Labour at crossroads as Liverpool conference looms amid internal rift

LIVERPOOL, England — Labour is entering its annual conference with a visible internal rift that threatens to widen into open conflict in the months ahead. A deputy leadership contest to replace Angela Rayner has exposed a fractured mood within the party, with poll numbers showing Labour struggling to hold on to around 20% of the vote and Keir Starmer’s personal standing reported as weak in multiple surveys. The tally of MPs who could lose their seats in a future election, commonly stated in the tens of dozens, has amplified backbench anger and fuelled talk of replacing, or at least challenging, Starmer sooner rather than later.

Former Cabinet minister and Greater Manchester Mayor Andy Burnham has stepped into the breach as a vocal challenger, courting disillusioned Labour members with a left-leaning, pro-bolder economic agenda. He has used interviews and profiles to articulate a stark critique of the current government and to advocate his own blueprint for the party. Observers note that Liverpool, Burnham’s home county, has quickly acquired a reputation as the stage for his push to become Labour’s alternative to Starmer.

Supporters and critics alike describe Burnham as personable and authentic, with a mana around him that contrasts with Starmer’s more restrained public persona. Yet detractors argue Burnham’s plans would require immense borrowing and would risk undermining market confidence. He has argued that Labour should not remain tethered to bond-market expectations, while outlining a policy package that would significantly expand state provision in housing and other basic services. Critics inside and outside the party have warned that such a borrowing-heavy approach could push Britain toward higher interest costs and a fiscal environment that frightens off investment.

The exchanges have gone beyond policy differences and into the realm of tone and strategy. Burnham has portrayed Starmer as lacking a transformative vision, saying parts of the government’s welfare policy were unacceptable and implying the party faces existential risks if it remains directionless. In response, Starmer allies have intensified their messaging around fiscal prudence and political steadiness, arguing that Burnham’s plans would be economically reckless and destabilizing to an already debt-burdened economy. Several aides have openly questioned Burnham’s readiness to govern, with phrases circulating that depict him as economically naïve or unserious. The intensity of the exchange has led to a perception among some observers that Labour’s conference atmosphere could become less about renewal and more about intra-party showdowns.

The policy fault lines are stark. Burnham has floated a substantial national housing program—reported at about £40 billion in new borrowing aimed at expanding council house-building—centered on Greater Manchester and funded through additional debt. He has also urged a rollback of certain Thatcher-era reforms and advocated renationalising elements of energy, water, buses, housing, and rail. Supporters of such moves argue they reflect Labour’s traditional emphasis on public ownership and social provision. Critics, including financial markets and many in Starmer’s camp, contend that such a program would require far more borrowing than Britain’s economy can sustain without triggering higher borrowing costs, a potential hit to investment, and a destabilising effect on the pound.

Independent analyses cited by Burnham’s backers argue that his borrowing-heavy platform would amount to a sizeable expansion of the state’s balance sheet beyond current projections. Opponents inside the party—alongside market observers—warn that funding large-scale renationalisation and national service affordability would demand either unsustainable debt or drastic tax increases that could alienate voters. The debate touches on a long-standing tension within Labour between left-leaning ambitions and the realities of debt, deficits, and market discipline, a tension that has characterized the party’s policy debates for decades.

Meanwhile, the decision to frame the conference as a moment of reset remains central to Starmer’s strategy. Senior aides argue that stabilising the party’s political trajectory and delivering credible governance are paramount, even as they acknowledge deep-seated differences with Burnham and other left-leaning figures. The party’s inability to present a coherent, widely accepted economic plan feeds questions about whether Labour can win back trust with a platform that reconciles competing factions.

The political calculus is complicated by fiscal realities. Observers point to the cost of debt service, which, in the current environment, remains a significant line item in public spending. Market watchers warn that the party’s most ambitious proposals, if pursued without commensurate revenue measures or growth strategies, could raise the cost of borrowing and dampen investment. The government’s opponents frame these concerns as evidence that Labour’s policy direction risks straining the budget and emphasizing costly guarantees that could weigh on future generations.

In Liverpool, the clash is as much about personality and political narrative as about numbers. Burnham’s supporters argue that he offers a credible alternative path for a party that believes it has been kept from power by cautious centrism; Starmer’s backers contend that leadership requires steadiness and a disciplined, fiscally aware approach that avoids destabilising markets. The public and party faithful will be watching closely how these tensions inform Labour’s conference platform, messaging, and its prospects heading toward the next election.

The broader question is whether Labour can emerge from Liverpool with renewed purpose or whether the conference will be seen as a hinge moment that leaves the party more divided and less prepared to form a government. The debate over cutting-edge policy versus political pragmatism—how far to go toward nationalisation versus how to balance investment in public services with responsible debt—will shape Labour’s trajectory for months to come. As Burnham and Starmer present competing visions, Labour officials insist that they are listening to voters and workers who want better public services and a clear plan for growth. Opponents warn that without reconciliation, the party risks leaving voters with a choice between two versions of a controversial economic approach, neither fully trusted to deliver stability.

If the party cannot bridge its philosophical divide, analysts say, Labour may struggle to present a coherent alternative to the current government. The unfolding discourse at Liverpool will set the tone for the party’s strategy as it heads toward the next electoral test, with the possibility that the leadership question could dominate headlines for months to come. In the meantime, the country will be watching to see whether Labour can unify behind a credible plan that can appeal to both its traditional base and a broader electorate weary of economic volatility and political rancor. If not, the internal rift may persist, leaving Labour with a presidentially styled contest between a cautious, steady approach and a more expansive, borrowing-led vision—each with its own risks and potential rewards. The question remains: if not Burnham, who?