'There's still mistrust': How Burnham's Brexit reset could unravel

Chancellor John Healey made a point of heaping praise on his predecessor Rachel Reeves when he stood up to deliver the first Budget of Andy Burnham’s premiership. It begged the question, if she was so good, why replace her? He’s since faced criticism for what some considered a rather stodgy Budget that lacked the radicalism needed to solve the problems piling up in the UK’s in-tray – defence spending, the benefits bill, the flagging economy, the cost-of-living crisis… it’s no small feat.

At one point during his speech, Healey joked that at least heckling MPs were still awake. But this was never intended to be a showstopper of a Budget. Treasury insiders had dubbed it the “see you next year Budget”, and that was precisely what he delivered. Apart from a £100 giveaway to 20 million people, some of Healey’s criticis have argued that there was little to get the heart beating or solve the UK’s problems. ‘Can they walk the walk?’

“It feels like they can talk the talk, but the jury is still out on whether they can actually walk the walk,” a Labour source said of Burnham’s new administration. All politicians are human, and as with all collective human endeavours, it has to be assumed a certain amount of frantic paddling is going on below the surface when looking at the calm exterior of a man downing a pint in one in triumph at delivering his Budget. Chancellor of the Exchequer John Healey (L) enjoying a pint with the Prime Minister Andy Burnham (R) during a visit to the Hare Inn in Harlow, east of London in July (Photo: Richard Pohle /Pool/AFP via Getty Images) But for all the nerves in No 10 and the Treasury over how the Budget would go down, their plans have so far been well received by voters.

Polling for The i Paper , carried out just after Healey’s Budget statement, gave Labour a 31 per cent share of the vote – 9 points ahead of Reform in second place, and ten ahead of the Tories. That is three points up on last month. The Budget far from puncturing the Burnham bounce, has sent it higher. Despite some negative headlines that surrounded the lack of action on the benefits bill, polling for this newspaper showed overall, more voters felt it was a good Budget than a bad one.

“This is the most popular Budget we’ve seen since we started tracking in 2022,” Robert Struthers, Head of Public Perceptions at BMG, said. “‘Vibes’ can sound dismissive, but getting them right is a real political achievement.” But how will the UK’s problems be solved if the big calls are shirked at the Budget? More clues may come at the end of next month. Burnham will launch a ten-year plan for the UK, which is likely to include his plans for a National Care Service and reform of the triple lock that has made the state pension take such a big chunk of national income.

One of the most striking findings to emerge from the Budget is that the rising cost of working-age, disability and child benefits is forecast to consume virtually all the additional revenue the Treasury expects to raise from freezing income tax and National Insurance thresholds. Yet, the Government has also indicated that reforming welfare in a ‘Labour way’ will take ten years. Big solutions to big problems, rather than tinkering in the Budget.

But whether these solutions become a reality will hinge on a general election, and BMG’s polling, according to Struthers, “will only add to calls in Labour for an election sooner rather than later.” Snap election fever a political stitch-up? There are strong reasons why an election may not come until 2028 – not least because the current fever may be cooked up by the opposition, according to a senior Labour Party source. “The opposition parties are trying to push us into a Gordon Brown-esque situation and create the speculation from which we feel we can’t back down without looking like we are bottling it,” a very senior Labour Party source said.

“I think our political rivals are doing exactly what I would do in their situation and trying to make sure speculation hits fever pitch, so it looks like a backing down when something that was never going to happen doesn’t happen,” the source added. Before the ten-year plan comes the Brexit reset summit in Brussels, when Burnham is planning on signing a deal to ease trade with the EU and allow under-30s to work and study here – and for UK nationals to do the same in Europe.

Burnham has made no secret that he wants to rejoin in his lifetime. At Prime Minister’s Questions before the Budget, the Prime Minister pointedly refused to rule out a second Brexit referendum when asked twice by Tory leader Kemi Badenoch. But he has has already discovered the political risks of setting out that vision. After calling for an “honest discussion” about restoring EU freedom of movement, he was forced to clarify that he would not reintroduce it without a referendum.

Downing Street subsequently insisted he was not proposing its return. And in a sign of how divided the Labour cabinet is on the issue, Healey has said he does not expect to rejoin the EU in his lifetime. At 66, he is ten years older than Burnham. The Brexit tightrope This week’s episode exposed the difficulty at the heart of Burnham’s strategy: making the case for closer ties with Europe without appearing to reverse Brexit or breach Labour’s manifesto commitments this parliament.

One supportive Cabinet minister believes Burnham is right to make the case for closer ties, but argues that he must avoid getting bogged down in the mechanics of negotiations and summits. The message, they say, should be about control: using greater co-operation with European partners to tackle illegal migration while making the economic case for a closer relationship with the EU. The minister argues that the public is more concerned about the loss of control symbolised by small-boat crossings than about freedom of movement itself.

Closer co-operation with European partners is essential to tackling the problem, they claim, potentially opening the door to more effective arrangements on asylum claims and returns. There is also scope, the minister believes, for a more nuanced debate about migration. One possible approach would be to make the right to stay in the UK beyond 90 days conditional on meeting a means test, rather than allowing unrestricted longer-term residence.

The economic case for closer ties has strengthened since Brexit, with central and eastern European economies performing strongly, the minister said. On the EU side, they would welcome closer relations – but not at any price. Sandro Gozi, a senior MEP and chair of the EU-UK Parliamentary Assembly, said Burnham’s readiness to reconsider freedom of movement marked a fundamental change in British thinking, potentially paving the way for a new partnership that could eventually include rejoining the EU.

“I think this is a new start. We are entering a new phase,” Gozi told The i Paper . “He rightly says that freedom of movement is not a price to pay for getting closer to the European Union. It is a major opportunity for British and European citizens, especially young people.” “The next summit is very important,” he added. “We need to resolve and conclude positively the negotiations currently under way, but above all, we need to establish a new strategic framework within which we can enhance our bilateral cooperation.”

He added that Burnham was showing “courage and bravery” in confronting the Brexit debate. The enthusiasm reflects a wider change in Brussels, where years of frustration with Britain’s reluctance to reconsider its Brexit settlement have given way to cautious optimism. EU mistrust Fabian Zuleeg, chief executive of the Brussels-based European Policy Centre, believes Burnham is laying the groundwork for a fundamental reassessment of Britain’s relationship with Europe in Labour’s next manifesto, while appealing to voters increasingly convinced Brexit has harmed the economy.

However Brussels would expect concrete proposals rather than simply warmer rhetoric, he cautioned. “There’s still a degree of mistrust. In particular, will the UK really follow through on these discussions? We’ve seen positive movement before without it leading to very much.” There is, however, another obvious problem with Burnham’s ten-year plan. Two of those years are constrained by existing manifesto commitments so in reality, he has just eight years to deliver the transformation he promises.

The question is whether he can do it without an election and a fresh mandate from voters. With speculation about a 2028 general election now gathering pace, Labour faces a narrowing window to make the difficult decisions needed to revive the economy before time runs out – or risk presiding over another year of drift and stagnation.