Business leaders preparing to attend Labour’s annual conference in Liverpool this month face a complex outlook under Prime Minister Andy Burnham’s government, which blends a pro-growth agenda with enduring ties to the party’s traditional working-class roots.
The conference, held at a centre on the banks of the River Mersey, will showcase the city’s ambitious regeneration plans led by metro mayor Steve Rotheram, a close ally of Burnham. Rotheram is seeking £11 billion in private investment to transform Liverpool’s historic docklands, including a 70-storey tower featuring luxury residences and a hotel. These initiatives echo Burnham’s “Manchesterism” strategy developed during his tenure as mayor of Greater Manchester, which focused on attracting private investment through regional infrastructure and public transport projects. Greater Manchester’s economy grew at an estimated 3.1% annually over the decade to 2023, twice the national average, driven largely by financial and business services.
However, Liverpool also reflects elements of Labour’s past ambivalence toward capitalism. The city was once a stronghold of the hard-left Militant Tendency in the 1980s, a period recalled with unease by some given Burnham’s July leadership speech. After replacing Sir Keir Starmer, Burnham criticised “four decades of neoliberalism” since the 1980s, invoking nostalgia for a pre-Thatcher, pre-Blair era despite having served in Blair’s government. His rhetoric has caused concern among business figures about Labour’s stance on private enterprise, especially after Starmer’s chancellor Rachel Reeves implemented a £25 billion annual increase in employer national insurance in 2024.
Despite these worries, some business leaders express cautious optimism. They point to Burnham’s pragmatic record in Greater Manchester and his emphasis on devolving power away from London as signs that his administration prioritises economic growth over ideological pursuits. Rick Haythornthwaite, chair of NatWest Group, described Burnham as a prime minister “with political nous and charisma” who could deliver pragmatic results. Similarly, Rain Newton-Smith, director-general of the Confederation of British Industry, said Burnham aims to “roll up his sleeves and turn problems into shared challenges.”
Still, skepticism remains. Entrepreneurs and analysts caution that promises of growth do not always translate into creators of it, and some fear the government may revert to a “tax-and-spend socialist” model. Labour’s evolving base, now predominantly public sector workers and advocates from charities and think tanks, contrasts with the working-class industrial roots of decades past. While Chancellor John Healey seeks to reduce business regulation by 25% by the end of the parliamentary term, new employment protections introduced last year, including expanded union recognition and rights for zero-hour contract workers, remain in place and may not be rolled back.
Energy costs pose a major challenge, especially for manufacturing sectors Burnham nostalgically champions. UK industrial electricity prices are roughly a third higher than the European average, a disparity seen as a governmental choice rather than a market inevitability. Targeted relief exists but leaves millions of companies facing high bills, contributing to concerns about the ongoing deindustrialisation of areas like ceramics and chemicals. These costs are part of a broader “tsunami” of expenses—including rising national insurance and National Living Wage increases—that weigh on businesses.
Policy tensions also emerge around Labour’s approach to the energy transition. While the government pursues a “clean energy superpower” vision led by Ed Miliband, Burnham’s focus on local economic restoration sometimes clashes with large metropolitan “job-deleting” projects. The future of North Sea oil and gas development remains uncertain, with projects like Jackdaw and Rosebank pending approval amid environmental opposition, though they promise significant investment and energy security benefits. Scottish Labour leader Michael Marra and unions support these developments, highlighting lingering divisions over energy policy.
Fiscal constraints are expected to limit the government’s ability to offer broad tax relief. The Treasury would face a £5 billion annual cost to shift energy levies from businesses to general taxation, a move the CBI supports as growth-enhancing but politically challenging. Further tax rises, including potential increases in capital gains tax closer to income tax levels, remain possibilities under fiscal pressure, heightening business concerns. Financial figures such as JPMorgan CEO Jamie Dimon caution against punitive windfall taxes, warning they could deter investment.
The relationship between Labour and business is further complicated by the absence of prominent economic advisers who helped shape Burnham’s initial thinking, including Andy Haldane and Lord Jim O’Neill. Instead, Downing Street relies on officials like business secretary Jonathan Reynolds and chief business adviser Varun Chandra, who have garnered respect but face the challenge of balancing growth ambitions with limited fiscal space.
With key decisions on devolution and power transfer to regional mayors forthcoming in a government white paper, observers see Liverpool—alongside Greater Manchester—as a litmus test for “Burnhamism.” The city’s ongoing transformation and its investment-driven regeneration plans offer a tangible illustration of the prime minister’s vision for a new economy, poised between historical nostalgic attachments and forward-looking development.
As conversations at the conference unfold, business leaders emphasize that future success will depend on government actions rather than rhetoric. “The government must look at what the world will want in 10 years and work from there,” said Rain Newton-Smith, underscoring a pragmatic approach amid evolving economic and political realities.