Britain’s most likely next prime minister, Andy Burnham, is under pressure from two of the country’s largest unions – Unite and the GMB – who have combined forces to try to prevent Ed Miliband becoming chancellor. The intervention comes as Burnham inherits an economy scarred by stagnant living standards, soaring food prices and a borrowing squeeze that leaves little room for his promised revival.
The economic challenges facing the next occupant of Downing Street are severe. The UK has had six prime ministers in a decade, and political instability has been driven largely by the economy – a lack of job opportunities, tumbling living standards and overstretched public services. Burnham has pledged to revive growth while sticking to the current government’s fiscal rules: only borrowing to invest, never for day‑to‑day spending, and reducing debt as a share of the economy within a few years.
“Unions Unite and GMB combine to stop Ed Miliband becoming chancellor as Andy Burnham faces economic challenges.”
But those rules have already been stretched. Before the US‑Israel war with Iran began, Chancellor Rachel Reeves believed she could meet her financial targets with £24bn to spare. Much of that cushion has since been eroded by the conflict. At the same time, interest repayments on the national debt now consume one in every £10 the government spends, making bond markets skittish. Burnham’s ambitions – boosting investment and skills, and taking more state control of utilities to lower bills – could easily exceed the available wiggle room.
Underpowered growth lies at the heart of the malaise. Between 1990 and 2007 the average person was better off by roughly 2.5% per year; since then the rate has halved, leaving households thousands of pounds worse off than they might otherwise have been. A lack of public and private investment during austerity and after Brexit hurt productivity, a blow compounded by Covid and higher energy prices. Food prices have jumped 40% in just a few years.
To fund his priorities, Burnham could tweak the borrowing rules, perhaps convincing bond markets that more investment would pay off through higher growth. Alternatively, he could raise taxes or cut spending elsewhere. But the union campaign against Miliband signals that even before he takes office, Burnham’s choices are being hemmed in by powerful interest groups. Whether he can square the competing demands of fiscal discipline, economic revival and union loyalty remains the defining question of his likely premiership.