No 10 North’s responsibilities for economic growth have been “watered down” and the “real power” remains with the chancellor, the Tories have claimed.

As the Press Association reports, Alex Burghart, the shadow Cabinet Office minister who has just been made deputy Tory leader, made the claim as he responded to a Commons statement from Louise Haigh, the first secretary of state, about the government’s rewiring the state plans for devolution.

Burghart told MPs he was sympathetic to Burnham’s desire to curb the power of the Treasury. He said:

The Treasury, which was the behemoth created in its modern form by Gordon Brown, designed to control Whitehall, designed to reduce department ministers’ authority over their spend and over their decisions.

So I was genuinely interested to hear [Haigh] say over the summer that the Treasury was an ‘imperial finance department’, and I rather hoped that she was going to lead the charge to smash over the barricades and destroy this terrible imperial power.

But instead, it appears that the empire has struck back, because the briefing that we were given initially was that Number 10 North was going to take control of growth.

That seems to have been watered down.

It’s now rumoured that the chancellor is going to give the speech on growth next week, and that the real power remains within ‘No 11 South’.

So will she tell the house what powers, levers, and budget will she, as head of No 10 North, have to increase growth across the UK?

Haigh said functions had been moved from the Treasury to No 10 North, describing it as “a little bit of a chip in its empire”. She said:

In terms of the new functions of No 10, we have transferred a number of strategic functions into No 10 North, including moving local economic growth and devolution strategy from the Ministry of Housing, Communities and Local Government and local economic growth policy from HM Treasury.

Nigel Farage, the Reform UK leader, has revealed that his party’s bank account has been frozen several times.

In an interview with the BBC’s political editor, Chris Mason, Farage said this was evidence Britain has become a “complainant society” where too much time is spent in investigating unfounded allegations.

Farage was responding to a question about why – as the Sunday Times revealed in July – Reform UK had its bank account frozen for two weeks ahead of the 2024 general election over concerns about potentially illegal donations.

Asked why the account was frozen, Farage replied:

That’s very common. It’s about the fifth time it’s happened to us. It happened to us all the time. It happened to us in Ukip [the party Farage led before Brexit]. Happened to us in the Brexit party.

Asked again why this was happening, Farage said:

Because complaints get made! We’re living in a complainant society.

You know, if I contact your bank and you’ve got a big transaction going to your account, and I say I think Chris is money laundering, they will sustain your account, pending an investigation. That’s the world we live in.

Some payments to Reform UK are being investigated by the police. Asked in the interview about some specific payments, Farage insisted that they were legitimate.

But he also claimed that rules to counter money laundering were excessive. “A series of European Union directives on money laundering have literally clogged up much of our banking system”, he said.

And he argued that Reform UK was subject to particular scrutiny because it was a threat to the establishment.

Asked about the separate investigation by the parliamentary commissioner for standards into claims that he broke Commons rules by not declaring the £5m donation he received before the 2024 general election, Farage indicated that he expected to be interviewed by the commissioner, Daniel Greenberg, in connection with this soon.

Farage indicated that he expected Greenberg to deal with the case fairly. But he implied the Commons standards committee, which will take the final decision about any punishment for breaking Commons rules, was biased against him. “I think we know the outcome already,” he said.

When pressed on why he was saying this, he said Reform UK did not have any MPs on the committee, and so all the MP members were political opponents.

The committee does have lay members. But Farage said all members making these sorts of decisions should be “apolitical” – implying he would like the committee to be composed wholly of lay members.

At Westminster it is expected that the committee will rule that Farage did break Commons rules by not declaring the £5m donation and that this was serious enough to merit a suspension of at least 10 days. This would allow a recall byelection to be held in Clacton.

Scotland’s first minister has insisted there is “no question” of workers facing compulsory redundancy as he embarks on a programme of major reforms to the public sector, the Press Association reports. PA says:

John Swinney announced plans in his programme for government that would see the number of area health boards in Scotland cut from 14 at present to just two.

Unions have raised concerns the changes will result in thousands of job losses, with Unite insisting that “all options will be on the table” if needed. [See 10.24am.]

The threat came as the union’s general secretary Sharon Graham hit out at the “slash and burn programme for the NHS” that Swinney proposed.

“The proposals will inevitably result in swingeing cuts and thousands of job losses across the public sector,” she added.

Swinney however insisted the Scottish government would “work very closely” with unions as it embarks on the changes.

When he announced the changes to MSPs on Tuesday, the first minister said they were “the most radical reshaping of public services” in Holyrood’s history.

And speaking today he insisted the country needs to not only “change the way in which we deliver public services to make sure they are sustainable”, but also needs to reduce the public sector workforce.

With the Scottish government facing a budget black hole of almost £5bn by the end of the decade, the SNP leader said: “I have said that for all the time I have been first minister there will be a need for public sector employment to fall.”

Stressing that the government has to “live in the realities of the financial situation that we face” he told BBC Radio Scotland’s breakfast programme that “it is likely over the next few years that there will be a reduction in public sector employment”.

He refused to estimate how many jobs could go as a result of the changes – which will also see a new structure set up for Scotland’s councils.

Swinney was clear he was not going to “put particular numbers on this” with regard to job losses.

But he insisted that ministers would “work collaboratively” with the unions as the country moves “toward the two-board approach”.

The first minister also insisted the government’s policy of no compulsory redundancies within the public sector would be maintained.

Here is Jessica Elgot’s story from PMQs.

So much for the talk of a new-look PMQs. (See 11.12am.) Although Andy Burnham and his team have spoken about adopting a new approach to the traditional Commons joust with the leader of the opposition, in the end this felt much like business as usual. Burnham was more willing to engage with Kemi Badenoch’s questions than Keir Starmer was (certainly in the late Starmer phase), and he did make a point of stressing several times his desire to work with opposition parties. But, although he has made “problem-solving, not point-scoring” his mantra, Burnham was quite happy to resort to point-scoring. His main blast was directed at Andrew Griffith, the new shadow chancellor, and his role in the Liz Truss mini-budget.

Burnham may not have been particularly innovative, but he was good; confident, plausible, quite funny. In the exchanges with Badenoch, there was no obvious winner, but he had the best single put-down. That came when Badenoch asked:

The prime minister told the house that his summer of promises would be paid for by reprioritising within government. So what exactly has he cut?

Burnham replied: “In terms of what has he cut? Tax is the simple answer.” This was a reference to the point he made yesterday about how his early announcements included two tax cuts in his first week.

While Burnham and Badenoch will both be fairly happy with how the exchanges went, one person less pleased will be the PM’s diary secretary. Burnham did seem to agree to a lot of meetings with MPs wanting to discuss this, that or the other. (Starmer would have fobbed them off with a meeting with a minister, which is what Burnham himself will probably be doing before too long.) And this did seem to confirm Badenoch’s point about Burnham being a people pleaser. (See 12.09pm.) She claimed that, in response to 125 questions yesterday, Burnham did not once say no to a spending request. It is a fair line of attack, although probably not one that will be available for long because Burnham will soon discover that he cannot do this job without having to disappoint.

Just Stop Oil protesters are blockading the road outside parliament, Kate Ferguson from the Sun on Sunday reports.

During PMQs Tan Dhesi, the Labour chair of the Commons defence committee, asked Burnham if he would commit to raising defence spending to 3% of GDP by 2030.

He said:

It is imperative that we invest in our armed forces in the here and now, rather than be sorry later. Indeed, defence is definitely one area where vibes alone just isn’t going to be enough.

So rather than kick the can down the road waiting for a fiscal event in the future, will the prime minister urgently commit to charting a pathway to reach 3% of GDP spend on defence by 2030, which, as his chancellor rightly noted, is critical to keep our country safe.

John Healey resigned as defence secretary when Keir Starmer was PM because Starmer would not commit to raising defence spending to 3% of GDP by 2030. He is now chancellor, but has not publicly committed to reaching the 3% target he insisted was essential by 2030.

In reply, Burnham said:

I’ve made that commitment, made it very clear, and I have done for a considerable period of time. And I was in Ukraine last week for a very specific reason to repeat it on the world stage. There [Dhesi] can be absolutely sure of that.

This sounded like a clear commitment to 3% by 2030.

But there was some doubt about his intention because earlier during the exchanges, when Kemi Badenoch said that the armed forces needed a plan to hit 3% now, Burnham in reply just repeated the commitment to get defence spending up to 3.5% by 2035. (See 12.18pm.)

UPDATE: According to Jason Groves from the Daily Mail, government sources are indicating that Andy Burnham mis-spoke at PMQs when he told Tan Dhesi that he was committed to spending 3% of GDP on defence by 2030. That is not a big surprise because the context implied that, when Burnham said “I’ve made that commitment”, he was actually thinking of 3.5% by 2035 – not the question he had been asked.

Groves says:

Government source confirms Burnham has *not* committed to hit 3% defence spending by 2030, despite appearing to do so at PMQs, saying: ‘His position is unchanged’

Liz Saville Roberts, the Plaid Cymru leader at Westminster, asks Burnham to give the Welsh government control over policing.

Burnham says he will give this proposal a fair hearing.

Ed Davey, the Lib Dem leader, says Burnham was right yesterday to blame Brexit for the UK’s lack of growth. The answer to the problem is staring us in the face, he says – join the single market.

Burnham says he is glad Davey accepts his analysis. He says he wants a closer relationship with the EU, building on the work of Keir Starmer. The EU’s “Made in Europe” plan could pose real problems for British steelmakers.

Davey says he hopes Burnham will rejoin the single market.

He says in North Devon a maternity unit has been closed, meaning women have to travel two hours to give birth. They are being taught how to give birth in cars. This is “unthinktable”, he says. Will he commit to reopening the maternity unit within days?

Burnham says he will commit to reopening it – but not within days.

He says there are structural problems with maternity units in the country.

Badenoch says Burnham is a people pleaser, not a leader. She says she has already offered to work with Labour on welfare.

I think it’s delightful that he wants to make everyone happy. But a prime minister needs to be a leader, not a people pleaser.

What has Burnham cut, she asks.

Burnham says there is a simple answer: tax.

He refers to the tax cuts he announced in his first week.

And he says he cancelled the digitial ID programme.

Kemi Badenoch starts by congratulating the PM “on his stamina – three hours”. (That generates some laughter.) She asks if Burnham can name a single spending request to which he said no.

Burnham says he was clear about the need to get welfare spending down.

It is not right to have so many young people on benefits. He wants to invest in their success.

This is an area where both parties can engage “in problem solving, not point scoring’.

PMQs is starting soon.

Here is the list of MPs down to ask a question.

In the news release to mark the first anniversary of his election as the Green party’s leader, Zack Polanski highlighted what he described as 10 achievements during his first year in charge. For the record, this is how he sees his record.

-Won the Greens’ first ever parliamentary byelection in Gorton and Denton

-More than tripled the party membership from 68,500 to over 230,000

-Won a record 587 council seats and majority control of five additional councils at the local elections in May

-Won our first two members of the Senedd – when he was elected leader, Zack said this was his number one priority

-Won the Greens’ first two directly elected Mayors in Hackney and Lewisham

-Secured the Green’s highest ever vote share in London and picked up the largest net gain in seats across the city with another 249 councillors

-Called on Andy Burnham to convene a Cobra meeting on extreme heat and wildfires

-Led the charge with Green MPs to push the government to end the two child benefit cap

-Maintained full support for trans rights in response to updated EHRC guidance

-Led the way in highlighting why Keir Starmer was unfit to be prime minister

My colleague Jessica Elgot says she now thinks Polanski being the Greens’ candidate in Holborn and St Pancras is a done deal.

Zack Polanski in Holborn and St Pancras sounds like a done deal from the hints the party is dropping over the past 24 hours. Needs the formality of local party sign-off.

Steven Morris is a Guardian reporter covering Wales.

The Welsh first minister, Rhun ap Iorwerth, sounded a rather gloomy note at his press conference to mark the start of the new Senedd term, warning the country faced a “very challenging” financial picture for the rest of the decade.

Speaking in Cardiff, the Plaid Cymru leader said:

Our budget for day-to-day spending next year will be lower in real terms than this year. Our capital budget will fall in real terms every year until the end of the decade.

He said the budget would focus on “improving efficiency and productivity” and said there would be discussions with other parties to find common ground.

The first minister declined to say where cuts may have to be made but said: “We are facing financial constraints that are real. We have to be cleverer in the way we go about it.”

Ap Iorwerth, whose party swept Labour aside in this spring’s Senedd elections, said the new government had hit the ground running. He said it was investing, for example, £100m in bringing down NHS waiting lists and had put in place a £1bn package for the agricultural sector over the next three years.

He said he had been encouraged by discussions with the UK prime minister Andy Burnham over devolution and said he was optimistic that policing and justice would be devolved to Wales.

Alexandra Topping has written a good preview of the challenge Kemi Badenoch faces at PMQs today. As she puts it, “early indications suggest [Badenoch] understands that Burnham’s folksy Hovis advert charm may require a different approach.”

Burnham faces an even bigger challenge. He became Labour leader and PM arguing that the Westminster political model functions in a way that is holding Britain back, and he has pledged to shake it up. He has said that he views PMQs as part of the problem, and suggested he would like to change the way it is conducted. But he has not properly explained how. According to a BBC report, this might mean a “tonal shift”, more jokes and less reliance on notes.

To older readers, some of this may sound familiar. Previous incoming prime ministers have tried to change PMQs – and failed. David Cameron said that he wanted to “end Punch and Judy politics” at PMQs. Keir Starmer said that, as part of his approach to PMQs in opposition, he would focus on “constructive criticism”. Trying to make PMQs gentle and civilised never seems to work because the dynamics of the event institutionalise conflict. Cameron explained it like this in an interview in 2013 explaining why Punch and Judy were still alive and well.

People don’t believe it but MPs do work hard and for 30mins each Wednesday they go effectively to the Colosseum and [what] they see are the Christians going to be eaten by the lions. And you’ve got a choice - are you going to be a Christian or a lion? It pays to get stuck in. When we’ve tested this. The public expects PMQs to be robust.

Historically, trying to make PMQs more dignified has been a bit like saying that boxing matches would be better if contestants didn’t actually hit each other.

But PMQs can change. In its modern form, it only started in the 1960s. Blair failed to change the tone of PMQs, but as soon as he won the 1997 election he changed it from being a twice-weekly event (two sessions of 15 minutes, on Tuesdays and Thursdays) to being a once-a-week event (half on hour on Wednesdays). If Burnham really hates PMQs, he could consider further reform along those lines, but he has expressed no interest in doing that.

Zack Polanski, the Green party leader, has said that the Holborn and St Pancras byelection will be “a referendum on ending rip-off Britain”.

In a statement to mark the first anniversary of his election as Green leader, Polanski said:

The Holborn and St Pancras by election will be a referendum on ending rip-off Britain. Only the Greens have a real plan for real hope and change.

We will announce our candidate in due course and they will set out an exciting agenda for the deep change our country needs.

I am proud of what I have achieved in the first year of my leadership of the Green party but it is just the start.

I am very excited for the next chapter for myself, for the Greens and for people across the country.

Polanski said earlier this year that he would “almost certainly” stand in a future byelection in London and he is expected to apply to be the Green candidate for Holborn and St Pancras. Polling figures, and the results of the May local elections, suggest Labour should win the byelection, but Polanski has been a formidable campaigner and his entry into the contest would upend expectations.

According Politico, Polanski has already started campaigning. In their London Playbook briefing, Andrew McDonald and Megan McElroy report:

Polanski hasn’t confirmed he intends to run in Keir Starmer’s Holborn and St Pancras seat, but … Green officials put out an afternoon statement saying “Zack has always made it clear he would like to be a London MP,” he was knocking doors in Camden last night and he sent out a quote saying “I am very excited for the next chapter for myself.” See if you can decipher that one. One person in the party said they expect him to put himself forward for selection this week.

But my POLITICO colleague Isabel Loubser (formerly of the Islington Tribune) hears from two Green figures that one of Polanski’s two deputy leaders, Mothin Ali, is also interested in running. One person says he would potentially gain the backing of two key leftie groups in the constituency: the Camden People’s Alliance and a local Muslim alliance too. The seat has a big Bengali and Muslim community.

Patrick Greenfield is a Guardian reporter covering Scotland.

Reaction to Scottish first minister John Swinney’s programme for government is still coming in this morning after he unveiled the SNP’s plans for the next five years in Holyrood yesterday. A major restructuring of local government and NHS health boards, and a new misogyny bill to crack down on violence against women and girls were among the most eye-catching announcements.

Swinney also insisted that his administration will move forward with plans to introduce a legally binding price cap on bread, milk and other essential food items despite strong opposition from farming and business groups.

The Scottish Greens’ co-leader, Ross Greer, said it was a “disappointing” programme that Nicola Sturgeon would not have backed, urging the SNP to roll out a £2 bus fare cap in the Highlands and west Scotland to the entire country. He also criticised Swinney for “throwing open the doors to tech billionaires by encouraging more applications to build hyperscale data centres in Scotland”.

In his speech, the first minister said there would be a strategic approach to green data centres “with clear expectations” around environmental and community benefits, something which was cautiously welcomed by campaign groups, but there was no suggestions of an outright moratorium.

On the health board overhaul, the union Unite criticised the programme for government as a “slash and burn” agenda, warning that it was likely to result in job losses. “Reducing health boards does not reduce workload or staffing pressures. Unite will not stand by and allow workers and services to be attacked,” said Unite regional coordinator James O’Connell.

Sally Jameson, a Cabinet Office minister, was the No 10 voice on TV and radio this morning. In interviews, she insisted that Andy Burnham did take fiscal responsibility seriously.

Asked about Jim O’Neill’s claim that Burnham’s tone in the comments yesterday would have concerned investors, (see 9.36am) she told Sky News she did not agree. She explained:

I think it’s important we don’t over-read into individual comments people make, because I think Andy Burnham has been really clear that we are going to stick to those fiscal rules rigidly, and that fiscal responsibility is absolutely imperative.

We’ve got to have controls on spending, and I don’t think Andy or anyone else has said any different to that.

And on the Today programme she said Burnham was “absolutely clear that we will be sticking to the fiscal rules and making sure that we’re controlling public spending”.

Sir Howard Davies, a former chair of NatWest and a former chair of the Financial Services Authority, echoed Jim O’Neill’s comments (see 9.36am) this morning. In an interview on the Today programme, he said Andy Burnham’s stance on economics was causing some concern in the markets.

Davies said the rise in long-term UK government borrowing costs yesterday was not “a major crisis of confidence in the UK government”.

But, asked if Burnham’s approach to public spending was causing “some market jitters”, he replied:

Yes, I think it is.

Unfortunately, we do have a circus built around our budgets, which actually does not happen in many other countries. There is a whole industry of people … to create expectations and then dash those expectations, and I think we are going to face a very dicky period between now and the budget.

I think we’re going to see a very uncertain period for the next three or four weeks, and it would be helpful if the government could make some signs about their overall approach to the fiscal balance, which I think could calm things down a bit.

Davies, like O’Neill, also said the government should get rid of the pensions triple lock. “If a government does not grasp that nettle at some point, then I think its credibility is going to be on the rack.”

Burnham has committed to keeping the pensions triple lock for the duration of this parliament, saying he has to because that is what Labour promised in its manifesto.

He has not said anything about his plans for the triple lock in the next parliament. But with Reform UK, the Conservatives and the Lib Dems all in favour of keeping the triple lock, it is not hard to see why he does not want to break ranks and suggest it could go after 2029.

Andy Burnham’s speech to MPs yesterday was “the last thing” that investors wanted to hear, according to Jim O’Neill, the former Goldman Sachs chief economist who served as a Treasury minister under David Cameron.

O’Neill, who sits in the Lords as a crossbencher, is not a regular Burnham basher; he is a big supporter of Burnham’s devolution agenda and he has been an informal adviser to the PM. There were even discussions about his taking a job in the No 10 team, which floundered because he did not want a formal role.

But potential policy disagreements also seem to have been a factor, and in an interview on LBC last night O’Neill said investors would be worried by the fact that Burnham seemed to express no interest in cutting spending. He said:

Andy made his first big speech in parliament since after the recess … and the tone of it, implying a lot more government spending to take control of X, Y, and Z, is the last thing that investors want to hear on a day where all of this is going on in the background.

And so yes, they’re like, ‘Who’s going to get real in this country about the challenges of getting our debt down and controlling spending?’

O’Neill also said it had been a tough day for government borrowing.

‘It is a tough day. Ten-year gilt yields or 10-year interest rates have risen by a quarter of a percent, which in one day is a lot. We’ve not had that since Liz Truss days …

If your country, whether it be ours or others, is under the focus of ‘Can they come up with a sensible fiscal strategy?’ on a day where the markets think ‘Well, no you’re not showing any signs of it’, they’re going to have a bad day.

O’Neill followed this up with an interview to the BBC where he said Burnham should end the pensions triple lock and cut welfare spending “in a credible manner”. He said these were “golden opportunities” because they would lead to a “significant decline” in government borrowing costs.

Good morning. Andy Burnham will face PMQs for the first time as PM today but he already has a fairly good idea of the questions he might get from Kemi Badenoch because she rehearsed them all yesterday. Here is an excerpt from the press release the Conservatives put out yesterday summarising those questions – and their take on how Burnham responded.

Kemi Badenoch asked if Burnham would:

-Set out a plan to get defence spending to 3% of GDP;

-Confirm whether Labour will use a Rwanda-style deal to secure our borders;

-Set out a timeline to get foreign-born prisoners out of British prisons;

-Pledge no new taxes at the forthcoming budget; and

-Stand up to his own backbenchers and cut benefits.

In response, Burnham floundered and couldn’t give straight answers to clear, straight questions.

Today Badenoch may well ask again about tax, benefit cuts and the economy.

And that is because, while Westminster was focused on Burnham’s impressive debut in the Commons yesterday afternoon, the more significant story may have been happening elsewhere, on the financial markets. The Telegraph sums it up like this.

Not for the first time, the Telegraph’s headline was not entirely fair to a Labour prime minister. As Heather Stewart explains in her Guardian story, the government’s long-term borrowing costs did jump “to their highest level since early 1998 on Tuesday as investors dumped government bonds” – but this was mainly the result of international factors.

As Graeme Wearden reports in his business live blog today, the UK is not the only country where government borrowing costs are soaring; Graeme says Australia, India and Germany are among other states facing similar problems.

But, just because the UK is not alone, that does not mean the problem is not real; as Heather reports in her story, the rise in borrowing costs means the Treasury has lost £12bn from its fiscal safety net. She quotes an economist saying “based on Tuesday’s yields, [the Treasury’s] headroom against the current budget rule would fall from £26bn at Rachel Reeves’s spring forecast to £13.8bn before covering any additional spending plans.”

When Badenoch challenged Burnham over tax yesterday, he pointed out that in his first week in office he made two tax-cutting announcements. But he refused to oblige her by ruling out tax rises in the budget.

Today the Resolution Foundation thinktank (whose former chief executive, Torsten Bell, is now a Treasury minister) has published a report saying that, if Burnham wants to raise defence spending, as he proposes, taxes will probably have to rise for ordinary workers. It says:

International data shows that the rise in employer national insurance contributions (NICs) last year and frozen tax thresholds in the UK have led to the largest annual rise in taxes on average workers across 33 comparable OECD rich countries. Strikingly, however, this was from a very low base – lower than the US, for example. The UK remains in the bottom third of such countries for the level of tax on an average worker, and the effective tax rate on a typical earner is still lower than it was before the financial crisis. Indeed, no country raises more in total tax as a proportion of GDP without also asking more of single average earners.

This analysis strongly suggests that any politician promising a bigger state and lower taxes on middle earners is not being realistic. So if we want to increase defence spending, then there is a clear case for paying for this through broad-based tax rises that include typical earners paying more.

With all this on the table, PMQs is likely to be dominated by questions about tax and borrowing.

Here is the agenda for the day.

9.15am: Michael Shanks, the energy minister, Ofgem officials and other energy experts give evidence to the Commons energy committee about the electricity market.

9.30am: Stephen Timms, the social security and disability minister, gives evidence to the Commons work and pensions committee.

Morning: Rhun ap Iorwerth, the Welsh first minister, holds a press conference in Cardiff ahead of the start of the Senedd year.

Noon: Andy Burnham faces Kemi Badenoch at PMQs.

After 12.30pm: MPs debate the remaining stages of the representation of the people bill.

Afternoon: Nigel Farage, the Reform UK leader, is doing an interview with Chris Mason, the BBC’s political editor, ahead of the party’s conference that starts on Friday.

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