Labour left tell Burnham to rip up tax pledges: With Starmer a dead man walking, allies of PM-in-waiting say it’s time to break manifesto promises on income tax and VAT

Andy Burnham is being pressured to tear up Labor’s tax pledges to fund costly spending plans.

The challenger to Sir Keir Starmer’s leadership has made a series of expensive commitments during the by-election campaign but has not yet determined how he will finance them.

Mr Burnham said Labor would honor its tax return commitments, which include not increasing income tax, National Insurance or VAT, as it contests the seat of Makerfield.

But the new MP’s allies are now pushing him to break that promise or risk ‘falling into disrepair’ in office.

The Prime Minister’s position was hanging by a thread last night and the announcement that Sir Keir will resign to make way for Mr Burnham could come as soon as today.

Labor ministers and MPs on the left of the party have rallied around Mr Burnham; among them were his right-hand woman Louise Haigh, Anneliese Midgley, who helped run his campaign, and Energy Minister Ed Miliband.

A pro-Burnham minister told the Daily Mail: ‘This manifesto was written at a particular time but a lot has changed. I think Andy has the opportunity to say that there is a new Prime Minister and he will need some big changes to create real change.

‘That includes tax, which will need to raise revenues to cope with the huge pressures on defence, on the NHS, on getting our high streets where they need to be… I think if we stick to those tax commitments, it will be nipped in the bud and people could become very disappointed very quickly.’

Crossing the line? Andy Burnham was in Cheshire yesterday following Makerfield by-election victory

The outgoing Greater Manchester mayor has pledged to cut business rates for pubs and hospitality venues, nationalize water, energy and transport, make a major investment in council housing and revitalize the northern leg of HS2.

Mr Burnham has yet to outline how he will pay for the promises, made in the heat of the by-election campaign and which could cost taxpayers tens of billions of pounds.

Government estimates put the cost of nationalizing the water industry alone at around £100bn; That means Mr Burnham may have to look again at the tax pledges on which Labor was elected to find cash for his economic agenda. Last night the Conservative Party warned Mr Burnham’s spending plans would damage the economy, saying he had ‘high tax, high debt in his DNA’.

Shadow Chancellor Sir Mel Stride told this newspaper: ‘Andy Burnham wants to destroy Labour’s already disastrous economic legacy and go even further. This will punish hard-working people who do the right thing.

‘Rachel Reeves increased taxes by over £60bn while letting the welfare bill spiral out of control. Burnham wants to double down on all his mistakes through more taxes and more careless spending and borrowing.’

Mr Burnham, who was photographed wearing Birkenstock sandals in Cheshire yesterday before returning to Westminster today, spooked financial markets last year by saying the government should be less ‘guiding’ to bond markets. But during the by-election campaign he said he supported the Chancellor’s fiscal rules; He made a U-turn just weeks after suggesting these rules could be changed to fund defense spending.

There are still people in Mr. Burnham’s circle who advocate such a move. On Friday former Treasury secretary Lord O’Neill said the government needed to be ‘bolder about borrowing for investment’.

The Prime Minister’s position was hanging by a thread last night and the announcement that Sir Keir will resign to make way for Mr Burnham could come as soon as today

The economist appointed by Mr Burnham to strengthen his team of advisers has suggested more could be done to ‘explore’ Rachel Reeves’ financial rules in a bid to boost spending.

Britain’s gilt yields, which determine the cost of government borrowing, rose after Mr Burnham’s victory cleared the way for a bid to oust Sir Keir. During his campaign he was likened to Robin Hood’s ‘Sheriff of Nottingham’ as he boasted of hitting Manchester with the highest taxes of any mayor.

Reform UK Treasury spokesman Robert Jenrick warned last night that ‘Burnham will show his true colors once he enters No 10’.

‘Higher taxes to fund wasteful Net Zero spending, homes for illegal immigrants and benefits for those who don’t need them,’ he said. ‘Labour will never change, and working Britons will have to pay the price.’

Meanwhile, Business Secretary Peter Kyle told Sky News Mr Burnham must maintain ‘fiscal discipline’.

Ms Reeves’s fiscal rules state that day-to-day spending must be matched with tax revenue so Labor can only borrow to invest, not to finance spending.