Andy Burnham has been warned that the UK cannot afford to maintain the pension triple lock amid concerns over the country’s spiralling borrowing costs.
Sir Howard Davies, the former chairman of NatWest said the UK “can’t afford it”, adding: “If a Government does not grasp that nettle at some point, then I think its credibility is going to be on the rack.”
He also said that concerns about the prime minister’s approach to public spending was causing “some market jitters”, and called on him to “make some signs” about No10’s overall approach.
Meanwhile, Mr Burnham is set to be grilled by MPs in his first Prime Minister’s Questions since succeeding Sir Keir.
On Wednesday, he will face Kemi Badenoch at the despatch box and it is expected that the Conservative leader will quiz the former mayor of Greater Manchester on the possibility of tax rises and Britain’s defence spending.
A think tank has warned Mr Burnham that he must be prepared to raise taxes for middle earners if he wishes to raise defence spending.
Key Points
- Banking boss warns Burnham that UK 'can't afford' pension triple lock
- ‘Unrealistic’ to fund defence spending increases without hiking taxes of middle earners
- Burnham to face first PMQs and test of authority
- What Burnham said in his first Commons address as prime minister
- Emmanuel Macron to visit No10 in Burnham's first meeting with world leader
Burnham ally says Budget would have to include spending cuts or tax increases
10:53 , Holly EvansHaving warned on Tuesday that Andy Burnham’s “tone” would have unsettled investors, Lord Jim O’Neill told Times Radio the Budget would have to include either spending cuts or “some form of tax increases” in order to restore the Government’s “headroom”.
Lord O’Neill, an ally of Mr Burnham, suggested the bond markets would “respond favourably” to a Government that takes “credible action to deal with the excesses of the triple lock or the excesses of welfare spending”.
Cabinet Office minister Sally Jameson told Today the Government was “absolutely clear that we will be sticking to the fiscal rules and making sure that we’re controlling public spending” as well as growing the economy.
Andy Burnham has more in common with Liz Truss than he cares to admit
10:29 , Holly EvansUp and down the land, as schools regather, head pupils picked last term before the long break must make their first appearance at assembly and explain to the rest why they were selected.
So, it was in the Commons where the new Chosen One got up to speak and sell himself.
Not that Andy Burnham had to do much convincing.
Behind him, those who anointed the Manc wunderkind cheered him to the creaking rafters.
In case they needed any reminding as to why they’d ditched the previous one and gone for Andy, Sir Keir Starmer chose this day of all days to complete his last U-turn and announce he was quitting as an MP.
Read the full analysis from Chris Blackhurst here:
Andy Burnham has more in common with Liz Truss than he cares to admit
Jimmy Lai’s son tells Burnham: Help save my father, before it’s too late
10:08 , Holly EvansThe son of imprisoned British citizen Jimmy Lai has issued an urgent plea to Andy Burnham to help save his father from a Hong Kong jail “before its too late”.
Mr Lai, the 78-year-old founder of Apple Daily, the city’s most vocal pro-democracy newspaper, was sentenced to 20 years in prison in February on disputed collusion and sedition charges, as part of a mounting national security crackdown on the former British colony by Beijing.
He has reportedly been kept in solitary confinement since his December 2020 arrest, despite mounting concerns for his deteriorating physical health.
In a personal letter to Mr Burnham, Sebastien Lai has demanded an urgent meeting with the PM and has called on him to personally press Chinese President Xi Jinping for his father's release on humanitarian grounds.
Read the full article here:
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Jimmy Lai’s son tells Burnham: Help save my father, before it’s too late
Housebuilding target is 'challenging' but 'we're determined to meet it', minister says
09:49 , Millie CookeThe government's housebuilding target is "challenging" but "we're absolutely determined to meet it", a housing minister has insisted.
Asked whether the government's target of building 1.5m homes by the end of this parliament is going to happen, Sally Jameson told the BBC: "We've we've built hundreds of thousands of homes already.
"Absolutely, it's a challenging target. But I think governments should be setting challenging targets and should be reaching to meet them because people quite rightly have got high expectations of their government and they want to see delivery and they want to see it quick.
"So yes, it's a challenging target, but we're absolutely determined to meet it and take the necessary steps to make sure there are the conditions for houses to be built and houses that are both affordable to people for people to buy, but also to rent privately or social and council houses as well."
Burnham could face first headache on electoral reform after PMQs
09:31 , Holly EvansAndy Burnham invited Labour MPs to Downing Street to woo them over drinks following his turn at the despatch box on Tuesday.
But Labour backbenchers pushing for faster reforms to electoral law could provide Mr Burnham with his first Commons headache on Wednesday, after he has faced Conservative Party leader Kemi Badenoch in his first Prime Minister’s Questions.
Alex Sobel, the Labour MP for Leeds Central and Headingley, is leading calls among backbenchers to establish a national commission on reforming the voting system.
He has tabled an amendment to the Representation of the People Bill, which will be debated in the Commons on Wednesday, calling for the Government to back the move.
Mr Burnham on Tuesday suggested he was open to the idea of electoral reform, but told the Commons that “we will need to get a consensus at the next election” to make such a change.
Banking boss warns Burnham UK 'can't afford' pension triple lock
09:12 , Holly EvansFormer NatWest chairman Howard Sullivan has warned that the UK “can’t afford” the pension triple lock.
He called for the policy to be changed, adding: “If a Government does not grasp that nettle at some point, then I think its credibility is going to be on the rack.”
He said that it would be “helpful” if Andy Burnham gave clear indications of his government’s approach to fiscal spending ahead of the October budget.
He said: “Unfortunately, we do have a circus built around out budgets, which actually does not happen in many other countries.
“There is a whole industry of people… to create expectations and then dash those expectations, and I think we are going to face a very dicky period between now and the Budget.”
He added: “I think we’re going to see a very uncertain period for the next three or four weeks, and it would be helpful if the Government could make some signs about their overall approach to the fiscal balance, which I think could calm things down a bit.”
Former NatWest chairman says Burnham approach causing some market concerns
08:59 , Holly EvansAndy Burnham’s ambitions for overhauling how the UK state operates are likely to be curtailed by the economic headwinds caused by the Iran war.
Government long-term borrowing costs have been sent soaring to their highest levels for 28 years, amid a global bond sell-off partly linked to signs of escalation in the Middle East conflict and the concern that inflation could follow.
While former NatWest chairman Sir Howard Davies told BBC Radio 4’s Today programme on Wednesday that this global sell-off was not “a major crisis of confidence in the UK Government” specifically, he agreed concerns about Mr Burnham’s approach to public spending were causing some market jitters.
Sir Howard said the country faced “a very dicky period” leading up to the Budget on October 28 and called for the Government to “make some signs about their overall approach to the fiscal balance” in order to “calm things down a bit”.
Infected blood victims call on PM to resolve compensation ‘injustices’
08:52 , Holly EvansVictims of the infected blood scandal have called on the prime minister to “resolve injustices” in the compensation scheme.
Between the 1970s and early 1990s, more than 30,000 people in the UK contracted HIV and hepatitis C after being given contaminated blood and blood products.
Campaigners have previously praised Andy Burnham for being a long-standing supporter of contaminated blood victims.
They are now calling on him to take action to speed up payments and resolve issues raised by victims and campaigners – including requests for “unreasonably high standards of evidence” from the compensation body.
Campaigners will hand a dossier of handwritten letters and documents to Downing Street on Wednesday ahead of his first Prime Minister’s Questions.
The Infected Blood Inquiry closed this year after examining what has been dubbed the worst treatment disaster in the history of the NHS.
Minister and ex-prison officer says she is 'absolutely confident' government is taking right steps on prison crisis
08:35 , Holly EvansHousing minister Sally Jameson - a former prison officer - has insisted she is "absolutely confident" the government is taking the right steps to ease the overcrowding crisis in the prison estate.
"I'm absolutely confident that the steps that the justice secretary is taking to make sure that our prisons are stable again are the right ones", she told the BBC.
"But look, this is this is not an easy journey. It wasn't an easy inheritance. We're absolutely determined to make sure it's fixed."
Emmanuel Macron to visit No10 in Burnham's first meeting with world leader
08:28 , Holly EvansAndy Burnham is set to welcome French president Emmanuel Macron to Downing Street next week.
Mr Macron will be the first European leader to visit the UK since Mr Burnham took office.
The visit is another sign the former mayor of Greater Manchester looks set to continue his predecessor Sir Keir Starmer’s policy of a “reset” of relations between the UK and the EU.
On Tuesday, the prime minister’s spokesperson said: "The Home Office has announced today that summer small boat crossings were at their lowest level since 2020 this year, which is evidence of our approach, including that close work with France, and that approach is working. But we're not complacent.
“That's why the Prime Minister is set to discuss this further with with President Macron later in the week, and you'll get a trail tomorrow on that."
Burnham to face first PMQs and test of authority
08:20 , Holly EvansAndy Burnham is to face his first Prime Minister’s Questions, and an early test of his authority over Labour backbenchers, after setting out his plans for Government.
The prime minister made his debut at the Commons despatch box on Tuesday, when he set out plans to devolve more power away from Westminster and into the regions, and to take back public control over utilities and services.
Mr Burnham blamed the legacy of Margaret Thatcher, the austerity era and Brexit for decades of slow growth, and insisted his plans to change the “failed economic model” would kickstart Britain’s economy.
Throughout his three hour and 23 minute Commons grilling, the PM declined to say whether there will be tax rises at the 28 October Budget.
But he suggested that his chancellor John Healey will find money to hike defence spending to 3% of GDP by 2030 by the time of the next spending review.
The Guardian reported that the prime minister told Cabinet on Tuesday that his Government will have three priorities: cutting the costs of essentials such as childcare and mortgages, regenerating communities, and greater public control over utilities such as water, energy and housing.
Minister hits back at Jim O'Neill criticism over government spending
08:06 , Millie CookeA government minister has hit back at some remarks from Lord Jim O’Neill, an ally of the Prime Minister, who suggested that international investors would not have approved of Mr Burnham’s “tone” about “implying a lot more government spending” in the Commons on Tuesday.
Asked about comments, Cabinet Office minister Sally Jameson said she disagreed.
She told Sky News: “I think it’s important we don’t over-read into individual comments people make, because I think Andy Burnham has been really clear that we are going to stick to those fiscal rules rigidly, and that fiscal responsibility is absolutely imperative.”
She added: “We’ve got to have controls on spending, and I don’t think Andy or anyone else has said any different to that.
“But I think the key thing is having growth and bringing optimism back into this country.”
Minister suggests government is not looking at full nationalisation of water companies
08:03 , Millie CookeA government minister has suggested Andy Burnham is not looking at full renationalisation of water companies, instead saying he wants to see more public control.
Asked what the government is looking at doing when it comes to the nationalisation of water companies, housing minister Sally Jameson told Sky News: "I don't think it's about renationalisation as such, its about public control and what's in the interests of people."
Asked what that means, she said: "The buses is the the good example of that, whereby what we've done is a franchising model in certain areas, whereby the local authority or the mayor, they are able to set the price and set the routes, and then commission out that service to private companies who will bid for it.
"So it put the public back in the driving seat again. And what the task force will do will look at other life essentials that the public rely on, and see what more can we do to make sure they're working in the interests of people and not just working in the interests of shareholders and delivering a poor service."
What Burnham said in his first Commons address as prime minister
07:57 , Holly EvansAndy Burnham took aim at the legacy of Brexit, saying it “ushered in a decade of low growth” which the UK is still paying for, as he made his first statement as prime minister to the Commons on Tuesday.
The Makerfield MP listed the “series of wrong turns” the UK has made since the 1980s and warned Brexit had embedded the problems caused by over-centralisation of government, deindustrialisation and privatisation of industry.
He also announced to MPs he will attend the Cop 31 climate summit in Turkey in November, as he pledged to “meet the climate challenge”.
Mr Burnham paid tribute to his predecessor as prime minister, Sir Keir Starmer, who announced he would stand down as an MP on Tuesday.
During a three hour and 23 minute statement, including questions from backbenchers, he hit out at the “failed economic model” which had led to high streets across the country being left desolate.
As he took a total of 125 questions from MPs, Mr Burnham:
– Confirmed that a path to spending 3 per cent of the UK’s economic output on defence, a Nato commitment, will be set out at the next spending review.
– Said he is “prepared to look at” electoral reform, including changes to the voting system, but not before the next general election.
– Committed to bringing forward a Bill which will make sweeping reforms to the leasehold system of ownership, allowing people to move more easily to commonhold “so that finally we can reform this unfair system”.
Burnham will stick 'rigidly' to fiscal rules, minister says
07:53 , Holly EvansAndy Burnham will stick “rigidly” to the Government’s fiscal rules, a minister has said amid rising borrowing costs.
Asked about comments by Lord Jim O’Neill, an ally of the Prime Minister, suggesting international investors would not have approved of Mr Burnham’s “tone” in the Commons on Tuesday, Cabinet Office minister Sally Jameson said she disagreed.
She told Sky News: “I think it’s important we don’t over-read into individual comments people make, because I think Andy Burnham has been really clear that we are going to stick to those fiscal rules rigidly, and that fiscal responsibility is absolutely imperative.”
She added: “We’ve got to have controls on spending, and I don’t think Andy or anyone else has said any different to that.
“But I think the key thing is having growth and bringing optimism back into this country.”
‘Unrealistic’ to fund defence spending increases without hiking taxes of middle earners, think tank says
07:46 , Holly EvansIt is unrealistic for the UK to increase defence spending without higher taxes for middle earners, think tank the Resolution Foundation has said.
Chancellor John Healey resigned from Sir Keir Starmer’s government in June, arguing that the then-prime minister was failing to fund defence properly.
The think tank’s new report Thin end of the wedge looks at how workers’ ‘tax wedge’ – total taxes on earnings minus cash benefits – has changed as a result of decisions taken in 2024’s Autumn Budget.
Its analysis suggests that any politician promising a bigger state and lower taxes on middle earners is not being realistic.
It argues that there is a clear case for paying for increased defence spending through broad-based tax rises that include middle earners paying more.
James Smith, chief economist at the Resolution Foundation, said: “Despite recent increases, the UK still taxes average earners less than most of our international peers.
“No other OECD rich country has a bigger state and a lower burden on average workers, so any politician promising both is not being realistic.
“There is a strong case that any benefits of increased defence spending will be broadly shared, so the tax rises needed to find this should be too, including higher rates on middles earners.’’
