Burnham to face first PMQs and test of authority after setting out ambitions

Mr Burnham blamed the legacy of Margaret Thatcher, the austerity era and Brexit for decades of slow growth, and insisted his plans to change the “failed economic model” would kickstart Britain’s economy.

“Britain is not where any of us would wish it to be,” he told MPs, adding: “Things are not working as they should, life is too expensive and too hard for too many.”

During his Commons outing, he described Britain’s water industry as “a leaking monument to that approach, a country run in the private rather than public interest”.

Throughout his three hour and 23 minute Commons grilling, the Prime Minister declined to say whether there will be tax rises at the October 28 Budget.

But he suggested that his Chancellor John Healey will find money to hike defence spending to 3% of GDP by 2030 by the time of the next spending review.

The Guardian reported that the Prime Minister told Cabinet on Tuesday that his Government will have three priorities: cutting the costs of essentials such as childcare and mortgages, regenerating communities, and greater public control over utilities such as water, energy and housing.

But Mr Burnham’s ambitions for overhauling how the UK state operates are likely to be curtailed by the economic headwinds caused by the Iran war.

Government long-term borrowing costs have been sent soaring to their highest levels for 28 years, amid a global bond sell-off partly linked to signs of escalation in the Middle East conflict and the concern that inflation could follow.

While former NatWest chairman Sir Howard Davies told BBC Radio 4’s Today programme on Wednesday that this global sell-off was not “a major crisis of confidence in the UK Government” specifically, he agreed concerns about Mr Burnham’s approach to public spending were causing some market jitters.

Sir Howard said the country faced “a very dicky period” leading up to the Budget on October 28 and called for the Government to “make some signs about their overall approach to the fiscal balance” in order to “calm things down a bit”.

Cabinet Office minister Sally Jameson told Today the Government was “absolutely clear that we will be sticking to the fiscal rules and making sure that we’re controlling public spending” as well as growing the economy.

The Prime Minister invited Labour MPs to Downing Street to woo them over drinks following his turn at the despatch box.

But Labour backbenchers pushing for faster reforms to electoral law could provide Mr Burnham with his first Commons headache on Wednesday, after he has faced Conservative Party leader Kemi Badenoch in his first Prime Minister’s Questions.

Alex Sobel, the Labour MP for Leeds Central and Headingley, is leading calls among backbenchers to establish a national commission on reforming the voting system.

He has tabled an amendment to the Representation of the People Bill, which will be debated in the Commons on Wednesday, calling for the Government to back the move.

Mr Burnham on Tuesday suggested he was open to the idea of electoral reform, but told the Commons that “we will need to get a consensus at the next election” to make such a change.

Veteran Labour MP Dame Emily Thornberry has meanwhile pressed the Prime Minister to back her amendment to the Bill which would ban “overseas voters” from financially backing political parties.

The Prime Minister was reported to have steered away from plans for a £500,000 cap on all political donations in the summer, amid concern about its impact on Labour’s trade union backers.