As the UK starts life with its seventh prime minister since the Brexit vote, it’s worth unpacking what Andy Burnham’s policies and decisions might mean for financial planning – or Burnhamomics.
Under Keir Starmer’s leadership, alongside Rachel Reeves, the single biggest change is going to be inheritance tax and the inclusion of most unused pension pots in the calculation of IHT from April 2027. Of the changes that were made and are already in force, employer national insurance (NI) increases, and stronger employee rights legislation are arguably the most impactful on businesses and could in some way explain rising unemployment figures.
Andy Burnham has been vocal in his assessment that people “might need to pay a little more”, so it’s likely that the overall tax base will be broadened.
He’s also pledged to stick to Labour’s manifesto promise not to touch income tax, national insurance or VAT, which as we’ve previously discussed, doesn’t leave him lots of room for manoeuvre.
One area where Burnham has been consistent is his desire to overhaul social care. In his first speech as Labour leader he said:
Let’s have the courage to fix the big things that politics has neglected, like social care. And have the conviction to go out there together and argue for our plans.
Andy Burnham,
Prime Minister, 2026
He’s a long-term exponent of a National Care Service, which gives families a more consistent approach, rather than means-tested care and unpredictable liabilities for families placing a loved one in care. It wouldn’t come cheaply, of course, and he has also mooted a death levy as a fixed percentage of wealth, potentially reforming IHT in the same fell swoop.
The concept that regional locations need greater devolution to move themselves forward, as Burnham did as Mayor of Manchester, is a key part of Burnhamomics. His creation of Number 10 North is symbolic of this (just don’t ask people in the East or West), but without a greater focus on wealth creation, this risks becoming a wealth distribution exercise.
If it works it could level the field between North and South and lead to an uptick in prosperity, potentially pulling other northern areas into the same growth trajectory as Manchester has enjoyed, and with it rising house prices. All of which might swell the Treasury’s coffers in due course and require more financial planning, especially in estate planning.
Burnham has long been linked to a land value tax and to simplifying council tax. He is on record as saying council tax based on 1991 property valuations is highly regressive, and has been close to the Fairer Share campaign, which wants to replace council tax and stamp duty with a Proportional Property Tax and charge an annual levy of 0.48% of a property’s value, rising to 0.96% for second homes, empty homes and properties owned by foreign nationals, moving the burden away from renters and onto property owners. Clearly, this would have an adverse effect on the South East of the UK and burden asset-rich, cash-poor citizens with sizeable annual bills without the ready means to pay. Backing this policy and erasing stamp duty would be a clear play to unlock downsizing as a logical strategy for older people.
He also argued strongly against some of Margaret Thatcher’s free-market reforms and has indicated that there will be more state control over essentials, like utilities. Water is the clearest example: he has described the industry as “broken” and argued for a 10-year plan of “more public control, more public ownership”, rather than nationalising everything immediately. Nationalisation is expensive if done correctly (with fair value paid to existing shareholders), and done badly (state seizure or poor value to shareholders), can deter future investment in key areas, especially nuclear power, where the UK is heavily reliant on international investors.
The appointment of John Healey as Chancellor of the Exchequer was something of a surprise. Much of the speculation was on whether he would choose Ed Miliband or Shabana Mahmood. Healey was Defence Secretary until recently, when he quit in a row over Keir Starmer’s Defence Investment Plan. He said the government’s Defence Investment Plan “fell well short” of what was needed and accused Starmer of being “unable” and the Treasury “unwilling” to commit the resources required to defend the country at a time of rising threats. His appointment is a clear signal that Burnham is about to commit to Healey’s cause and fund defence spending to his preferred plan of 3.5% of GDP by 2035.
It’s probably not a surprise to anyone who runs a business or receives a payslip that the UK’s tax burden is at, or very close to, a post-Second World War high. Whether the government could introduce any further taxes without choking off economic growth and deterring foreign investment remains to be seen.
Healey has not yet announced a formal change to the fiscal rules, but he has been linked with creative financing options for defence, including war bonds or participation in a Global Defence Bank. That matters because these structures may be presented as targeted national-security investment, but markets are likely to treat them as additional borrowing unless they are matched by tax rises or spending cuts elsewhere.
We’ve got to get beyond this thing of being in hock to the bond markets
Andy Burnham,
September 2025
Andy Burnham’s comment in 2025 unsettled investors, although he has since reiterated his commitment to the UK’s fiscal rules. Like it or not, with around £3 trillion of government debt and annual debt interest payments of approximately £110 billion, the bond market matters.[1] Gilt yields determine the cost at which the Government can refinance maturing debt and issue new borrowing.
For now, markets appear broadly comfortable. However, with 10-year gilt yields at around 5%[2], there is limited room for policy missteps. The Government is well aware of this constraint, and the discipline imposed by the bond market is likely to act as a natural brake on any more extreme fiscal policies.
[1] Source: House of Commons Library
[2] Source: Bloomberg
The information provided does not constitute advice or recommendation. The information provided regarding tax treatment or legislation is based on our understanding of current UK legislation law, tax law and HM Revenue and Customs’ practice (July 2026), all of which may be subject to change.
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