Andy Burnham has refused to rule out tax rises in his first budget as the Prime Minister warned he “won’t be unrealistic” about the state of Britain’s finances.
Mr Burnham admitted the country was in a “challenging position” but was quick to insist he would take a “careful approach” to the economy.
On his first visit to Ukraine, Mr Burnham defended policy pledges such as cutting VAT on household electricity bills and capping bus fares at £2 as “funded commitments”.
Questions remain over how some promises, including £5billion in defence spending which was announced before he entered Downing Street and his plans for major reforms to the social care system, will be paid for.
Doubts have also been cast over his plan to pay for the VAT cut by cancelling the previous Labour administration’s digital ID scheme after former minister Darren Jones claimed the policy was not costed.
Asked if the public should accept they will have to pay more in tax rises for some policies, he told ITV News: “They don’t necessarily need to accept that.
“What I have put out so far, I wouldn’t say is everything, but they are the first steps and they are significant.”
Pressed on whether he would need to fill in spending gaps with tax hikes, he said: “I will always take a careful approach to things. I ran Greater Manchester for 10 years and we ran a very tight ship with rock solid finances.
“Nothing will change as I come into this role as Prime Minister. I won’t take risks with people’s jobs or their livelihoods or their family finances.
” I will try to help them in whatever way I can, I have already done some things that will help them. I will do what I can but I won’t be unrealistic and people really need to understand that.”
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Andy Burnham to pledge largest council housebuilding programme since the post-war era
Andy Burnham is set to announce the largest council housebuilding programme since the post-war era to tackle the severe housing shortages and homelessness.
A share of nearly £10billion has been allocated to councils and housing associations in the first wave of Government funding to boost “genuinely affordable homes.”
The Government said 60 per cent of the new homes delivered will be for social rent, a target in line with plans when the £39billion social and affordable homes programme was launched in 2025 under Sir Keir Starmer’s leadership.
The funding being announced is focused on enabling the delivery of more than 70,000 homes across England by 33 “strategic partners”.
The Prime Minister said: “No child should be raised in a hostel room and no family should wait 10 years for a front door of their own. I have said from my first day in this job that everything starts with a good home.
“Nearly £10billion will go to councils and housing associations to build genuinely affordable homes, most of them for social rent, in the places where families are waiting longest.
“Councils built this country out of a housing crisis once before. Backed properly, and trusted to get on with it, they will do it again.”
Fiscal squeeze laid bare ahead of John Healey’s first budget
The fiscal squeeze facing new Chancellor John Healey ahead of his inaugural Budget has been laid bare as official figures showed government borrowing unexpectedly rose to £1.8billion last month.
The Office for National Statistics (ONS) said government borrowing stood at £1.8billion in July, £700million or 68.7 per cent higher than a year ago and confounding expectations.
The hike came despite a record July for income tax receipts.
Inflation also surged to a four-month high of 2.9 per cent in July amid the fallout from the Iran war.
Experts, including the National Institute of Economic and Social Research (Niesr), have warned Mr Healey that he will need to either raise taxes or cut spending elsewhere as pressure on the public finances has left no room for extra borrowing.
The Chancellor has told the Cabinet they must be prepared to make cuts to finance some of the new pledges, and promised his economic plans would be “built on fiscal discipline” and meet the fiscal rules set by his predecessor Rachel Reeves.
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