It’s now generally accepted that Andy Burnham will end up in No.10, at least for part of his time, if his proposal to set up a No.10 of the North goes ahead.
If (or should I say when) that happens, it should represent a meaningful shift in tone, and hopefully, in substance, in how the government engages with business in the North.
What we hope to see: a “North-first” agenda
Burnham’s political identity has been built on fighting regional imbalance. As Prime Minister, I am hopeful that will translate into a more deliberate focus on how policy impacts areas outside London and the South East.
If that happens, what I hope we will see is a government with a more grounded understanding of how local economies actually work, with less reliance on “one-size-fits-all” policies, and potentially fewer interventions that miss the commercial reality by those at the coalface.
That said, intent and outcome do not always line up. Politicians can say all the right things, but ultimately the proof will be in the pudding.
Employment and cost pressures
Throughout his career, Andy Burnham, who is naturally more left leaning than Starmer, has aligned himself with stronger employment rights and the “good work” agenda. In practice, that is likely to point to:
- tighter expectations around employment standards – (this is not just direction of travel – it’s already happening through the “new” Employment Rights Act);
- upward pressure on wages, particularly in labour-intensive sectors;
- increased scrutiny of working models in certain sectors.
For some businesses, that could mean higher costs and reduced flexibility.
A welcome change that he could consider would be a reversal of the employers’ NIC increase introduced by the current Chancellor in April 2025. That would give business some much needed breathing space.
Whether that will happen remains to be seen. With economic black holes already being discussed (particularly in relation to defence spending), Burnham’s new Chancellor’s first Budget will certainly be an interesting one.
Tax: stability matters more than headline rates
As of yet, there is no Burnham tax “roadmap.”
Things I would expect we might see from him include:
- closer alignment between income and capital gains tax (but hopefully with reliefs for business owners as discussed here)
- an increased focus on aligning dividend taxation with salary;
- a focus on succession and wealth;
- continued scrutiny on structures perceived as artificial or avoidance-driven.
Much of the North West’s business base is made up of privately owned companies, often family- owned, with succession planning on the horizon. Possible changes to CGT and reliefs for business owners will be felt directly by that group.
For many of our clients, the issue is not whether tax increases. It is how predictable the system is. Even talking about potential changes can make business owners nervous, affecting behaviour and confidence. People want stability, and that’s something we’ve not had for quite some time.
Short-term policy-making, frequent tinkering – as we have seen from the current Chancellor – and a lack of clear long-term direction make it difficult for taxpayers to make informed decisions.
If a Burnham government can set out a roadmap, particularly around capital taxes and business ownership, it should give people the confidence to plan.
Without that, decisions will be deferred.
I’d like to see less in the way of “flag flying” in the run-up to the first Budget and, instead, a stronger indication of the direction of travel.
Accessibility: a likely shift
One of Burnham’s strengths as Mayor of Manchester has been his visibility and accessibility. He has generally been willing to engage, listen and respond to people. That is, in part, why he seems to have garnered so much popularity.
That may not translate into Downing Street. Prime Ministers operate in a far more controlled environment, with their movements guided heavily by security, civil servants, special advisers and tightly managed schedules. Access will become more structured, rather than the organic approach he has been used to, and we are already seeing hints of that shift. Communication is likely to become more controlled, with fewer open exchanges. We saw an example of this earlier this week, when journalists were not invited to ask questions following his speech.
Businesses don’t need constant access, but they do value genuine dialogue with those at the top. If engagement becomes more staged, there is a risk that policy drifts further from commercial reality.
What this all might mean for PM+M’s clients
For our clients, this is a time to be proactive.
In practical terms, in light of all that is being mooted about possible changes to CGT, business owners should:
- Review ownership structures and succession planning – particularly where exits or intergenerational planning are on the horizon;
- Sense-check remuneration models – especially the balance of salary, dividend and long-term incentives;
- Stress-test future plans against potential changes to CGT and reliefs.
None of this is new, however the direction of travel suggests it should become a greater priority.
Summary
I am hopeful that a Burnham premiership will bring a more regionally focused approach to policy, through a “northern” lens.
For businesses in our area, this is hopefully an opportunity for Whitehall to gain a better understanding of how the North actually works.
Hopefully we will see a tax roadmap, giving business what it craves: certainty and stability.
Ultimately, the key test will be the same as always: does the environment created by the government support confident decision-making?
If it does, businesses in the North will invest and grow. If it doesn’t, they will pause, regardless of who is sitting in No.10, irrespective of whether that’s in Manchester or London.
