Blain’s Morning Porridge July 22^nd, 2026 – Burnham’s New Regime and Why Social Housing could be a winner!

“Here comes the new boss, same as the old boss…”

Regime Change occurred in the UK with relatively a few headless corpses left on the field of political failure… Burham is juggling with talent, spending and tax constraints, to maintain confidence. To succeed he needs to get radical. Social Housing is one avenue to growth he could pull off, and it could be funded off-balance sheet. The UK ain’t finished yet!

LINK TO PODCAST

We are at a very interesting point in the markets… with so many potential flashpoints threatening to erupt into crises – which will prove minor speedbumps? What will be the consequences as the Iran crisis deepens with the Houthis about to open a second front in the Red Sea? What would a full-blown reversal of the AI narrative do to the US economy as the new Chinese Open-Weight models threaten to overturn the expectations around adoption, profits and spending?

All Topics for later this week as I catch up from a brief sailing break.

Let’s start with matters close to home in the UK where our fractured politics have become a case-study in topsy-turvy modern politics. Will the new “improved” Burnham Labour V2.1 regime make it any more successful than the already forgotten Starmer/Reeves effort?

• The goal is growth.
• The method is sustaining the Virtuous Sovereign Trinity of i) a Stable Currency, ii) a Sustainable Bond Market, and iii) Political Competency to sustain the base-conditions required for growth.
• The constraints are taxes, spending, business and consumer confidence, and demonstrating political ability.
• The risk is failure and a populist rejection of politics at the next election – deepening the downside for Broken Britain.

I decided to wait a day before commenting on new Prime Minister Andy Burnham’s assemblage of political talent. His choices seem not to have overly scared the horses. 10-year gilts are toying either side of 5%. Sterling didn’t crash out and burn. But already the press is all over them for unfunded policy announcements and trying to sew division. UK Politics is the modern equivalent of Bearbaiting – which is why confidence across all politics is now so febrile.

The two big surprises were appointing John Healey as Chancellor and Wes Streeting as Defence Minister on Monday. Like all British Prime Ministers, the challenge for Burnham was appointing a Cabinet to reflect and control the party while simultaneously demonstrating they have collective competence and ability to the electorate. As such it’s a game for smart politicians to play – how do they optimise their apparent skill sets and claimed allegiances to best progress up the greasy pole of political preferment. (I could add the appointment of Ed Miliband as Foreign Secretary; a clear sign that Burnham isn’t too worried about the relationship with Trump’s administration in the US.)

If the Camel is how the Horse would look if had been designed by a cabinet committee, then John Healey could be the result of a political design brief. (Nothing against Healey or Camels – the camel might look ridiculous, but it does plenty of what a horse does – often better.) Healey ticked all the boxes for the Chancellorship – despite nobody being able to remember anything particular he’s actually said, done or achieved, except that he resigned as Defence Minster a couple of weeks ago. That may be his defining characteristic. He was a surprise choice given all the talk about Millipede or the highly competent Shabana Mahmood. He’s a long-term skilled if colourless, moderate Labour apparatchik. His background in trade unions before joining the Blair/Brown Government as a junior Treasury minister gives him the chops for the job.

Healey’s resignation as UK Defence Minister just a few weeks ago was either the straw that broke the back of the Starmer administration, or (as some suggest), it was a brilliantly played hand giving him leverage to secure the top job from Burnham – which any political observer could see coming. I suspect Healey enjoyed the Defence Brief but is a politician at heart. His resignation on a matter of principal – that Starmer was failing to fund the defence of the nation – makes him look the honourable man. Burnham would not want ambitious rivals at his table in Parliament.

Streeting as Minister of Defence is an interesting call. He is not a military man and has never shown much interest in the topic. But he’s a skilled political operator and pragmatist. Before he resigned, he was doing a passable job getting to grips with the NHS – with the right vision and understanding of how much the battlespace has changed – he may just prove an enlightened choice for the MOD. I wish him luck. He will need it.

Where will the UK go from here? The problems in the UK are not about inventiveness or innovation, but around scale and momentum in an economy speed-bumped by regulation and costs. Raising taxes to fund spending will further cripple the economy. Yet, we know austerity policies don’t boost the economy either. For all the noise about the coronation of the King of the North as the new Premier – the reality is nothing much can change for a government trapped by spending constraints.

Labour will fail unless they get radical.

Solving the welfare spending crisis is the obvious one. But where to start? I am delighted to hear that social housing is one of Burnham’s key priorities. It’s an obvious solution to a major impediment in the UK – the lack of secure accommodation for young workers to begin and expand careers while embarking on family formation. Once they are earning and paying reasonable rents, then the economic multipliers are obvious. Give them homes close to work is critical.

The effect of building literally millions of social apartments around the UK could itself trigger growth. (And if you are looking for the construction labour force, my pet hate is homebuilder Persimmon – nationalise them, and put the CEO on a treadmill (see my recent book, The Battle for Hamble to understand.)

It’s also social policy in action. Put young people back in City Centres and watch what happens in terms of new shops and street life. According to a recent survey, nearly 49% of British Women under 30 say they plan or expect not to have to children because they can’t afford it and fear a lack of housing security if they do. Slowing the pace of demographic decline will have multiple positive consequences for social cohesion and future growth.

There should be a caveat – new social housing should be prioritised for workers – not welfare cases. That’s always a tough call – the deserving poor vs the deliberately poor (who choose to game welfare payment as a lifestyle option over work.) Social Housing is part of the welfare solution – and a key problem for the UK is slashing the welfare spend. Housing benefits account for about 11% of the UK’s £335 bln Welfare Spend.

The cost of social housing could be addressed through the markets and effectively kept off government balance sheet, together with a rethink on how local authorities and housing association’s function. I’ve written many times about how a new National Housing Fund could finance a new UK social rental sector. Check it out here and here.

There are always solutions… if you are willing to go seek them.

Out of time, and back to the day job…

Bill Blain

Author of the Morning Porridge
CEO Windshift Capital
Advisor – Spitfire Strategic Capital

Meanwhile, don’t forget about my new book:

You can read a review on the Society of Professional Economist’s website here.

The Battle For Hamble is a proper grown-up examination of how economies fail: a tale of Greedy Corporates, Bad Planning and Economic Illiteracy. It uses a wholly unnecessary Gravel Quarry in the middle of a prosperous village to illustrate the multiple failings and abdications of responsibility that have created Broken Britain. It’s about bureaucracy, money, exploitation and shareholders vs stakeholders. It’s about social injustice – asking why it’s ok to put 6000 jobs at risk so corporate bosses can reap bigger bonuses! Whether is the Hamble Quarry, HS2 or the abysmal state of UK armed forces due to bad procurement, read the book to understand how its broken process and bureaucratic indifference that is sinking Britain.