What's next for Burnham after the Budget?

The prime minister faces many challenging issues in the coming months, from resetting UK-EU ties and immigration to welfare reform and energy

Wednesday's low-key Budget is likely just the start of a series of challenges that could define Andy Burnham's term in Downing Street.

From oil drilling in the North Sea to immigration measures and welfare reform to the future of UK-EU ties, the series of thorny policy issues will establish whether the prime minister can shake off his reputation as a "people pleaser" by taking difficult decisions on behalf of the country.

UK-EU relationship

A long-awaited summit on November 20 will present an opportunity for Burnham to nail down a closer relationship with the EU in three specific areas.

The two sides have already entered the final stages of crunch talks to conclude a three-part accord that will remove border checks on food and drink exports, re-link EU and UK carbon markets, and allow 18- to 30-year-olds to live, work and study in each other's countries for up to three years.

But London and Brussels have yet to agree a cap on the number of places available under the scheme, with the EU demanding at least 100,000 to be shared out among its 27 member states based on their population size.

Last weekend Burnham called for an "honest discussion" about whether Britain would reinstate freedom of movement, triggering praise from metropolitan Labour MPs and a backlash from others in Brexit-supporting "red wall" seats.

Downing Street later pulled back by suggesting Burnham was not proposing a return to freedom of movement or any other particular option. He would set out the options at "around the time" of the November 20 summit, it added.

Ten-year plan

In December, Burnham is expected to publish an overarching strategy document setting out his sweeping long-term goals, which has been described as a 10-year plan for Labour in government.

The prime minister will then authorise the release of multiple specific policy papers with priorities for various areas, ranging from European relations and health to defence and infrastructure, stretching into 2027.

Pushing ahead with devolution is a key priority, with mayors around England waiting for details of how much control they will have over business rates and income tax.

By focusing on 10-year priorities, Burnham wants to push some trickier issues beyond the next general election -- to the consternation of some colleagues.

Plans to end the longstanding "triple lock" on pensions and to move away from the "first past the post" voting system to proportional representation have been set aside for the next parliament.

But in many areas Burnham will not be able to dodge decision-making this side of the election, which must take place by summer 2029.

Spending review

Next year's spending review poses a much larger challenge for John Healey than the Budget, as the chancellor allocates Whitehall departmental budgets between 2028-29 and 2030-31.

Spending totals pencilled in for these later years imply a sharp slowdown in overall spending growth.

Healey will need to find £35bn in tax rises or welfare cuts by 2030-31 if he wants to avoid real-terms cuts to some areas of public services, sustain growth in health budgets and meet defence spending goals, according to the Institute for Fiscal Studies think-tank.

Defence and welfare

Defence is arguably Healey's biggest test, since he resigned from Sir Keir Starmer's administration as defence secretary over what he claimed was insufficient expenditure on the military.

Now in charge of the purse strings, Healey is under mounting pressure to spell out how Britain will bring defence spending up to 3 per cent of GDP by 2030. For the moment, ministers are committing only to the separate, more distant target of 3.5 per cent by 2035.

Burnham has promised that "national security cannot come at the expense of our social security", but he will also need to explain how the government can contain the fast-growing welfare bill in the coming years.

Next month former cabinet minister Alan Milburn will set out recommendations on helping nearly 1mn young people not in education, employment or training. A cornerstone will be a separate youth benefit system offering less cash and more job support.

How such plans are received will be a key test for the prime minister after months of pitch-rolling among Labour MPs, whose rebellion over welfare reform last year was a fatal moment for Starmer's authority.

Energy and climate

Burnham has said he wants to pursue a "pragmatic" approach to energy policy while sticking to Britain's tough and legally binding climate targets.

Energy secretary Miatta Fahnbulleh last week approved a new gasfield at Jackdaw off the Scottish coast, but she faces a trickier decision over the much larger Rosebank oilfield near the Shetland Islands.

The binary decision -- balancing climate goals with jobs and taxes -- will end up angering either green-minded Labour voters and environmental campaigners or the fossil fuel industry.

In Whitehall, Burnham will have to arbitrate a dispute over how far to relax the "ZEV mandate", which forces carmakers to sell an increasing proportion of electric vehicles in the coming years.

The business department wants to loosen the rules as much as possible, while the energy ministry is more resistant.

Utilities

Burnham has set hares running with his frequent talk about wanting more "public control" of utilities and ending "40 years of neoliberalism". For now the details remain scant.

At Labour's annual conference in Liverpool in September, Burnham said he would overturn a 1989 restriction on government share ownership in private water and sewerage companies.

His first real test is Thames Water. Burnham has said he wants the utility, which is struggling under the weight of enormous debts, in public control. But he has not yet made a decision on whether to temporarily nationalise it via the "special administration" regime.

Immigration

Having promised to end party factionalism when he entered Downing Street in July, Burnham is now confronted with ministers warring over a set of contentious immigration rules.

Home secretary Shabana Mahmood has a plan to force care staff and other non-graduate workers -- who came to the UK expecting to settle after five years -- to wait 15 years for indefinite leave to remain.

The proposals are intended to fend off Nigel Farage's anti-immigration Reform UK. But they are unpopular with many Labour members, trade union leaders, MPs and ministers including housing secretary Angela Rayner.