Andy Burnham commits to funding defence plan while considering tax adjustments

On July 2, 2026, Andy Burnham, the incoming prime minister, emphasized the importance of funding the defence investment plan during an interview with LBC. He acknowledged potential changes to business rates to support tax cuts for small businesses, while adhering to Labour's manifesto promises regarding VAT, income tax, and national insurance.

Burnham's Tax Strategy for Small Businesses

Burnham's plan includes increasing business rates for large warehouses, such as those operated by Amazon, to facilitate tax relief for pubs and independent retailers. "I stick by the manifesto and the promises that it made," Burnham stated, highlighting his commitment to fiscal discipline.

During his successful campaign to become the MP for Makerfield, he pledged a 20% cut in business rates for pubs, clubs, and music venues. Additionally, smaller businesses will see an increase in the threshold for business rates, a change not made since 2017.

• 20% cut in business rates for pubs, clubs, and music venues
• Increased threshold for small businesses
• Higher levies on large online retailers

Challenges Ahead: Defence Spending and Public Finances

As Burnham prepares for his new role, one of the pressing issues will be addressing the £15 billion increase in defence spending proposed by Sir Keir Starmer. Burnham's future chancellor will need to identify at least £4.7 billion in savings from other departments to balance the budget.

Responding to criticism from Conservative leader Kemi Badenoch regarding his approach to public questions, Burnham stated, "I will take my responsibilities fully to fund the defence investment plan, if I am in the position to do so, I will take those responsibilities extremely seriously." His previous experience as a Treasury minister is expected to inform his approach to managing public finances.

Welfare and Education Reforms

Burnham also addressed welfare policies, asserting that he would avoid making "crude cuts to benefit levels that just put people who are struggling in even worse poverty." Instead, he aims to reduce the benefits bill by reforming the education system to better support young people pursuing vocational qualifications.

He advocated for improved mental health support for employed individuals and emphasized the need for work placements for 16-year-olds. As speculation grows about his potential chancellor, Burnham has not yet made a decision but hinted at possibilities involving notable figures like Ed Miliband.