Prime Minister Burnham Grilled on Reckless Spending as UK Borrowing Costs Soar at First PMQs
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Prime Minister Burnham faced tough questions from Treasury Secretary Angela Badenoch over his unfunded spending promises, as government bond yields surged to an 18-year high.
Prime Minister Burnham was put on the defensive during his first Prime Minister's Questions session since taking office in July, as the UK’s borrowing costs surged to their highest level in 18 years—a direct result of market fears over his irresponsible fiscal agenda. Treasury Secretary Angela Badenoch demanded that the prime minister explain how his ambitious spending programme would be paid for, warning that markets were rightly concerned about a 'spendthrift' leader with no credible funding plan.
Burnham attempted to justify his approach by pointing to tax cuts, including a reduction in VAT on energy bills and lower business rates for hospitality firms—measures that critics argue could further strain public finances. He claimed that scheduling the Budget for October with Chancellor John Healey would help reduce market speculation, but failed to reassure those worried about the government’s commitment to fiscal discipline.
Badenoch referenced economist Lord Jim O'Neill, who, despite acknowledging a short-term boost in confidence, warned that rising interest rates could force the government to make tough decisions on pension and welfare spending. She also highlighted O'Neill’s assessment that Burnham’s recent Commons statement had rattled investors, underlining the dangers of reckless economic management.
The yield on 10-year UK government bonds reached its highest level since 2008, and the 30-year yield hit a peak not seen since 1998, signaling mounting concerns about the Treasury’s ability to manage debt responsibly ahead of the upcoming Budget.
Burnham responded by distancing himself from Lord O'Neill’s warnings and lashed out at the shadow cabinet reshuffle, which he claimed brought back members of the previous Conservative administration. However, many see this as an attempt to deflect from his own government’s lack of a coherent fiscal strategy and the failures of left-wing economic policies.