Incoming UK PM Burnham eyes utility nationalisation, North Sea oil

Andy Burnham will become the UK’s 59th prime minister next Monday, bringing a flurry of policy announcements that threaten to reshape the country’s utilities and energy sectors.

The incoming leader is preparing plans to take water and energy companies under public control. This proposed nationalisation programme will form a central pillar of his early agenda, alongside a new council house-building initiative.

In a notable departure from the 2024 Labour manifesto—which explicitly pledged to halt new oil and gas licensing while honouring existing contracts—Burnham is expected to signal new drilling in the North Sea. The immediate focus of this potential policy reversal centres on the Rosebank and Jackdaw fields in Scotland.

Regulators had originally approved these two assets in 2022 and 2023 under the previous Conservative government. However, both approvals were overturned in 2025 following legal challenges, leaving their operational fate unresolved.

Despite initial reports of an imminent announcement on North Sea drilling, a source close to the incoming prime minister stated that no final decisions in this area had yet been made. For energy investors, this creates immediate uncertainty. The market must now weigh the likelihood of a manifesto U-turn against the possibility that the initial drilling reports were premature, leaving capital expenditure plans for the basin in suspense.

Beyond the energy sector, Burnham intends to outline new measures to give “people breathing space on the cost of living.” He has promised a “dynamic start... focused on delivering tangible change to people's lives as soon as possible.”

His ascent follows the rapid collapse of Keir Starmer’s government, which suffered a severe drop in polling and lost Wales for the first time in over a century. Facing existential threats from both the radical-right Reform UK and the left-wing Greens, parliamentary Labour MPs turned to Burnham as their best chance of electoral survival.

This precarious political foundation suggests the new administration will prioritise popular, interventionist economic policies over orthodox market-friendly approaches. Burnham’s decisive by-election victory in Makerfield—a constituency where every ward had previously been won by Reform UK—demonstrates his ability to defy expectations. For executives and investors, this points to a leadership style willing to take significant political risks with direct consequences for corporate ownership and energy licensing.