Burnham faces defence gap, housing crisis and power shift plans

He returned to Parliament through the Makerfield by-election last month, after a first nomination tally of 322, and will enter Downing Street next week with Labour MPs already behind him and a list of problems.

Defence is the most immediate fiscal trap. Reuters data put Burnham’s shortfall at about £4.7bn, after Sir Keir Starmer unveiled a £15bn defence investment plan and warned him not to borrow to fund it. He will need to show a path to NATO’s 3.5% defence spending target. That leaves him with a narrow set of choices in his first weeks: find savings, raise revenue or slow the pace of other promises. Borrowing for defence has already been ruled out by Starmer’s warning.

Housing is the other pressure point that will land quickly in Burnham’s first 100 days. BBC figures put the average house price in England at £300,000 last year, and millions of people in England face unaffordable rents, long waits for social housing or are priced out of buying altogether. Burnham has backed the “biggest council house building programme since the post-war period”, a pledge that would demand land, capital and planning reform at the same time as ministers are being pressed to spell out how it would be paid for.

Burnham is also promising a shift in where power sits. He has proposed a Downing Street team based in Manchester called “No 10 North” and a 10-year mission to raise living standards. He wants to give mayors more power.

Rachel Reeves said Burnham needs a “worked-through plan” to govern, adding that “governing is hard in Britain” and that shocks will come his way. Burnham has also been considered as a possible replacement for Reeves as chancellor, though a spokesperson said no decisions had been made.