Andy Burnham will be sworn in as Britain's prime minister on Monday, ending a Labour leadership transition that took its first substantive policy shape Sunday when deputy leader Lucy Powell told the BBC's Laura Kuenssberg the new government would take "a more pragmatic approach" to North Sea oil and gas.

The Sunday signals — a softer stance on hydrocarbons, a preview that Burnham's first major policy pledge will be to scrap the previous government's digital identity plan, and an unresolved race for chancellor — outline the new prime minister's opening days before he enters No. 10. Whoever runs the Treasury will inherit high debt, low growth, welfare reform, defence spending and the economic fallout from the US-Israel war with Iran.

North Sea shift

Powell said Burnham would stick to Labour's 2024 manifesto but with a "change of emphasis" on oil and gas. She said Labour remained committed to delivering "our own homegrown, clean, much cheaper energy" but called North Sea gas and oil "an important part of the mix" of the country's long-term supply. She characterized Burnham's stance as "a more pragmatic approach" and said he would work with the industry.

The immediate test is Rosebank and Jackdaw, the two North Sea fields whose original Conservative-era approvals are being reconsidered after a successful legal challenge by Greenpeace and Uplift. The BBC reported those consultations close in August and that the new prime minister will not confirm approval for either on day one. Beyond exploration licences — which Energy Secretary Ed Miliband banned after Labour took power in 2024 — industry pressure is focused on the Energy Profits Levy, the windfall tax whose 78 percent headline rate is due to be replaced in 2030.

Chancellor race

Burnham's team said no cabinet appointments will be made until Monday. Home Secretary Mahmood, Miliband, Foreign Secretary Yvette Cooper, Wes Streeting and Work and Pensions Secretary Pat McFadden are among the names the BBC cited as candidates for the Treasury.

The pound rose about 1 percent against the dollar over the past week on reports that Mahmood was the leading candidate, according to XTB research director Kathleen Brooks. Brooks said the reaction told her the market trusts Mahmood "to take a sensible approach to economic policy, and to tackle the hard questions of welfare spending". Cross-bench peer Lord Jim O'Neill, who has advised Burnham, said his counsel was to "figure out what his priorities are as prime minister before he picks a chancellor".

Panmure Liberum chief economist Simon French called Streeting a "relatively market-friendly option" and McFadden potentially "the safest pair of hands". Chancellor Rachel Reeves, whose fiscal rules Burnham has said he will retain, is expected to be offered a junior or mid-level cabinet role, the BBC reported.

Digital ID reversal

The BBC previewed the scrapping of the previous government's digital identity scheme as Burnham's first major policy pledge, a departure from a program advanced under Sir Keir Starmer. Details of the reversal were not released ahead of Monday's swearing-in.

What is missing

Sunday's dossier for this account came entirely from centrist BBC reporting; neither the Conservative opposition nor the party's left flank publicly weighed in on the North Sea softening or the digital ID reversal in the coverage reviewed. Greenpeace and Uplift, whose legal challenge forced the Rosebank and Jackdaw reconsideration, had likewise not responded to Powell's Sunday remarks by press time.

Burnham takes office on Monday. His cabinet — including the choice of chancellor — is expected the same day.