Healey sets budget for late October, promising to ‘spread money and power’ around UK
Chancellor John Healey has announced a budget for late October, promising to 'spread money and power' out of Westminster and into every postcode around Britain. The budget will be built on fiscal discipline and will meet Labour's fiscal rules.
Intelligence analysis by Llama
Labour's new budget, set for late October, aims to 'spread money and power' out of Westminster and into every postcode around Britain. The budget will be built on fiscal discipline and will meet Labour's fiscal rules.
The UK government is making a new budget to help people and businesses. The budget will try to make sure everyone has enough money and that the government doesn't spend too much. This is important because the government needs to make sure it has enough money to pay for everything it does.
Analysis
A Budget for Change
Labour's new budget, set for late October, aims to 'spread money and power' out of Westminster and into every postcode around Britain. The budget will be built on fiscal discipline and will meet Labour's fiscal rules. This is a crucial moment for Labour's new prime minister, Andy Burnham, as he tries to turn around the party's faltering performance in opinion polls.
The budget will have to find money for Burnham's policies, including his cost of living support, devolution plan, and billions of pounds of cuts pencilled in by Starmer and Reeves to support a £15bn increase in defence spending over five years. Healey said Labour was 'working fast to restore hope' with the government's announcements and that he was pushing to 'get on with the job' in his first budget as chancellor.
However, the UK government has faced a sharp rise in borrowing costs on global financial markets in recent weeks as the economic fallout from the Iran war hits activity, stokes inflation and adds to the financial pressures for countries around the world. With elevated levels of annual borrowing and the UK national debt at the highest point since the 1960s, City investors warn that Burnham has limited room for manoeuvre in the public finances.
The prime minister has also committed to stick to Labour's manifesto promises, including ruling out an increase in income tax, national insurance or VAT. City traders had expressed unease over the potential appointment of Ed Miliband as chancellor and Burnham taking a looser approach to the public finances. While picking Healey for chancellor and pledging to retain Rachel Reeves's fiscal rules has eased concerns, investors still warn the government faces a delicate balancing act that may lead Burnham to consider tax rises.
In his first weeks in office Burnham had initially suggested he could look at 'any flexibility' in the fiscal rules. He has also faced calls to consider a wealth tax and to overhaul property taxes, and has not ruled out tax rises to fund social care.
Key points
- Labour's new budget aims to 'spread money and power' out of Westminster and into every postcode around Britain.
- The budget will be built on fiscal discipline and will meet Labour's fiscal rules.
- The budget will have to find money for Burnham's policies, including his cost of living support, devolution plan, and billions of pounds of cuts pencilled in by Starmer and Reeves to support a £15bn increase in defence spending over five years.
- The UK government has faced a sharp rise in borrowing costs on global financial markets in recent weeks.
- City investors warn that Burnham has limited room for manoeuvre in the public finances.
If the budget is successful, it could help the UK economy grow and create more jobs. It could also make sure that everyone has access to the things they need, like healthcare and education.
However, the budget could also lead to higher taxes or spending cuts, which could hurt some people and businesses. The government will have to be careful to make sure it doesn't overspend and that it has enough money to pay for everything it does.
