Client Update - 26th September 2025

Despite Nigel Farage deflecting much of the news flow away from Sir Keir Starmer this week, the Prime Minister still fell foul of a surprise leadership challenge this week from Andy Burnham, Labour mayor of Greater Manchester.

Speaking in the run-up to Labour’s annual conference, Burnham said MPs were privately urging him to challenge Starmer and set out his personal manifesto for the party leadership. Burnham did not deny he was interested in the Labour leadership — which he has tried and failed to win on two previous occasions — and made it clear that if he was successful, he would take the party sharply to the left.

Burnham, who has stood twice previously to be Labour leader, claimed on Wednesday that some Labour MPs wanted him to stand against Starmer, whose poll ratings are indeed at rock bottom. He set out a range of policies intended to appeal to the Labour left, including a nationalisation programme to reverse the Thatcher revolution of the 1980s. “When you’ve lost control of housing, energy, water, rail, buses, you’ve lost control of the basics of life,” he said. Burnham suggested that the cost of renationalising such services could be partly recovered by reclaiming dividends already “siphoned out” to shareholders. Burnham also proposed higher taxes on the wealthy, including a 50p income tax rate for the highest-paid and steeper council taxes on expensive homes in London and the south-east and to borrow £40bn to build more council homes.

Bond investors have warned that a Labour government led by Andy Burnham would spark a fresh sell-off in gilts and the pound if it launched a borrowing spree against a backdrop of fragile markets. Burnham has said the UK should not be beholding to bond markets. However, the proposal to borrow an extra £40bn alongside a mass nationalisation programme would be likely to alarm a gilt market already under pressure from the scale of UK government borrowing.

Sticking with UK politics, as it is already conference season, this week saw the Liberal Democrat Leader Ed Davey round off his conference with a cunning attack on a key rival for the next elections - Nigel Farage.

His point was simple and effective - “Farage = Trump”. I wrote last week about how unpopular Trump is here. Farage is a polarising figure in British politics — very popular with around a third of the country, very unpopular with the rest. Trump however is not really polarising at all in the UK — almost all voters dislike him and don’t want something that looks like Trumpism in the UK. Labour is in government and therefore have to sound diplomatic. Farage’s associations with Trump world are too well-established for him to disassociate himself. And the Conservatives under Kemi Badenoch are unwilling to criticise Trump, which means that Davey has this particular bit of political real estate all to himself: he can say “Trump is bad, Farage agrees with Trump, therefore, we’ve got to stop Farage”. There are other, smaller parties, like the Greens also saying this, but Davey benefits from being the leader of the largest party with this position.

Davey is a genuine centrist whose objection to the Labour government’s leftward positioning on private schools and its taxes on farmers are based on principle, not just because the seats that the Liberal Democrats hold are full of parents hit by VAT on private schools and small farmers opposed to many of the measures in Rachel Reeves’ first Budget. He appears to be gaining some ground here.

What is clear is that the conference season will bring with it soundbites, self-preservation from politicians in power and an insight into what awaits us in a few years’ time (or earlier if things go horribly wrong for Starmer) when the next elections arrive. Rather than listening to our politicians, I suggest you turn off the news feed, do something that you enjoy, spend time with family and friends, watch England win the women’s rugby world cup and above all – do have a good weekend.