Burnham signals no immediate wealth tax as Starmer exits with tributes and Thames Water warning

Starmer’s final Prime Minister’s Questions

Outgoing Prime Minister Keir Starmer delivered an emotional farewell during his last Prime Minister’s Questions on Wednesday. He defended his government’s record on NHS waiting lists, child poverty reduction and economic management before a chamber that included his family and invited guests such as Jaguar Land Rover workers. Conservative leader Kemi Badenoch dispensed with her usual combative questions, instead paying warm tribute to Starmer and to the late MP Ann Widdecombe, for whom Starmer proposed a memorial shield in the Commons. Starmer ended his appearance with a tearful goodbye, telling the chamber: “Every prime minister knows when they take up the torch that the day will come when they have to pass it on. That day has come for me.” Speaker Lindsay Hoyle reminded MPs that applause is against the rules after the chamber broke into cheers.

Burnham’s tax signals

Andy Burnham, who will become prime minister on Monday, signalled that an immediate wealth tax is off the agenda. In an interview with podcast host Gary Lineker, he said he did not want to “create new divisions and pitch people one against another.” He confirmed he would honour Labour’s 2024 manifesto pledges not to raise income tax, VAT or national insurance, but added that “at some point that might be having to ask for a little more.” He left room to adjust business rates, suggesting a rise on warehouses to fund cuts for pubs and high-street businesses. Some Labour MPs, including close ally Louise Haigh, have urged him to adopt a wealth tax, such as a 2% levy on assets above £10 million. Burnham insisted that “those decisions are not for now. They’re for another day.”

Thames Water nationalisation plan

Burnham’s team is expected to announce plans for the water industry within weeks. He has previously said that Thames Water, which serves 16 million customers, “should be brought under public control.” The utility warned on Wednesday of “material uncertainty” over its long-term future, while confirming it could survive another 12 months. More than 80% of the public support state ownership, according to a YouGov poll from earlier this year. The GMB trade union is among those pushing for swift action.

It’s clear the free market is no place for a natural monopoly like water and this disastrous experiment has failed.

Liberal Democrat MP Charlie Maynard urged the new prime minister to put Thames Water into special administration, calling it a “perfect way” to demonstrate commitment to customers. The utility is currently in the effective control of its creditors, who are seeking Ofwat approval for a takeover.

Cabinet speculation

As Burnham prepares to form his government, Home Secretary Shabana Mahmood has emerged as the frontrunner to become chancellor, despite lacking formal economic experience. Reports suggest he may have reconsidered earlier plans to appoint Ed Miliband to the Treasury. The prospect has disappointed some on Labour’s left, who had hoped for a more radical economic shift. Burnham has not yet confirmed any cabinet appointments.

Opposition reactions

Reform UK’s Treasury spokesman Robert Jenrick claimed Burnham had admitted people would pay more in tax, pointing to ten taxes he said the new premier had previously supported, costing every family £3,450. Conservative leader Kemi Badenoch said Burnham was already talking about raising taxes before even entering office. Burnham insisted his immediate focus was bringing people together rather than creating new divisions, while acknowledging future decisions would be difficult.