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As Labour prepared to enter government in 2024, then-chief of staff Sue Gray assembled what insiders reportedly referred to as a "priority issues list"—a briefing outlining the most urgent challenges the new administration would face.
Now, with Andy Burnham succeeding Keir Starmer as prime minister, Gray has returned in an informal advisory role. Once again, she is helping an incoming leader navigate a series of pressing political and economic issues expected to dominate the government's first weeks in office.
1. Tackling the Cost of Living
Burnham has pledged to focus on increasing household incomes and easing financial pressures on families. His adviser, Miatta Fahnbulleh, has indicated that addressing the cost-of-living crisis will be one of the government's immediate priorities.
Among the proposals reportedly under consideration are a one-year freeze on private sector rents, lower caps on bus fares, and shifting green energy levies from household bills to general taxation. However, implementing these measures would require significant funding. Although some Labour figures have called for higher taxes on wealth to finance the plans, Burnham has suggested he is unlikely to pursue such tax increases in the short term.
2. Financing Defence Commitments
Burnham also inherits a substantial funding gap in the UK's defence spending plans, estimated at around £4.7 billion.
Officials in Downing Street and the Treasury have reportedly suggested increasing government borrowing to cover the shortfall, arguing that there remains some fiscal room within existing debt targets. However, rising inflation linked to the conflict with Iran has reduced that flexibility, while Burnham must also finance his domestic priorities and potentially bring utility services back under greater public control.
3. Deciding the Future of Thames Water
One of the most urgent infrastructure issues concerns Thames Water, whose creditors are attempting to secure a £10 billion rescue package.
Former Environment Secretary Emma Reynolds opposed the proposal, arguing it would offer poor value for taxpayers. Burnham must now decide whether to support the rescue plan or seek a High Court order placing the company into special administration—a move that could pave the way for public ownership.
4. Reforming Political Funding
Before Parliament's summer recess, the government delayed further debate on the Elections Bill to prioritise the passage of the Hillsborough Law, leaving several unresolved political reform proposals for Burnham's administration.
Labour MPs have put forward amendments including limits on political donations, a ban on cryptocurrency donations, and the creation of a commission to examine wider electoral reform. Burnham has previously advocated for a different approach to politics, making these proposals an early test of his commitment to reform.
5. Completing the UK-EU Reset
Plans for a UK-EU summit aimed at improving post-Brexit relations were postponed after it became clear that Starmer would be leaving office.
Negotiations had already produced draft agreements covering agriculture, energy cooperation and expanded youth mobility visas. However, one major disagreement remained over EU demands that European students pay the same university tuition fees as domestic UK students—a proposal estimated to cost more than £100 million.
The postponed summit means Burnham will now have to make the final decision on this and other politically sensitive issues before any agreement is concluded.
6. Managing Relations with the United States
During his time as prime minister, Starmer prioritised maintaining strong ties with US President Donald Trump.
However, relations reportedly deteriorated after Starmer criticised the US position during the Iran conflict. Burnham must now determine whether to rebuild the relationship with Washington or adopt a more independent foreign policy stance, reflecting the views of many Labour MPs who favour greater distance from the current US administration.
