Andy Burnham as Prime Minister: What would it mean for London?

Andy Burnham was heading for a showdown Labour leadership contest against Sir Keir Starmer after storming to victory in the Makerfield by-election.

The now former Greater Manchester Mayor beat Reform UK’s candidate Robert Kenyon by a majority of 9,231, nearly 4,000 more than Labour achieved at the 2024 general election.

He gained 54.8% of the votes cast, outperforming opinion polls.

Mr Kenyon trailed in second place with 34.5% of the vote.

The victory gave Mr Burnham a triumphant path back to Parliament which was gripped by talk that he could launch a move to replace Sir Keir within weeks, possibly even days.

There was speculation that Mr Burnham and his allies may seek to persuade the Prime Minister to step aside to avoid a bitter leadership contest but so far Sir Keir has vowed to fight any attempts to remove him.

Amid the political frenzy, millions of voters including in London are asking themselves what a Burnham government would look like and how it would be different from Sir Keir’s administration.

For the capital, there are already concerns that he could adopt an anti-London agenda which could damage the city and the wider economy.

Here are some key issues:

Mr Burnham has previously voiced support for a land value tax (LVT) which given land prices in the capital would hit London hardest if it was introduced.

Just replacing council tax with a land levy could leave hundreds of thousands of Londoners with a £1,000 rise in their property tax bill.

An LVT could also be introduced instead of stamp duty.

Mr Burnham has played down the idea that he may swiftly try to bring in a wealth tax.

He previously said that there is “definitely a case” to reintroduce the 50p top rate of income tax in coming years.

He has signalled he may want to look at income tax personal allowance levels and has suggested replacing inheritance tax with a care levy.

But he has also more recently made clear he wants to “tread carefully and carry people with us” on fiscal issues.

All eyes will be on how the financial markets react to Mr Burnham gaining the keys to No10, if he does.

He is widely expected to steer the Government to the Left which could benefit some of London’s more deprived communities in a deeply divided city.

However, if he wants to raise public spending he would have to increase taxes or borrowing.

Chancellor Rachel Reeves, to a certain extent, won over the City with her commitment to her fiscal rules and Mr Burnham has sought to reassure the markets that he can be trusted.

"Let me say this really clearly. I support the fiscal rules,” he said.

The consequences of losing the confidence of the markets was laid bare by Liz Truss’ disastrous “mini-Budget” in September 2022 which saw the cost of borrowing soar, including for many Londoners with large mortgages due to high property prices.

Ms Reeves has already torn up the Treasury investment book to divert more public funding to the regions.

Mr Burnham has strongly criticised the level of investment outside London and if he becomes PM he is expected to ramp up moves to channel billions more to other parts of England.

The impact of this could be less money for key infrastructure projects in the capital and a lower central Government settlement for Transport for London, which could put upward pressure on fares.

Mr Burnham bangs the drum for more devolution of power so he may be more open to giving London Mayor Sir Sadiq Khan control over some of the commuter rail lines into the capital.

As mayor, Mr Burnham championed improving conditions for renters in Manchester, signing an open letter a few years ago to the Government calling for a freeze on private sector rents, and has pushed for more environmentally-friendly social housing.

The Government has taken a series of actions which could ease the capital’s housing crisis including the Renters’ Rights Act and an agreement with Sir Sadiq to reduce the number of affordable homes required in some developments in a bid to unlock more schemes.

Mr Burnham would face the same challenges as Sir Keir in achieving Labour’s flagship goal to build 1.5 million new homes and his “Manchesterism” approach to housing may struggle to deliver as effectively in the complexities of London’s property market.

Sir Keir’s government has a number of London MPs in senior positions, including Deputy Prime Minister David Lammy, MP for Tottenham, and Communities Secretary Steve Reed, MP for Streatham and Croydon North.

When Ilford North MP Wes Streeting quit as Health Secretary he was replaced by Ealing North MP James Murray, and of course Sir Keir is MP for Holborn and St Pancras.

So London has a strong voice around the Cabinet table which is expected to be cut back in a Burnham government as he promotes more MPs from outside the capital to key positions.

If as expected he presses for closer ties with the EU, Mr Burnham will be in tune with a majority of Londoners on Brexit, with the capital having voted 60/40 to Remain.

Like Sir Sadiq, who has argued Britain should rejoin the EU, Mr Burnham has taken at times a more pro-EU position than the Government.

“Long term, I’m going to be honest, I’m going to say it... I hope in my lifetime I see this country rejoin,’ he has said.

Squeezed by Reform UK and facing the new threat from Zack Polanski’ Green Party, Sir Keir’s Government has in recent months become increasingly willing to speak out about the economic harm caused by Brexit.

Mr Burnham warned eight years ago that expanding Heathrow could “suck more activity and investment into the capital and leave the North waiting even longer for its promised Northern Powerhouse”.

There is also talk that if he becomes Prime Minister, he may appoint Ed Miliband as Chancellor.

Net Zero Secretary Mr Miliband has previously opposed a third runway and more recently warned that it should only happen if it did not breach Britain’s legally-binding climate change commitments.

Some unions support expanding the west London airport.