Britain’s economic reality threatens Burnham’s honeymoon with voters

Andy Burnham is about to bid farewell to his political honeymoon and confront the harsh realities of the economy. Since taking office in mid-July, the British prime minister has succeeded in winning over voters and boosting Labour’s standing in the polls through a combination of low-cost but popular measures, such as capping public transport fares and cutting VAT on household energy bills, while carefully managing his media and social media presence. The image of a prime minister constantly on the road, listening to people’s concerns across the country, has proved effective.

As a new parliamentary session approaches, however, Burnham will have to make good on his promises. Britain’s economy, like much of Europe’s, remains stuck in a period of sluggish growth, having expanded by just 1.3% in 2025 and expected to post similarly modest figures this year. The prime minister is bound by an election program, inherited from his predecessor Keir Starmer’s victorious 2024 campaign, that ruled out increases in income tax, VAT or employees’ national insurance contributions.

“The legacy [that Burnham has inherited] presents many challenges. The U.K. remains the G-7 country with the highest debt servicing costs; the energy shock has consumed almost all of the expected fiscal headroom; spending plans have been eroded by inflation; and commitments to increase defence spending and help households cope with the high cost of living are also weighing on the public finances,” warns David Aikman, director of the National Institute of Economic and Social Research.

Council housing

Much of Burnham’s early success with voters has stemmed from his willingness to act boldly. In contrast to the cautious, incremental change offered by Starmer, the new prime minister has embraced sweeping rhetoric, promising a model of “good growth in every postcode” that will bring an end to “40 years of neoliberalism,” return powers to local authorities, redistribute power across the country and prioritize social investment.

When he rolled out his strategy to replace Starmer — beginning with the battle for the Makerfield seat that allowed him to return to the House of Commons and vie for Labour’s leadership — Burnham offered an early glimpse of that ambition. “Let’s not be coy any more. I’m saying that the funding should be dedicated to council housing, because control matters,” he said while unveiling a plan to invest more than £39 billion ($53 billion) in housing.

What did he mean by that? That all the planned apartments and houses would be owned by local councils, as was common in the 1960s. Local authorities would manage the homes and set rents. The proposal was as ambitious as it was expensive.

On Tuesday, however, the economic reality began to catch up with Burnham. Many media outlets accused Burnham of rowing back on his promises, noting that the first measures announced closely resembled those once put forward by Starmer.

An initial 70,000 new homes will be built over the coming decades as the first phase of a broader plan that aims to increase that figure to 300,000 and invest more than £39 billion in the effort. But only 60% of the new homes will be council houses, which typically rent for less than half the market rate and are subject to much stricter eligibility requirements. The remainder will be delivered through models such as partnerships with developers and housing companies, or shared-ownership schemes.

“We’ve taken a pragmatic approach. We want to get money out the door. There are housing associations and other providers who bid for grant funding who are ready to deliver homes,” said Housing Minister Matthew Pennycook, rejecting suggestions that Burnham had retreated from his original pledges.

In return, the prime minister has strengthened the powers of mayors and local councils to drive these construction projects forward. He has provided them not only with funding, but also with the authority to bypass some of the bureaucratic and legal hurdles that can delay housing developments for years.

The specter of taxes

For many of Starmer’s critics, his first budget marked the beginning of his political decline. The decision to raise employers’ national insurance contributions ultimately helped trigger an economic slowdown and a wave of discontent from which neither the prime minister nor his chancellor, Rachel Reeves, ever fully recovered.

Now Reeves’s successor, John Healey, is approaching the autumn budget under pressure to find additional revenue while remaining constrained by election pledges that Burnham wants to honor. Promises to increase defence spending, the impact of the war with Iran and the costly measures announced by the new prime minister over the summer have all added to the strain on the public finances. Burnham himself has acknowledged that some form of tax hike is on the table.

“I will try to help [citizens] in whatever way I can and we have already done some things that will help them going forward. I will do what I can, but I won’t be unrealistic and people need to understand that,” the British prime minister said this week, declining to rule out higher taxes.

His allies within Labour have suggested raising taxes on wealth or on capital gains, while Healey has already warned fellow ministers that further spending cuts are on the way.

For now, however, Burnham is still enjoying his honeymoon with voters. Nearly half of Britons (47%) hold a favorable view of the prime minister, an achievement that would have seemed almost impossible in recent years, and the gap with Reform UK, Nigel Farage’s party, which has led the polls continuously since 2025, has narrowed to a tie.

The autumn’s economic decisions will show whether Burnham can maintain his run of popularity or whether, like his predecessors, he is heading toward a new winter of discontent.

Sign up for our weekly newsletter to get more English-language news coverage from EL PAÍS USA Edition