Andy Burnham doesn't rule out Budget tax rises and refuses to say how he will tackle soaring debt at first PMQs

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Conservative Party leader Kemi Badenoch pressed Mr Burnham on how he will tackle soaring debt and taxes in a fiery exchange - as he faced his first test in Parliament after setting out his plans for Government.

It comes as long-term borrowing costs have been sent soaring to their highest levels for 28 years. Mr Burnham blamed this on market turbulence and the Tory record on rising debt, declaring “we are turning that corner”.

But Mrs Badenoch pointed to a warning from Lord Jim O’Neill on LBC that the Prime Minister’s “tone” during his Tuesday Commons debut would have unsettled investors.

She told the PM: “Lord O’Neill, a close friend of the Prime Minister, said yesterday’s statement in the Commons was the last thing investors wanted to hear.

“Lord O’Neill is a serious economist, he knows what he’s talking about and sure enough, yesterday, the cost of government borrowing rose to its highest in 18 years. How does he tackle to tackle the Government’s rising debt costs?”

Mr Burnham replied: “Can I say to the Right Honourable lady, I’ve worked with Jim O’Neill for 10 years. Jim O’Neill always gives me candid advice, we don’t always agree. But he and I worked together to turn Greater Manchester from a former industrial heartland to the fastest-growing city region in the country.

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“They complain, but where are their ideas about growth? When they were in government we saw 14 years of stagnant growth, we saw 14 years of debt rising as a percentage of GDP. I would say to her that the turbulence on global markets are because of that exposure that we left behind. We are turning that corner.”

Mr Burnham said Britain had the fastest growth in the G7 and that borrowing fell to its lowest level in six years in the first half of 2026, adding: “I say to the party opposite... that is problem-solving rather than pointscoring.”

Lord O'Neill, a former minister and Goldman Sachs economist had told LBC: "If your country is under the focus of 'can they come up with a sensible fiscal strategy' on a day when the markets think 'well no, you're not showing any sign of it' you're going to have a tough day… if it stays like this your mortgage rate is going up."

The PM was also challenged by Mrs Badenoch on whether he will be raising taxes.

He refused to say how he would address the issue, insisting he will not write up a Budget here and now.

"I've already indicated my first moves were to cut tax, but I'm not going to do what any prime minister has done and write the Budget here," he told MPs.

He added: "I can also say to her that he and I took a deliberate decision to set an early date for the Budget so that we reduce the period for prolonged speculation of the kind that she is wanting us to indulge in today."

The pair also clashed over the Prime Minister’s spending commitments when Mrs Badnoch claimed he needed to be a “leader not a people-pleaser”.

Mrs Badenoch had asked Mr Burnham during his three-hour, 23-minute statement in the Commons on Tuesday if he had denied a spending request. In turn, he said he was committed to bringing down the welfare bill.

He said: “I do not want to be a Prime Minister that sees a situation where we have so many people in their 20s not in education, employment or training.“I can’t defend that, and I want to change that by giving more support to young people so that we start investing in their success rather than paying for failure, as we have done for many years under successive governments.”

Mrs Badenoch replied: “He did not say no to a single spending request, and personally I think it’s delightful that he wants to make everyone happy but a Prime Minister needs to be a leader not a people-pleaser.”

She added: “Yesterday the Prime Minister told the House that his summer of promises would be paid for by reprioritising within Government. So what exactly has he cut?”

Mr Burnham replied: “In terms of ‘what has he cut?’, tax is the simple answer to that question. Within days of office I indicated that we would remove VAT off electricity bills, that will help people with the cost of living and then days later with the support of the Chancellor we said that there would be a cut in business rates for pubs, social clubs, live music venues. So this Government (is) lowering the cost of living, lowering the cost of business.”

The Prime Minister also sought to stress his administration’s fiscal responsibility and said ministers were taking the action needed to reduce debt.He said: “We are taking the action needed to get debt down.

“This will be a Government grounded in fiscal responsibility. It will stick to the fiscal rules, but at the same time, we will help reduce cost-of-living pressure on our constituents, and that’s the approach that we will take.”