The UK at a crossroads following Keir Starmer resignation

Keir Starmer has announced he will step down as Prime Minister. The news coverage will focus on the leadership contest and on the frontrunner, Andy Burnham. The bigger question is what kind of economy his successor decides to run.

As our Executive Director Claire Godfrey said earlier this week: “For a decade, living standards have stalled while a narrow tier of financiers and monopoly owners have been allowed to hoard power and wealth. Every government has called this “growth.” Under Starmer, this approach has gone further: sacking the head of the competition watchdog for refusing to fall in line and appointing a former Amazon executive in their place.”

“The next Prime Minister must choose a side. They can defend the competition regulator’s independence and support it to use existing legal powers to bring dominant firms to heel. The UK does not need another reset that protects a broken model. Power and wealth must be handed back to the many who create value in our economy,” she added.

So his successor inherits a choice. Keep protecting the financiers and monopoly owners who have done well out of the last decade or use the powers the state already holds to break their grip.

Take the Starmer government’s replacement of Marcus Bokkerink — former chair of the Competition and Markets Authority (CMA) — with former Amazon chief Doug Gurr. The message was hard to miss. The watchdog was being told to fall in line with the UK’s open for (big) business mood that this government has worked hard to cultivate.

We saw it in September last year, when the Balanced Economy Project, Global Justice Now and Just Treatment called on the CMA to investigate three major pharmaceutical giants — AstraZeneca, Merck/MSD, and Eli Lilly — after they each paused UK investments worth a combined £1.5 billion inside a year. The announcements landed within weeks of each other, which raised suspicions that the firms were acting in concert to pressure the government into paying more for medicines on the NHS.

The CMA declined, saying it had “not seen any direct evidence” of collusion. That is a circular test, because an investigation is usually the only thing that turns up such evidence. We said at the time it was the latest sign of a regulator that had lost its appetite for a fight since the government supercharged a “growth at all costs” agenda.

It is why Balanced Economy Project joined 17 businesses, industry bodies and public figures earlier this year in a letter led by Mozilla and signed by organisations including the Coalition for App Fairness and the Institute for Public Policy Research, pressing the government and CMA to enforce the Digital Markets, Competition and Consumers Act (DMCC) harder and faster. Whoever takes over must use the DMCC, and every other power they hold, against the firms that have entrenched themselves at the top of the economy.

Big Tech is the next test. Take the government’s recent decision to ban under-16s from a range of social media platforms. As we argued in a recent edition of the Counterbalance, that ban asks nothing of the companies behind those platforms. It shuts young people out of digital communities and leaves the firms free of any responsibility for how their platforms are built or what runs on them.

AI is where the fight is now the hottest. Designating data centres as Critical National Infrastructure has pushed the UK into joint-second place globally for data centre capacity. That did not come from real market demand. It came from a handful of big tech giants putting up the capital, and from a government that treats attracting their money as a national priority.

This is the part of the inheritance that should give Burnham’s own supporters pause. He has spent his years as mayor courting this kind of investment into Greater Manchester and calling it growth. His instinct elsewhere is to re-regulate – buses and energy being the obvious cases. The test is whether he turns that instinct on the firms building out AI or decides that this is one form of concentrated power worth waving through.

Our recent Licensed to Loot report sets out where this leads. The boom hands a small group of firms lasting power over workers, regulators, and broader society. For example, the London Assembly’s Planning and Regeneration Committee found in December last year that housing development had stalled in three London boroughs because the local electricity grid had reached capacity. A handful of companies are manufacturing their own demand, locking the government into dependence on them and pushing the financial and environmental costs onto the rest of us.

The report shows this build-out is creating competitive and political dependencies that cannot be undone and is doing it faster than government and regulation can keep up. The incoming PM should do what we have called for and impose a conditional, time-limited moratorium on new large-scale data centre approvals.

These are only a few of the anti-competitive issues waiting for Starmer’s successor the day they walk into Number 10. Across whole sectors, concentrated capital has grown too powerful, and one government after another has given in to it.

The chance to break that pattern is there for the taking. The next Prime Minister can hand power and wealth back to the people who created it or protect the few who have hoarded it. There is no third option.

The Counterbalance is published every Thursday. Please send any thoughts and feedback to scott@balancedeconomy.org.