Andy Burnham’s first Labour conference as prime minister

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0:34Today is Monday, September 28th, and this is your FT News Briefing. Andy Burnham is trying to make his mark at Labour Party conference, and European diplomats are confused about a new EU proposal to counter Russian hybrid warfare. Plus, investors are putting their money into Panama. I'm Josh Gabor-Doyan, and here's the news you need to start your day.

1:06It's Labour Party conference this week. The annual meeting kicked off yesterday and it's Andy Burnham's first as Prime Minister. That makes it particularly important for a man who's promised some fairly ambitious changes to the UK economy. The FT's Lucy Fisher joins us now from conference in Liverpool to discuss. Hi, Lucy. Hi, Josh. Lucy, what's been the vibe at Labour conference this year? Well, let's just take a moment to reflect for a minute. This year's conference comes 12 months after last year when Andy Burnham attempted to get a coup underway against Keir Starmer. That fizzled out. He failed to get MPs to line up behind him and instead had to sort of slink off with his tail between his legs.

1:50So it's striking what a difference 12 months makes that he is now here, all triumphant, having successfully forced Starmer out of Downing Street. and replaced him. It's definitely fair to say that the mood among the party faithful, certainly among MPs and ministers, is a lot more buoyant than last year. There's a real feeling of hopefulness around Burnham, and there's a sense that the party wants to capitalise on that as they get together this year. What about in terms of policy? What have we heard so far from conference? Well, we've actually heard quite a lot. Andy Burnham has already announced a key rabbit out of the hat, as we call them, a positive policy announcement in terms of the resurrection of the help to buy policy.

2:36This is around helping young people get on the housing ladder with significant equity loans so that people can take out tiny 2.5 % mortgages. He's also announced that he's not going to pursue a massive overhaul of social care policy until after the next election. He's at the moment undertaking a review to look into how to reform the very troubled sector. And he has suggested on Sunday that he will enter the next election, hinting that he will ask the public to accept tax rises in order to fund a new national social care service based on a similar model to the National Health Service. OK, so some big announcements early on already.

3:22We also know that the Chancellor John Healy is expected to confirm some£6 billion towards the UK's Navy. But, of course, looming over all of this is the upcoming autumn budget. Healy's going to be the one putting that budget together. What more can you tell us about what to expect from his big speech later today? I think it will be a moment for him to try and repeat his insistence that he will show fiscal discipline in this budget. There's a sense that Andy Burnham has an instinct towards spending. So Healy will want to make clear that he will rein that in, that he won't reach for more borrowing, particularly at a time when even within the last month we've seen UK guilt yields saw to their highest point in almost 20 years.

4:09tax rises again you know we've already had two years of budgets that have raised more than 60 billion in additional revenues since Labour came to power so I think he'll be wanting to signal he's not going to be pulling massive levers to raise additional tax although it is possible that we will see some taxes rise and also on spending cuts he may give some kind of signal that on the other side of the ledger that he is willing to take some difficult choices so it's a little bit of a tightrope that he's got to walk this week. Right. And generally speaking, what do you think it is that senior Labour Party figures want to see this week?

4:47I think they would be happy if they feel they've given a sense of a party that's united, that is confident and that has a plan for the future. So for Andy Burnham, his conference speech will be a real moment for him to try and define himself, his character more clearly in the eyes of voters who don't know much about him, They've got a lot potentially to learn from him this week about his personal backstory and to give a bit of a sense on where he wants to take the UK over the next decade this week. That's EFT's Whitehall editor, Lucy Fisher. She's also the host of Political Fix. They're recording a live podcast on Tuesday, and that will drop in your feed later this week.

5:26Thanks, Lucy. Thanks, Josh.

5:35European diplomats are split over how to respond to Russian efforts to destabilize the region. They're going to be debating a proposal for an emergency security protocol in Brussels today that would be triggered when countries are hit by Russian arson, sabotage, cyber attacks, or other forms of what's called hybrid warfare. These types of attacks fall below the threshold that would warrant a full-on NATO response, which have made them a bit of a struggle for European governments. The new European Commission protocol is, well, pretty similar to something NATO already has. It's called Article 4, which is meant to be triggered when a member country's, quote, security is threatened.

6:17Diplomats told the FT they're worried about this new proposal. They say there's been widespread confusion over what the new EU protocol would do and whether it might compete with NATO processes. The European Commission, for its part, said that the continent has to ramp up its preparedness and that the current policy hasn't kept pace with the new reality.

6:45Panama recently went through a big political crisis, but that hasn't scared off investors. Perhaps unusually, they're snapping up the country's debt at a rate that's just above the cost of U.S. treasuries, meaning investors think tiny Panama, famous for its canal, is about as safe a bet as the world's largest economy. Christine Murray is the FT's Mexico and Central America correspondent. She joins me now. Hi, Christine. Hi. So investors don't think Panamanian bonds are very risky right now. They're buying them up a lot, in fact. What's been so attractive to investors? So Panama long had aspirations of being a kind of Singapore of Latin America, an important trading, logistical, financial hub.

7:31It grew quickly, had relatively solid institutions and a business friendly environment in general. And obviously the Panama Canal's importance in global shipping, as there have been disruptions elsewhere, has only grown. And investors and shippers clearly still see it as a vital and increasingly vital part of global logistics. So it sounds like essentially the frustrations in the Strait of Hormuz and with shipping in the Middle East, that's been kind of good for Panama. But Panama itself has had its own issues, hasn't it? So underneath Panama's long-term economic success was very vast inequality that exploded into massive protests in 2023 that shut down one of the world's largest copper mines that accounted for around 5 % of Panama's GDP.

8:23and from there began a couple of very difficult years socially, economically in Panama, which was then followed by then President-elect Donald Trump saying that he wanted to take back the Panama Canal. Then there were separate protests over pension reforms that shut down other large foreign investments, including banana plantations owned by Chiquita Brands. And just generally, it looked like this long-running story for Panama of fast growth and investor interest might be coming to an end. But essentially, it didn't come to an end, did it? That's right. So there was a sell-off in the government debt and Fitch downgraded the country's bonds to junk in 2024.

9:11But in the last 18 months or so, the government has been focused on regaining this economic credibility. And so the deficit went from being more than 6 % in 2024 to 3.7 % last year, and it's still narrowing. And the bonds have basically bounced back and recovered the ground that they lost in the more difficult period for Panama. That sounds like it's all very positive for Panama and these ambitions to be a global finance and trade hub. When you talk to investors, though, what are they thinking about in terms of whether Panama can sustain this? So all of this adds up to, you know, what Panama hopes is being back on track.

9:59Both the government and the Canal Authority have plans for expanding the capabilities around the canal, adding a huge pipeline that rungs along the canal. But underneath all this, there is still a major decision to make about the mine that shut down. The government's popularity is relatively low. And how it handles what to do with this massive copper mine is going to be watched very closely by investors. Because Panamanians broadly are still against reopening the mine. But obviously, there are economic benefits to reopening it or even reopening it for a time. So that's a balancing act that the government is currently doing.

10:44And it has to come up with a recommendation soon. So investors will be watching that very closely. Christine Murray is the FT's Mexico and Central America correspondent. Thanks, Christine. Thank you. You can read more on all of these stories for free when you click on the links in our show notes. This has been your daily FT News briefing. Check back tomorrow for the latest business news.

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