Burnham signals tax rises as UK budget pressures mount
Prime Minister Andy Burnham has refused to rule out tax rises in the autumn Budget, saying he will not “be unrealistic” about the state of
Prime Minister Andy Burnham has refused to rule out tax rises in the autumn Budget, saying he will not “be unrealistic” about the state of Britain’s public finances. The warning came as he travelled in Ukraine and tried to defend his first wave of cost-of-living pledges as fully funded.
Burnham said the government faced a “challenging position” and insisted any new spending commitments would be carefully thought through. “Whatever I do will be carefully thought through, it will be funded and there will be no more to come as we go into the Autumn,” he said.
Pressure builds before the first Budget
The comments land ahead of the first Budget on 28 October, when Chancellor John Healey is expected to face a tight fiscal squeeze. Economists have already warned there is little room for fresh promises after higher borrowing costs and the energy price shock linked to the US-Iran war.
That leaves Burnham with a difficult balancing act. He came into Downing Street in July promising breathing space for households and help with the cost of living, and has already announced measures including a cap on bus fares at £2 and a cut in VAT on household electricity bills.
But those pledges have not erased questions over how bigger plans, including social care reform, would be paid for. Burnham said the first steps he had taken were possible because he had moved money from lower priorities, including digital ID, which he said was not at the top of the list for now.
Wealth taxes on the table
There is now pressure on the government to go further. Tax increases on wealth, capital gains and bank profits have all been floated in political debate, while departments have been told to make budget cuts to help fund new spending.
Burnham has tried to square that circle by stressing caution. He told reporters he had run Greater Manchester for 10 years with “rock solid finances” and said he would take the same approach in government. “I will always take a careful approach to things,” he said.
The debate comes as official figures showed government borrowing at £1.8bn in July, underscoring the strain on the public finances. Burnham said people needed to understand the scale of the challenge. “I won’t be unrealistic,” he said. “We are in a challenging position.”
The coming weeks will test whether that caution turns into higher taxes, deeper spending cuts or both. The answer is expected in October. For now, Burnham is leaving the door open.
