New Prime Minister Andy Burnham is set to introduce a series of significant policy initiatives in the coming days, aiming to make a strong initial impact. These plans reportedly include substantially increasing foreign aid and potentially taking control of the debt-ridden utility company Thames Water.
Burnham's agenda also signals a potential shift in the UK's approach to North Sea oil and gas. While his party's manifesto included a ban on new exploration licenses, recent union concerns over Net Zero policies may lead to a softening of the opposition. The windfall tax on oil and gas firms is expected to be eased, and a less stringent approach to applications for exploiting the Rosebank and Jackdaw fields is anticipated. This stance has drawn praise from U.S. President Donald Trump, who suggested on social media that Burnham would be "opening up the invaluable North Sea oil," predicting it would benefit the people of Aberdeen and potentially transform Britain's economic standing.
However, Labour's deputy leader Lucy Powell has indicated that reforms regarding North Sea oil and gas might be modest, maintaining the party's manifesto commitment to ban new oil exploration licenses. This suggests a potential divergence from Trump's expectations.
Regarding foreign aid, Burnham's team has not disputed reports that he plans to re-establish the commitment to spending 0.7 percent of GDP on foreign aid. This target was previously reduced to 0.5 percent by the Conservative government and was slated to fall further to 0.3 percent to reallocate funds for defense. Reinstating the 0.7 percent target would represent an annual increase of approximately £11 billion.
The potential takeover of Thames Water could involve a significant cost to the taxpayer, estimated to be up to £10 billion. The water company has faced financial instability for months, and its creditors' takeover plan was recently rejected by ministers. The company has stated it requires at least £2 billion from the taxpayer to remain operational through the end of next year. Industry sources suggest the taxpayer could be responsible for funding the firm's capital investment program, which is projected to cost £10 billion by the end of the decade.
Burnham has also expressed a desire for greater state control over energy and water sectors. Other stated priorities include addressing the social care crisis, with proposals for a 10 percent levy on estates, a plan critics have labeled a "death tax" and which could cost an estimated £18 billion annually.
Opposition leader Kemi Badenoch has urged Burnham to clarify how these new spending commitments will be funded, emphasizing the need for spending cuts and attention to the national debt, given current high tax levels and borrowing.
In addition to these policy shifts, Burnham intends to scrap or scale back certain controversial decisions made under the previous Labour leadership. Sir Keir Starmer's proposed digital ID scheme is reportedly being abandoned, with Powell stating the estimated £1.8 billion cost could be better allocated elsewhere.