Burnham warns of 'difficult decisions' ahead of challenging October Budget
Prime Minister Andy Burnham said on 16 September 2026 he is prepared to take "difficult decisions" on the economy and will not take risks with it.
He spoke to reporters ahead of the Budget on 28 October. He called the Budget "challenging" and said the "situation in the Middle East" had pushed up inflation in recent months. Inflation rose to 3.1%, driven by petrol and diesel price rises. BBC
His remarks followed criticism from Andy Haldane, the former Bank of England chief economist who has advised Mr Burnham on the economy. In an interview with LBC, Mr Haldane said Mr Burnham should not raise taxes further. He asked whether Mr Burnham would risk angering Labour backbenchers, MPs who do not hold ministerial jobs, by cutting public spending. BBC
Mr Haldane said Mr Burnham faces a "straight choice" between raising taxes and cutting spending at the Budget. He said financial markets, the investors who lend money to the government, now suspect the government is a "traditional tax and spend socialist government with better TikTok videos."
Mr Burnham rejected that description. He said "That doesn't tell the story. We are not that." He said he would take tough decisions to keep the economy on track. Reuters
On the detail, Mr Burnham repeated Labour's general election promise not to raise the main rates of income tax, VAT or National Insurance, a tax on earnings. He said he would keep the debt and spending targets set by the previous government. He said he inherited a £24bn buffer, spare room against those targets, from the Starmer government.
He said he had already taken difficult decisions. He said the government reprioritised spending over the summer to pay for early cost of living announcements and scrapped the rollout of digital ID. He said he has committed about £1.8bn to cost of living support since taking office. He said money set aside for digital ID would fund a VAT cut on household electricity bills. He said a decision on when to meet the target of spending 3% of GDP, the value of all goods and services produced in a year, on the military will wait until next year.
Mr Burnham's finance minister is John Healey. In August Mr Burnham promised help for business within a difficult financial outlook. Reuters In July he promised to overhaul adult social care in England, which is devolved and so applies to England only, and said difficult decisions were needed to fix what he called an unfair system. On becoming prime minister, he promised stability and immediate help with the cost-of-living crisis.
The broader context here will be familiar to Budget watchers. A prime minister with limited spare room, firm promises not to raise the main taxes, and early spending pledges must find the rest through moving money around, smaller taxes or holding down spending. Mr Haldane's warning points to the parliamentary side of that problem. Tax rises test market confidence. Spending restraint tests support among his own MPs. Mr Burnham's answer, that moving money and cancelling digital ID can cover early pledges, leaves October as the moment when the full sums must be set out.
