Burnham tells MPs Britain took 'a series of wrong turns' for 40 years and pins blame on Brexit and Thatcher

Andy Burnham used his first appearance in the House of Commons as prime minister to deliver a blunt diagnosis of British decline, blaming Brexit and the Thatcher era for a decade of low growth and arguing the country had taken "a series of wrong turns" over the last 40 years. About six weeks into the job, Burnham framed his premiership as a break with that record, telling MPs he wanted to build a new sense of optimism so "we can make this next decade better than the last".

The speech came hours after his predecessor, Keir Starmer, announced he would stand down as MP for Holborn and St Pancras, reversing a July pledge to stay until the next election. Starmer said he wanted to focus on international affairs. His departure hands Burnham an immediate byelection test in a seat where the Greens expect to be competitive.

Burnham's central economic claim was specific. The UK economy has taken a 6% hit from the effects of Brexit, according to economists' analysis of internal Bank of England data on thousands of British companies since the 2016 referendum. In his three-hour Commons statement, he argued that the Brexit vote was itself a reaction to earlier policy choices. "Political power was centralised, economic power privatised, the country de-industrialised," Burnham said. "Austerity followed, hollowing out councils and depriving them of the agency to act to reverse any of this." Brexit, he said, compounded the damage and ushered in "a decade of low growth and stalled regeneration".

The prime minister, whose Makerfield constituency voted Leave in 2016, has previously argued against re-running the referendum but said he wants the UK to rejoin the EU in his lifetime. He told MPs the next UK-EU reset summit could take place in November. Burnham also set out three priorities the cabinet was briefed on the previous day: cutting the costs of essentials such as childcare and mortgages, regenerating communities, and giving the public greater control of water, housing and energy. His deputy, Louise Haigh, will lead task forces on each area, and Burnham told ministers they must be "relentless" in delivering them.

On specific policy lines, Burnham hinted at a commitment to spend 3% of GDP on defence by 2030, saying he had appointed John Healey as chancellor "precisely because" of his stance on military spending. He signalled openness to renationalising water, describing the privatised sector as a "leaking monument" to those failures, and opened the door to revisiting electoral reform in Labour's next manifesto, subject to an electoral consensus. On energy, Burnham said he would attend the Cop31 summit in Turkey and continue pursuing renewables but would be "pragmatic" about supply, indicating the Jackdaw gasfield is likely to be approved. "The mistake is saying it's got to be one or the other for political purposes. The truth is, it's going to have to be both."

Tory leader Kemi Badenoch accused Burnham of "living in the past". She pointed out that Thatcher, prime minister from 1979 to 1990, took office before Badenoch was born and argued Burnham was effectively calling for a return to the 1970s.

Burnham's diagnosis lands against a difficult fiscal backdrop. The chancellor's headroom against Labour's fiscal rules could be halved at the first budget if the current global bond sell-off persists, and economists have warned mortgage rates could rise this autumn. His promise to cut the cost of essentials therefore faces immediate pressure from market conditions he does not control.

The first political test, however, is closer to home. Starmer's departure from Holborn and St Pancras hands Burnham a byelection he cannot afford to lose and where the Greens are already organising. Combined with Burnham's call for a "much more substantial change" on the big issues facing the country, the coming weeks will show whether his diagnosis of 40 years of decline translates into parliamentary momentum or into an early electoral headache.