Andy Burnham Defends Nationalisation Push in Long-Awaited MP Grilling

Andy Burnham pledged to push ahead with a fresh wave of nationalisation today, arguing that the roots of Britain’s current troubles stretch back to the Thatcher era and were deepened by Brexit, as he came under sustained questioning from MPs.

The Prime Minister used the Commons’ return from recess to set out what he described as the broad “direction” of his new Government, in a statement closely watched across Westminster.

With Chancellor John Healey and his de facto deputy Louise Haigh beside him, Mr Burnham said the UK had made a series of “wrong turns” over the past four decades, claiming that widespread privatisation had been made worse by the decision to leave the European Union.

He told MPs he had heard the message from voters and would respond by putting “ownership” back at the centre of government policy, while also setting out what he called his “triple helix theory of growth”.

Mr Burnham also praised his predecessor, Keir Starmer, following Sir Keir’s announcement that he will step down as an MP, saying the former Labour leader had built a “platform to change this country for the better”.

But in their first direct clashes, Kemi Badenoch ridiculed Mr Burnham for blaming Thatcher four decades after she was in power. She jibed that the PM wanted to take Britain ‘back to the 1970s’. 

‘He is going to have to start taking this job seriously,’ she said.

Mr Burnham is facing mounting anger over the prisoner early release scheme and the prospect of tax hikes to fund more spending.

Ministers have warned of ‘difficult’ decisions looming in the Budget, as Government borrowing costs spiked again this morning.

Interest rates on 30-year gilts – one of the main ways the Treasury finances debt – hit 5.89 per cent, the highest level since 1998.  

Global markets have been spooked by inflation pressures from the Middle East crisis and fears about an AI crash.

Mr Burnham took over from Keir Starmer just as Parliament went into its break, meaning he has benefited from a ‘soft launch’ with the public’s focus largely on the sunshine instead of politics.

The new leader has gifted Labour a bounce in the polls. However that looks to be fading and the former Greater Manchester mayor has already been forced into a bewildering variety of policy shifts.

Earlier, Mr Burnham worked up a sweat on his jog around Westminster before gathering Cabinet in No10, congratulating them on the Government’s ‘sense of momentum’. 

In other developments today:

• Keir Starmer has announced he is quitting as an MP, despite insisting he would stay on until the next election; 
• Mr Burnham swiped at his predecessor this morning by telling Cabinet voters had noticed a ‘change of pace’ since he took over; 
• The PM has declared that he will be going to the COP31 climate summit in Turkey in November; 
• Ex-Treasury minister Darren Jones has warned that Britain cannot become wealthier through raising taxes for more Government spending;
• Donald Trump has said he is ‘reviewing’ the US position on the Falklands Islands, amid tensions over the Government’s stance towards Israel;
• Kemi Badenoch has finished reshuffling her shadow cabinet, axeing big beasts as she puts the Tories on a war footing for an election.  

According to a Downing Street readout, Mr Burnham kicked off Cabinet by thanking his colleagues for establishing ‘a strong sense of momentum’ in his first few weeks.

‘The Prime Minister opened cabinet by thanking colleagues for establishing a strong sense of momentum in his first weeks in office,’ a spokesman said.

‘He said the country has noticed a change of pace with the Government setting the agenda and starting the process of giving local areas the levers they need to create good growth.

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‘He said that during his summer tour, it was clear that life was hard for many people, that they wanted to have hope and hear a positive outlook for the country.’

The PM’s statement to the House is due to start at 3.30pm. 

It will be his first appearance at the despatch box since he was a minister 16 years ago. 

Aides say Mr Burnham will flesh out his vision for the country, but not make significant policy announcements.

He is expected to argue that stronger public control over utilities can be an engine for economic growth.

However, that could cost billions of pounds, and in an interview today Chancellor John Healey admitted there are already ‘difficult’ decisions looming in the Budget.     

A No10 source said: ‘Andy is optimistic about our country’s future. He has a clear plan for how we turn things round. He is determined we make this the moment we bring back hope.’

The session will see Mr Burnham clash directly with Kemi Badenoch for the first time, who used the Bank Holiday to reshuffle her shadow cabinet ready for an early election – axeing Tory big beasts including Sir Mel Stride and Dame Priti Patel.

MPs are poised to probe the PM on the slew of policies he announced over the summer – which critics say were unfunded.

That includes the cut to VAT on energy bills which comes into force next month, and slashing business rates for pubs and clubs.

Mr Burnham must explain how he will fill a £4.7billion funding gap in the defence investment plan, left to him by predecessor Sir Keir.

This morning the yield on ten-year gilts – a benchmark for what the Treasury pays to borrow money – climbed to an 18-year high of 5.21 per cent after an international market sell-off. The rise was the steepest since May and increases the pressure on Mr Healey ahead of his first Budget.

Mr Healey conceded last week the Budget will not set a timetable for spending 3 per cent of GDP on defence, instead that schedule will be laid out at the spending review next year – even though Mr Healey quit Sir Keir’s government in protest at the lack of a firm commitment.  

Mr Healey told The Times he was still determined to scale up spending on defence. 

‘For the first time at the spending review, we will set out a clear path about how we meet that Nato commitment in 2035, of 2.5 per cent of GDP,’ he said. ‘And as part of setting out that clear path, we will set that target date for 3 per cent.’

Mr Burnham could also be quizzed on his commitment to bring Thames Water under public ownership, and whether drilling will be allowed at the Rosebank and Jackdaw fields in the North Sea.

Crunch decisions on a flagship Bill to tighten immigration law, and calls for MPs to change electoral law are also on the horizon.

After Mr Burnham’s statement, Justice Secretary Alex Norris will give the Commons details of the plans for the early release scheme review to relieve prison overcrowding.

Over the weekend the PM said the killers of Thames Valley Police officer Andrew Harper will not be eligible for the scheme following a widespread backlash.

Mr Burnham initially resisted calls to limit the scheme further after it emerged that Albert Bowers and Jessie Cole, who were convicted of PC Harper’s manslaughter in 2020, would be eligible from next year.

Ministers also plan to create capacity in prisons by building hundreds of new places with a £110million investment, by deporting foreign prisoners and releasing inmates who are serving indefinite sentences under imprisonment for public protection sentences (IPPs).