The Big Energy Questions Facing a Burnham Government

By Matthew Houlsby, Managing Director, Net-Zero Transition

When Andy Burnham enters Downing Street, he will inherit an energy system that is more successful, and more politically fragile, than at any point in the last decade.

In a recent speech where Burnham set out what his leadership could look like, he focused on how devolution of powers over utilities, including energy, can support reindustrialisation and industrial competitiveness for the UK.

The context is critical. The UK’s clean power transition is accelerating. Renewables are expanding, low-carbon investment is growing, and electricity sector emissions continue to fall. Yet public confidence remains weak. Bills are still politically toxic, infrastructure projects face opposition, industrial electricity prices remain uncompetitive, and the benefits of the transition are unevenly spread.

For Burnham, energy policy is unlikely to mean a major change of direction. It will mean a change of emphasis: from targets to delivery, from decarbonisation to affordability, and from national strategy to regional growth, while managing as well as possible the complex and unpredictable geopolitics of energy supply.

1. Is energy policy about carbon or bills?

The Starmer government’s central argument has been that clean power is the route to cheaper energy. That may be true over time, but it has struggled to land with households still facing high bills.

Burnham knows voters judge governments by monthly direct debits, not carbon intensity. He has spoken about the ‘Makerfield test’ before – making sure that national policies deliver for his constituents – so expect a continued sharp focus on visible consumer and voter outcomes: retail market reform, network charging, electricity market reform, insulation, heat pumps and stronger consumer protection. Net zero may remain the destination. Lower bills will be the political test.

2. How interventionist should the state become?

Burnham is instinctively comfortable with a more active state and a more active role for regional and combined authorities. But that does not mean wholesale nationalisation. The real questions are where government should own, where it should devolve responsibility, where it should regulate, and where it should use public capital to shape markets.

Great British Energy is the obvious test. Does it remain an investment vehicle, or become a strategic developer? Networks will also come under pressure, as rising investment needs and public concern over regulated returns sharpen scrutiny of ownership and regulation.

The government also faces overdue decisions on carbon capture clusters, hydrogen, the circular economy and the future of the Renewables Obligation, to name but a few. Investors can live with a more active state. They will struggle with uncertainty about its limits.

3. Can planning keep pace?

Every government wants more renewables, transmission, battery storage and clean industrial investment. Fewer communities want the infrastructure nearby.

Burnham’s devolution instincts point towards consent, local benefits and stronger regional voices. But nationally significant infrastructure needs faster decisions. Transmission lines, offshore connections, substations and industrial clusters cannot be delivered at the current pace.

The answer may be a new social contract for infrastructure: quicker planning in exchange for clearer economic benefits for host communities.

4. What role remains for North Sea oil and gas?

This is where Labour’s internal tensions are most exposed. Unions want jobs protected. Environmental groups oppose new production. Industry wants certainty.

Burnham is likely to take a more pragmatic tone on licensing. But given depleted reserves, exploration risk and long development timelines, this is more about political signalling than immediate energy security.

The bigger test is whether government can produce a credible transition plan for offshore workers, supply chains and coastal economies. Without that, every licensing decision becomes another proxy war over net zero.

5. Can clean energy become a regional growth strategy?

This could be Burnham’s defining contribution. His politics have long been rooted in the belief that growth depends on devolving power from Westminster.

Applied to energy, that means bigger roles for combined authorities in local energy planning, heat networks, flexibility markets and industrial decarbonisation. It also means designing clean energy investment around regional economies rather than Whitehall funding competitions.

Many of the UK’s strongest clean energy opportunities, from offshore wind and hydrogen to carbon capture and advanced manufacturing, sit outside London and the south-east. A Burnham government is therefore likely to treat energy policy not just as climate policy, but as industrial strategy.

A different political test

Burnham is unlikely to rewrite the UK’s net zero framework. The Climate Change Act, carbon budgets and investor expectations all point to continuity.

But the political test has changed. The first phase of the transition proved decarbonisation was possible. The next must prove it improves everyday life.

That means lower bills, better jobs, stronger regions and greater energy security. Without those, public consent will weaken. With them, Burnham could build a coalition for net zero that lasts.

As the UK's energy transition enters a new political phase, the need for clear, strategic communications has never been greater. If you'd like to discuss what these developments could mean for your organisation, we'd love to hear from you - [email protected].