Early evening summary
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Keir Starmer has suggested Andy Burnham borrow billions more to cover the hole in the government’s Defence Investment Plan (Dip), in a move which economists say would severely reduce Burnham’s headroom against his fiscal rules. As Kiran Stacey and Alexandra Topping report, the prime minister said at PMQs that his successor – who is very likely to be the Makerfield MP – should use the headroom to fund a £4.7bn gap in defence spending over the next four years. Starmer unveiled the Dip on Tuesday with an extra £15bn for weapons systems such as nuclear missiles and drones, but without having allocated money for all of the additional spending. He told MPs:
[The funding gap is] about £1bn a year over four years. Because of the decisions at the last budget, we’ve got headroom of £22bn. That is precisely so we can take decisions like this.
Government sources say this would make little difference to the government’s fiscal position, given the Office for Budget Responsibility calculated earlier this year ministers had space to borrow an additional £22bn before hitting their limits. However economists say that the Iran war has already severely squeezed the government’s space to borrow more, and funding the defence investment plan would reduce it further.
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A government-backed flood reinsurer will cap payouts, amid fears poorer households are subsidising flood insurance for some of the richest. As the Press Association reports, the new claim limit is one of several reforms to Flood Re announced by water minister Emma Hardy in the Commons. She said a river flood last year resulted in a single claim worth more than £3m to Flood Re – to cover a quad garage, indoor swimming pool, jacuzzi, gym, music room, den, outdoor artificial turf, padle court and five-a-side football pitch. Hardy told MPs:
Without reform to Flood Re, we will continue to have a system where the average and low-income households are subsidising flood insurance for the richest households in the country.
For a full list of all the stories covered on the blog today, do scroll through the list of key event headlines near the top of the blog.
Rayner accuses Whitehall of 'institutional resistance' to fiscal devolution
On the subject of devolution, Angela Rayner, the former deputy PM, will tell the New Economics Foundation in a speech tonight that, when she was in power, the Whitehall system opposed fiscal devolution.
According to Emilio Casalicchio in his London Playbook PM briefing for Politico, Rayner will say:
There was institutional resistance to fiscal devolution throughout my time in office.
But we have shown it can be overcome. We faced them down in announcing an overnight visitor levy. We can do so again.
Andy Burnham may have heard this story too. In his speech in Manchester on Monday, he said:
And let me say this very directly: the days of Whitehall fighting the devolution of power into the regions and nations are over, for good.
Updated
Vince Cable, the Lib Dem business secretary in the 2010-15 coalition government, has written a thoughtful critique of Andy Burnham’s devolution plans in a post on his Substack blog. He points out that there is an inherent tension between wanting devolution and wanting “good growth in every postcode”.
Here is an extract.
But let me be more generous and imagine that Manchesterism is just the first step towards something big in devolution: more freedoms for elected mayors and for councils to spend and raise revenue; less power for Whitehall to impose policies and priorities. Would that help to revive the economy and raise overall living standards and public satisfaction as Andy Burnham believes? Quite possibly; but not necessarily. If a powerful tier of regional government is built up at the expense of local government it may have the opposite effect, producing a different form of centralisation. More devolution may be at the cost of more ‘post-code lotteries’; indeed it is the point of devolution to allow more variety and experiment. Successful city regions may produce dynamic city centres at the expense of surrounding small towns and suburbs. Devolved government may produce worse outcomes by pursuing wrong-headed policies. Critics of the Nationalist government in Scotland argue that experimentation with a new school curriculum may have damaged school performance - at least as measured in PISA scores.
The NAHT union, which represents school leaders, is more positive about the teachers’ pay award than the NEU. (See 4.42pm.) It has issued this statement from Paul Whiteman, its general secretary. He said:
We are pleased the review body and government have listened to NAHT and other unions, agreeing that an above-inflation pay uplift is required.
Although there remains some way to go to achieve our aim of restoring the value of pay to 2010 levels, this represents another step in the right direction so long as we don’t see a big spike in inflation.
The big drop in real-terms salaries since 2010 has coincided with increased responsibilities and pressure - putting this right is essential if we are serious about ensuring our children have the first-rate teachers and school leaders they deserve.
It is helpful that the government is bringing some additional funding to support schools, but we need to be clear that this is not a fully-funded award and it will mean more pressure on already stretched budgets. There is very little headroom in existing budgets and talk of ‘maximising value’ is deeply unhelpful.
NEU teaching union considering strike ballot after schools told pay award for teachers won't be fully funded
The UK’s largest education union is “considering all options”, including launching a formal ballot for industrial action, following the announcement that schools will need to partially fund teacher pay rises, the Press Association reports. PA says:
The government has accepted the recommendations of the school teachers’ review body (STRB) for teachers to receive a 3.5% pay rise from September and a 3% increase from the same time in 2027.
But the Department for Education (DfE) said schools will have to find the first 1% of each pay award.
Unions had called for any pay increase to be fully funded after the DfE suggested in its evidence to the STRB in October that teachers’ pay should rise by 6.5% across 2026/27, 2027/28 and 2028/29.
Earlier this year, the National Education Union (NEU) said it would launch a formal ballot for strike action in October if the Government failed to make a fully funded, above-inflation pay offer.
Today, following the government’s teacher pay announcement, a spokesperson for the NEU told the Press Association: “We are considering all options.”
Additional funding of £1.8bn will be provided to schools over two years to support pay rises for teachers and support staff and an additional £485m will be provided to colleges and further education providers over the same timeframe.
The DfE also announced that academy trust executives’ pay will be capped at £174,000 from September.
Daniel Kebede, general secretary of the NEU, said in a statement: “A partially funded settlement still means cuts to education, and the NEU will never accept that.
“Schools are being asked to find £460m from budgets already at breaking point.
“This is the equivalent of 8,300 school staff: 3,900 teachers and 4,400 support staff. Ministers cannot claim to want more teachers while overseeing such a drastic reduction in numbers next year.
“In Makerfield, in Andy Burnham’s constituency, that means 40 schools being forced to find £866,842 collectively from their own budgets simply to meet the government’s requirement to fund part of this pay award.”
There have been a lot of reports saying Andy Burnham is being urged to give a job to David Miliband, the former cabinet minister who lost the Labour leadership to his brother Ed in 2010 and who for the last 13 years has been running the International Rescue Committee, a global charity based in the US. But today the Times is reporting with more confidence that Miliband is now expected “to play a significant role” in a Burnham administration.
But, in their story, Oliver Wright, Steven Swinford and Patrick Maguire say making Miliband foreign secretary, the job he did under Gordon Brown, would be problematic for his brother. They report:
The irony is that this time it could be David who ends up thwarting Ed’s political ambitions. David is said to have his eye on returning as foreign secretary. Ed wants to be chancellor.
The dilemma is simple — can Burnham really afford to put two Milibands in great offices of state? “You cannot have more Milibands than women in the top jobs. That kind of thing matters,” one cabinet minister said.
They also say that Ed Miliband was one of the people urging Burnham to give a job to David. The two brothers are said to have a much better relationship now than they did after Ed stymied his elder brother’s ambitions in 2010, and Ed knows that David is more progressive than people who stereotype him as a Blairite would assume.
Darren Jones suggests Burnham's devolution will only work properly if involves central government getting smaller
Andy Burnham has made it clear that, when he becomes PM, he wants to see significant devolution of power to English regions.
In a speech to the Re:State thinktank today, Darren Jones, the chief secretary to the PM said that Burnham was right to say there is “overcentralisation of power and bureaucracy in Westminster”. But he said devolution of power should be accompanied by a reduction in the number of officials working for central government in London.
He said:
When I ask the question: ‘As we’ve devolved things to combined authorities have we reduced the headcount in London by a commensurate amount?’ No, headcount has increased.
And I just say to Whitehall, with the direction of where the political winds are blowing, I think this is a clear warning: devolution must mean devolution, not duplication.
In the past, we’ve gone down the path of replicating checks, both in the regions and in Westminster, creating more state rather than more power in those regions.
So, for this to truly work, Westminster must trust local leaders to make the right decisions and instead of an almost parental relationship, we need to actually devolve power and accountability across the country.
Jones said that “if you’re really committed to devolution, you should see a change in the shape of London departments”.
Asked if the government would have to think about which departments remained in existence if there was genuine devolution to the UK’s nations and regions, he replied:
I think in the long run, probably yes. I think in the short-to-medium term, I would expect them to at least change shape or shrink.
Small boat arrivals in first half of 2026 down 41% on total for first half of 2025, figures show
The number of migrants who arrived in the UK after crossing the English Channel in the first half of the year fell sharply compared with the same period in 2025, the Press Association reports. PA says:
Some 11,884 migrants arrived in the six months from the start of January to the end of June, according to the latest Home Office data.
This is 41% lower than the total that had reached the UK by this point last year, which was 19,982.
It is also down 12% on the 13,489 who arrived in the first six months of 2024.
The steep drop is likely to reflect a number of factors including the weather, the supply of small boat parts, government policy, and the flow of migrants into Europe from elsewhere in the world.
In April, the home secretary, Shabana Mahmood, signed a three-year agreement with French authorities to pay £662m to support beach patrols as part of efforts to drive down arrivals.
Mahmood is also seeking to overhaul the asylum system to deter crossings and deport people easier, including proposed changes to make refugee status temporary.
Looking further back, this year’s figure for January-June of 11,884 is 4% higher than the equivalent number in 2023 (11,433) and 7% below the figure in 2022 (12,747).
While the number of arrivals has fallen so far this year, the number of migrants arriving per boat has climbed to a new high, averaging 65 per craft over January to June.
The average across the whole of last year was 62 migrants per craft, while the figure for January-June 2025 was 58.
Some 2,742 migrants arrived last month after crossing the Channel, the lowest number for June since 2021.
UK national lottery review to give public more say in how funds are spent
The government is to review the future of the national lottery for the first time in more than 20 years as the culture secretary, Lisa Nandy, promised to give the public a greater say in how billions of pounds raised by ticket sales is spent. Rob Davies has the story.
At the post-PMQs lobby briefing, the PM’s spokesperson did not rule out cuts to some hospital building programmes to pay for increased defence spending.
Asked whether hospital building projects would be protected from cuts to capital budgets, the spokesperson replied:
Thanks to this government’s record investment in the NHS there will be no impact to funding for frontline services. This will also not affect the timetable for delivery of the seven Raac-affected hospitals which we’ve prioritised or wave 1 projects of the New Hospital Programme and we still plan to spend more than £15bn on capital health investment.
Asked about other hospital programmes, the spokesperson repeated the point about how the cuts would not affect the Raac-affected hospitals or the first wave of the government’s new hospitals programme.
No 10 insists there is 'credible plan' for funding Dip
At the post-PMQs lobby briefing, the PM’s spokesperson insisted that the government had set out a “credible” proposal to fund the defence investment plan (Dip). He said:
We have set out a credible plan for funding.
The vast majority of this package has already been funded by reprioritising departmental spending with £10.3bn identified now. We’ve worked with secretaries of state across government to find savings and reallocations in a way that protects day-to-day spending on frontline services.
The residual amounts to just over £1bn-a-year for this parliament which will be set out at the budget in a fair and balanced way.
I’m not going to get ahead of that process but we’re taking the responsible decisions now to increase defence spending in response to the growing threats the UK faces.
PMQs - snap verdict
There aren’t many advantages to being forced out of your job if you are prime minister, but knowing that you will never have to face another PMQs is one clear bonus. Among the many reasons why it is such an ordeal is the fact that, as PM, you get blamed for everything. In part that is because the opposition parties will always be critical, regardless of whether or not that’s fair, but mostly it’s just a facet of leadership.
Today Keir Starmer sounded more fed up about this than usual. As he hit back at his critics, he was more withering and disdainful than usual. And, as a result, better than usual too.
He slapped down Dave Doogan, the SNP leader at Westminster, with ease, forcefully and effectively. (See 12.30pm.) And when Lee Anderson from Reform UK asked a question, Starmer briskly addressed it before devoting most of his answer to a hatchet job on Nigel Farage. (See 12.42pm.)
But it was Kemi Badenoch who seemed to wind Starmer up the most. As expected, she devoted all her questions to the defence investment plan (Dip). Her problem, though, was that while Starmer might be prepared to listen to criticism of his record on defence spending from the chief of the defence staff, or from Lord Robertson, or from the Nato secretary general, he is not minded to accept the same lectures from her party given its own record on this issue.
Starmer rightly accused her of “faux outrage”. In his second response to her, he said:
Their record is cutting spending. My record is raising it to £300bn, and rising.
Their record is cutting frigates by a quarter, cutting minehunters by a half and leaving 47 of 49 defence programmes delayed or over budget. My record is the biggest boost to defence investment since the 1980s.
Their record is missing army recruitment targets every year for 14 years. We’ve given our armed forces the biggest pay rise for 20 years and increased funding by £15bn a year.
In his third response to her, he said:
What did they actually do? They cut defence - 2.5% down to 2.3% in their 14 long years. And what did they do on welfare? They put the bill up by £88bn. So no lectures from them.
And in his fourth, he said:
They won’t defend their record because they can’t. They won’t apologise for it because they’d have to admit what we all know is a total failure. They just try to pretend the 14 years they were in power never really happened.
Collectively, all this made an impact. Starmer had a point, and he was making it with punch and passion.
Badenoch was a bit less aggressive than usual, but perhaps she is losing interest. It was interesting to note that, at one point, she started training her fire on Andy Burnham. (See 12.21pm.) He is the opponent who matters to her now.
Updated
Carla Lockhart (DUP) says last week a former MP (the former DUP leader Jeffrey Donaldson) was convicted for child abuse offences. She praises the courage of his victims. But she says thousands of girls were victims of Pakistani grooming gangs. Will the PM ensure the grooming gangs inquiry goes ahead?
Starmer also pays tribute to the courage of Donaldson’s victims.
On the grooming gangs inquiry, he says it should go wherever the evidence takes it.
Starmer questions whether Farage has been involved in paid lobbying on behalf of cryptocurrency industry
Lee Anderson (Reform UK) says in his constituency four nurses were removed from a HMO (house in multiple occupation) and replaced by four illegal migrants, one of whom went on to rape someone. Does the PM agree all illegal migrants should be detained and removed?
Starmer says migration is down.
And he says Anderson should be asking questions of Nigel Farage, the Reform UK leader, who is sitting next to him. He accepted £5m from a crypto billionaire and then went on to lobby the Bank of England for changes to crypto policy.
That is a reference to this story.
Starmer asks if that amounted to paid lobbying, which is banned for MP.
And why was the donation kept secret?
And he asks if Anderson is happy about Farage earning £20,000 an hour for promoting gold.
Sarah Russell (Lab) asks about the contract for NHS dentists. A new one is promised. She urges the government to start work on that quickly.
Starmer says some reforms have already been implement. The consultation on the new contract will start soon.
Catherine West, the Labour former Foreign Office minister who briefly threatened to be a leadership candidate against Starmer, pays tribute to his leadership, and says Foreign Office staff appreciated his service.
Starmer thanks West, and pays tribute to her too.
Desmond Swayne (Con) says injured veterans only get a year to put their compensation in a trust. Will the government ensure that they can get more time?
Starmer says the government will seek to resolve any difficulties. He urges Swayne to let him know of any specific cases.
Michelle Welsh (Lab) asks about the two recent reviews of maternity services. Does the PM agree the system is failing, and cruel. Will the Hillsborough law be introduced in full so families can get the justice they deserve?
Starmer agrees that the Amos review showed the system is not working. The recommendations of the Amos and Ockenden reviews will be delivered.
Starmer dismisses SNP criticism of his defence record as 'sanctimonious nonsense'
Dave Doogan, the SNP leader at Westminster, said he was gravely concerned that the PM keeps citing recent trends in defence spending to defend his plan, when the underlying situation is more serious. He calls the plan “paper-thin”.
Starmer says the SNP want to get rid of the nuclear deterrent, and he accuses Doogan of “sanctimonious nonsense”. He says the SNP’s former chief executive has just been jailed for five years. And the SNP claim not to know what was happening. They say they did not see the motorhome parked in the drive.
UPDATE: Doogan said:
I am gravely concerned that time after time this prime minister, in response to the abject and honest criticism of his defence investment plan, he cites recent trends in defence spending when he should be calibrating it against the chronic and very real threat that the people on these islands face.
In his limited time left in No 10, will he get a grip of his paper-thin plan?
And Starmer replied:
This is the party that thinks we should give up the nuclear deterrent, and he stands there to talk about defence, so we need no more advice and sanctimonious nonsense from the SNP.
Before he or any of them give any more advice to me or this House, let’s have some home truths.
Their chief executive has just been jailed for five years for embezzlement.
They’re all pretending they didn’t know anything about it. They couldn’t even see the motorhome parked in the driveway, apparently.
And now they’re blocking an inquiry into the Scottish parliament. Before they offer any more advice, they should look in the mirror.
Updated
Ed Davey says British Indian friend told by Reform UK activists that Farage government would revoke her citizenship
Ed Davey, the Lib Dem leader, says the wars in Ukraine and Iran show the threat from drones. The UK needs the best possible missile defence system. But the Dip plans fall short. Why has the PM left the UK so vulnerable? And why hasn’t he adopted the Lib Dem plan for defence bonds
Starmer says the Dip gives the UK what it needs to fight now and in the future.
He says he has looked at the defence bonds plan, but they are just borrowing by another name.
And he says Davey sat in a cabinet that cut defence spending by 22%.
Davey says Starmer will share his concern about the way race hate is being normalised by people in this country, including some people in this house.
He talks about a friend of Indian ancestry who had Reform UK activists come to their house and say, under a Reform UK government, their citizenship should be revoked.
Starmer says racism should be called out by all MPs in this country.
He refers to the plaque in the Commons commemorating Jo Cox, and says at a recent event to mark the 10th anniversary of her death he had to say that he did not think the situation had got better over the past decade.
UPDATE: Davey said:
I have another concern that I think the prime minister will share.
The rising tide of racist violence and hate that we are seeing in our country, and the way it is being incited and normalised, including I am afraid, by some members of this house.
I was talking to a British friend of Indian ancestry, who told me how Reform activists came to her door and said that, if they get into power, she and her family will have their passports seized and their citizenship revoked.
Does the prime minister agree that racism has no place in our country, and will he join me in condemning anyone who is stoking it?
And Starmer replied:
Our politics is becoming more divisive, and racism and intolerance is permeating everywhere. We have to deal with it, because it’s tearing our societies apart.
It is keeping good people away from politics, because they don’t want to be involved in it.
It should be called out by every single person who is a politician of any level in this country.
I say this, looking at the plaque to Jo Cox, and of course, we’ve got David Amess behind me too.
We had a Jo Cox 10-year reminder that it was 10 years ago, just a week or so ago, that we lost Jo, and I had a reception in Downing Street with her parents and other close friends and relatives of hers, and we read out the words of Jo again.
The very sad thing is, I was not able to say that in the 10 years since Jo’s death things have got better, because sadly they’ve got worse.
That’s on us to fix, all of us to fix, every single member of this house, whatever their party is, and anybody who flames it should be absolutely ashamed of themselves.
Updated
Badenoch urges Burnham to condemn defence investment plan
Badenoch says the government is facing a moment of danger unlike anything seen when they were in power. She says Burnham should come out and condemn this plan if he does not want to be seen complicit in it. If Labour cannot defend the country, what is the point of them?
Starmer says the Tories won’t defend their record, because they can’t. And they won’t apologise either. They sit their pretending it won’t happen.
He says NHS waiting lists are falling at their fastest rate for 17 years.
Starmer says budget headroom will enable government to fund £5bn black hole in defence investment plan
Badenoch says Lord Dannatt, the former head of the army, said yesterday the plan was inadequate. She says Badenoch. is in this mess because he would not cut welfare. The only way to get the money is to increase taxes, increase borrowing or cut welfare.
Starmer says the last budget had more than £22bn of headroom. That gives the government the abillity to take these sorts of decisions. He says the Tories do not understand that because they lost control of the public finances.
UPDATE: Starmer said:
We built a headroom of £22bn. The very reason for the headroom is to have the credibility to take decisions outside the budget and outside the spending review. They don’t understand it because they lost control of the public finances.
Updated
Starmer won't confirm that Burnham has agreed to fund defence investment plan
Badenoch says the funding should have been in the last budget. She quotes from the Times criticising the defence investment plan.
And she asks again if Burnham knew about the £5bn black hole.
Starmer says he won’t take lectures from Badenoch on this. They hollowed out the armed forces. The Tories are just trying to pretend their 14 years in power did not happen.
He says any Labour PM would stand behind this plan.
Starmer accuses Badenoch of 'faux outrage' over £5bn shortfall in defence investment plan funding
Badenoch says the chief of the defence staff is an honourable man making do with very little. Poland and Germany have increased defence spending. And Russia is spending 10% of GDP on defence.
Has Andy Burnham agreed to fund the £5bn shortfall?
Starmer says the Tories cut defence and increased welfare spending by £88bn.
He says he has found £15bn more for defence outside a budget and outside a spending review.
He says the last Tory government announced an NHS investment plan, while saying they would explain the funding at the next budget. He accuses Badenoch of “faux outrage”.
Badenoch says this settlement is not fair for our troops.
John Healey said, when he resigned, that he was having to take decisions that would make the country less safe. How can the PM stand there and say this is enough?
Starmer says this is the biggest upgrade to defence capacity since the 1980s. He quotes the defence chiefs welcoming it, and the Nato secretary general too. He says the Tories cut defence spending. He has boosted defence spending, he says. The Tories missed recruitment targets. Labour has put defence pay up, he says.
Kemi Badenoch says she agrees with Starmer about Venezuela – and the Lib Dems.
She says the armed forces said they needed £28bn for defence. Why is Starmer only giving them half of that?
Starmer says the government is making a record investment in defence. It is what is needed to keep the country safe.
Al Pinkerton (Lib Dem) says a site chosen for a hospital relocation in his Surrey Heath constituency is unsuitable.
Starmer says this hospital is in the front of the queue for new projects. But Pinkerton has demanded a new hospital while objecting to the site. He says Pinkerton complained the new site would remove a golf course. He jokes that demanding a hospital but standing up for golf courses is very Lib Dem.
Keir Starmer starts by saying MPs are thinking of the people of Venezuela.
He says Sunday marks the 70th anniversary of the NHS. He says waiting times are falling, and he welcomes the deal with resident doctors on pay.
Updated
Burnham 'a true patriot' who will keep the country safe, says defence secretary Dan Jarvis
Dan Sabbagh is the Guardian’s defence and security editor.
Andy Burnham is a “true patriot” who will provide the money needed to maintain Britain’s security when he becomes prime minister, the new defence secretary, Dan Jarvis, said on a visit to a factory in Cambridge today.
Speaking a day after publication of the defence investment plan, Jarvis insisted the UK would meet a Nato commitment to lift defence spending to 3.5% of GDP - and that the prime minister-in-waiting would help. He said:
I’ve known Andy Burnham for more than 15 years, he is a true patriot, and I absolutely believe that he will make sure that we have the resources that we need to field the kind of capabilities that are required given the nature of the world that we’re operating in.
The minister added the UK had made “an ironcast” commitment to Nato allies to spend 3.5% of GDP on defence, and that there needs to be “a trajectory to it” in future years. The spending plan leaves defence at 2.7% of GDP in 2030. He said:
I know what we need to do to keep Britain safe, and I’m absolutely confident that Andy Burnham, as the next prime minister, knows that as well, and we’ll make sure in the context of the next spending review that we’ve got the resources we need to keep the country safe.
The spending plan, agreed after months of cabinet wrangling, leaves the UK over £25bn a year in real terms short of the final target. Concern about the difference led to the resignation of Jarvis’s predecessor John Healey earlier this month.
Starmer faces Badenoch at PMQs
PMQs is starting soon.
Here is the list of MPs down to ask a question.
CMA launches review of early years education and childcare services in England
Sally Weale is a Guardian education correspondent.
The Competition and Markets Authority (CMA) has launched a review of early years education and childcare services in England, amid concerns about the hidden costs parents face, pressures on nurseries and the growing presence of private equity providers in the market.
It follows a request by education secretary Bridget Phillipson who expressed her concerns in an article in the Guardian in May that too many parents are still not feeling the benefits of the government’s £9.5bn investment in funded childcare.
She wrote:
The vast majority of nurseries and childminders are doing a brilliant job – but we have to ask hard questions every time we hear stories of families hit with hidden charges, restricted hours or excessive deposits that bear no relation to what parents are actually paying.
Phillipson also raised concerns about a doubling in the number of nurseries backed by private equity and investment firms. For every £5 spent at an investment-backed nursery in England, she said more than £1 ends up as profit – double what other private nurseries make and seven times more than non-profits.
Sarah Cardell, CMA chief executive, said:
We know how important it is to find affordable providers close to home that parents can trust. But too many families are struggling to find the right place at an affordable price, with providers also under real pressure.
We’re going to take a close look at where change may be needed as part of our commitment to support economic growth and household prosperity, so the system works well for families and providers alike.
Neil Leitch, chief executive of the Early Years Alliance, which represents 14,000 childcare providers, said:
For all the positive rhetoric on the importance of the early years, the fact is that sustained underfunding – across successive governments – has left far too many settings with no choice but to raise fees and prices or risk permanent closure, while many families still face a postcode lottery when it comes to finding early years places.
There are more than 53,000 childcare providers in England, providing an estimated 1.6bn places for children aged 0-4 in a sector with an estimated annual value of £14bn to the economy. The CMA findings will inform a wider government review of childcare provision.
For more on private equity, this Guardian explainer launched earlier this week on the impact private equity has had in the veterinary medicine sector is excellent.
Swinney says Burnham wrong to say people in Dundee feel as distant from Holyrood as they do from Westminster
John Swinney has rejected Andy Burnham’s claim that parts of Scotland feel as distant from Holyrood as they do from Westminster, the Press Association reports.
In his speech in Manchester on Monday, Burnham, who is set to become PM later this month, said:
[The work of No 10. North] will be about offering new opportunities to extend devolution in Scotland, Wales and Northern Ireland by taking power deeper down.
The people of Dundee and Bangor feel just as distant from Holyrood and the Senedd as they do from Westminster.
Asked about this comment, Swinney told the Press Association:
I don’t agree with them that areas feel distant from Holyrood.
The city of Dundee just re-elected SNP members of the Scottish parliament and the Labour party got terrible results in the city.
I don’t really think Andy Burnham is in a strong position to lecture me about all of these questions.
I think rather than offering us these polemics, if Andy Burnham is going to become the prime minister, he should have a substantive discussion with the Scottish government and me about how we empower and strengthen the powers of the Scottish parliament …
He’s spent years telling us that Whitehall doesn’t work, that Westminster is broken, and that means he’s got to devolve more powers to the Scottish parliament, and in that respect, I’ll be a willing partner in making sure that’s the case.
Swinney also said he did not want to see elected mayors in Scotland.
What I agree with is having empowered and strong local authorities, as we have in Scotland. I want to make sure they’ve got more power and more scope to increase economic performance in individual localities.
Andy Burnham has not yet become PM, but already the rightwing papers are exploring how best to present him negatively in the eyes of their readers.
Yesterday the Daily Mail splashed on a story saying Burnham wants “to run Britain part-time from Manchester”. The 10-word intro managed to simultaneously imply that Burnham would be working from home a bit, not fully committed to the job, and anti-London.
Today the Telegraph has got an even more ingenious line of attack. It is running a headline saying: “Burnham could ‘turbocharge North-South house price divide’.” The story says house prices are growing at 3.9% in the north and north-west, compared to just 0.1% in the south-east, and it quotes someone from a property search company saying: “A huge injection of government spending into the north could create a Burnham bounce that accelerates northern price growth further.” While this sounds like a grave injustice to homeowners in the south (where Telegraph readers live), they might have been reassured if the article had included figures showing that house prices on average are far higher in the south than in the north. Burnham’s political project is all about reducing that divide, not turbocharging it.
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Andy Burnham’s team is “properly furious” about the £5bn black hole in the funding for the defence investment plan, according to Sam Coates from Sky News. On his podcast this morning, Coates said:
I am old enough to remember when Rachel Reeves and Keir Starmer came into government complaining from every hilltop that the Tories did just similar by cutting budgets and failing to fully fund them.
It’s no wonder that Team Burnham are, for the first time in this transition I think, properly furious, right? They’ve really avoided briefing until now, but it was made clear to me yesterday they are cross about this because they didn’t know and it’s a big headache.
To be fair, compared to some of the other budget and public policy problems facing a Burnham administration, having to find £5bn over four years (it’s a cumulative figure, not an annual figure) may not be welcome but it’s hardly the biggest challenge they will be facing.
Housebuilding in Scotland at lowest level for almost a decade, figures show
Robyn Vinter is a Guardian reporter covering Scotland.
Housebuilding in Scotland is down to its lowest level in nearly a decade, official figures show.
Apart from 2020-21, when Covid impacted housebuilding, completions were the lowest since 2016-17, Scottish government statistics show.
A total of 17,268 new homes were built, and 14,955 homes were started in Scotland in 2025-26, a 10% and 4% drop respectively on the previous year.
Critics have said at the current rate of progress, the Scottish government’s target to deliver 110,000 affordable homes by 2032 will be missed by a significant margin.
Scottish Labour housing spokesperson Mark Griffin said:
Scotland’s housing emergency is causing misery for families all over the country and this fall in housebuilding will fan the flames of the crisis.
The Lib Dem MSP Morven-May MacCallum said the “chopping and changing of housing policy must end”. She added:
Too many Scots have nowhere to live or are paying through the nose. Housebuilding is going in the wrong direction and this needs to change.
Announcing spending plan while deferring saying where all money coming from 'not unusual', says minister
Luke Pollard, a defence minister, has been giving interviews this morning. Speaking to Times Radio, he defended the government’s decision to defer explaining how around one third of the £15bn defence investment plan (Dip) will be funded until the budget in the autumn. He claimed that leaving a hole in spending plans like this was “not unusual”.
He said:
We’ve announced a £15bn increase in defence spending, which is a huge boost for our readiness and helps us buy the kit and equipment that we need.
Of the £15 billion extra spending power that we now have, the Treasury set out how £10bn or so of that will be spent … £4.7bn will be set out at the autumn budget. And that’s not unusual for governments to do.
When Rachel Reeves announced a U-turn on the winter fuel payments cut last summer, costing £1.25bn, she also put off explaining how it would be funded until the budget later in the year.
In his interviews Pollard also declined to comment on reports that Andy Burnham and his team were not told about the £5bn black hole in the plans until the figures were published yesterday. Pollard told the Today programme that he only saw details of how the £15bn would be raised yesterday, and that he was “not involved” in the talks with the Burnham operation.
Burnham is expected to become PM in just under three weeks.
Ministers ‘furious’ over cuts to road projects to fund defence plan
Here is Jessica Elgot’s story about the backlash over the proposed road scheme cuts that will part-fund the defence investment plan.
Starmer to take penultimate PMQs as he faces backlash over ‘poisoned chalice’ defence investment plan
Good morning. Yesterday Keir Starmer published the defence investment plan (Dip), which was probably the last substantial announcement of his premiership. Today he is facing what will probably be his second last PMQs (he is expected to be at the Nato summit next Wednesday, and he’ll have his swansong on 15 July), and the session is likely to be dominated by complaints about the Dip.
Broadly, there are three distinct criticisms.
1) ‘It doesn’t raise defence spending by anything like enough.’ This is what military chiefs (in private) and retired military leaders (on TV) have been saying for ages. Yesterday the Institute for Fiscal Studies in effect agreed. In a briefing, it said the rise in defence spending under Labour had been “substantial”. But the problem is that last year, under pressure from Donald Trump, Keir Starmer and other Nato leaders committed to raising defence spending to 3.5% of GDP by 2035 and, as the IFS explains, despite the increase announced yesterday, there is as yet no credible path to get there.
2) ‘It is not even properly funded.’ As Kiran Stacey and Dan Sabbagh explain in the Guardian’s splash story, the Dip amounts to a £15bn spending increase – but there is as yet no explanation as to where the money will come from to fund almost £5bn of this.
That is a problem for Andy Burnham, who was not briefed on the black hole ahead of the publication of the Dip yesterday, and for his chancellor. Last night Liam Fox, the former Tory defence secretary, said that Starmer was leaving a “poisoned chalice” for his successor.
3) ‘And the bits that are funded are in part funded by cuts that are not popular.’ Some of the Dip is being funded by the cancellation of road projects, and this has angered Labour MPs whose constituencies are affected. Hamish Falconer is a Foreign Office minister, and normally ministers don’t criticise government decisions in public. But he is also MP for Lincoln and last night he posted a message on social media saying he was “disappointed” by the threat to the A46 Newark bypass widening scheme. In the Commons Jonathan Davies, MP for Mid Derbyshire, said shelving the A38 Derby Junctions scheme would be “a brake on economic growth”. And last night Claire Ward, the Labour mayor for the East Midlands, complained her region was disproportionately affected. She told the the Cathy Newman Show on Sky:
What I’m complaining about today is that the East Midlands would appear to be the only region that has been told it is sacrificing its road investments programme in order to be able to contribute to the Dip.
Here is the agenda for the day.
9.30am: MPs hold a debate in Westminster Hall on the case for banning MPs from having second jobs.
Morning: Dan Jarvis, the defence secretary, is on a visit in Cambridgeshire.
Noon: Keir Starmer faces Kemi Badenoch at PMQs.
2.15pm: Police chiefs give evidence to the joint committee on human rights on the policing of protests.
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