Andy Burnham became the United Kingdom’s Prime Minister on 20 July 2026, following the resignation of Keir Starmer. He immediately faces demands from the manufacturing sector, which is seeking clarity on his plans for the industry.
The industrial sector has experienced a challenging period. Manufacturers continue to face supply chain disruptions, high energy costs and skills shortages. This political instability has added to existing pressures on businesses of all sizes.
Andy Burnham’s Vision for British Manufacturing
Prime Minister Andy Burnham has outlined his commitment to re-industrialising Britain. He aims to enable each region to develop ‘clear and credible industrial ambitions’ and support British manufacturers focused on innovation and exports.
His strategy includes strengthening domestic manufacturing through strategic public procurement. Burnham advocates for government contracts to prioritise UK-based suppliers, moving beyond the sole consideration of the lowest-cost overseas options. Burnham said the approach would ensure that ‘every pound raised from taxpayers will work harder.
Procurement as an Industrial Tool
Public procurement policy under Prime Minister Burnham will now include ‘proper social value weighting’ for eligible public contracts. The change is intended to give British firms greater opportunities to secure public contracts while supporting local economies and supply chains. The Defence Investment Plan, a significant area of public spending, will also adopt this new approach.
Burnham also identifies critical national capabilities, including steel, defence, energy, food, and farming, as sectors requiring protection. He stresses the importance of safeguarding sovereign manufacturing and production capacity to prevent further industrial decline. The approach follows the previous Labour government’s intervention in British Steel.
Regional Focus and Devolution
Drawing on his experience as Mayor of Greater Manchester, Burnham supports place-based industrial investment. He has proposed ‘Good Growth Funds’ for regions and greater devolution of powers over skills, transport and economic development. The measures are intended to support the development of manufacturing clusters across the country.
His focus on regional growth is further reflected in the establishment of ‘No 10 North’ in Manchester. This location will function as “the government’s new situation room for growth,” where Burnham expects to work weekly. He also chaired the first meeting of the National Economic Council (NEC) from the northern hub in July 2026, with regional mayors attending.
Industry’s Urgent Demands on the New Government
Manufacturing industry representatives have presented Prime Minister Burnham with a range of priorities. These priorities focus on improving competitiveness and confidence, with industry representatives calling for policies that support investment, growth and job creation. UK manufacturing leaders have called for practical action.
A primary concern is the reduction of high business costs. This includes industrial energy prices, business rates, and employment costs. Industry representatives have called for greater government support to translate into reductions in these costs.
Energy Cost Imperative
Manufacturers have called for measures to reduce energy costs and improve competitiveness. Requests include accelerating grid connections and reducing non-commodity costs, ultimately ensuring internationally competitive electricity prices. High energy costs can reduce the funds available for investment in new equipment, technology and personnel.
The government has announced the British Industrial Competitiveness Scheme, which is expected to reduce electricity costs by up to £40 per megawatt-hour for eligible manufacturing businesses from 2027. An expanded British Industry Supercharger scheme also intends to cut network charges for approximately 500 energy-intensive firms, such as those in steel, chemicals, and glassmaking. The measures are intended to reduce electricity costs for eligible businesses.
Bridging the Skills Divide
Addressing skills shortages remains a priority for the sector. Kate Ambrosi, Chief Executive of the Baker Dearing Educational Trust, noted Burnham’s strong support for technical education during his mayoral tenure. She expressed hope that he would bring this focus to Whitehall, advocating for parity between academic and technical education routes.
The sector needs clearer pathways into manufacturing, engineering, and other technical careers. This requires a stronger emphasis on apprenticeships, vocational routes, and technical university places. Government contracts, for example, will now require companies to offer in-work training for young people, supporting the development of future talent.
Sir John Lazar CBE FREng, President of the Royal Academy of Engineering, emphasised engineering and technology’s role, contributing over a third of the UK economy and supporting 8.5 million jobs. He highlighted the fact that more than half of UK engineering and technology firms have not adopted advanced technologies such as AI, despite the UK leading in research and innovation with many spinouts and start-ups.
Industry Leaders Demand Action
Stephen Phipson CBE, CEO of Make UK, commented that manufacturers welcome the Prime Minister’s ambition to re-industrialise Britain and foster growth in every postcode. He stressed the need to turn this ambition into action through effective implementation of the Industrial Strategy.
Phipson added that manufacturers were seeking progress on issues affecting their ability to invest and grow. He identified the high costs of doing business, including energy, business rates, and staffing, alongside critical skills shortages, as top priorities. Make UK research shows business confidence is at its lowest in four years, with a quarter of manufacturers considering moving production overseas due to the UK’s high cost base.
Make UK and SMMT Perspectives
Mike Hawes, Chief Executive of the Society of Motor Manufacturers and Traders (SMMT), congratulated Burnham, noting Labour’s prior commitment to automotive manufacturing. He stated that the sector can contribute to economic growth through investment, innovation, and high-value jobs across the UK. Hawes stressed strengthening competitiveness and supporting the net-zero transition to drive reindustrialisation.
The manufacturing sector stands ready to contribute to economic growth and resilience. However, industry leaders said this would require government policies that support investment and growth. Confidence to invest is currently low, hampered by ongoing high costs and a general climate of uncertainty. British craftsmanship and circularity are also discussed in relation to the UK’s manufacturing sector.
SME Challenges and Solutions
Chris Greenhough, Managing Director of Westley Engineering, echoed calls to address the skills challenge. He proposed a Training Tax Credit to encourage businesses of all sizes to invest in apprenticeships, staff training and future talent development. He argued that training remains too expensive and time-consuming for many firms.
Greenhough also pointed to the complexity of international trade, including measures such as the Carbon Border Adjustment Mechanism (CBAM), tariffs and export compliance requirements. Many small and medium-sized enterprises (SMEs) lack dedicated compliance teams. He called for simplified guidance, practical support, and streamlined processes from the government.
For SMEs, navigating the defence sector also presents significant barriers. Despite increased defence spending, complex procurement processes can create barriers for smaller manufacturers. Greenhough asserted that these businesses bring innovation and agility, but the high entry barriers hinder their contribution.
The Path Forward: Consistency and Implementation
Andy Burnham committed to the previous Labour government’s fiscal rules in May 2026 and reaffirmed the commitment in his first speech as Prime Minister on 20 July 2026. The commitment is intended to provide fiscal stability, which manufacturers say is important for long-term investment planning. Chancellor John Healey announced a Budget statement for 28 October 2026, promising to decentralise “money and power out of Westminster.”
Burnham has also promised to unveil a ten-year industrial plan later this year. Manufacturing businesses often operate on investment cycles that extend beyond political terms. They require consistent policy and clear direction to invest in new technology, sustainable production, supply chain resilience, and workforce training. Advanced manufacturing automation relies heavily on such long-term planning.
Sunny Prakash, the managing director of WERIT UK, said Burnham’s proposals on devolution, reindustrialisation and a ten-year plan had resonated with him. Prakash believes that decisions made closer to manufacturing operations, combined with strategic public procurement, can better align with local employer needs and regional economies. Prakash said this approach could give businesses greater confidence to invest.
The previous Labour government’s Modern Industrial Strategy 2025 (MIS2025) encompassed dozens of industries, with eight “Growth Sectors” and 37 “Frontier Industries,” alongside “Foundational Industries.” The strategy involved more than 350 interventions covering areas such as skills, technology adoption, regulation, planning, data and research and development.
Despite these measures, business confidence among food and drink manufacturers stood at -31% in Q2 2026, marking nine consecutive quarters of negative business sentiment. Eighty-eight percent of respondents reported deteriorating business conditions since Labour came to power, according to the survey.
The figures highlight the challenge facing Burnham’s government as it seeks to translate its industrial plans into measurable outcomes.
Looking Ahead: Realising Industrial Ambition
Prime Minister Burnham’s task now involves translating his industrial vision into policy and implementation. His emphasis on regional decision-making, public procurement and long-term industrial planning could shape the development of UK manufacturing policy. If implemented effectively, these policies could affect manufacturing capacity, competitiveness and economic growth across the country.
The manufacturing community will be closely observing the government’s industrial strategy as it develops in the coming months. Industry representatives have called for policies that support manufacturers of all sizes to compete, innovate and grow, ensuring the UK remains a hub of industrial productivity and engineering excellence.
