Defy “Orthodox Economists” To Invest Billions In Reindustrialisation, Labour MPs Urge Burnham

Andy Burnham holds a National Economic Council meeting at No 10 North at Heron House in Manchester, July 24, 2026 (Christopher Furlong/Pool Photo via AP/Alamy)

Exclusive: Andy Burnham has been urged by a new group of Labour MPs to defy “orthodox economists” and invest billions in creating and sustaining one million production-based jobs in Britain.

The demand comes from the first policy paper of the newly launched Reindustrialisation Research Group (ReRG).

Currently counting 44 Labour MPs as members, it aims to emulate the European Research Group (ERG), which brought Eurosceptic Tories together and wielded considerable influence under the last Conservative government.

The ReRG’s inaugural research paper calls on Burnham’s government to create an additional one million jobs in production-based industries above their current level over the next decade, telling the new Prime Minister to prioritise not just the “Makerfield test” but also the “Maker-things test” to deliver a new political economy.

It argues that Britain’s “most vulnerable neighbourhoods are concentrated in deindustrialised areas and coastal communities” and that governments have “tried repeatedly to reverse this decline through an exclusive focus on services and the knowledge economy, but these sectors have failed to help places recover”.

“This is not just nostalgia,” the working paper argues. “Britain has badly miscalculated in giving up on physical production.”

While it briefly considers proposing the target of an absolute output for production, the idea is dismissed in favour of a jobs target, stating: “Although people want growth, whether they care about a particular absolute level of growth is questionable.”

The ReRG paper concedes that creating and sustaining one million production-based jobs would necessitate high levels of investment, at least a doubling of the level currently spent annually, because these have “a much higher level of capital intensity than the service sector”.

“This will require creating at least an additional £645bn of capital stock over the next decade into the production sectors of the economy,” it specifies. “This also does not include the tens of billions that will need to be invested in the workforce as well as supportive infrastructure to enable the flow of goods.”

The group is clear that the private sector would not be able to achieve this alone, concluding: “The state will have to take an active role in providing this capital through a range of measures from capital grants, subsidies and tax credits, asset and land transfers, matched investment, loan guarantees and equity investment.”

Burnham has promised to prioritise reindustrialisation in government, including as part of his “reset”. He vowed in his first key speech after winning the Makerfield by-election to “support every region to set clear and credible industrial ambitions, and provide the support to achieve them”.

Andy MacNae, Labour MP for Rossendale and Darwen and convenor of the ReRG, told PoliticsHome : “It's so exciting to see the Prime Minister calling for reindustrialisation. This is how we can cut bills, improve our national security and bring back good jobs to seats like mine.

“This won't be easy, orthodox economists are dismissive of British industry's potential. That's why the government must set a bold target for reindustrialisation, as our paper today suggests. Only then will the system change.”

Jonathan Brash, Labour MP for Hartlepool and a founding member of the ReRG, wrote in an op-ed last week: “We have redistributed wealth rather than creating it. We have expanded welfare while shrinking productive capacity. We have concentrated investment in already successful places while asking everyone else to be patient. It has not worked...

“We need a new political economy that makes more things, in more places, with more British workers.”

ReRG officers Connor Naismith and Yuan Yang were among those appointed to government by Burnham as new parliamentary private secretaries (PPSs) on Monday.