The impending leadership of Andy Burnham is set to bring significant changes to Labour's economic policies. As he prepares to unveil his cabinet on Monday, the Confederation of British Industry (CBI) has issued a stark warning: avoid a "summer of speculation" over tax and spending that could unsettle businesses across the UK.
Rain Newton-Smith, Director-General of the CBI, has urged Mr Burnham to adopt a cautious approach, mindful of the damaging impact of uncertainty on British firms. Speaking to The Guardian, she recalled how previous summers were marred by leaks and speculation surrounding former Chancellor Rachel Reeves's autumn budgets – a scenario Ms Newton-Smith hopes will be avoided this time.
Ms Newton-Smith has stressed that an early decision for Mr Burnham will be the appointment of his Chancellor. While there have been suggestions that Energy Secretary Ed Miliband could take on the role, she advised that any appointee should resist feeling "bounced into making decisions in the first couple of weeks." Instead, Ms Newton-Smith advocates taking time to consult with businesses and adopting an approach of "evolution, not revolution," accompanied by the establishment of a credible fiscal plan grounded in clear fiscal rules.
The CBI Director-General has praised Mr Burnham's business-friendly initiatives during his tenure as Mayor of Greater Manchester, which focused on attracting investment and promoting growth. However, she cautions against more radical proposals reportedly being considered by some of his allies, particularly the renationalisation of key utilities, arguing that such moves would be "incredibly expensive" for taxpayers.
Ms Newton-Smith advocates a renewed focus on public-private partnerships to finance essential infrastructure projects, including new homes, reservoirs, and energy-efficient buildings. She also urges the incoming administration not to overlook the cost of doing business, particularly soaring energy bills that remain a significant concern for firms – with UK businesses facing electricity costs 45% higher than the G7 average.