Burnham refuses to rule out tax rises in autumn Budget
Experts have warned that he and Chancellor John Healey will have little room to manoeuvre in their first Budget.
Andy Burnham, the Prime Minister, has indicated that tax increases are a possibility in the forthcoming autumn Budget. He stated that he would not be "unrealistic" given the "challenging" state of the nation's public finances.
Burnham, who assumed the premiership in July with pledges to alleviate the cost of living and provide relief, emphasized his commitment to a "careful approach" to the economy. He defended his previously announced cost-of-living initiatives as fully funded.
Uncertainty persists regarding the financing of significant policies, such as social care reforms. Experts have cautioned that Burnham and Chancellor John Healey will have limited financial flexibility in their inaugural Budget on October 28.
During his initial visit to Ukraine, Burnham discussed the policies implemented thus far, including a £2 cap on bus fares and a reduction in VAT on household electricity bills. He characterized these as "the first steps that I've felt able to make," made feasible by reallocating funds from other areas.
"I took the decision early on that digital ID wasn't the top priority for now. And so we've reprioritised funding to other priorities," he explained in an interview with ITV.
When asked if the public should anticipate tax increases to fund new policies, Burnham suggested this wasn't necessarily the case. Pressed further on whether tax hikes would be necessary to bridge spending gaps, he responded: "I will always take a careful approach to things. I ran Greater Manchester for 10 years and we ran a very tight ship with rock solid finances."
He continued, "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. I will try to help them in whatever way I can, I have already done some things that will help them."
Burnham had previously acknowledged to the BBC that his initial announcements to address the cost of living were insufficient on their own, hinting at further support.
Speaking during his first official overseas visit on Monday, he reiterated his commitment to doing what he could, but cautioned, "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."
Last week, official figures revealed that the government borrowed more than anticipated in July, despite a record month for income tax receipts. Inflation also reached a four-month high of 2.9% in July and is projected to rise further due to the ongoing impact of the Iran war, which has affected energy and fuel costs.
Experts have advised Burnham and Healey that they must either raise taxes or cut spending elsewhere, as pressure on public finances has left no room for additional borrowing. Both the Prime Minister and Chancellor have pledged to adhere to the fiscal rules established by former Chancellor Rachel Reeves. These rules aim to ensure that day-to-day spending is covered by tax revenue by the end of the Parliament and to reduce debt as a proportion of GDP.