Burnham promises to bring ‘substantial change’ as he gives first Commons address as prime minister – UK politics live

PM says he has a ‘clear diagnosis of what has gone wrong’ with UK, and pays tribute to Keir Starmer after his predecessor quit parliament

My colleague Richard Partington, the Guardian’s senior economics correspondent, grew up, like Andy Burnham, in the Warrington suburb of Culcheth. He has been home to find out what people there are saying about the new PM.

Yesterday, Kemi Badenoch announced a reshuffle, replacing Mel Stride with Andrew Griffith as shadow chancellor and Priti Patel with Tom Tugendhat as shadow foreign secretary.

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Rising inflation underlines scale of Andy Burnham’s cost of living challenge

PM’s plan to shield households from more pressure risks being overwhelmed by wider price rises

July’s increase in inflation, to 2.9%, is likely to be the first of several, underlining the challenge facing Andy Burnham in shielding consumers from a fresh cost of living squeeze this autumn.

Rising energy bills, as an increase in Ofgem’s quarterly price cap came into force, were the main driver of the jump in inflation, from 2.6% in June. That was partly offset by cheaper fuel prices – the knock-on effect of hostilities easing in the Middle East, after Donald Trump hailed his “memorandum of understanding” with Iran in June.

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Iran war and high living costs fuelling last-minute holiday bookings, Tui says

Geopolitics and cost of living crisis have cost Europe’s largest travel company €60m so far

Holidaymakers are waiting until the last minute to book their trips because of the continuing uncertainty caused by the war in Iran and the cost of living crisis, according to Tui, Europe’s largest travel company, which said the war had cost it €60m (£51m) so far.

In the weeks after the outbreak of the war at the end of February, Tui recorded a temporary drop-off in customers wanting to travel to Cyprus or Turkey, in what the company called a “volatile market”.

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Labour says Farage has ‘no serious answers’ to prisons crisis – UK politics live

Reform says it will free up space in jails in England and Wales by rapidly deporting all foreign offenders

With parts of Britain set to experience their fifth heatwave of the summer this week, Zack Polanski, the Green party leader, has accused the government of not recognising the severity of the crisis.

In a statement, he said:

We are now facing the fifth heatwave in months following the recent deaths of 3,000 people in our country from extreme weather conditions.

This is the greatest crisis this country has faced since the second world war and to complacently dismiss the demands for immediate action by saying everything is under control is gross negligence, blatantly untrue and misses the severity of the crisis.

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Calls for UK bank tax to fund cost of living help as HSBC profits hit £7.5bn

Levy could raise £19bn to help pay for Andy Burnham’s support for those struggling with bills, say campaigners

Campaigners have renewed calls for a windfall tax on UK banks that could raise £19bn towards Andy Burnham’s cost of living agenda, after HSBC raked in $10.1bn (£7.5bn) worth of profits in the second quarter of the year.

Bosses at HSBC reported on Tuesday that profits rose 60% year on year in the three months to the end of June, helped by fees from wealth management and insurance business, as well as higher interest rates, which allow the bank to charge more for loans and mortgages.

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Healey’s profiteering warning on food and fuel risks row with retailers

Chancellor says the government wants to prevent shoppers being ‘taken for a ride’ at the pump or till

The chancellor, John Healey, has said the government is standing by to prevent the public from “being taken for a ride at the pump or the till” as the Iran war continues to hit prices.

While he said there had been “no significant evidence of so-called price gouging” during the crisis, he used a weekend column to tell the big retailers that ministers were “watching closely” for any signs of profiteering.

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Pay gap widens as UK bosses get 130 times average worker’s salary

In its final report the High Pay Centre says the median remuneration of a FTSE 100 CEO has risen to a record £5.06m

The bosses of Britain’s largest listed companies received record pay last year, fuelling the widest earnings gap with workers in eight years.

Median pay for FTSE 100 chief executives hit £5.06m in the last financial year, according to data released by the High Pay Centre, an 8.6% increase on £4.66m the previous year and the highest level on record.

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Lucy Powell agrees Ed Miliband would be ‘good’ as Andy Burnham’s chancellor

Labour deputy leader says she thinks energy secretary would suit Treasury but ‘tittle-tattle’ over posts ‘unedifying’

Ed Miliband would make a “good” chancellor to Andy Burnham, Labour’s deputy leader, Lucy Powell, has said, before the likely next prime minister’s first major speech on the economy since he returned to Westminster.

Powell, who served as Miliband’s chief of staff in opposition and is close to the former party leader, appeared to endorse him to run the Treasury – although some in Burnham’s camp acknowledge such a move could be politically risky.

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Streeting says he resigned because Labour ‘in fight of our lives against nationalism’, and is currently losing – UK politics live

Former health secretary standing down after saying he no longer had confidence in Keir Starmer as PM

Labour is in a curious, transitional state at the moment. Officially Keir Starmer is committed to staying as leader and prime minister until the next election. There is no formal leadership contest underway. But, informally, it has already started, with Andy Burnham and Wes Streeting already setting out their offer to the Labour membership. We will hear more from Streeting this afternoon. But much of the parliamentary party is already working on the basis that a Burnham premiership is all-but-inevitable, and so Streeting’s interventions may turn out to be more about shoring up his position in a potential future Burnham administration than a rehearsal for an election that may never happen.

Here are some of the stories out today covering Starmer, Burnham and Streeting.

Ailbhe Rea in the New Statesman says an insider describes the atmosphere in No 10 now as “very, very odd”. She says:

Starmer and his remaining loyal cabinet ministers want to make every day that they are still in office count, and are determined to cut through the noise of the leadership drama. Many cabinet ministers, who may not survive long in their posts if Starmer is replaced as Prime Minister, are desperate to set a legacy and bank achievements in their briefs while they can. “Let’s get out there and make the case for what we’re doing,” has been Starmer’s message to colleagues. There is even a fleeting hope inside Downing Street that the leadership speculation “burns itself out”, that “Wes and Andy tearing chunks out of each other for weeks might just make Keir look better”. But even many loyalists accept that is wishful thinking. “The writing is on the wall, even if we don’t know exactly what form that takes yet,” one concludes.

Patrick Maguire, Geraldine Scott and Larisa Brown in the Times say Starmer could stay in Downing Street until early next year. They report:

Ministers familiar with Starmer’s thinking say he has no plans to step down before the Labour Party conference in September and is unlikely to relinquish office before Christmas.

They told The State of It, the political podcast from The Times and Sunday Times, that there were still significant obstacles ahead for Andy Burnham, the mayor of Greater Manchester, who on Tuesday refused to rule out breaking Labour’s manifesto pledge against tax rises.

Caroline Wheeler in the i says cabinet ministers are already angling for jobs in a Burnham administration. She says:

Senior ministers are preparing visits to Makerfield amid growing expectations in Westminster that Burnham could ultimately take the Labour leadership – and with it the power to appoint the next Cabinet.

“The equation cabinet ministers are making is that if they go and he wins they will get a plum job,” one senior source said. “If they don’t go and he wins, he will remember. And if they don’t go and he loses, he will remember.”

Many now believe that Burnham is lining up to make Ed Miliband, the Energy Secretary, as his chancellor. It comes as Miliband’s special adviser was seconded to work with Burnham for the by-election campaign …

Burnham is also widely expected to make Lucy Powell, the Deputy Leader of the Labour Party, his deputy prime minister. Multiple sources said that other women likely to be given top jobs include Angela Rayner, the former deputy prime minister, Lisa Nandy, the Culture Secretary, and Louise Haigh, the former transport secretary, who is also the co-chair of the influential soft-left Tribune group of MPs.

Sam Blewett at Politico has taken an in-depth look at the team supporting Burnham. He says the key figure is Kevin Lee, director of the Greater Manchester mayor’s office, who has been advising Burnham with little break since 2010.

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Worried Britons ‘prepping’ for major disruption with stash of tins and cash, survey shows

Fears over a natural disaster or cyber attack are pushing households into contingency planning, Link survey shows

Millions of Britons are “prepping” for a potential “major disruptive event” by keeping a stash of cash at home, stockpiling tinned goods or ensuring they have a battery-powered torch close to hand, new data suggests.

With war raging in the Middle East and Ukraine, extreme weather becoming more frequent, and warnings that the UK’s critical infrastructure is at risk from cyber-attacks and power outages, many people feel the world has become a more dangerous and chaotic place.

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Fertiliser shortages will have ‘dramatic’ effect on global food prices, warns farming boss

Powerful property and farming firm Grosvenor Group says knock-on effect of Iran war could arrive next year

Fertiliser shortages caused by the Iran war have driven up costs for UK farmers by up to 70% and will have a “dramatic” impact on food prices globally next year, according to one of Britain’s most powerful property and farming companies.

Mark Preston, executive trustee of the 349-year-old Grosvenor Group, controlled by the Duke of Westminster, said fertiliser “was already quite expensive” before the 50% to 70% surge in prices since the start of the Iran war in late February.

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Airlines among companies using fuel surcharges to cover surge in costs, UK survey shows

Firms raising prices at fastest rate in three years, driven by soaring energy and wage bills but also extra materials costs

Airlines and other companies are increasingly using fuel surcharges to cover soaring costs, a survey has found, in a further sign of Iran war-linked inflation hitting the economy.

A poll of companies in the services sector, which includes airlines, found rising fuel prices had contributed to businesses raising prices at the fastest pace in more than three years in April.

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Collapse of US-Iran talks heightens fears of prolonged energy shock

Oil prices and borrowing costs are expected to rise this week as tankers remain stranded in the Gulf

The failure of the US and Iran to reach a peace deal after marathon negotiations has put markets on alert for further oil and gas price rises.

With large numbers of oil tankers remaining stuck in the Gulf, the US vice-president, JD Vance, blamed the collapse of the talks on Tehran’s refusal to abandon its nuclear weapons programme, while Iranian sources hit back at “excessive” demands from Washington.

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Reeves criticises Trump for starting Iran war with no ‘clear plan’ to get out of it – as it happened

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Starmer says he understands why people are concerned about the cost of living.

He says he has already set out a five-point plan to deal with the crisis.

Just look at what’s happening today. Today your energy bills will be cut because of the action that we took at the budget. And whatever happens in Iran, that price is now fixed until July.

The most effective way we can support the cost of living in Britain is to push for de-escalation in the Middle East, and a reopening of the strait of Hormuz, which is such a vital route for energy.

To that end, we’re exploring each and every diplomatic avenue that is available to us.

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Zack Polanski tells NEU teachers’ union that Greens would abolish ‘toxic’ Ofsted – UK politics live

The Green party leader said Ofsted is a ‘failed institution’ and that teaching should move ‘toward a genuinely collaborative model’

Starmer complained about other parties whipping up division, and he specifically criticised Nick Timothy, the shadow justice secretary, for “complaining about Muslims praying in public”.

Labour, by contrast, values bringing people together, he said.

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Reeves says planning for energy bills support under way but hints wealthiest may not be included – UK politics live

Chancellor says she has the data available to run targeted scheme, unlike the Tory programme used when the Ukraine war started

The live feed from the Lib Dem local elections campaign launch did not last long, and it did not include footage of Ed Davey taking questions from reporters. But this is what the Lib Dems are saying about their five key campaign issues.

-Cut the cost of living: A plan to halve energy bills within a decade, saving households an average of £870 a year

-Fix the NHS and care: Guarantee the right to see a GP within seven days (or 24 hours for urgent cases) and ending 12-hour A&E waits.

-Rescue high streets: Give an emergency cut to VAT for hospitality businesses, to bring prices down and boost struggling high streets.

-Clean up rivers: Ban water companies from dumping raw sewage into local rivers and coastal areas.

-Restore community policing: Ensure visible, effective local policing to reduce crime.

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Labour claims extremist candidate revelations show Reform UK’s launch in Scotland has fallen apart – UK politics live

Some Holyrood candidates have been accused of spreading false rumours about asylum hotels, describing Humza Yousaf as ‘not British’, and backing Tommy Robinson

Severin Carrell is the Guardian’s Scotland editor.

Malcolm Offord, Reform UK’s Scottish leader, has doubled down on his defence of the party’s vetting by dismissing remarks by candidates backing Tommy Robinson or describing Humza Yousaf as an “Islamist moron” (see 10.12am) as “fruity language”.

It has taken a matter of hours for Reform Scotland’s big launch to fall apart and their true colours to show.

If Nigel Farage refuses to act and remove this candidate, Malcolm Offord must step up and show some leadership himself. This incident has confirmed once and for all how poisonous and chaotic Reform is and I have no doubt that Scots will send them packing.

Again, as I say, this was done in a former life before she became a member of Reform. We’ve all said things in the past that may be intemperate… I am saying that we have to grow up on this and not take offence at every moment in time.

I’ve been very clear that we have brought in a whole range of candidates, 80% of whom are not politicians. They’re real people with real lives who said real things in a past life. Okay, this was said before she was a candidate. She wasn’t even a member of the party at that time.

And what we got in the situation is that in all our lives in the past, we’ve made comments that might sometimes be intemperate. But the issue with this modern world we live in is everything is now written down and remembered. I just think we have to be more, more realistic about the fact that real people say real things, and now she’s a candidate, she will be held to a higher standard.

Liberal Democrats urge the government to ensure the NCA or new National Police Service takes over investigations into serious waste crime. We also need an independent review of the entire waste crime system to crack down on organised gangs once and for all. New powers for the Environmental Agency simply won’t cut it.

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Fewer Britons giving to charity, study says, with donations down by £1.4bn

Charities Aid Foundation says giving no longer a ‘deeply embedded cultural norm’ amid rising cost of living

Britain is rapidly losing the charity habit, with public donations to good causes plummeting by more than £1.4bn last year and millions of people saying they can no longer afford – or do not want – to give, according to an analysis.

The Charities Aid Foundation (Caf) said in its annual report that, while the British remained generous at heart, society was witnessing a big transformation in attitudes towards charitable giving. Just half of people gave to charity in 2025, down from 61% a decade earlier.

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Rachel Reeves targets UK’s wealthiest in £26bn tax-raising budget

Chancellor axes two-child benefit cap and cuts energy bills paid for by mansion tax and freezing tax thresholds

Rachel Reeves targeted Britain’s wealthiest households with a £26bn tax-raising budget to fund scrapping the two-child benefit policy and cutting energy bills.

On a chaotic day that involved key details of her budget accidentally being released early by the Office for Budget Responsibility (OBR), the chancellor defended the measures, saying she was “asking everyone to make a contribution to repair the public finances”, but that she wanted the wealthiest to pay the most.

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Reeves to lay groundwork for tax rises in ‘candid’ speech about budget

Chancellor to promise ‘fairness and opportunity’ but will not repeat manifesto pledge on tax, after PM’s hint at breach

Rachel Reeves will lay the groundwork for a tax-raising budget that could break Labour’s election promise on income tax, in a major speech in which she will be “candid” about the tough choices ahead.

The chancellor will give the speech as the markets open on Tuesday, when she will promise to make fair choices at this month’s budget but decline to repeat her manifesto pledge of no rise in income tax, VAT or national insurance.

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