Andy Burnham is set to become Britain’s next prime minister in less than a week, bringing with him a promise to make sweeping changes to the direction of the Labour government.
The former Manchester mayor has pledged to tackle the cost of living when he takes over, telling LBC earlier this month that the government needs to “be serious about putting more money back into people’s pockets.”
His comments come as the UK continues to grapple with rising costs for essentials like food and energy. Inflation held at 3 per cent in May in welcome news for households, but the situation in the Middle East has led to fears of more price shocks to come.
Conflict in the region has resumed despite peace talks between the US and Iran progressing last month, with the spiking price of oil during the effective closure of the Strait of Hormuz hitting economies across the globe.
Mr Burnham’s comments were echoed by former Labour minister Miatta Fahnbulleh earlier this week, who is understood to be a key advisor to the incoming PM as he shapes his policy agenda.
She told the BBC on Sunday: “Everyone recognises that people are under pressure, living standards have not risen and we have to grip that.”
Here are the options that Mr Burnham may be considering upon taking office:
Energy bill support
One of the key areas where the incoming prime minister has been encouraged to provide relief is on energy bills.
Ofgem’s energy price cap recently increased by £221 a year to £1,862 – the highest level in more than two years – largely triggered by spiking oil prices in the wake of the US-Iran conflict.
The New Economics Foundation (NEF), which Ms Fahnbulleh led as chief executive from 2017 until her election in 2024, has urged the government to introduce an "essential energy guarantee" to ensure households' basic heating and power needs are met.
This progressive pricing model would provide a free or heavily discounted tier of energy for basic household needs, offset by higher tariffs for additional consumption.
Dr Alex Chapman, head of economic and environmental policy at the think tank, told The Independent: “I think there's a very strong case for some energy bill support being involved. It’s a live issue. The situation in the Middle East seems to be deteriorating by the hour, and that's obviously bad news for fossil fuel prices.”
While Mr Burnham has signalled that he intends to increase public control over services like energy, water and transport in a bid to reduce costs over the course of the decade, immediate subsidies could remain an option to lower bills this winter.
Rent controls
Following the passage of Labour’s Renters’ Rights Act, many housing campaigners have turned to rental costs as a pressing issue.
The landmark legislation brought in a slate of new protections for renters, notably including the removal of the controversial Section 21 ‘no fault’ eviction notices.
And while it also created greater powers for tenants to challenge unfair rent rises at tribunal, the government stopped short of bringing in rules to control or freeze rents.
Rental costs have continued to rise between 6 and 9 per cent every year in every region across England, recent research from the NEF found, outstripping wage growth for 11 of the past 15 years.
Mr Burnham has not publicly committed to an immediate action on rental costs. However, in 2023, he co-signed an open letter to then-housing secretary Michael Gove to “introduce an immediate freeze on rents” in the wake of the Covid pandemic.
In recent months, the incoming prime minister has promised the “biggest council housebuilding programme since the postwar period” when he comes into power, a policy which – if successful – could be instrumental in bringing down housing costs in the longer-term.
Bus fares capped
Public transport forms a cornerstone of Mr Burnham’s vision for government. The former Manchester mayor often references the success of the city’s ‘Bee Network’ in his speeches, consistently arguing that public control of transport is a key way to ensure costs remain low for households.
It has been reported that he is considering a £2 cap on bus fares across Britain, emulating the scheme put into place in Manchester.
During a recent ‘ask me anything’ session on Reddit, Mr Burnham was asked if he would like to see free public transport for all. He responded: “In an ideal world, I would like to cut the cost of public transport as low as possible. I have made it free for 16 to 18-year-olds and recently removed the 9.30am restriction on older and disabled people’s bus passes.
“I will try to keep the £2 capped bus fare for as long as I possibly can. Low cost or free public transport is, in my view, a brilliant way to get people back to work and connect communities.”
Dr Champan commented: “If you look at some of the wording in the Milburn review, just a couple of months ago, it's really compelling that with the Neet problem, and the broader youth unemployment problem, transport costs are a major issue.”
Inevitably, some of the ideas floated by the incoming prime minister have caused concerns about costing. Alleviating the cost of living for households across the countries is a different task to a city-level policy, requiring much more spending power or borrowing.
It will ultimately be the job of the new chancellor to find all the funding for the cost of living package that is likely to be announced, with the incumbent Rachel Reeves not expected to remain in the role. Further details can be expected from Monday, when Mr Burnham is set to formally take over and assemble his government.
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