Andy Burnham addresses potential tax increases in upcoming Budget
Andy Burnham has refused to dismiss potential tax increases in the upcoming Budget, stating he “won’t be unrealistic” regarding the state of public finances, reports BritPanorama.
Acknowledging that the UK faces a “challenging position”, the Prime Minister maintained that his strategy for the economy would involve a “careful approach”.
During his initial trip to Ukraine, Mr. Burnham reiterated promises to cap bus fares at £2 and lower VAT on household electricity bills as “funded commitments”.
However, uncertainty persists regarding how other key promises, including a £5 billion defence commitment made prior to entering No 10 and plans for major reforms to the social care sector, will ultimately be financed.
Further scrutiny has surrounded proposals to finance the VAT cut by scrapping the former Labour administration’s digital ID scheme, after former minister Darren Jones stated that the previous policy had not been properly costed.
When asked whether the public should prepare for higher taxes for some policies, the Prime Minister told ITV News: “They don’t necessarily need to accept that. What I have put out so far, I wouldn’t say is everything, but they are the first steps and they are significant.”
Pressed on the necessity of tax hikes to fill spending gaps, he emphasized a careful approach: “I ran Greater Manchester for 10 years and we ran a very tight ship with rock solid finances. Nothing will change as I come into this role as Prime Minister. I won’t take risks with people’s jobs or their livelihoods or their family finances.”
He added: “I will try to help them in whatever way I can; I have already done some things that will help them. I won’t be unrealistic and people really need to understand that. We are in a challenging position; whatever I do will be carefully thought through, it will be funded and there will be more to come as we go into the autumn.”
When questioned about whether his messaging ahead of the autumn statement suggested tax increases, Mr. Burnham told LBC: “No, it doesn’t mean that. We have a manifesto and I will honour that manifesto.” He indicated that improving the cost of living could be achieved by “changing some of our priorities” and vowed to manage finances “prudently and carefully”.
The fiscal squeeze facing new Chancellor John Healey ahead of his inaugural Budget has been highlighted by official figures showing government borrowing unexpectedly rose to £1.8 billion last month. The Office for National Statistics (ONS) reported that government borrowing stood at £1.8 billion in July, marking an increase of £700 million or 68.7% compared to the previous year, which confounded expectations.
This rise occurred despite a record July for income tax receipts. Inflation also surged to a four-month high of 2.9% in July amid the fallout from the Iran war.
Experts, including the National Institute of Economic and Social Research (Niesr), have warned Mr. Healey that he will need to either raise taxes or cut spending elsewhere, as pressure on public finances offers little room for additional borrowing.
The Chancellor has informed the Cabinet that they must be ready to implement cuts to finance some of the new pledges and has promised that his economic plans would be “built on fiscal discipline” to meet the fiscal rules established by his predecessor Rachel Reeves.
Shadow chancellor Sir Mel Stride remarked that Mr. Burnham is “staring down the inevitable barrel of tax rises” after announcing pledges “without a plan,” adding, “It doesn’t matter who is in charge, it is the Labour Party itself that’s the problem.”
