billion pounds, or $148bn, in 2025-26, around 8 percent of public spending.

Figures from the Office for National Statistics cited by Al Jazeera showed borrowing has exceeded plans this year. The report also noted that taxes are forecast to reach their highest share of the economy since World War II by the end of the decade.

Gareth Dale of Brunel University told Al Jazeera that Burnham’s record in Manchester, including capped bus fares, shows some reforms do not require large new spending. Menon cautioned that policies used in Greater Manchester may be harder to apply nationwide, and said voters will judge Burnham by whether living standards and public services improve.

China dispute on day one

Burnham also inherits a dispute over British Steel. Al Jazeera reported that the government fully nationalised the Scunthorpe works after taking control of the loss-making plant a year earlier when its Chinese owner, Jingye Group, planned to close it.

According to Al Jazeera, Jingye said it would seek full compensation through legal channels. China’s Ministry of Commerce accused London of damaging confidence among Chinese investors, leaving Burnham with a strained relationship with Beijing as he takes office.

Foreign policy and party pressure

Menon told Al Jazeera that events beyond Britain, including the war in Ukraine, Brexit and the COVID-19 pandemic, show how exposed the UK is to outside shocks. He said ties with US President Donald Trump will matter, while Britain’s reliance on the United States for defence and technology limits any sharp break in the relationship.

Menon also expected Burnham to place less emphasis on European Union relations than Starmer did. On Gaza, Al Jazeera reported that Burnham has apologised for the previous government’s position, though Menon said any policy shift would depend heavily on events.

Dale told Al Jazeera that Burnham is likely to give defence spending priority over welfare and ease parts of the net zero agenda, including by allowing new North Sea oil and gas drilling. Dale also pointed to Burnham’s vote for tighter asylum measures, warning that such policies could benefit the far right and push some Labour voters toward the Greens.

Katwala told Al Jazeera that Burnham cannot avoid debates over identity, immigration and race, even if he wants to focus on jobs and devolution. Menon said Reform UK remains a threat, though recent polling and by-election results suggest many voters are prepared to back candidates who can stop Reform from winning.

This story draws on original reporting from Al Jazeera.