Bringing Investment into the UK
In 2025, we had a trade deficit of about £39 billion, this is principally because we import more in goods and services than we export (mainly a deficit in goods and a surplus in services).
We remain an acceptable location for foreign direct investment, however some of the key drivers behind turbocharging Foreign Direct Investment (FDI) include high regulatory burden, trade and tariff risks post-brexit and high levels of tax comparatively to other English language economies.
By easing some regulatory burden on existing Small and Medium Enterprises (SMEs) and having an attractive offer such as tax breaks for companies who relocate to the UK for the first 18 months, we could increase income tax revenue, create jobs and increase the corporation tax receipts in the medium term without raising tax.
Additionally, Andy Burnham should not shy away from having the courage to increase market certainty by re-assessing our relationship with the European Union.
Young People Not in Education Training and Employment
Another major issue that cannot wait is the productivity crisis amongst young people fuelled by the complete lack of jobs available to younger people. This in turn is exacerbating a mental health crisis as young people feel a sense of hopelessness about their current economic circumstances.
Labour have already done some important work here but the most powerful lever available to the government is empowering communities to drive social change through meaningful devolution of the skills budget.
This can and should be done through the series of regional Mayors that will be covering the United Kingdom. Burnham’s record in this area as a former metro-mayor is strong and he should seek to expand on this more.
The size of the welfare bill
Here Burnham has an opportunity to succeed where Keir Starmer could not, by championing meaningful reform of the welfare system, Burnham can meaningfully cut the size of the welfare bill.
For example, taking someone from Universal Credit (UC) into a role paying £30,000 per year can lead to over £10,000 in net savings. This frees up more money for targeted support for people who need more assistance to get into work.
By taking the courageous path early on, Burnham can increase the pace of recovery for the public finances.
Three areas that Burnham can focus on for welfare reform are:
Winter fuel allowance, this may sound hideously unpopular but there is a strong moral case for not subsidising some of the wealthiest pensioners with WFA and using the savings to help those who need it more.
Personal Independence Payment. This is an area where the government has rightly supported the beginnings of some reforms to support people with milder conditions to access work whilst tightening the entry criteria for obtaining PIP. This is the right approach, and Burnham should continue this work.
Invest in welfare to work programmes. For too many people who find themselves out of work, the actual support for getting back into work is poorly supported. Burnham should bring together civil society alongside the DWP to produce a significant welfare to work programme where civil servants are rewarded for getting people from UC into work. This will result in long-term savings as well an increased sense of purpose in the population.
Reform student loan repayments
For many graduates on plan two student loans, they have essentially been sold a contract that has changed. In any fair contract, one party cannot unilaterally change the terms whilst the other party has no recourse. Yet this is the reality that many young people have found themselves trapped in.
The freezing of repayment thresholds and credit card-Esque interest rates have meant that young people have no realistic prospect of paying off their student loans. For many this means that hundreds of pounds is missing from their pay check each month. This is money that could meaningfully go towards house deposits or a multiplier effect in public spending.
Whilst it is undoubtedly too expensive to do across the board, a tapered approach, targeting key workers (doctors, police, nurses, teachers and the armed forces) first could lead to some economic growth. The other effect is that it could lead to lower turnover in those sectors.
His final challenge
The final challenge is to not change what is going well. The UK has not made significant progress economically since 2024, but it has made some significant steps in rebuilding international relations and credibility post-Johnson/Truss.
This is important because these relationships matter. They matter because Starmer has been a moral leader for the west where there has been a vacuum of moral leadership from the White House. He is trusted by key allies in Germany, France and Canada and he has been steadfast in holding together the “coalition of the willing” who have stood with Ukraine.
Burnham should be willing to spend political capital in maintaining that presence for the UK on the world stage.
* Callum Robertson is a teacher and member of the Federal Board. He is a Watford Borough Councillor.
Follow @libdemvoice.org on Bluesky
Like us on Facebook
Subscribe to our feed
Sign-up for our daily email digest
Lib Dems should target becoming largest party in local government (LDN#212)
The Joy of Six 1552
Trump offended by key Burnham appointment
Clear the gallery!
The first serving PM to receive the Legion of Honour?
Peter Martin
Tony Vickers
cim
Rif Winfield
Diana Simpson
5 Comments
My wish is that Andy Burnham says that there aren’t any savings to be made on welfare spend, there will be changes which generate flexibility but every penny saved with be invested back into the people who need it and where they need it. For example, access to work schemes face long delays currently and even longer for those currently in work needing help to stay in rather than the media friendly number of getting people into work. Another example is how weak the communication is between different benefit departments, so it creates admin for claimants and increases risk of overpayment.
Anyone whose first thought is how to save money through reducing welfare spend probably hasn’t seen the trend of how each change (DLA to PIP, removal of LCW as paying element within UC, 2 child limit etc. etc.) typically creates a more complex system, doesn’t offer enough support and inevitably sees people’s circumstances become worse so more money ends up being spent anyway.
Andy B, and indeed all of us, should have students loans near the top of our to do list. The vast majority of graduates were never going to pay off their loan, even before interest rates went up. For them it was always a graduate tax. Only higher wage earners could regard it as a loan to be paid off. They will pay more if interest rates on the loan go up, so perhaps there is a progressive element in all this ? I don’t agree that there should be special terms for “key workers”, genuflecting before doctors, nurses and teachers. This is horribly devisive, invites us to judge jobs by their supposed moral value , rather than economic value, or their actual ability to pay. You know an average GP earns three times the median wage, but you want to give them concessions ?
“ This in turn is exacerbating a mental health crisis as young people feel a sense of hopelessness about their current economic circumstances.”
I work with young people who are risk of becoming NEET. The reality is that there are plenty jobs available but many of the young people I work with have no interest in getting a job. For some, it is because they are more interested in gaming. For others, it is because they realise that they can make far more for much less effort by involving themselves in the illegal drugs ‘industry’. As for mental health issues, there is certainly a large increase in young people refusing to attend school due to claimed anxiety, though many of them are not too anxious to go out with friends and socialise. No doubt many of them will go on to claim an inability to work due to anxiety as a way of gaining enhanced benefits. Merely increasing the number of jobs available will do little to address this issue.
Jana – with all the best will in the world, there are not exactly masses of jobs available for young people.
@ Callum,
“In 2025, we had a trade deficit of about £39 billion, this is principally because we import more in goods and services than we export (mainly a deficit in goods and a surplus in services).”
This isn’t a ‘because’. You’re explaining what a trade deficit is. The ‘because’ is perhaps less obvious. We do run an even bigger deficit with the EU of £93 bn which means our surplus with the R.O.W. must be £54 bn.
So it follows that our trading partners in the EU are accumulating more ££s than they know what to do with. They can change some of them for other currencies like $$s because our ROW trading partners will need those to buy stuff from us but they can’t be selling too many otherwise the £ will fall too much in value.
So they do have to re-export their surplus £ back into the UK via the capital account. This is why so many of our assets like rail, water, and windfarms, even football clubs etc end up in foreign ownership. The capital account and current account have to add to zero. If there is a tendency for imbalance the pound will shift in value on the forex markets.
So “bringing foreign investment” into the UK isn’t really a problem. It’s just the mirror image of our trade deficit.