Andy Burnham’s in-tray: The challenges facing the new UK PM

Andy Burnham will become Britain’s next prime minister on Monday, with huge challenges and opportunities.Andy Burnham speaks after being confirmed as the Labour Party's new leader and the United Kingdom's next prime minister, during 'Labour's Special Conference' in central London, Friday, July 17, 2026 [Henry Nicholls/Pool Photo via AP]Published On 19 Jul 2026Andy Burnham, who becomes the United Kingdom’s next prime minister on Monday, faces a roster of challenges as the country’s seventh leader in a decade.Burnham was overwhelmingly backed as Labour leader on Friday after current Prime Minister Keir Starmer resigned last month.It has been a whirlwind month for the former Greater Manchester mayor, with his vision for the country and his cabinet still unclear.“This has gone faster than he thought. It’s only been four weeks since he won the by-election. I don’t think he knows all of the answers yet; he hasn’t had the thinking time,” Sunder Katwala, director of the British Future think tank, told Al Jazeera.Experts say the incoming prime minister will inherit an economy that has barely grown in two decades and a challenging geopolitical environment. He also has to deal with a marked decrease in Labour’s popularity, with the party trailing the right-wing Reform UK in the polls for 18 months.“Burnham has relatively little fiscal room for manoeuvre,” said Anand Menon, director of UK in a Changing Europe.New spending will have to be raised via taxation rather than borrowing, though there may be scope for “hypothecated spending” tied to a clear purpose, such as defence bonds, Menon said.“If you make it absolutely clear what these things are for, the markets will be more permissive. But the fiscal situation is tight,” he noted.Andy Burnham, mayor of Greater Manchester, in the stands during a football match [David Klein/Reuters]Manchester modelThe government spent around 110 billion British pounds ($148bn) on debt interest in 2025-26 alone, about eight percent of all public spending. Borrowing has run higher than planned this year, and taxes are forecast to reach their highest share of the economy since World War II by the end of the decade.Gareth Dale, associate head of Social and Political Sciences at Brunel University, points to Burnham’s record in Manchester, including the city’s fare-capped bus network, as proof that “meaningful reforms needn’t always come with a big price tag”.Whether that scales up nationally will hinge on his willingness to confront the bond markets.“What Burnham did in Manchester might be harder to do at a national level,” warned Menon. “He’s got to get the balance right between showing he’s aware of the fact that there’s a country outside of London and that isn’t just Manchester.”Menon doubts fiscal manoeuvring alone will shift the public mood. He says that living standards have stagnated and services have eroded since 2008 so “people don’t just want to listen to what you’re saying, they want to see changes for the better in their lives”.Burnham’s in-tray is complicated further by a diplomatic dispute that flared days before he is slated to take office. The government fully nationalised British Steel’s Scunthorpe works, a year after taking control of the loss-making plant when Chinese owner Jingye Group said it planned to close it.Jingye has vowed to pursue “full compensation through legal means,” while China’s Ministry of Commerce accused London of undermining Chinese investor confidence.It leaves Burnham managing a strained relationship with China from day one, after Starmer went to great efforts to reset relations between the two countries.The United Kingdom’s government announced this morning that it was taking British Steel into public ownership in a bid to ‘protect UK steelmaking’ [Christopher Furlong/Getty Images]Beyond bordersMenon argues that much of what shapes a prime minister’s fortunes lies outside their control and outside Britain’s borders.“Sometimes the drivers of political success and failure are utterly out of your hands,” he said. He cited the war in Ukraine, Brexit and the COVID-19 pandemic as reminders that a “medium-sized open economy” is exposed to forces it cannot direct.That extends to Washington, where personal chemistry with US President Donald Trump will matter “at least for a while, until he goes off people”, Menon said.Dependence on the US for defence and technology rules out any dramatic reconfiguring of British-US ties.Menon expects European Union relations to get less attention than under Starmer, predicting Burnham to be “more avowedly domestic” focused.This could still be tested by Gaza, where Burnham has apologised for the previous government’s stance. Menon cautions that turning words into policy “depends heavily on events”.“He’s given some hints he’ll be less knee-jerkly supportive of Israel than Starmer was, but whether that carries over into power, we’ll have to wait and see,” explained Menon.He also doubts whether Burnham would risk a rupture with Washington regarding US bases in Britain, which could be used, indirectly, in US-Israel war on Iran.Andy Burnham, right, shakes hands with Neil Kinnock, former Labour Party leader in the 1980s and 1990s, as he arrives before being confirmed as the Labour Party’s new leader and the country’s next prime minister during ‘Labour’s Special Conference’ in London, England, the United Kingdom, July 17, 2026 [Henry NIicholls/Pool/EPA]Defence firstReports suggest that Burnham is likely to put defence above welfare spending, which will again rankle some in his party.“He’ll probably prioritise arms spending over welfare… while dialling down the ‘net zero’ programme,” warns Dale, with Burnham expected to allow for new North Sea oil and gas drilling.“And he voted to make the asylum system more brutal. If he does set policy in these directions, it’ll put wind in the sails of the far right, and probably accelerate the shift of voters from Labour to Green,” Dale said.Burnham has moved from Labour’s Blairite wing to its soft left, but “commands widespread support among Labour MPs” and “gets on with various factions”, he noted.But that unity masks deeper erosion: Labour’s vote fell from 12.9 million in 2017 to 9.7 million under Starmer.The centre-left party’s support base is also “narrowing towards wealthier, less diverse parts of the electorate, with the Greens now drawing disillusioned voters on the left”, said Dale.Political dividesThat erosion is bound up with a wider polarisation in the country that Katwala says no government can avoid.“I don’t think it’s enough to say we’d like to talk about jobs and devolving power and therefore we won’t talk about identity, immigration, race,” says Katwala.A woman holds a placard outside Downing Street during a ‘National March for Palestine’ calling on Britain’s next prime minister, Andy Burnham, to stand up for the Palestinian people, in London, Britain, July 18, 2026 [Jack Taylor/Reuters]He argues that fairness should be framed as universal rather than a concession to certain groups of society.“Whether it’s tackling anti-Semitism, Islamophobia or racism generally, these are issues for everybody in society. It’s not for the minority group itself to work out how to challenge the prejudice it faces,” Katwala said.“The people who are hostile to Muslims are the people who know the least Muslims and live furthest away. It’s the government’s job to get to that really tough end of attitudes and perceptions that are making people feel less safe.”Menon sees a narrow opening on the right-wing narratives popularised by the Reform UK party.Labour entered government in 2024 with 33 percent of the vote against Reform’s 14 percent, a gap that has since collapsed following the right-wing party’s links to George Cottrell, a convicted fraudster. Recent polls put Reform around 24-26 percent and Labour close behind it, a marked turnaround from polling earlier this year.By-election results also suggest a broad anti-Reform coalition and tactical voting exist, which should strengthen Labour.“Even if 30 percent of people are willing to vote Reform, almost 70 percent are willing to do whatever it takes to stop them being elected,” Menon noted.Whether that holds, he said, depends on how Burnham performs once the difficulties of government set in.“It becomes a very different game when things are going badly, and if he ends up being a lucky general, then Reform self-destructs,” Menon said.