Burnham refuses to rule out Budget tax rises

Daniel MartinMon, August 24, 2026 at 7:39 PM UTC

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Andy Burnham has refused to rule out tax rises in his first Budget as he warned the public finances were in a “challenging” state.

Speaking on a visit to Ukraine, the Prime Minister said he “won’t be unrealistic” about the state of the economy.

Mr Burnham was asked by ITV whether the British public needed to accept that they would have to pay more in tax to fund his spending pledges.

He replied: “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.

“So we will take VAT off electricity bills. We will bring back the £2 cap on bus fares for the whole of 2027; these are things that we can do because I’ve reprioritised. I took the decision early on that digital ID wasn’t the top priority for now. And so we’ve reprioritised funding to other priorities.”

Asked again whether the need to increase defence spending meant that the public needed to accept tax rises, 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.

“We are in a challenging position. Whatever I do will be carefully thought through, it will be funded and there will be more to come as we go into the autumn.”

Mr Burnham has already pledged to fully fund the Defence Investment Plan, unveiled shortly before he became Prime Minister. However, John Healey, the Chancellor, resigned as Sir Keir Starmer’s defence secretary after concluding the former prime minister had not provided the military with enough money to keep Britain safe.

John Healey (left) argued that the Defence Investment Plan was too little - Annabel Lee-Ellis/Getty Images

Mr Burham has also said he will introduce a major reform of the social care system, which analysts say will cost at least £15bn.

Despite this, the Prime Minister has promised to stick to fiscal rules which limit borrowing and Labour’s 2024 manifesto, which ruled out rises in income tax, VAT and national insurance.

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This means he will have to raise taxes or cut other spending to fund his pledges.

Labour has raised taxes by more than £60bn since the election despite its campaign promise that increases would be modest.

Rachel Reeves’s decision to increase employers’ national insurance has led to a rise in youth unemployment, while hospitality businesses have been hit hard by higher business rates.

Sir Mel Stride, the shadow chancellor, said: “Andy Burnham became Prime Minister without a plan and has been unable to say where the money is coming from to pay for his commitments, so is now staring down the inevitable barrel of tax rises.

“It doesn’t matter who is in charge: it is the Labour Party itself that’s the problem. As the Welfare Secretary said, all they want is to raise taxes to fund more benefits.”

Andy Burnham has ruled out a general election that could give him a stronger mandate - Diego Fedele/Getty Images

Mr Burnham said he was “ruling out” a snap general election to give him the mandate for more radical reforms.

“I am focused on the needs of the country and not party political interest,” he said.

“I am not going to call an election. I said outside Downing Street that I would do politics differently, that I would try to bring people together and focus on problem-solving rather than point-scoring.

“I am ruling it out right in front of you. I am going to try my best as we go through the autumn to bring people together, to get some confidence going.”

The Prime Minister also warned that floods were on the way after a summer of wildfires and drought.

“I hate to put it this way, but after fires we may see more floods in the second half of the year as we go into the autumn because that’s the long-term prediction,” he said.

“Are our fire and rescue services properly set up to do that? No, there’s more we need to do.”

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Source: “AOL Breaking”