New Prime Minister Andy Burnham is preparing a series of high-profile policy initiatives, with plans reportedly including a substantial increase in foreign aid and the nationalization of the water utility Thames Water. These announcements are anticipated in the coming days as Burnham seeks to establish his administration's priorities.
Burnham's agenda also appears to signal a shift in the UK's approach to North Sea oil and gas exploration. While Labour's manifesto had previously pledged a ban on new exploration licenses, reports suggest a softening of this stance. The windfall tax on oil and gas companies may be reduced, and the government could adopt a less resistant approach to applications for developing fields such as Rosebank and Jackdaw. This potential policy adjustment follows union concerns regarding the impact of Net Zero policies.
The prospect of doubling foreign aid to the international benchmark of 0.7 percent of GDP would represent a significant financial commitment, potentially costing an estimated £11 billion annually. This figure far exceeds the recent increase allocated to defense spending following internal party discussions. Reform UK's Treasury spokesman, Robert Jenrick, criticized this potential move, stating it "looks like Burnham is going to raise people's taxes to waste it abroad. It's more of the broken status quo."
Taking control of Thames Water, a utility company that has faced financial instability, could also incur substantial public cost. The company has indicated a need for significant taxpayer funding to remain operational. Estimates suggest that a full takeover and subsequent capital investment program could cost the taxpayer up to £10 billion by the end of the decade.
Beyond economic and infrastructure policies, Burnham's administration is also reportedly planning to abandon Sir Keir Starmer's digital ID scheme, with the estimated £1.8 billion cost deemed a distraction that could be better allocated elsewhere.
These proposed policies have drawn scrutiny from the Conservative party. Tory leader Kemi Badenoch has written to Burnham, emphasizing the necessity of outlining how his agenda will be funded. She stated, "Given taxes are already too high, and we are already borrowing far too much, you must commit to making spending cuts and to addressing our debt burden."
The potential North Sea policies have also garnered international attention, notably from U.S. President Donald Trump. Trump praised Burnham on social media, anticipating a move to "open up the invaluable North Sea oil" and suggesting it would lead to significant economic benefits for the region. However, Labour's deputy leader, Lucy Powell, has indicated that the party's commitment to its manifesto pledge of not issuing new oil exploration licenses would remain, potentially setting up a divergence from Trump's interpretation.