Andy Burnham won't rule out tax rises in autumn Budget

Andy Burnham has refused to rule out tax rises in the 28 October autumn Budget, telling ITV he will take a careful approach amid challenging public finances. The prime minister said his cost of living crisis measures are funded for now, but experts warn he and Chancellor John Healey may need higher taxes or spending cuts.

Key Takeaways

• Burnham would not rule out tax rises when pressed during his first visit to Ukraine, though he said the public would not necessarily have to accept higher taxes.
• His early cost of living pledges — including a £2 bus fare cap and lower VAT on household electricity — were funded by reprioritising spending, including pausing digital ID.
• July borrowing exceeded expectations despite record income tax receipts, while inflation hit a four-month high of 2.9%.
• Lord Jim O'Neill warned Chancellor John Healey that raising capital gains tax would be "stupid" and could suppress wealth creation.
• Both Burnham and Healey have pledged to stick to Rachel Reeves's fiscal rules on tax-funded day-to-day spending and debt reduction.

Why won't Burnham rule out tax rises?

Speaking to ITV during his first official overseas visit on Monday, Burnham said he "won't be unrealistic" about the state of the public finances. He became prime minister in July promising breathing space on the cost of living crisis, but questions remain over how major policies such as social care reforms will be funded.

When asked whether the public needed to accept that new policies would be paid for through tax rises, Burnham said they would not necessarily have to. Pushed further, he said he would always take a careful approach and would not take risks with jobs, livelihoods or family finances.

What cost of living help has he announced so far?

Burnham described capping bus fares at £2 and cutting VAT on household electricity bills as "the first steps that I've felt able to make." He reprioritised funding after deciding digital ID "wasn't the top priority for now."

He previously told the BBC that his earlier announcements were not enough on their own and hinted at further support, saying there would be "more to come as we go into the autumn." For households tracking how policy shifts affect personal finances, our Net Worth & Wealth coverage follows the wider economic pressures shaping family budgets.

What is squeezing the public finances?

Official figures last week showed the government borrowed more than expected in July, despite a record month for income tax receipts. Inflation reached a four-month high of 2.9% in July and is expected to rise further due to the ongoing impact of the Iran war on energy prices and fuel costs.

Experts have warned that Burnham and Healey will have little financial room to manoeuvre in their first Budget on 28 October, according to BBC News reporting. The fiscal rules set by former chancellor Rachel Reeves require day-to-day spending to be funded through tax revenue by the end of the Parliament, and debt to fall as a proportion of GDP.

Could tax rises hit wealth creators?

Lord Jim O'Neill, the former Goldman Sachs economist whom Burnham sought to appoint in various advisory roles, has warned publicly against increasing capital gains tax. He told The Independent that such a move would be "stupid" at a time when many businesses still struggle with Brexit, national insurance changes and labour market reforms.

O'Neill argued that further taxes on business would suppress wealth creation and undermine the optimism Burnham has tried to foster. Rain Newton-Smith, chief executive of the Confederation of British Industry, told the Today programme that the cost of employing people and doing business had risen so sharply it was holding firms back from creating opportunities for young people.