A think tank has warned Andy Burnham that he must be prepared to raise taxes for middle earners if he wishes to raise defence spending.
After quitting Sir Keir Starmer’s government in June over this issue, his chancellor John Healey has made clear he will wait until next year’s spending review to present a plan to meet Labour’s pledge of devoting 3.5 per cent of GDP by 2035 to defence.
The Resolution Foundation thinktank has warned that he will not be able to raise the necessary £28bn a year without asking average earners to pay more.
Meanwhile, Mr Burnham will be grilled by MPs in his first Prime Minister’s Questions since succeeding Sir Keir.
With parliament back from summer recess, the Makerfield MP on Tuesday addressed the House of Commons for the first time since becoming prime minister.
He said that Britain needs to be “blunt” about what has gone wrong in recent decades, and must spread power to people and places across the country to kickstart economic growth.
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.
Minister hits back at Jim O’Neill criticism over government spending
A 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.”
Millie Cooke2 September 2026 08:06
Minister suggests government is not looking at full nationalisation of water companies
A 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.”
Millie Cooke2 September 2026 08:03
What Burnham said in his first Commons address as prime minister
Andy 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”.
Holly Evans2 September 2026 07:57
Burnham will stick ‘rigidly’ to fiscal rules, minister says
Andy 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.”
Holly Evans2 September 2026 07:53
‘Unrealistic’ to fund defence spending increases without hiking taxes of middle earners, think tank says
It 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.’’
Holly Evans2 September 2026 07:46