For investors accustomed to centralised, predictable decision-making, an Andy Burnham-led Britain will demand a different playbook, one built on regional engagement, faster reaction times and sharper intelligence. Control Risks' assessment is that while risks are real, so too are the opportunities for those who move first.
Now is the time to revisit UK scenarios, update stakeholder engagement and ensure an accurate flow of reliable intelligence on emerging trends.
1. Will this government compromise on fiscal responsibility?
Our assessment: a "Liz Truss" moment, where bond markets lose confidence, remains low risk. One trigger would be Burnham changing the fiscal rules. However, an acknowledgement of the risks involved in doing so and the new fiscally conservative Chancellor John Healey is likely to prevent this.
A greater near-term risk is communication, rather than a catastrophe. Expect inconsistent messaging over revenue-raising measures, leading to investor uncertainty, at least until the budget around late October. As in the run-up to the 2025 budget, this is likely to slow down business activity.
The numbers are tight. The government has at most GBP 22bn headroom, yet it plans to spend, including closing a GBP 5bn defence funding gap, providing GBP 0.85bn in household electricity bill relief, likely allocating GBP 2bn to place a water company into special administration, while also introducing measures including caps on transport fares and business rate relief for the hospitality sector.
Burnham is also expected to shift fiscal policy leftwards and focus on taxing wealth over income. Likely measures include the introduction of a land value tax, higher capital gains tax rates and an increase in taxation on warehouses.
2. Could devolution reshape the investment landscape?
The government will prioritise devolving power to regional and local authorities. But this will be a gradual process, likely takingover a year to operationalise. Burnham will need to negotiate responsibilities with local leaders and pass legislation to fully devolve powers.
For investors, this cuts both ways. Expect more varied regulation across regions, but also greater accessibility to policymakers and funding opportunities. Investors in the transport, healthcare and education sectors will see the greatest impact.
3. How will government interventionism play out?
We are watching utilities particularly closely. Investors here, especially in water, should expect greater government intervention, with the government expected to take Thames Water into special administration within weeks.
It will likely consider a similar approach to other water companies, but stop short of full nationalisation due to the high costs involved.
4. Will the government address high energy costs?
Energy costs will remain a core concern for infrastructure investors. The UK has among the highest prices in Europe and is particularly exposed to the conflict in the Middle East.
Here, the signal is continuity. The new energy secretary, Miatta Fahnbulleh, shares her predecessor Ed Miliband's pro-net-zero stance. Expect existing frameworks to endure, including the Contracts for Difference system, which is designed to incentivise investment in renewable energy through government subsidies.
5. Can foreign investors expect a warm embrace?
Burnham has not spelled out his approach to foreign investment but his time as mayor of the northern English city Manchester (2017-26) indicates that he will not tighten restrictions on foreign investment.
Manchester has enjoyed strong growth, partly driven by its success attracting private capital. Burnham is widely associated with a pro-investment policy approach known as “Manchesterism”, which is now expected to be replicated at a national level.
Other signals also point towards constructive engagement, particularly with China. The new foreign secretary, Ed Miliband, pushed for greater Chinese investment in the UK while energy secretary. This, combined with Burnham's agnostic approach to China, suggests the UK will seek constructive ties with Beijing.
The bottom line
In Burnham’s Britain, investors must understand where political power sits and how quickly it can shift. Relying on national-level engagement and annual planning cycles is a growing risk. Now is the time to reassess assumptions, update stakeholder engagement strategies and ensure decision-makers have access to timely, reliable intelligence.
Three practical steps to take now:
- Revisit your UK scenarios to reflect faster, more devolved and more interventionist policy-making.
- Rebuild stakeholder engagement around the regions, not just Westminster, prioritising the local leaders who will increasingly hold the levers.
- Invest in a reliable intelligence flow on fiscal, regulatory and geopolitical trends, so you can move ahead of policy, not react to it.
To understand how these developments could affect your portfolio, investments or operations, contact our lead UK experts [email protected] and [email protected].
Article written by: Alexandra Kellert and Tom Arnold