Prime Minister Andy Burnham has stated he will not rule out tax rises in the forthcoming autumn Budget, acknowledging the "challenging" condition of public finances. He indicated he would take a "careful approach" to the economy.
Burnham, who became prime minister in July, has previously announced cost of living pledges, including capping bus fares at £2 and cutting VAT on household electricity bills. He stated these were funded by reprioritising funding, such as from digital ID projects.
Experts have cautioned that Burnham and Chancellor John Healey will have little financial flexibility in their first Budget, scheduled for 28 October. This comes as official figures revealed the government borrowed more than anticipated in July, despite record income tax receipts. Inflation also reached 2.9% in July, a four-month high, with expectations of further increases due to the ongoing impact of the Iran war on energy and fuel costs.
Both Burnham and Healey have committed to adhering to fiscal rules established by former chancellor Rachel Reeves, which aim to ensure day-to-day spending is covered by tax revenue by the end of the Parliament and to reduce debt as a proportion of GDP.