Britain has a new Prime Minister, a new Chancellor, and a Budget date in the diary – 28 October 2026.

For businesses across Liverpool and Manchester, it carries an unusual extra dimension: the two people setting the country’s fiscal direction have deep North West ties, and several of the sectors we work across are set to feel the effects of the change in government.

The short history of Andy Burnham and John Healey

Andy Burnham became Prime Minister on 20 July 2026, stepping down as Mayor of Greater Manchester to do it, after Keir Starmer resigned following poor local election results. His governing approach – dubbed “Manchesterism” – is built on the devolution model he ran in Greater Manchester: a “No. 10 North” office based in Manchester, social housing investment, public ownership of key utilities and reindustrialisation, alongside public commitments to existing fiscal rules to reassure markets.

His Chancellor, John Healey, is a less familiar face in economic circles – he resigned as Defence Secretary in a spending dispute with predecessor Rachel Reeves before an appointment that surprised Westminster, though he did serve as a junior Treasury minister under Gordon Brown between 2002 and 2007. Markets read him as a “safe pair of hands”: gilt yields fell on his appointment, and Bloomberg-surveyed investors rated him their second choice for the role. Early polling gave Burnham the best favourability rating of any incoming PM since Theresa May – the “Burnham bounce” – though his personal ratings have moved around since, with the public increasingly split on whether he’s principled and trustworthy.

What the 2026 Budget could contain

Healey has said the Budget will be “built on fiscal discipline.” The National Institute of Economic and Social Research (NIESR) has warned of a roughly £24 billion funding gap by the end of the decade, driven by costly early commitments – VAT off energy bills, the £2 bus fare cap, business rate cuts, social care reform – against inflation forecast to stay above target until 2029. That leaves Healey choosing between raising revenue, cutting spending, or a real-terms squeeze on services. Burnham has faced internal pressure for a wealth tax and property tax overhaul and hasn’t ruled out tax rises for social care – but the picture isn’t one-directional. There’s pressure running the other way too: Burnham told broadcasters he’d “look at” raising the frozen income tax personal allowance, while insisting there’d be no “unfunded” promises – a position Bloomberg Tax described as increasingly muddled, given the policy would cost billions if implemented. Either way, it sharpens the funding question the Budget has to answer. Worth remembering too: Reeves’ final Budget in November 2025 already introduced a mansion tax on £2m+ homes from 2028 and raised tax on dividend, property and savings income by 2 points – a direction of travel Healey may find easier to build on than reverse.

The new part: devolved tax powers

The most consequential announcement for the North West isn’t a tax rate – it’s structural. On 31 July 2026, government confirmed regional mayors will get a share of income tax receipts generated in their own economies, with combined authorities retaining more business rates from Spring 2027. Income tax rates don’t change; this redirects existing revenue to where it’s generated. Analysts have called it the most significant fiscal devolution since England’s mayoral system began, moving closer to the German or Canadian model. The Liverpool City Region is named as an immediate beneficiary; Greater Manchester’s new mayor Bev Craig labelling the move as potentially ‘life-changing’.

That regional alignment runs deeper than policy. Burnham was born in Aintree, Merseyside (though raised in Culcheth, Cheshire – locally debated whether that makes him a ‘genuine Scouser’), remains a lifelong Everton supporter and long-time Hillsborough justice campaigner, and has a close working friendship with Steve Rotheram, Liverpool City Region mayor since 2017 who has said he’ll lobby Burnham to relocate civil service jobs to Liverpool. It represents an alignment of political will behind the North West specifically, distinct from investment aimed at the North of England more broadly.

Sector by sector: what’s moving

Construction and social housing have the clearest tailwind of any sector we work with:

A £39 billion Social and Affordable Homes Programme, a £16 billion National Housing Bank, and planning reforms forecast to add 170,000 homes over five years. The Regulator of Social Housing expects around £10.9 billion a year in repair and maintenance spend over the next five years. Set against that: private housing output is still forecast to fall roughly 7% in 2026, and 62% of planners report permissions are getting harder to secure despite the reform push – the 60% Social Rent requirement within the housing programme is also flagged by CBRE as a real constraint on delivery speed, since it’s the least commercially viable tenure.

Manufacturing got a genuine boost from British Steel’s move into full public ownership on 16 July 2026:

Plus £500 million for Tata Steel’s Port Talbot transformation. But the new steel trade measures behind that protection – tariff-free import quotas cut by around 51-60%, a 50% tariff above that – have drawn a formal petition from manufacturers reliant on specialist steel grades not produced at scale domestically (aerospace, defence, motorsport, energy), who warn the measures could disadvantage the wider industrial base, per IOM3.

Retail and hospitality are getting repeated business rates support:

15% relief for pubs and live music venues from April 2026, a further 20% cut from 2027/28, and Burnham has signalled this week that the government is looking to go further at the Budget. The likely funding source is less welcome for eCommerce and logistics specifically: reports point to higher business rates on large fulfilment warehouses, which the British Retail Consortium and UK Warehousing Association warn could raise costs and discourage investment – effectively a transfer from online retail to the high street.

Technology and software

Burnham scrapped the £1.8 billion national Digital ID programme in his first days in office, and reports suggest the Department for Science, Innovation and Technology may be broken up and distributed elsewhere. TechUK and the Startup Coalition wrote directly to Burnham warning this was the “wrong change at the wrong moment” for a sector growing at 10% a year, per Computer Weekly. Digital and creative businesses are largely insulated from this so far – creative industry tax relief hit a record £2.4 billion, with video games relief up 12%, and the AVEC/VGEC transition is proceeding on its existing timetable untouched.

Academy trusts get an extra £700 million for 2026/27

…but face a stricter new Academy Trust Handbook from October requiring detailed inter-school funding breakdowns and new restrictions on pensions and CFO recruitment – a real compliance burden on top of existing SEND deficit pressure, per ICAEW and Schools Week.

Property benefits from the same long-horizon, regionally-focused investment thesis Burnham favours

…but still potentially carries the ‘mansion tax ‘and 2-point property income tax rise from Reeves’ last Budget.

Public sector stand to gain from the devolution funding shift but face the same £24 billion gap pressure as everyone else.

Professional services and charities and not-for-profit

haven’t seen material sector-specific change from the new government yet – the pressures already on our radar (audit market consolidation, ECCTA/ACSP, SORP 2026, the general funding squeeze) remain the main story for both.

The common thread

Burnham’s cost-of-living measures have already been delivered, but they’re not funded beyond cancelling Digital ID – and NIESR’s £24 billion gap means the Budget has to answer who pays. Based on the direction Reeves already set, property, retail logistics and higher earners are widely rumoured to be the likeliest sources; construction, social housing and steel manufacturing look like the clearest beneficiaries of new spending so far. We’ll be tracking the detail as it lands on 28 October, with a particular eye on what it means for businesses across Liverpool, Manchester and the wider North West.