In the end, the result was not even close. Andy Burnham won the pivotal Makerfield by-election with nearly 55% of the vote. He increased Labour’s vote share from the 2024 General Election with a higher turnout. The change Burnham has promised clearly captivated Makerfield’s voters. There are no caveats to his victory.
So, what happens now, and what should businesses be doing?
Things will likely move quickly in the days and weeks ahead.
Such a comfortable result in Makerfield has led to many in Labour believing there should be a swift move, with a belief that Burnham should be elected leader without a contest and become Prime Minister in the coming weeks.
This will be tested in frenetic conversations in the coming days. Keir Starmer has been quick out the blocks to say he will contest a leadership election, as he is entitled to as sitting Leader.
Wes Streeting, the former Health Secretary, has similarly outlined his intention to contest the election in a “battle of ideas” and is adamant he has the 81 names needed.
What is clear, is that this weekend will see Labour luminaries attempt to play kingmaker. This sets Britain – and the UK’s businesses – up for a summer where politics dominates. Whether it’s a Labour leadership battle, or a new PM setting their agenda.
Whoever prevails will be confronted with the same challenges facing the current Government:
- Dangerously low fiscal headroom
- Nervous bond markets
- Ever mounting international crises
- War in Europe
- Energy costs sapping economic growth
- An impatient and demanding electorate
Burnham has walked a difficult path in recent weeks, appealing to the Makerfield electorate specifically rather than the country. His supporters firmly believe they have answers to the challenges they will face if their man does get the top job.
Fundamentally Burnham firmly believes in more state intervention and a change to the economic status quo.
That means insourcing rather than outsourcing. A significant shift to social housing rather than affordable housing. Stronger public “control” (notably not ownership) of utilities, on the model of the bus franchising he has overseen in Manchester. Cuts to business rates for high streets shops, with higher taxes on internet giants like Amazon.
With the Makerfield challenge now safely behind him, more specific announcements are likely to come swiftly – along with a concerted effort to soothe the concerns of business and the markets.
Wes Streeting has also outlined his pitch to tackle the myriad challenges the country faces, calling for a “Wealth Tax that Works” and a move to “progressive capitalism”.
For businesses, this is naturally a worrying time. Uncertainty and a shift of approach does not sit naturally with economic growth and long-term business decisions.
All the players are aware of this, and there will likely be a concerted effort to engage pragmatically. Insights and engagement will be critical going forward.
But there is more about the results to digest, even if Makerfield has taken the bulk of the headlines.
Last night also gave us insights into the state of play of other parties, namely Reform and the Conservatives.
For Reform, Makerfield was the type of seat they expect to win. They overwhelmingly won in Council elections just weeks ago. Even with Andy Burnham as Labour’s candidate, all expectations were that they would, at worst, run the contest close.
Instead, there was light and day. In recent by-elections they have been pipped to the post as voters actively voted against them. Even in Runcorn, they only won against an unpopular Labour Government by a mere 6 votes. Tactical voting to stop Reform is becoming the norm.
Worryingly for Farage’s strategy, they are now also contesting on their own right wing. Restore Britain came from nowhere to take over 3,000 votes, and online algorithms – particularly on Elon Musk’s X – heavily promoted them.
With Reform also coming third in the Aberdeen South by-election serious questions will be asked about their way forward, and Farage will come under significant pressure to lean to his right to shore up the flank from Restore.
Doing so may lose them more votes than they gain, with polling already suggesting his positioning on the horrific murder of Henry Nowak spooked some voters in Makerfield who would otherwise be aligned towards Reform.
Kemi Badeonch’s Conservatives might have had a bad night in England’s north west, but can point to their success in Aberdeen South, marking their first Scottish by-election victory in an astonishing 50 years, and local gains from Reform in England as a sign they’re turning things around. Aberdeen South is undoubtedly a big win, but the context is critical for understanding what it might mean.
Badenoch made skilled jobs and the future of oil and gas central to her party’s pitch, squeezing both the Labour and SNP Governments whose Net Zero policies are, in their view, threatening the industry. It has worked well, and a clear focus on protecting the industry and having a pragmatic approach to energy security is likely to be built on going forward.
For businesses, the key lesson from these results is that political volatility is not a temporary backdrop but the operating environment itself. The assumptions that shaped engagement strategies at the start of this Parliament may no longer hold by the autumn.
A new Labour leader or a weakened incumbent – would mean new advisers, new priorities, new language and, potentially, a very different approach to the relationship between government, business and the state.
The organisations best placed to navigate this period will be those that move beyond simply monitoring events and start actively mapping what change would mean for them. That means understanding the people, factions and policy ideas shaping the debate; identifying where their objectives align with the next phase of the political agenda; and engaging early with credible evidence and practical solutions.
In a period of political flux, silence is rarely a strategy. The businesses that can explain their value clearly, constructively and at the right moment will be the ones best positioned for what comes next.
Political volatility is now a commercial risk. Explore how TEAM LEWIS’ Public Policy team can help you anticipate change, engage the right stakeholders and shape outcomes – before decisions are made
