Andy Burnham Defends Public Finances as UK Faces £4.7bn Defence Funding Gap

Andy Burnham, the Labour leader-in-waiting expected to become Britain’s prime minister on 20 July, said he had not decided who would be his finance minister and defended his record on managing public finances while addressing a looming defence funding gap left by Keir Starmer.

“The United Kingdom’s likely next prime minister says he will take responsibility to find funds for a long-anticipated defence plan, days after a 4”

Al Jazeera

Burnham said the defence investment plan would be funded with “no compromise on the security of the nation,” after the plan published on Tuesday provided a £15bn spending boost to defence but was projected to leave a £4.7bn funding gap to fill.

Al Jazeera

The BBC reported that the defence plan was published on Tuesday and projected to leave the next prime minister with a £4.7bn funding gap, while Burnham told LBC he had not seen all of the details of the plan prior to its publication.

Reuters reported that Burnham said he was frustrated that Westminster “wants to endlessly speculate about personalities before policy and before direction,” as investors fretted over who would become finance minister and what his leadership would mean for public finances if he takes over in two weeks.

In his first media interview since announcing his bid to become PM, Burnham told LBC he would “stick to the Labour manifesto” and said there was “some room within that manifesto for movement on tax,” including the possibility of increasing business rates on warehouses and major developments to cut tax for pubs and some high street businesses.

The BBC also reported Burnham rejected attacks on his economic stance, insisting he would not be “indisciplined” on public finances, and said he would not make “crude cuts to benefit levels that just put people who are struggling in even worse poverty.”

BBC

Politico.eu reported Burnham pledged to find billions in his first budget to close the defence funding gap, saying he would “take my responsibilities fully to fund the defense investment plan,” while also noting Starmer left £4.7 billion to be found in this fall’s budget.

Politico.eu further reported Burnham confirmed he was not told about the spending gulf when Starmer’s government briefed him on the DIP, and said he was examining a tax rise on specific businesses as he faces difficult choices on spending.

The Guardian reported that infrastructure cuts to pay for defence will cost UK 10,000 jobs, citing an analysis of the government’s own figures by researchers at the Transition Security Project, and said the extra defence investment will generate about 10,000 jobs by 2029-30 while taking the money away from other sectors will cost nearly double that.

“Abandonment of British frigates, bad news for BAE Systems (Zonebourse”

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The Guardian quoted Transition Security Project co-author Khem Rogaly saying: “The idea that military spending can provide a defence dividend is misleading,” and quoted Unison general secretary Andrea Egan saying the plan will result in job losses and “less for schools and hospitals.”

Reuters reported that Starmer announced plans to increase defence spending but left £4.7 billion of its funding to be set out later in the year, and said Burnham would have to find an additional £4.7 billion to close the defence funding gap through deeper spending cuts or higher taxes.

In the same Reuters reporting, Dan Jarvis told reporters: “I absolutely have the assurance that, as prime minister, Andy Burnham will make sure that we’ve got the investment coming into defence that’s good for our nation, good for our national security,” as the plan’s funding relied on defence efficiencies of £10.7 billion being found by 2030.