Businesses warn Burnham that ambition on devolution needs a delivery plan

Andy Burnham’s first major economic intervention since becoming the effective prime minister in waiting has been greeted with a wary mixture of interest and scepticism by business leaders, who welcomed the language of growth and regional renewal but warned that greater intervention in transport and utility markets must not come at the expense of investment.

In a 35-minute speech at the People’s History Museum in Manchester, the former Greater Manchester mayor set out a broad programme that would, in his words, “re-industrialise” Britain, strengthen public control over essential services, and redirect power and resources away from Westminster. His pitch was framed as a decade-long mission to raise living standards across the country, with a “No 10 North” nerve centre overseeing what he described as a more balanced model of national development.

The speech, delivered a week after he forced Sir Keir Starmer’s resignation, was intended to position Burnham as the political figure most likely to define the next phase of Labour government. He cast Britain as an economy in need of a new industrial strategy, one that would support “good growth in every British postcode” and rebuild capacity in sectors he regards as strategically important, including steel, defence, energy, food and farming. He also promised reform of business rates to help pubs and high street retailers, businesses that have long argued that the current system punishes labour-intensive firms while favouring online and out-of-town models.

But while Burnham’s language was expansive, the reaction from the City and business groups suggested that enthusiasm for the broad thrust of his plans is tempered by a demand for detail. The core concern is not the politics of devolution itself, which many companies and trade bodies have long supported, but the practical question of how a more interventionist state would be funded, how quickly it would operate and whether it could be delivered without undermining private-sector confidence.

Alex Everett, an investment director at Aberdeen Investments, described the speech as optimistic, though “light on detail”. Simon French, chief economist at Panmure Liberum, was more pointed, calling it a “pitch to Make Albion Great Again”. His formulation captured the rhetorical force of Burnham’s intervention, but also the uncertainty surrounding its policy substance. French said the speech was heavily weighted towards regional devolution, place-based policymaking and a national-interest industrial strategy, but that it remained unclear what policy architecture and political alliances would underpin such ambitions.

That criticism goes to the heart of the business response. Burnham’s argument rests on the idea that the state should steer more decisively, using public ownership or stronger public control where markets are judged to have failed, while also shaping investment towards sectors and places with the greatest potential for long-term productivity gains. Yet for firms already contending with higher taxes, rising labour costs and a weaker investment climate since Labour’s return to power in 2024, the prospect of further intervention raises a familiar concern: whether the government is encouraging new capital or making the UK a less predictable place in which to deploy it.

One veteran business leader, speaking privately, put the issue bluntly. The speech might be laudable in intent, he said, but the serious questions are where the money will come from, what trade-offs will be made, and when the promised changes will arrive. For companies making investment decisions over the next year, the problem is not simply ideology but timing and certainty. Targets matter, but so do delivery mechanisms, measurement and fiscal credibility. Without them, even an attractive national story can look little more than an aspirational prospectus.

That view was echoed in more measured terms by Shevaun Haviland, director general of the British Chambers of Commerce. She said businesses would judge Burnham’s plans on whether they deliver the boost to investment, productivity and trade that the economy urgently needs. The chambers’ network has long supported devolving power over transport, skills and infrastructure to local areas, she noted, but fiscal devolution must be used to spend money well and stimulate growth, not become a vehicle for additional burdens on business.

Rain Newton-Smith, chief executive of the CBI, offered a similar response. Business leaders, she said, would be encouraged by attempts to use devolution as a lever to help regions outside the south-east attract more investment. Yet she stressed that firms would need a clear delivery plan, particularly on business rates, and warned that intervention in transport and utilities must avoid deterring investors. In her view, public-private partnerships remain the most effective and affordable way to renew essential infrastructure, because they can crowd in private capital and support long-term growth. Public spending alone, she argued, cannot resolve the cost-of-living crisis or transform the economy. For business to serve as the engine of growth, government must first address the cost of doing business, which she said has already reached a tipping point.

That phrase captures the tension running through Burnham’s proposal. He is not arguing for growth in the abstract, but for a form of growth that is more geographically distributed, more state-directed and more rooted in manufacturing, advanced services and local industrial ecosystems. In his telling, the British economy has become too centred on financial returns, too passive in the face of declining industrial capacity and too weak in linking regional strengths to national strategy. His prescription is to reverse that pattern through a combination of public planning, procurement reform and a stronger role for government in industries that he believes are too important to be left to market forces alone.

He said the key to higher growth lies in “world-beating British manufacturers and service providers at the frontier of new technology and exporting to the world”. To support that goal, he outlined a more collaborative approach between regions with complementary industrial strengths, citing the potential for cross-UK partnerships between places such as Cambridge and Manchester in life sciences. The aim, he suggested, is to make better use of the full value of “UK plc” by ensuring public procurement helps British-based suppliers become more stable and competitive.

There is an economic logic to that approach, particularly in a country where productivity growth remains stubbornly uneven and where the benefits of innovation often cluster around a relatively small number of places. Burnham’s emphasis on regional clusters reflects a recognition that growth is rarely created by single policy levers alone. It depends on links between universities, firms, public agencies, transport systems and skilled labour markets. In that sense, his pitch is not simply about more state intervention but about a more coherent state, one that can align local strengths with national priorities.

Yet there are limits to what can be achieved through rhetoric and broad strategic intent. Duncan Johnson, chief executive of Northern Gritstone, the investment consortium backing academic spin-outs in the north of England, welcomed Burnham’s support for innovation but warned against dispersing resources too thinly. If government tries to spread support everywhere, he suggested, it may fail to create the concentrated clusters that actually drive innovation and commercial success. That caution is significant because it exposes one of the recurring dilemmas in British industrial policy: whether levelling up means levelling the playing field everywhere or concentrating investment where it is most likely to generate scale and momentum.

Burnham also used his speech to challenge the assumption that higher education should remain the dominant route into success. He said he wanted to bring an end to “the days of a school system configured entirely around the university route”. That theme will resonate with employers who have long argued that technical education and apprenticeships have been undervalued. Business groups generally support greater parity between academic and technical qualifications, and Haviland said as much. But the issue is politically delicate, because any effort to elevate technical routes must avoid creating the impression that universities are being downgraded or starved of support.

Joe Marshall, chief executive of the National Centre for Universities and Business, made that point explicitly. Universities, he said, do much more than provide skills and talent. They also drive research and innovation, which help create the next generation of business activity. Achieving parity between academic and technical routes should not therefore mean reducing support for universities, whose finances are closely connected to their wider economic role. That is an important reminder that the debate about vocational education should not become a crude zero-sum contest between institutions that each contribute differently to growth.

The broader political context explains why Burnham’s intervention has attracted so much scrutiny. Taxes and costs have risen since Labour returned to office in 2024, and business sentiment has worsened. The government’s economic record is therefore already under pressure, and Burnham’s speech was widely interpreted not simply as a policy statement but as an attempt to redefine the terms of debate within Labour itself. His vision has the appeal of clarity: more power outside London, more control over strategic sectors, and a state willing to shape industrial change rather than merely respond to it. But the reaction from business indicates that support will be conditional on whether that vision is translated into predictable, investable policy.

There is also a deeper issue about the relationship between growth and control. Burnham’s rhetoric suggests that public authority can be used to correct market failures, rebuild strategic industries and improve living standards. Business leaders do not necessarily reject that proposition, but they want reassurance that intervention will be disciplined, targeted and funded in a way that does not discourage the very investment the country needs. In a climate where capital is mobile and international comparisons are unforgiving, political ambition alone is not enough. Investors want to know which sectors will be prioritised, how quickly regulations might change and whether the government can maintain a stable framework over time.

That is why the demand for a “clear delivery plan” has become the common refrain from industry figures. It is not a refusal to engage with Burnham’s ideas, but a request that they be converted into policy that can survive contact with fiscal reality. The speech may have been designed to signal a break with the cautious managerialism that has dominated recent economic debate. Whether it can also persuade firms to commit capital will depend on whether Burnham can reconcile a more assertive state with the practical necessities of investment, competition and scale.

For now, his message is straightforward: Britain needs to make more, decide more locally and stop relying on a narrow set of routes to prosperity. The appeal of that argument is obvious in places that feel left behind by the current model. But the test for business, and for any government that may emerge under Burnham’s leadership, is whether the new order he promises can be turned from political vision into economic reality without placing another layer of uncertainty over firms already struggling with higher costs and sluggish confidence.