Burnham targets Thames Water, energy bills in UK policy reset
Britain's incoming prime minister Andy Burnham is preparing to take public control of key utilities and overhaul the housing market, signaling a decisive shift toward state intervention in the UK economy.
Andy Burnham is moving to reshape the British state, starting with the forced administration of Thames Water. The collapsed utility, which serves 16 million customers, will be placed under special administration until a buyer is found, marking the beginning of a broader push to bring water networks back into public ownership.
The intervention extends to the energy sector, where proposals could cut household gas bills by £130 annually. By shifting policy levies onto general taxation at a cost of £3.2 billion a year, the government aims to make running a heat pump cheaper than a gas boiler. For European energy markets, this represents a significant state-driven shift in how household consumption is priced and subsidised.
Burnham is also applying his public ownership model to transport, drawing on his experience taking the Greater Manchester bus network back under public control from private operators. The overarching agenda signals a decisive turn toward state intervention following the private-sector focus of his predecessor.
Housing and fiscal reforms
The incoming prime minister is targeting the housing sector, blaming record taxpayer subsidies flowing to private landlords for a "ruinous impact" on public finances. He has pledged the largest council house building programme since the postwar era to address a social housing waiting list that has reached 1.5 million families.
That gap has grown steadily since the 1980s due to the sale of 1.5 million council homes. Building new public housing would represent a massive structural shift in the UK property market and a significant draw on public capital.
Longer-term fiscal reforms include replacing inheritance tax with a progressive "care levy" to fund a national care service. "I personally would look at all of the kind of implications of that in relation to inheritance tax and care charges and everything," Burnham said. "I wouldn’t flinch from it."
Policy reversals and Whitehall shake-up
The new leader is simultaneously navigating internal party divisions over energy exploration. While the 2024 manifesto banned new North Sea licences, officials are exploring "tieback" arrangements that would connect new offshore drilling to existing facilities, a technical workaround likely to anger climate campaigners.
In Whitehall, Burnham plans to abolish the Department for Science, Innovation and Technology, folding its remit into a more powerful business department led by Jonathan Reynolds. A dedicated minister for artificial intelligence will be created. He is also scrapping his predecessor's digital ID cards—a scheme that drew 3 million signatures of opposition—to redirect funding toward the cost of living.
On immigration, Burnham has backed controversial changes by Shabana Mahmood to tighten the asylum system, noting that net migration needs to fall further.
