Andy Burnham confronts £4.7bn defence funding gap and hints at tax increases

Prospective Prime Minister Andy Burnham said he did not have "all of the details" of the £4.7 billion shortfall in Sir Keir Starmer’s £15 billion defence investment plan, confirming that the gap will have to be resolved at the Autumn Budget. He ruled out "crude" cuts to welfare benefits and signalled that the government may need to raise taxes, proposing higher business rates on warehouses and large commercial properties to fund a 20 % cut in rates for pubs and other high‑street businesses.

Burnham also stated he has not yet chosen a Chancellor of the Exchequer, describing the decision as a deliberate, inclusive process. He reiterated Labour’s commitment to the 2024 manifesto’s tax promises while leaving room for adjustments. The defence funding issue has been highlighted by Labour MP Luke Pollard and opposition figures as a test of the party’s fiscal credibility, with analysts warning that the gap could force trade‑offs elsewhere in the budget.

In addition to defence financing, Burnham pledged to ease cost‑of‑living pressures through public control of water, energy and transport, and to make bus travel free for 16‑ to 18‑year‑olds. He emphasised that any fiscal measures would respect public‑finance rules and that he would take full responsibility for funding the defence plan.