The House | Hazards Ahead: How Labour Unity Under Andy Burnham May Be Tested In The Months Ahead

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Things, as they might say, can only get worse. Labour gathers in Liverpool with tails up, ahead in the polls having overtaken Reform UK. But it is in the nature of bounces that what goes up must come down, and Andy Burnham well knows that the momentum will fade.

Despite repeated public denials he is planning an early election, the Prime Minister is understood to have discussed the option with James Purnell, his chief of staff. No firm conclusion was reached, say sources.

On one level, that is unsurprising – indeed it would be odd if he hadn’t at least reviewed the possibility with his closest political aide – but it adds to the sense there is an ongoing calculation.

Although the decision will be Burnham’s alone, Labour MPs will do much to condition his thinking in the months ahead.

If he believes he can carry the party through difficult decisions – on welfare and immigration in particular – he may be more likely to wait until he can more confidently campaign on Labour’s record in government. On the other hand, if it appears he has become their captive, he may be more inclined to seek a mandate of his own.

Watching on are the dispossessed and disgruntled, ejected from government for their loyalty to Sir Keir Starmer. The revelation by Louise Haigh that Burnham’s return to Westminster had been in the works for a year has only deepened their resentment.

At the centre of this emerging group is Darren Jones, the former chief secretary to the prime minister, whose exclusion from Burnham’s Cabinet has angered MPs in the group who saw it as a serious miscalculation.

“Even now, they still don’t realise how much power Darren wields in the PLP,” warns an MP in the group. “When the wheels start falling off, they might need him.”

Jones showed his teeth when he challenged No10 claims about how much would be saved through shelving the digital ID scheme, for which he’d had ministerial responsibilities.

At the moment Jones sees himself as something of a Jeremy Hunt-like figure in the Labour Party, who can make significant interventions without undermining the government.

But he is not the only former minister to know where the bodies are buried. Some, like Olivia Bailey and Catherine Atkinson, have been elected to chair select committees which will look at policy areas they tackled in government.

MPs on ‘rebel watch’ insist they want Burnham’s government to succeed, but they have no problem being “critical friends” when it comes to some of the difficult choices ahead, especially those affecting the economy.

“The group has so much institutional knowledge of government – they have a lot to offer,” says an MP organising for the group.

They have begun meeting regularly, including for drinks at the Clarence pub on Whitehall.

Those involved describe it primarily as a support network for MPs adjusting to life outside government, but it has also become a place to connect with donors and develop longer-term policy ideas aimed at securing a second Labour term.

Burnham’s first real tests will come not in Liverpool but in the months ahead, when he will have to make tough decisions that will upset different wings of his party.

MPs are eagerly awaiting the government’s 10-Year Plan in November to provide more clues about the government’s direction of travel.

Welfare, defence, the Troubles Bill, oil and gas and plans for devolution are all issues on which the new government could face opposition from its own benches.

The economy

Burnham inherited an economy with little room for manoeuvre and will deliver his first Budget on 28 October against a backdrop of rising inflation, high borrowing costs and sharply reduced fiscal headroom. The government is facing pressure to fund defence, ease the cost of living and maintain its fiscal rules at the same time.

The government wants the Budget to be as quiet as possible. The Spending Review next year is likely to be the more significant test, particularly on welfare and defence.

Attacks on Rachel Reeves have not gone unnoticed by Labour MPs, with some saying it is “totally unfair” and warning it “will not wash”.

The group of disgruntled Labour MPs is watching closely to see whether Chancellor John Healey sticks to the fiscal rules and how he balances competing demands from defence, welfare and public services.

In a sign that the government is taking the group seriously, The House understands that Healey has asked to speak to Jones ahead of the Budget.

Meanwhile, talk of an early election is rife among Labour MPs, with some reporting contact from regional organisers that they believe could be preparation for a snap poll.

Welfare

Addressing Britain’s £333bn ballooning welfare bill will be one of Burnham’s most politically dangerous tasks. He has said he wants to reduce spending but has yet to set out in any detail how he intends to do it.

Two reports will soon land on his desk: one by former minister Alan Milburn examining youth unemployment and another by Stephen Timms on disability benefits. Milburn has already argued that the welfare system is trapping young people in unemployment and called for a tougher “working state”.

The PLP is divided over how far Burnham should go. Starmer’s attempt to cut £5bn from welfare spend last year ended in a revolt that exposed the depth of opposition on the Labour benches and started the downfall of his premiership.

Burnham faces the same fundamental dilemma: how to reduce the bill without provoking another rebellion from the left.

Some MPs want to see a credible plan to get welfare spending down, while MPs on the Labour left, including Kim Johnson, Rachael Maskell and John McDonnell, will not tolerate what they regard as “punitive” cuts.

Many of those who were involved in last year’s welfare rebellion are now in government, including the new Chief Whip Anneliese Midgley, creating the prospect of a fight within the government itself if Burnham struggles to win support.

“It will be the moderates that will end up saving Burnham when a vote comes to cut welfare,” predicts an MP on the party’s right flank.

Defence

Defence spending could provide Burnham with an equally awkward coalition of rebels. The Prime Minister has committed to spending 3.5 per cent of GDP on defence by 2035 but has so far refused to set out a timetable for reaching three per cent.

With little spare cash, reaching three per cent by 2030 would require difficult decisions elsewhere. The government has indicated that the route to the 3.5 per cent target will be set out at next year’s Spending Review.

The decision to appoint former defence secretary John Healey as Chancellor is a sign of the importance Burnham attaches to the issue.

MPs on Labour’s right want to see the government make defence a priority, particularly after Burnham declared that national security “cannot come at the expense of social security”.

The line was pre-prepared, The House understands, and while the sentiment spoke to some Labour backbenchers, others were less impressed.

“He was dreadful today. Everything I feared,” one Labour MP said following that PMQs performance on 9 September.

Healey’s decision to resign from Starmer’s government over defence spending has also given him little room for manoeuvre. Many MPs will expect him to demonstrate that his new role as Chancellor has not diluted his commitment to increasing military spending.

Tan Dhesi, chair of the Defence Select Committee, has already warned the Prime Minister that “vibes alone just isn’t going to be enough”.

Troubles Bill

New Northern Ireland Secretary Chris Bryant faces the difficult task of passing the Northern Ireland Troubles Bill, intended to replace contentious elements of the Legacy Act.

The legislation is contentious as it could expose former British military personnel who served in the Troubles to continuous unfair legal action. The government has been attempting to address those concerns while also preserving routes to justice for victims and their families.

The bill has become deeply controversial in the veteran community. Since his appointment,

Bryant has been on a charm offensive to convince Labour MPs with military backgrounds to give their support to the bill, some of whom could present powerful opposition if the government gets this wrong.

Several MPs invited for talks say the government is moving in the right direction, but key MPs remain uncertain about whether they can support the bill until they see the final amendments. 

Former armed forces minister Al Carns cited the legislation as one of the reasons for his resignation in June, saying it risked failing the veterans it was intended to protect.

Immigration

Home Secretary Shabana Mahmood is facing a growing rebellion from Labour MPs on the soft left over plans to retrospectively extend the qualifying time for Indefinite Leave to Remain (ILR) from five to 10 years or more.

The size of the growing rebellion from within the PLP means Mahmood will likely end up watering down her proposals. Some MPs are calling for skilled worker visa holders to be exempt from extended settlement, allowing them to qualify in five years instead of 10.

Darren Jones sees himself as something of a Jeremy Hunt-like figure in the Labour Party

A motion calling for this move tabled by Neil Duncan-Jordan, the left-wing Labour MP for Poole, has attracted 81 signatures so far, including 42 other Labour MPs.

Duncan-Jordan argues that the proposals could make it harder to recruit workers into sectors such as social care, where there are already around 110,000 vacancies.

“The Prime Minister’s plan to reset the social care system has no chance of succeeding if we keep on with the current plans of ILR. We already have 110,000 vacancies in the sector and the threat of making people wait another five or 10 years until they reach settled status is simply unfair,” he says.

“You can’t reset social care without the workforce and to change the rules for those who are already here is cruel. The Prime Minister needs to rethink or he could be facing his first rebellion.”

Justice

The Courts Bill will be another test of Burnham’s ability to absorb pressure from his own benches.

Under proposals from the Starmer government, jury trials in England and Wales were set to be scrapped and replaced with a single judge for crimes carrying a likely sentence of up to three years. The move was justified as a bid to tackle the courts backlog, which has reached a record level of 80,000 cases.

The plans were originally put forward by former justice secretary David Lammy but faced a significant backlash from Labour MPs. Karl Turner, the MP for Hull East, was at the forefront of efforts to defeat the proposals, calling them “undemocratic” as well as ineffective in reducing the backlog.

Andy Burnham has since described jury trials as a “linchpin of a fair society”, signalling he will scrap the reform – the rest of the Courts Bill, however, is expected to remain very similar, which could be a source of frustration for some.

The extent to which Burnham reverses the Lammy-era proposals will be made clear when the bill returns on 13 October.

Devolution

English devolution is central to Burnham’s premiership. The PM has pledged to take power out of Westminster and give it to communities across England, promising “good growth in every postcode”.

There is broad support for moving power out of Whitehall. The problem for Burnham is that a growing number of Labour MPs fear their constituencies, particularly in London and the South, are being asked to surrender power and money to regional mayors.

Labour MPs representing constituencies in the South have told The House that Burnham’s ‘Manchesterism’ agenda risks being seen as overlooking other parts of the country also facing serious economic and social challenges.

London Labour MPs in particular are worried that deprived parts of the capital will be ignored. In his first intervention since leaving government, former housing secretary Steve Reed publicly warned Burnham that he “can’t make the rest of the country richer by making London poorer”.

There has also been backlash from MPs in regions that do not have elected mayors and those in rural constituencies who fear they will be overlooked.

Perran Moon, Labour MP for Camborne and Redruth, tells The House: “There’s a misunderstanding about Cornwall. We will never join a combined mayoral authority because of our national minority status. So we are at risk of being excluded from the powers and funding we need to unleash Cornwall’s economic potential.”

Burnham has attempted to head off that criticism, promising to work with Cornwall council and its six MPs on a devolution deal “with or without an elected mayor” and extending the offer to areas across England without devolved power.

The government’s decision to row back on local government reorganisation has been welcomed by many MPs who criticised the one-size-fits-all approach. But it now leaves unanswered questions over who gets power, who loses it, who gets the money and who is accountable.

Oil and gas

There is growing pressure on Burnham to approve North Sea oil and gas projects, notably Rosebank and Jackdaw. He has previously said he is “open-minded” about North Sea drilling and recognises the need to balance energy security, jobs and the transition to net-zero.

It is widely expected that Burnham will green-light Jackdaw, but the announcement has been delayed. It is thought that a decision will now only come after the Holborn and St Pancras by-election next month, amid fears it could lose votes to the Greens.

The issue has split Labour. Labour MP Henry Tufnell broke ranks back in March to publicly call for North Sea drilling, arguing it would boost economic growth, create jobs and prevent further deindustrialisation. Unions are also watching the decision closely, with Unite and the GMB in favour of drilling.

But some on the soft left of the party, many of whom are now in government, remain hostile to new oil and gas licences. Foreign Secretary Ed Miliband clashed with the Treasury over the decision when he was energy secretary.

In August, Labour MP Clive Lewis wrote a letter to the new Energy Secretary, Miatta Fahnbulleh, urging against new oil and gas licenses. He wrote on X: “Framing this as a choice between protecting the climate and protecting jobs is misleading. The real risk lies in clinging to volatile fossil fuels, which leave us vulnerable to energy price shocks.”

This new government will not be able to satisfy every wing of the party. For a Prime Minister who has promised to end the factionalism of the Starmer years, Burnham’s first real test may be learning to accept he can’t please everyone.